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Leadership is about trust

Sir Stuart Rose, former Chairman of British retailer Marks & Spencer, and new Chair of internet grocer Ocado, says: ‘For a leader, building reputation and trust is the day job, which makes communication the day job too.’

Communication, along with other supposedly soft management skills, has too long been neglected. It is an issue that affects not only the fortunes of businesses but also the prosperity of nations.

Says Sir Stuart:

‘All of these changes call for more open leadership. There is a definite need for more open dialogue, for more social engagement, for more social responsibility and for more accountability… Leadership is not just about producing the right results. Leadership is about setting the right tone in the organization. It’s about ethos, it’s about what you stand for, it’s about trust.’

Every day, it seems, we read about further declines in levels of trust. As a result, business leaders increasingly pontificate about the need to restore trust, and they’re right to be worried. Trust is money. It delivers improved cash flow, higher valuations, faster times to market, competitive edge. Without it, everything takes longer, is more complex and often vastly more costly.

Paul Zak, Director of the Centre for Neuroeconomic Studies at Claremont Graduate University in California, says that personal trust is a strong predictor of a country’s wealth and prosperity.

‘High-trust countries tend to grow much more rapidly than low-trust countries. Trust really is a kind of economic lubricant, resulting in a government sector that works well, a social sector that works well and an economy that also works well.’

he says.

So trust matters, and is essential to progress. And it starts with employees. Restoring trust though is misleading as a concept. It is very hard to think about what to do with that concept. The thing we forget about trust, is that it only occurs in relationships. A better concept is that relationships are the engines of success, and we need to focus on the health of our key relationships. We can do something about that. Building a climate of trust in relationships requires emotional intelligence. Knowing how to create a positive relationship with employees, customers, suppliers, the local community, society and shareholders is becoming the fundamental element for long-term success.

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