• Jeff Doolittle

3 Ideas for Restoring Organizational Trust

Trust is an essential attribute for establishing value-added relationships with customers, employees, regulators, and investors. In addition to developing trust as a leader, evidence-based research is clear that organizational trust directly impacts the bottom line in many different ways. Corporate trust builds resilience against market chaos, enhances attitudes, intentions, and relationships with key stakeholders. Several research studies link organizational trust with discretionary effort, also known as organizational citizenship behavior, the "holy grail" of performance management. Additionally, organizational trust influences an organization's ability to attract and retain top talent.

Today's Unfortunate Distrust Reality

A recent 2019 largescale study of over 34,000 participants across 28 world markets found no institution is viewed as competent and ethical. There is an increasing sense of inequity driving down trustworthiness. This same study found that businesses are considered as the most capable but lack ethical behavior. Also, non-governmental agencies are perceived as behaving the most ethically but lack competence. What is also concerning is that many companies this year made significant changes to how they operate, undermining reliability and stability perceptions. According to the U.S. Bureau of Labor Statistics, in April 2020, unemployment rates in 43 states reached their highest levels since unemployment data began being collected in 1976. Additionally, increased opportunistic mergers and acquisitions have led to further changes within organizations.

What makes an organization trustworthy?

A widely accepted evidence-based understanding of organizational trust is the perception of the organization's ability, purpose, and integrity.

  • Ability – the skills, competencies, and characteristics that enable an organization to influence within a specific area

  • Purpose – organizations moral obligations and responsibility to demonstrate concern for others interests

  • Integrity – the follow through on organizational promises in a manner that is acceptable by others

Interestingly, integrity is the most essential factor of all three organizational trust factors. Edelman's recent study found that integrity and purpose account for 76% of a business's trustworthiness and competence only accounts for 24%. Having competent leaders, being financially stable, providing quality products, and being a recognizable brand is not as important to organizational trust as acting with integrity and purpose.

Ideas for Restoring Organizational Trust

Today's marketplace realities make building and enhancing organizational trust an essential strategy for any business looking to thrive in the future. Companies wanting to restore organizational trust should