DOWNLOADS Open interactive Popup Article (4 Pages)This edition of Author Talks features Raju Narisetti, McKinsey Global Publishing's trust researcher, and Harvard Business School professor Sandra J. Sucher discussing her new book, The Power of Trust, How Companies Build, Lose, and Regain It (PublicAffairs July 2021). Coauthor Shalene Gupta and Sucher examine the economic effects of trust and the science behind them, drawing on more than two decades of research. What is the result? The result? Below is an edited transcript of their conversation.Which problem is this book trying to solve?VideoTrust crisis facing business. According to the 2021 Edelman Trust Barometer, business was actually the highest-rated institution and received 61 percent of trust. For example, government was at 53%. However, it is not a very high score for businesspeople if they ask themselves, "How do we feel about 61 per cent of respondents trusting us?" Trust is when we are open to vulnerability in a relationship with someone or an organization that has power over us.A great study was done on NCAA basketball players. It found that the team with the most trust in its coaches had the highest wins and the team with the least trust had the lowest scores. This all leads to a business question: How can a company build trust? Shalene Gupta, and I co-authored this book to help people understand trust and how to recover it if it is lost.Individuals with disabilities should have equal access to our site. We are happy to provide information on this content. Email us at McKinsey_Website_Accessibility@mckinsey.com Shalene Gopta, coauthorTrust the COVID-19-era workplaceWhat has the pandemic done to trust?Two dimensions have become more important to me: first, companies' safety responsibilities. This topic is new, so unless you work in the extractive industry or have large machines that move around and people inside, it's not something companies have had to worry before. What you will see now on every website is: Here's how we keep our employees safe. Here's how we tried to keep our customers safe.This is a new responsibility that is ongoing and is the core of trust. People are now trusting companies with their lives, regardless of whether they are employees or customers. Another thing is that people are starting to think about how they relate to their work. In reality, we are at a place where organizations need to be reconnected.I'd like to ask three questions. First, I want to know how COVID was for my employees. Second, I want to learn about their experiences with COVID. I would like to know how they felt we had done in managing the COVID challenges on behalf of others. I would also like to know in which areas they believe we could do better.The internal versus the external trust challengeTrust is built from within. This is one of the fundamental principles we discovered about trust. If employees are not trusted, it is almost impossible for a company to be trusted by customers. You must follow the same steps as any other business process to regain trust. These steps are contrary to the usual business practice of companies focusing on legal matters first and not addressing trust issues. The cost and liability of a scandal is not prohibitive. However, regaining trust can be a very different goal and requires a different approach.If employees are not trustworthy, it is almost impossible for a company to be trusted by customers.First, you must take responsibility for any harm that you have caused and apologize. I am sorry to all the lawyers who are screaming at me, "Dont do that!" Trust has a moral domain. One of the most important components is the ability of people to accept responsibility for the consequences they have caused. This is one of the key elements that we trust individuals and companies. First, you need to say, "We did this thing, it was wrong and we are so sorry for the mistakes that we made."This is the second step, and it's hard. It's to hold those responsible accountable for what they did wrong. This is where companies often pull back and say, "Well, it was those down at the bottom who did this." But fairness demands that people understand that companies are hierarchies and that they should, morally, hold the person at or near the top accountable for the actions of others.There is some interesting research showing that it is possible to punish CEOs without affecting their compensation. What people really care about is that the person responsiblefor what happens be held accountable. The third step is a long-term strategy to try and fix the problem that caused it.These are the three steps to take: apologise, hold accountable, and address the foundation problems that caused the breach.Which stories are most effective in building trust?I was surprised at the impact sustainability reporting could have on a company's story. Some companies do a great job with their sustainability reporting. They can say, "Here's the strategy. Here are the important things. Here are the stakeholders we were trying to please. Here are the measurable progress that was made. And here are some things we need to do."Another is to remember that your first audience is within the company. Trust is built from the inside. The people within the company need to be able to see what you have done and how you plan to continue to improve.Even if this doesn't get to the outside, having a credible story and data about the issues you found, what you did about them, and the positive outcomes that resulted from it, will help people to juice the company back to a state that can be trusted by the outside.Arguments for taking a stand or notWhat to do about weighing in?There are several dimensions to trust. One is confidence. A company that is not competent at its job will never be trusted by anyone. People care deeply about three aspects of the moral domain. They care about how a company is acting in the best interests of its customers. They care about the fairness of a company's means of achieving its goals. They care deeply about the company's impact, the real impact people see in the world regardless of the company's claims.Let's look at how companies decide whether to participate in something. We know that there will always be backlashfrom the dissatisfied group, especially since these are moral issues that are still being discussed. You do your best to please people who have different opinions. For some issues like Black Lives Matter and voting rights, it is a moral judgement on the part the company. You know you will tick off some people and may have to suffer legislative setbacks or new taxes because they are unhappy with you. Trust is an essential part of our company's identity. These moments are what help companies succeed.However, this does not mean companies have to be involved in every issue. There are too many issues. Number two, not all of them touch their hearts or require them to make a stand. The first thing I would say is: Is there any place I feel I should be taking a stand? This is one area where I believe the boards can be useful, provided they are open-minded and able to weigh what is actually happening. These are moral calls and there will be those who disagree.Global organizations and regional issuesGlobal companies are always asking the question of what is the same and what is different. I believe that this applies to this dimension of trust. It is essential to inform everyone in the organization about a regional issue if it hasn't crossed over to other countries.First, you resolve [the problem] at the country-level. Then you work within the company to explain what you have done so that they don't get surprised if you ask. You also have a reason to believe that this issue is only relevant in one country. This is why this issue is not an issue globally.
