Culture of Trust vs Emotional Recession

Trust is like the air we breathe – when it's present, nobody really notices; when it's absent, everybody notices.

Warren Buffett

The Place Where Expectations Meet Trust and Engagement – A Mythical Land?

The expectations of employees, leaders, and businesses have changed in the wake of the pandemic. Employees have an increased expectation they will be treated as individuals and in a manner that demonstrates their value as human capital, not as cogs in a machine. Many employees are finding it difficult to give up the freedom, flexibility, and efficiency enjoyed when working remotely. At the same time, we are seeing a host of leaders and businesses expressing their belief employees must be “in the office” to ensure they will help achieve the expected levels of cultural cohesion, collaboration, engagement, and productivity.

Somewhere between the two lies the land of trust and engagement! This can seem like a mythical place to those who do not have trust—and this goes in either direction. In the absence of trust, it can be hard to see the engagement necessary to propel individuals, teams and businesses through the turbulent times we are currently experiencing, both economic and social. However, for those who have found it, they will be able to not only better weather any economic recession, but also escape an emotional recession that can come with costs on a professional and a personal level.

According to Shae Green, SVP of HR Grace Hill

In a trusted environment, individuals are empowered to authentically express themselves, take decisive action, and make meaningful contributions. This not only cultivates personal growth, but also fuels collective success, igniting a ripple effect of empowerment, engagement, and achievement.

According to DDI’s Global Leadership Forecast 2023, there is a crisis of trust in the workplace. Only 46% of 14,000 leaders trust their manager to do what’s right, and only 32% trust the senior leaders in their organization to do what’s right.

The Trust Void… What Does it Really Matter if our Employees or Leaders Lack Trust?

As we speak with HR leaders daily, their attention has been drawn to a lack of trust embodied by the disruptions of “quiet quitting” and the “return to office” stand-off between employees and employers. While it is easy to get caught up in the catch phrases, truly forward-thinking HR and business leaders are recognizing that a “lack of trust” is at the heart of almost every issue eating away at engagement, retention, and productivity. It goes without saying that an organization suffering retention issues is well on its way to also suffering productivity issues as less engaged employees mean less productivity and success.

What Does a Lack of Trust and Engagement Really Cost?

Our observations regarding trust/engagement/productivity were supported by Forbes and MIT Sloan Management Review articles in 2023.

Forbes and MIT shared that less than 25% of employees trust their organization’s leadership—while leaders overestimate their workforce’s trust by more than 40%. This is of note because companies with high employee trust ratings are:

• 76% more engagement
• 106% more energy at work
• 260% more motivated at work
• 50% higher productivity
• 41% lower absenteeism
• 13% fewer sick days
• 74% less stress
• 40% less burnout than people at low-trust companies
• 50% less likely to look for a new job

According to Forbes 89% of board leaders consider trust critical to attracting and retaining top talent. In addition Gallup adds, Low employee engagement costs the global economy $8.8 trillion -- or 9% of global GDP.

The conversations with our network spanning more than 160,000 HR leaders globally confirm that many see a lack of trust equaling a lack of employee engagement and productivity, which in turn impacts business success. What often comes next is the question, “How can leaders foster a culture of trust and best position their organization to meet and exceed the demands of the business?”

The DNA of Trust… What Do I Need to Know About Trust?

To begin with, leaders can consider that there are two types of trust—within every workplace there will be opportunities for leaders to build and foster “Practical” and “Emotional” trust. Practical trust is the most easily recognizable, and it could be argued, the most fundamental. It is embodied in the demonstration of competence and dependability by employees. Quite simply, you do what you say you will do, when you say you will do it, and ensure all obligations are met! However, Emotional trust is much more complex. Emotional trust takes place when employees believe leadership is on their side. They believe they will be treated respectfully, their efforts will be applauded, and their honest thoughts, feelings, and ideas will be received with kindness and appreciation.

According to Dedra Ward, Global HR Leader Commercial Solutions, Conduent,

The majority of the workforce wants to feel that they are a part of something greater than themselves, contributing to the greater good. When the trust is missing in the day-to-day environment, that contribution is not able to come to fruition.



Without the full achievement cycle that comes from the teamwork, collaboration, and personal accomplishment, only restlessness and insecurity can remain, which leads to unfulfilled corporate goals, selective involvement, and detached employees

The leaders we have spoken to often point out the level of engagement and belief across their workforce has a direct impact on the ability of that workforce to innovate and achieve. An observation highlighted by Stephen Covey, the author of “The Speed of Trust” was that “low trust causes friction, which slows down organizational processes and eventually leads to low-quality outputs.”

This assumption is further supported by Bryan Robinson, Ph.D. in an article by Forbes where he shared that trusted companies outperform their peers by up to 400%, through directly correlating trust with the company bottom line. Thus, anecdotal and empirical evidence indicates the creation of a high-trust culture will positively influence and drive business outcomes.

