Michael is the Group General Manager of an industrial company with a division of 250 people.  Due to the company winning a new contract interstate, he has been travelling more frequently than normal over the last four months.  The contract is not going well, so he is spending most of his time putting out fires.

Back at head office, his employees are worried about the future of the company and their job security.  With Michael travelling so frequently, looking harried and not spending much time talking to others, the situation has quickly deteriorated.  While he is away, staff gossip and turn any information into proof the company is in trouble.   When he finally calls everyone to a meeting, he dismissively tells everyone that everything is under control.  No one believes him.

What can Michael to win back trust and confidence in the company?

Building Trust

According to a Watson Wyatt study, it takes an average of seven months for employees to build their trust in a leader, but less than half that time for them to lose it.  When you consider that the same study found that fewer than two out of five employees today have trust and confidence in their senior leaders, the issue is further compounded.

Trust is the cornerstone of business.  Research has found that high-trust companies outperform low-trust companies by a whopping 276 percent.

Every interaction, communication and action we take in business is an opportunity to build trust or betray.  As leaders, your employees are watching your every move to evaluate whether they can trust what you say.  When employees distrust, it’s most likely because of conclusions employees have drawn from watching a leader’s behaviour.  That’s why the standard leadership advice of “walking the talk” is so critical and matching your behaviour to your corporate values.  After all, this is the standard on which people will judge you, if they are also being held accountable in this area.

Humans crave certainty.  They want to know that they have job security.  In fact, studies have shown that increasing certainty is perceived as rewarding and actually increases activation in reward neural circuitry.  Employees who are scared of change will monitor their boss for potential signs of a disaster looming.  That’s why open and transparent communication is so important.

An astonishing 81% of employees would rather join a company that values “open communication” than one that offers perks such as top health plans, free food, and gym memberships.  No wonder that in the same survey undertaken by 15Five found that 85% of employees are unsatisfied with the quality of communication in their workplace.

What people really want are leaders who will speak to them honestly about the challenges they face together.  They want leaders to show courage and see hope, who will say “This is the challenge we have, I don’t know the answer, this is how we’re going to try to work it out, I believe we can do it, once it’s solved I can see a better future.  Follow me.”

So what did Michael do wrong?

He ignored his employee’s need for certainty, by telling them everything was alright, without providing any evidence or even an option for them to question him.  People tend to automatically distrust leaders and his communication style of hiding the truth and ‘spinning’ the situation only exacerbated the situation even further.

Restoring Trust

Here are two steps he needs to do to rebuild trust, which thankfully can quite quickly restore trust back to normal levels:

Sharing the why – In a low-trust environment, the majority of people will instantly distrust and misunderstand what you say.  It doesn’t matter how careful and precise you are with your information, as they will tend to misinterpret  and manipulate your motive.  This means they will most likely push back on what they perceive is your own agenda.  

To get through their fortress, you need to truthfully specify your intention.  Typically, most leaders tell people the what (Here’s our action plan to get the contract back on track), but are poor at explaining the why – which is their intention and the thinking behind the decision.

Explaining the why behind the what makes an enormous difference in how others interpret our motives, as well as how they interpret our subsequent behaviour.  Unfortunately, the chances are that if you don’t share the why, your employees will fill the gap by creating their own why, which often assumes negative intent.  

Sharing the why signals your behaviour and helps focus everyone on the outcome that needs to be achieved.  It also provides an emotional connection to the information, that is more likely to be accepted.   Over time it builds trust, as people will see that you aren’t self-serving and that you care for employees, customers and the company.  It also provides important context, transparency and reduces uncertainty.

This is what Michael could have said to improve the situation.

“In this meeting today, I’m aware that many of you are uncertain about how the ACME contract is going.  I’ve called this meeting to keep you fully  updated about what is going on, so that you feel comfortable (the WHY).  It’s been a tough four months.  We’ve had to reschedule our deliverables due to unforeseen power issues at the Plant which has been compounded by its isolation and the difficulty with getting skilled electricians into the area.  After working with ACME, we now have power and work is underway(the WHAT).  The good news is that they know we’re not a fault.  The issue was due to faulty wiring.  I haven’t been able to discuss the situation while an investigation was being undertaken.”

The only proviso is that you follow your why and what with the confluent behaviours at all times.  As Stephen M. R. Covey says, you can’t talk yourself out of problems you’ve behaved yourself into, you can only behave yourself out of problems that you have behaved yourself into.  

Belief in the team – Belief is critical to getting results in life.  It’s the foundational platform for success, as it effectively drives our behaviours and actions.

For Michael, there are three different types of belief he needs to communicate clearly to his team:

1. A belief that the company is making a positive impact
2. A belief that they will overcome their challenge and create a beneficial outcome for the client (and that they are in a very important learning phase of what doesn’t work)
3. A belief that employees will be able to achieve the outcome.

To incorporate belief, Michael could follow on with:

“While it’s been difficult to get the power on, installing our new equipment into their premises will also be challenging.  We’re not sure how we can do this quickly now that winter and heavy rains are upon us.  All that I know is that I believe the team can achieve this, thanks to the power of Tim, the head engineer and his people.  I believe the situation will turn around and ACME will realise how we are there to help them and the initial challenges were not a bad omen.  The good news is that once we’ve installed the new equipment ACME will get some extraordinary productivity gains, as we do have the best XYZ in the marketplace.  I am determined that I do will everything in my power to help them achieve that and I believe everyone working on the project is capable to achieve the right outcome as well.”

Of course, a leader can’t guarantee future performance.  The world changes so fast that you can never know if a new competitor will come along with a new service or that the Government will change regulations.  All you can guarantee is that you will put in the effort to turn the situation around.

By using the power of belief, Michael is able to let people know that he trusts them to perform, as well as himself and the company.  In doing so, he restores certainty and he can start to rebuild trust.

Avoiding Distrust

Without being aware of it, leaders can quickly create distrust if they’re not conscious of their behaviours.  If the organisation itself as been recently acquired, reduced its workforce or had a major fraud case within senior leadership, distrust will also be created.

The speed at which trust eroded in Michael’s department, all depended upon how much trust capital he had already accumulated with his employees over time.  Provided that he had a history of being transparent, following up his words with action and caring about others’ needs, rather than his own, Michael would have previously accrued a healthy trust account.  This would have buffered him from his recent indiscretions of being evasive and avoiding talking straight.

Remember, leaders have the choice in building trust or betraying people’s trust in every interaction.  Trust is built and even lost in small moments.

The good news for Michael is that he can quickly his trust account by demonstrating that he’s not hiding the truth by openly sharing his motive and declaring it to the world.  

In addition to briefing the larger workforce, Michael will also need to brief his direct reports on the why behind any decision.  This will make it easier for managers to customise the information to their team members (see How to Communicate a Changing Vision to your Team).  Thereby, ensuring open communication flows through the whole department.