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Trust is in short supply – if we want our economy to grow, we need it | Veronica Hope-Hailey

Trust in the workplace is key in a strong society, but it’s slipping away thanks to the financial crisis. How do we get it back?

In times of uncertainty, trust becomes more important. The Edelman Trust Barometer has reported some depressing results: the global financial crisis and the demise of high-profile banks, and the government rescue plans that followed, have profoundly destabilised public confidence, resulting in a breakdown in trust in government and business.

The UK public’s cynicism has been stoked by the MPs’ expenses scandal, high-profile organisational failures (such as the BP disaster in the US), the unveiling of News International’s phone-hacking practices, the 2011 summer riots and the ongoing eurozone crisis. Cuts to national and local public services have been reported alongside the reinstatement of high bankers’ bonuses in the very institutions taxpayers so recently bailed out – a decision perceived as incomprehensible to those experiencing a reduced standard of living.

Does it really matter for society whether trust is up or down like the weather? Surely some of the decisions made in the banks that led to the crisis were a result of people trusting leaders too much? Is trusting your work colleagues essential, or simply a “nice to have”?

The answer is yes, trust does matter; we rely on certain levels of trust to function and prosper. Ask any UN peacekeeper and they will tell you that a society whose citizens lose the capacity to trust one another will become dysfunctional. Trust is critical for building the foundations of social order; it is the basis for civil society.

In the workplace, one distinct advantage of trust is its link to innovation. Some economic commentators argue that for UK plc to return to growth and restore job opportunities, innovative approaches will be key. No one is going to take a risk unless they know that they will be backed by their immediate and senior managers. For small- to medium-sized enterprises, innovation will fuel growth, and that has to be good for our economy. In the public sector, managers will have to rethink the way they deliver services – we need people to spend time reinventing forms of delivery, not simply hacking away at the size or volume of existing practices.

Another distinct benefit is that “high trust” workplaces find it much easier to embrace organisational change – they can change faster and will achieve better levels of employee engagement at all levels. At times of high uncertainty, having a boss or CEO that they really trust can encourage employees to take the plunge and try something different. Furthermore, we know that trust encourages successful co-operation and teamwork, promotes and facilitates partnerships and joint ventures and decreases operating and transaction costs (managers can spend less time monitoring staff).

A focus on trust does mean concern for a company’s moral and ethical principles. Perceptions of trustworthiness include the organisation’s competence and predictability, but also relate to two ethical dimensions. One is the integrity of the organisation – the degree to which it and its managers adhere to general moral standards. Another is benevolence, which emphasises the positive intent towards those who are trusting in them. Research both conceptually and empirically illustrates that employees prefer to trust organisations that uphold moral and ethical standards.

In autumn 2011, as part of an in-depth case study research, my team and I surveyed 2,000 people at 14 private- and public-sector organisations. While trust remains a serious problem for many workplaces, there is good news. Some of the organisations researched not only managed to maintain trust during adverse times, but in some cases actually enhanced trust relations despite downsizing and restructuring – and this was observed within the public as well as the private sector.

In many cases, it came down to senior managers taking some bold but moral decisions about how to manage change while elevating the importance of maintaining the trust of their workplace. For some organisations this paid dividends at a business level, in their community and in their workplace.

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