If you want to achieve success, that concept is not easily put into practice. Think of it this way… it is “simple” to run a marathon, you just keep running. However, it is not “easy”! ChapmanCG advises leaders to keep in mind that creating high-trust culture takes time, patience, and effort. The commitment to doing, and maintaining the things necessary to build trust, is an ongoing and evolving endeavor

The Trust Blueprint…. What Can I Do to Achieve Trust?

Tim Knoerzer, CHRO Springs Window Fashions states:

Great leaders view trust as the foundation from which to build the high performance and commitment that drives an organization forward. Trust comes from a genuine investment and concern for people. Treat them with kindness, communicate openly with them, own mistakes when they happen, and you will create an engaged environment where you retain your top talent and can prosper in the face of uncertainty.

To help span the gap between simple and easy, we share five “simple” ideas that can move leaders towards a trusting environment.

1. Be open, authentic, and human. HR Leaders have long known that it is better to err on the side of being more open in sharing their own feelings, learnings, and challenges. By doing so they can engage their followers at a human level which in turn can inspire greater levels of trust. According to Deloitte, “environments of managerial authenticity find employees are 1.5 times more likely to positively review their employer on a public website!” So, authenticity leads to better internal and external branding!
2. Be kind. While much has been said about the need for all leaders to take on a kinder, more gentle approach to get the most out of the workforce of today, it is not just a talking point. Instead, our conversations with HR leaders revealed that treating employees with kindness is worth its weight in gold. Forbes refers to kindness as, “the purple dye of trust; all it takes is one drop of kindness and the whole complexion of a situation changes!” Indeed, kindness is the secret ingredient that supercharges trust within your organization.
3. Communicate with passion and vulnerability! People love, and are drawn to, those around them who are passionate. Our conversations often revolve around how leaders with an inspiring vision, communicate passionately, operate comfortably within vulnerability, and bounce back quickly from disappointment. Passion has the power to generate a positive "can do" confidence that can inspire others to trust them. DDI research indicated that, “when leaders regularly display vulnerability, their employees are 5x more likely to trust them; and when leaders acknowledge their failures or shortcomings, they were 7x more likely to maintain trust over those who did not”!
4. Operate with transparency! Not a day goes by when we do not hear the word “transparency” in a leadership conversation.Leaders who operate within a culture of pay transparency, career transparency, and decision-making transparency find that by sharing their truth through words, behaviors, and actions are more likely to have the followership necessary for success in times of unrest. Gallup says, “when people lose trust in leadership, their decisions are informed by suspicion and their actions by self-interest. Businesses become more vulnerable as fewer employees are motivated to act for the greater good.” So, if you operate with transparency, then you are more likely to operate as a single unit focused on a common goal.
5. Invest in people! The last part of the blueprint is possibly the most obvious: our conversations reveal leaders who spend time really getting to know their employees on a personal level, and use a “management by wandering around” philosophy, are better positioned to help their staff develop through coaching rather than telling. Leaders who spend time investing in their employee base find that they can drive improved performance while still improving levels of trust in the team. Gallup shared that, “22% of employees believe personal performance management is being managed in a way that motivates them to do outstanding work!”

The Trust Training Vacuum… The Missing Piece of the Puzzle

Piggybacking off the last point, it is vital for organizations to invest in their leaders to ensure they can create an environment of trust. Given the prominence of a hybrid working model, we are finding it difficult for leaders to be able to successfully complete the suggestions above. After all, how do you “wander around” getting to know your employees when they are dispersed across the globe, and you only congregate in a video chat? That means it is up to organizations to prepare their leaders successfully to navigate the “trust blueprint” and not leave them on their own to figure it out.

Gallup's research shows that, “when followers strongly agree that they trust their leaders, one in two are engaged; when followers don't find leaders trustworthy, only one in 12 are engaged”—so make sure leaders are prepared!

Companies must invest in and create leadership learning opportunities that can foster four main areas:

• Build relationships that establish connections that transmit ideas and accomplish work.
• Drive development that focuses on followers' needs, expectations, and aspirations
• Impart inspiration in others by encouraging their efforts and celebrating success.
• Evolve communication that result in clear, open, and transparent dialog that empowers trust.

In 2024, the companies which succeed in bridging the trust gap will be well-positioned to support the achievement of business goals and profitability. To achieve this status, they must not only understand where trust may break down within the organization, but what components make up the DNA of trust and how they can follow the blueprint for success in achieving a culture of trust. Finally, if they are able to create an environment where leaders can learn how to navigate the daily pitfalls for trust, then they will be able to observe and feel the return on investment regarding talent attraction, retention, and engagement. When leaders create this culture of trust, it helps ward off the emotional recession that will plague so many in the years to come and drive a positive outcome for the company bottom-line.