How companies build trust in crises
Promoting integrity and focusing on strengths helps to manage the transformation
Crises promote psychological stress and existential fears among employees. Is my job secure? Can I feed my family? What if costs continue to rise? How can I manage it all? To meet their employees’ increased need for security while still promoting personal responsibility, companies should build a resilient culture of trust.
Corona, wars, climate and energy crises – the media never tire of showing us the vulnerability of the world every day with catastrophic scenarios. What happens? Our confidence is shaken. The associated developments often lead to short-term solutions in companies, such as savings and increased flexibility, but also to helplessness and a mood of doom. Paradoxically, however, we are in a far-reaching transformation phase of the digitization of society, which requires entrepreneurial vision, creative drive and inventiveness.
“Those who have prepared themselves as best they can for the uncertainty of external influences are intimately familiar with the feasible, but at least not unfamiliar with the impossible.”
(Epikur: Kyriai Doxai)
Fear and panic do not help, but are bad advisors. Instead of taking care of tasks in a focused, determined, and deliberate manner, we fall into a reactive mode that makes us driven by events. In the worst case, we see ourselves as victims who have to assert themselves against their opponents through elbow tactics. Resentment and competitiveness are pre-programmed. These not only hinder our self-perception and the perception of others, but also allow synergetic effects through cooperation and collaboration to pass unused.
This does not have to be the case. We cannot change the effects of macroeconomic conditions on our society or the political decisions of actors, but we can change the way we deal with them. A positive and calm attitude has been shown not only to lift mental spirits, but also to keep a cool head.
Promises of trust generate stability and social capital
Complex changes take time. Even if social media enable a new participation in social discourse in real time, one should not be under the illusion that social consensus or progress can be bought by operational overzealousness of the executive. A stable foundation of structures that guarantee basic security, dignity and the well-being of the individual is essential, even in times of crisis. Promises of trust can contribute to resilience on a psychological level: They create a stabilizing effect that can be self-reinforcing.
Although the trust created does not guarantee that the path taken is the right one, it does increase commitment. However, if promises of trust are repeatedly and carelessly broken, they have the opposite effect. We are currently experiencing this in both business and politics, where corruption scandals, manipulation and frequent breaking of voter promises result in a loss of trust in institutions and individuals after a very short time. What can companies do?
Trust as a success factor can only be had at the price of integrity. The model of homo economicus has had its day. The narrative that people only strive for profit and self-advantage has been proven wrong. The ideal of self-regulating markets, to which the entire modern era more or less adhered, has flopped. In fact, contrary to the claims of early theorists of national economics, even early human communities functioned less capitalistically than communistically. The crucial property of capital is fulfilled first and foremost as social capital, as the economic historian and social scientist Karl Polanyi noted 80 years ago.
“The outstanding discovery of recent historical and anthropological research is that man’s economy is usually embedded in his social relations. He does not act to secure his individual interest in the possession of material goods, but to secure his social position, his social claims, his social wealth. He values material goods only insofar as they serve this purpose. Neither the process of production nor the process of distribution is tied to specific economic interests associated with the possession of goods; rather, each step in the process is directed toward a set of social interests that ultimately ensure that the necessary step is taken.”
(Polanyi, Karl: The Great Transformation)
What does that mean? The quality of a community determines whether something has value. According to Polanyi, the decisive characteristics for maintaining a production order are reciprocity and redistribution. If we apply this to companies, we can say that effective organizational models are those in which communication symmetries prevail, there are no structural bottle necks nor dead ends in production, and fair conditions such as equal treatment in work tasks and pay as well as support for the individual create added value for employees. If the corporate community is united by original creativity, a transparent error culture and priority responsibility for quality, new potential for value creation opens up.
Cooperative leadership: Assuming responsibility on the principle of voluntariness
Instead of control and guidance of employees by expert management, the focus in the information age is on the diversity of the individual and the self-control of the “complex man. On the stock exchanges and in society, companies are no longer measured only by their profitability, but primarily by their growth and innovative potential. This has also changed corporate culture and the organizational models that can be derived from the human image. Instead of transactional leadership, trust-based leadership behavior is required to match decentralized and agile organizational forms.
In the Corona pandemic, however, many companies prioritized more supervision because employees seemed to slip away from them due to the unfamiliar absence in the home office – a mistake, because this attitude generates downright opportunistic behavior in the workforce. The organic integrity of the corporate community can even be destroyed in this way. Why do companies find it difficult to place this trust in their employees? A high level of trust requires a willing acceptance of loss of control and is ultimately a business risk.
What is overlooked, however, is the fact that in return for the trust shown, a motivational boost is generated for the employee, which often manifests itself in the voluntary assumption of responsibility. Trust should by no means be confused with gullibility. It is not a naive attitude that negligently throws rationality overboard, but an active decision that fully bears the risk of vulnerability. In the positive prospect of shared success, this act of trust-giving reciprocally generates a symmetrical reaction in the other person. This kind of trust advance counteracts alienation and creates behavioral expectations that insist on voluntarism.
According to the IW report “Trust in Companies” (Source), trust can reduce transaction costs by eliminating the costs of monitoring or formalized safeguards. Managers can determine with their own behavior how the employee perceives the integrity, goodwill and competence of the manager. Creating a cooperative work climate within the company is described as one of the “key elements of modern management” that has a mobilizing effect. The accompanying stabilization of social relations within the company leads “to increased knowledge exchange and more value creation.” When the working atmosphere and job satisfaction increase, it has been proven that employee commitment and loyalty also rise. There is therefore a direct link between trust and identification with the company.
Four tips for more confidence in your own success
In a time of skills shortages and high job turnover, it is all the more important for companies to retain employees. This can only be achieved through confidence-building measures and the promotion of freedom and co-determination in the workplace. Even if many companies still believe that marketing measures can boost their image, successes in this regard are short-lived, if they last at all. Firstly, word gets around in the industry and beyond about failures or poor management, and secondly, in the long term, reputation with customers and survival in the market are decisive.
So instead of spending a lot of money on PR campaigns or high-profile measures, companies would do better to ensure that their own organic influencers are satisfied – the company’s stakeholders. This can be achieved by analyzing the company’s own strengths and trusting in its employees’ willingness to change.
1. Be a role model
Act with integrity and clarity. Communicate with appreciation and offer orientation. Only those who demonstrate integrity themselves can demand it from their employees. If moral principles and uniform guidelines are followed that put the well-being of all in the foreground, a sustainable and long-term healthy company can be created.
2. Live values
Promote a culture of trust and autonomy. Consistently communicate and regularly re-evaluate corporate strategy, goals and objectives. Managers should support an open culture of error and take transparency and equal treatment seriously. Entrepreneurial resilience is only created through self-efficacy, by building confidence in the future and in one’s own strengths.
3. Establish integrity
Establish participatory corporate culture. Involve all stakeholders and listen to the grapevine. It is not enough to invest in employees’ personal development; management must also share its successes with employees. Those who also communicate crises in a timely and transparent manner build trust through education and honesty.
4. Transform strengths
Develop mission statement together with employees. Introduce process innovation. Innovative work behavior at all levels is necessary for employees to recognize innovation potential. It is optimal if they can communicate these strategically and are committed to implementing them.