How HR can help make leaders great again, as CIPD survey reveals how little faith we have in the C-suite
The last few years haven’t been a good time to be a British business leader, with a succession of corporate scandals leaving our faith in senior management fundamentally shaken. But a new survey from the CIPD reveals just how little we feel we can trust our leaders.
According to the Employee Outlook: Focus on trust in leaders report, more than one in three employees (34 per cent) report their level of trust in senior managers is “weak”. And the results cannot simply be put down to a general decline, as trust in colleagues (92 per cent) and line managers (80 per cent) remains robust.
On some levels, that’s relatively unsurprising. From catastrophic banking failures, epitomised by the spectacular downfall of RBS under the stewardship of Fred Goodwin, through to Lord Justice Leveson’s criticism of the close relationships between media bosses and politicians and the fallout from the Jimmy Savile scandal at the BBC, the bad news has just kept on coming for bosses. But could HR professionals play a vital role in rebuilding trust in executives by working alongside their leaders to reconnect them with the organisation?
“It’s not that people don’t have the propensity to trust, they just choose not to,” says Veronica Hope Hailey, dean of the University of Bath’s School of Management, who is working with the CIPD on research into developing and selecting trustworthy leaders, with a report due out in the spring.
Recent corporate malfeasance has exacerbated the problem, says Hope Hailey, but she points out that the crisis of trust in senior leaders predates the global economic slowdown. In fact the European Values Study shows that British adults’ confidence in major companies fell from 50 per cent in 1981 to 40 per cent in 1999 and just 38 per cent in 2008.
Senior managers, says Hope Hailey, are more remote than ever, with organisations increasingly relying on monitoring and evaluation and becoming more globalised. “There are many things technology can do for us but there are some things it can’t replace. People decide who they are going to trust by watching people’s behaviour. That is why politicians go round the country if they want to be elected.”
That’s something Kirit Patel, chief executive of Day Lewis Pharmacy, has learned the hard way. The family business grew rapidly after it was founded in the 1970s but almost hit the buffers during the 1980s recession, when interest rates soared and the business started running out of cash.
At the time, Patel readily admits he hadn’t even seen some of the shops. “I was always in my office,” he says. “It became clear to me I had no control over the business. I did not have my finger on the pulse and morale was quite low. I realised we should have stuck to the [family] culture we had at the beginning.”
Inspired by an MBA, Patel set about changing both himself and the business, replacing the autocratic structure with a bottom-up listening culture, becoming much more visible and available to employees, sharing information and renaming head office as “the support office” to reflect its subordinate role to the people in the business who really matter – the 1,850 employees on the front line. His efforts have more than paid off. Day Lewis was not immune to the effects of the global credit crunch but over the last few years it has seen annual growth of around 10 per cent.
“The most important people in my business manage my shops,” says Patel. “People pay you back when they feel they are being invested in.” Patel’s experience suggests that – despite the statistics – all is not lost. And the CIPD’s research backs this up, with 38 per cent of employees reporting that trust is on the agenda in their organisations and respondents suggesting creating a climate of trust is not “rocket science”, citing approachable, competent and consistent leaders who act with honesty and integrity and lead by example.
Worryingly, leaders themselves appear out of touch with feelings on the front line, with senior managers much more likely to report strong trust between employees and senior management (40 per cent) than non-managerial staff (27 per cent). That is where HR can step in, says Claire McCartney, research adviser at the CIPD and author of the report. “HR has a responsibility to have an awareness of trust levels within an organisation, whether that’s through a survey or picking up on some of the signals that things are not going right,” she says. “It’s an opportunity for HR to take on a trust custodian role.”
Policies and processes are critical to developing or repairing trust, she says: “If people are being promoted who are not trustworthy or are being rewarded for failure, that will create a culture of distrust”. HR also needs to work with senior leaders on communication: “It’s about being honest and open, especially when things go wrong, admitting mistakes and facilitating more meaningful communication.”
“HR needs the strength and conviction to challenge senior leaders if they can see there are problems. So many of the answers lie with HR. It’s performance management, reward management, career development, leadership development. We need to get integrity back into management competencies,” adds Hope Hailey.
CIPD Employee Outlook: focus on trust in leaders report bit.ly/HRtrust
Graham Abbey from the University of Bath will share insights from the trustworthy leaders research at the CIPD annual conference and exhibition on 6-7 November cipd.co.uk/ace