Why Building Trust is a Must for CEOs in 2019
Davos, Switzerland, home to the World Economic Forum Annual Meeting, was even colder than Boston was last week. In my native Australia, December 1 marks the beginning of summer, so this business of weather is all relative. The business of CEO trust, however, is an absolute — at least for any company striving to earn and maintain heightened growth.
Trust is a topic near and dear to my work as a CEO and as a person who is deeply committed to leadership. When given the opportunity to speak last week in Davos on the topics of diversity, equity, inclusion, and how CEOs can affect meaningful change by building trust with the people who matter most, I jumped at it.
Here’s why building CEO trust must be a priority and what my team at Reputation Institute, a data and insights company, and very recent Boston implant from Cambridge, knows to be true:
● 14 percent of a company’s reputation directly correlates to CEO leadership; what a CEO says, how they act, and what they do matters.
● CEO familiarity enhances stakeholder admiration, trust, and overall feelings of goodwill towards a given company.
● Being responsible, behaving ethically, and caring about social causes drives almost one-third of a CEO’s reputation.
● CEOs who prioritize doing good through corporate responsibility earn greater trust than those who do not.
● Approximately 35 percent of a CEO’s legacy is defined by financial performance, with the remaining 65 percent by non-financial criteria.
With data to keep us grounded in why building CEO trust must be a priority, let’s explore how CEOs can build trust:
Be honest. This is so simple, so powerful, and yet often quickly dismissed as trite. Let’s be clear: I’m not suggesting anyone breach company confidentiality, but do be accessible and transparent with your consumers, your employees, and your investors. If something isn’t quite right, call it out, lean into it with bravery, and work on it. Don’t pretend everything’s perfectly rosy. This is business and it’s imperfect. Be honest about what works and what doesn’t in order to effectively move onward.
Be uber communicative. Get credit for your honesty and earn trust by communicating authentically and frequently. Be yourself. Share what you’re working on, what you’re thinking about, what keeps you up at night, what you’re reading — and encourage your team to do the same. Communicate through all kinds of channels — speaking events, email, mobile apps, digital and print media. Make being honest one of your core company values, and put it into practice so that trust permeates throughout your organization until it reaches your consumers.
Walk the talk and take a stand. Our data shows that CEOs who take a stand on values that pertain to the company they represent win on trust. CEO success is no longer based purely on financial returns. I won’t ever say ROI isn’t critical, but to be relevant as a contemporary leader, CEOs must have a conscience and stand for something with a higher purpose.
This is a precarious time to be a CEO. A January 2018 report by the oldest outplacement firm in the US, Challenger, Gray and Christmas Inc., states that CEOs experienced the highest turnover in eight years, with 132 departures, many due to serious transgressions; some dismissed by their own boards.
This is no time for CEOs to be sitting back. It’s a time for CEOs to be present and take a stand. Audiences that have a greater level of familiarity with CEOs are more likely to buy from, invest in, and want to work for their respective companies. So, as a CEO, be vocal and be out there. Focus on building trust and the rest will follow.
This article was originally published in the Boston Business Journal.
