In today’s pressure-cooker of a business world, the ability to handle constant change is the difference between success and failure. When situations are uncertain and risky for people and organisations, trust issues bubble to the surface, often unbeknownst to leaders.
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Recently, I chaired the two day Melbourne HRD HR Summit that included heads of people, culture and learning from a variety of well-known Australian and international brands. Companies such as Spotify, Australia Post, Telstra, Hesta, St Vincent de Paul Society and Mirvac.
Every organisation consists of a complex network of strategic relationships that coordinate work through making promises to one another. Even if we are talking about 10 or 10,000 employees, people need to rely on each other, in order to exchange information, ideas, services and goods.
Why is that successful and well-managed companies struggle with change and disruptive innovation? Too often, what got companies to where they are now, isn’t what will get them to the future. Established organisations continue to do the same things, in the same way, every day, that they don’t realise that these habits no longer translate into future success. Over time, their focus morphs into managing risk, rather than managing potential opportunities. The fall out is accidentally managing themselves into brand oblivion.
With the rate of change and uncertainty in the world, CEOs think about trust regularly – no matter the size of their organisation.
Trust might be a small word, but it’s a huge, complicated topic. Everyone thinks they know about trust – after all, we make the decision to trust someone almost daily. But it’s this past experience that stops us from really learning more about trust and doing a better job at it.
As organisations get bigger through organic growth or acquisitions, consolidation becomes an important value creation strategy to provide economies of scale and reduce duplication of effort. Operating in a borderless and integrated fashion across geographies and functions improves growth and adaptability. Back in 1994, when Lou Gerstner took over IBM one of his major tasks to help the failing company was to reduce billions of dollars in expenses through consolidating global functions and to train staff to collaborate across borders and functions. Achieving this goal helped turn IBM around in a spectacular fashion.
The pace of change within most organisations is accelerating. It’s now commonplace for companies to be restructuring, changing their business model, undertaking M&As, launching a new strategy or initiative, entering a new market or even relocating.
Jane leads a team of 30 software programmers for a large insurance company. After months of slavishly working on a new sales tool to promote to car dealerships, the head of operations informs Jane that the company’s strategy has changed. The new direction means months of rework. Jane’s team feel deflated. Rather than celebrate a successful launch, they’re stuck with renegotiating contracts, dealing with the frustration from other internal departments and various technical challenges. Scepticism abounds with the new strategy. Jane urgently needs to restore trust and counteract the growing cynicism of her team.