“It is more important to know who you are than where you are going, for where you are going will change as the world around you changes. Leaders die, products become obsolete, markets change, new technologies emerge, and management fads come and go, but core ideology in a great company endures as a source of guidance and inspiration.” Jim Collins
One of the common issues a CEO faces during instability and change is how much longer employees will continue to trust them when things are in a state of flux.
According to Jim Collins, who spent 25 years researching leadership, he found that the foundational element to leading an organisation is guiding by a set of core values and purpose (known together as core ideology).
When organisations face uncertainty, core purpose becomes even more important — not less so. That’s because the what and how of business need to change more frequently in a volatile world. This leaves purpose, the why, as the primary compass for navigating key decisions. It’s critical information to communicate to employees to get their thinking aligned and to reduce fear. It also sets up the foundations for trust.
One of the most common attributes of companies with high-performance workplace cultures is that they have a clear, well-specified purpose that states both how and why the company makes a positive impact on the world. It’s their fundamental reason for existence beyond just making money.
This is not a feel-good statement. It actually works towards pulling people forward especially in difficult times (and good). It helps people make better decisions and it generates tremendous energy that aligns everyone together towards a common cause.
But it doesn’t matter how much positive impact your organisation does for the world if you don’t communicate this to your employees.
Company leaders who fail to inspire their employees to rally behind their company’s purpose are sacrificing a golden chance to attract and retain top talent, improve stakeholder trust and confidence levels and help employees make better decisions that contribute to meeting the company’s long-term objectives. That’s why all the great business leaders of our time from Steve Jobs, Bill Gates right through to Richard Branson have always been so maniacally focused on their social purpose.
A Better Way
What successful organisations have learnt is that it’s important to develop a sustainable culture that champions trust. In an organisational context, I define trust as:
“The willingness for somebody to take a risk, to allow themselves to feel vulnerable, and to confidently rely on the other person to have an attitude of goodwill towards them whenever an uncertain situation entails risk.” Marie-Claire Ross
When change occurs in an organisation, employees immediately go into fear. Essentially, all fear means is an absence of trust. A belief we won’t be taken care of. Employees who trust leaders to do the right thing will commit to a new vision and withstand the challenges that go along with it. This makes execution so much easier.
According to a study by Imperative Research, high trust organisations generate 2.5 times the revenue of low trust companies.
Building trust provides employees with the psychological safety they need to thrive in their jobs. Developing a high-trust culture doesn’t happen overnight. In a high-trust collective, you will find leaders who are trustworthy and who have a concept of what it means to act with trust. They lead by extending trust to all employees.
They also expect this behaviour from others, ensuring that trust cascades throughout the organisation. Over time, it eventually becomes embedded within the company.
Here are five methods to generate a high-trust culture that will build resiliency during times of instability:
Enhancing Leadership Capabilities
Building trust starts with leadership. After all, organisations succeed or fail based on the strength of their leadership team. Trust is often overlooked as a leadership competency because it is taken for granted. If you look at the reasons behind disengaged employees, one of the top reasons is a lack of trust in leadership.
According to the 2016 SunSuper Australian Employee Insights Report, 24% of Australian employees always trust senior management, while 47% always trust their immediate manager. Yet, few leaders have ever been taught how to diagnose, enhance and repair trust.
Leaders who understand trust at a comprehensive level and who work at building it every day ensure that employees know that they will do the right thing by them. It’s important that leaders are trained in how to judge, build and rely on trust (see Delivering Leadership Results through Trust).
Importantly, leaders empower followers through trust. This creates a virtuous cycle of efficiency, innovation and loyalty.
One of the ways leaders enhance trust is through consistently communicating the purpose and core values (core ideology) to produce an alignment of thinking.
In today’s economy, it’s not enough to make excellent products. You have to inspire passion. Purpose is your why and what makes you special. It avoids employees making false assumptions and applying valuable energy in the wrong direction. The more specific you can be about who you are as an organisation, the greater the likelihood for success. It forms the basis of the CEO’s regular stump speech and keeps everyone’s heart engaged.
The central pillar for building trust is a corporate purpose that’s defined by a genuine commitment to the social good. A socially relevant purpose that’s defined, communicated and embedded throughout the organisation provides employees with the context they need to understand how their work makes a difference to the world. Humans are emotional beings and they buy-in to their workplaces based on how much the purpose resonates with their own values.
After all, we’re more likely to trust a company that they’re ethical if we can see proof that they’re visibly making a difference to the world and not just paying lip service to it.
It’s even becoming more and more important to hiring talent. According to Deloitte’s Millennial Survey, 57% of respondents who perceived their organisation to have a “strong sense of purpose” reported a “high level of employee satisfaction” at their company versus only 23% of those who worked at an organisation without a strong sense of purpose.
For newly formed organisations or for those going through a merger, it’s important that the executive team formulates the core purpose (after collating ideas from employees). This is because leaders are the channel of the company purpose and if they fail to connect with it, they can hardly connect others to it. Leaders also have a more holistic understanding of the environment they are working in and the legislative and governance requirements.
In addition to the core purpose, leaders need to espouse and model core values. These are the behaviours that define the culture and are reinforced through your HR systems and leadership communication on a daily basis.
During a merger, it’s important to consult with all of your employees as to what values they believe are required for the new organisation. Leaders can’t impose values on members but must involve them in a process of creating shared values. The result is a unified voice on values which makes it much easier to drive new behaviours.
Companies with a strong sense of purpose and clear shared values enable their employees to relate more to each other through being able to collectively see the meaning in their work. A sense of belonging makes people more confident and organisations stronger.
Crafting a clear core ideology that contains the how, what and why enable executives and managers to focus their employees through a shared understanding and acceptance of the mission. It’s much easier to communicate and direct behaviour, as well as guide strategic decision-making when everyone is clear on the purpose.
Leading by a Handful of Rules
It might seem counter-intuitive but creating a high-trust organisation with relatively little compliance produces the best results. In a high-trust environment, the culture becomes self-regulating and reinforcing of trust, weeding out perpetrators. It becomes a much more effective form of “control” than additional rules and policies. Your culture always eats through policy, law and regulations.
It’s a common estimate that 3% of a company workforce will try and cheat. There will always be employees that can’t be trusted in some situations. But rather than create rules to stop them, create rules for the 97% that want to do the right thing. The end result is that the cheaters will become highly visible and ejected out of the organisation like a virus.
According to Verne Harnish in the book, “Scaling Up,” creating a strong culture driven by a handful of rules makes leading people much easier, reduces the need for stacks of policies and procedures, gives everyone a foundation from which to make tough decisions, and generally brings simplicity and clarity to many of the ‘people’ systems within a firm.
It even improves innovation and employee satisfaction; allowing employees to follow guidelines but create their own personal interpretation.
Melanie Whelan the CEO of SoulCycle who has helped grow the business into 70 spin-class studios said to Fast Company recently “We hire for attitude and aptitude and less for experience. For instructors, we want someone who can hold the energy of a space, who can lead a group of people and who’s genuinely inspired by the music (that they play in classes). We teach employees everything to know about the SoulCycle Method, the anatomy of the workout. When the people who work at SoulCyle feel ownership over the experience they are creating, they feel pride and they bring a different level of energy. It’s freedom within a framework.”
Improving Internal Communication
A Towers Watson Communication ROI 2014 study found organisations that communicate effectively are 3.5 times more likely to significantly outperform their industry and peers through a deep understanding of culture and behaviour.
Human beings need certainty. If employees suspect information is being hidden from them, they are more likely to assume the worst-case scenario which reduces productivity.
By having open, regular and transparent internal communication, that is focused on purpose and values, employees don’t have to guess what leaders are thinking and are less likely to gossip, take sickies and even conduct fraud.
Building a Resilient Company Culture
Some industries struggle to tie their services into the greater good of humanity. Oil and gas, engineering and accounting firms often fail to grasp how they help the world. The reality is if you are selling a product or service people want to buy, then you are making an impact. It just means you need to see the value your organisation creates through a different perspective. That’s why we conduct organisational essence workshops, to help employees and leaders truly understand the impact they are making.
Tying your social purpose to the noble ideal of improving the environment, improving social connection or even making life easier is a compelling way to influence your employees and customers. Particularly, during times of uncertainty, when we need each other. Leaders who can use their social impact statement to anchor the meaning of work provide employees with the security they need to stop them getting all lost at sea.
But don’t be fooled into thinking that your purpose and values are enough. The other 99% of the effort goes into keeping the values and purpose alive with existing employees. It’s the repeating of living consistently with the firm’s values that is the most difficult part of the process. At the heart of it all, it’s working out how to get employees to start to align to the new behaviours, in order to produce the right results.
“We don’t think ourselves into a new way of acting, we act ourselves into a new way of thinking.” Verne Harnish
By ensuring leaders have the right competencies to communicate your purpose and values and lead with trust will ensure that you create a sustainable, high-performance culture. The result is a workplace environment that is enjoyable and employees who embrace change and accept the challenge.