News and Views
February 4, 2020
Posted in: WATSON Views
In the first part of our three-part series on trust, we explore how boards and management can collaborate to build trust when starting out with a new CEO. Read the second part of our series to learn some practical steps you can take to rebuild trust when it has been broken. The third part will take a closer look at the trust relationships within the board.
“The best way to find out if you can trust somebody is to trust them.” – Ernest Hemingway
When a new CEO starts, their organization often enters a phase of substantial change. The CEO is excited about leading the organization. They often bring new ideas and sometimes face high expectations by the board and other stakeholders. As everybody gets to know each other, there are important questions that may arise: How does the CEO involve the board in their plans for the organization? Who makes changes to the organization’s strategy and how? Does the CEO inform the board of major operational decisions? This is the time when the board and the CEO lay the foundations for their working relationship.
The line that demarcates the responsibilities of the board and management is notoriously difficult to define. In most organizations, it can meander, be fuzzy for moments, and take shades of grey. In the end, the alignment between board and management is crucial for successful governance. The foundation for this alignment is strong mutual trust.
Trust is sometimes described as the glue that keeps life together. Merriam Webster defines trust as the “assured reliance on the character, ability, strength, or truth of someone or something”. We all know intuitively or from experience how trust can make things better and how a lack of trust is counterproductive. Science confirms this, proving that trust is universal to humans and strong trust is linked to better performance at work, higher satisfaction, and even higher compensation. At WATSON we believe that dynamics and context are major drivers for boards when safeguarding the best interests of their organizations. This makes trust the basis of meaningful governance interaction.
There are some practical steps you can take to build trust as a director or a new CEO when starting a fresh working relationship:
- Trust goes both ways and it starts with giving. Be generous and bring goodwill to the new collaboration. If it was a difficult transition, make a conscious point to turn a page and start over.
- Trust is about setting clear expectations and doing what you say you will do. This can be challenging when there are sudden changes or factors outside your influence. If you are unable to meet a commitment, it is important to communicate transparently and immediately, as silence can lead to negative assumptions by others.
- Many board and management teams believe in a philosophy of no surprises. Communicate a lot and very clearly, using different modes of communication if possible. Framing a message in different ways makes communication more effective; you can foster a better understanding of your decisions and actions by sharing information about your challenges and context.
- Trust yourself and know your capability as the basis of building trust with others. Harness your strengths to build credibility and trust, e.g., by contributing in your area of expertise.
- Be authentic, sincere, and respectful. You do not need to agree with others to ensure they are heard. Acknowledging other voices showing respect for other perspectives can make a difference in building trust with those who do not share your viewpoint.
- Right wrongs, even if they are small, and particularly if they are your own. This promotes accountability and fairness. Seek conversations to resolve issues and apologize if need be. It can be tempting to gloss over small issues to demonstrate confidence. When it comes to trust, being human, vulnerable, and well aware of your own weaknesses can make you stronger.
- Reduce trust killers, such as time pressure or stress. It can be as simple as booking enough time and transparently stating the goal of a conversation when starting it, so your conversation partner does not need to guess or assume there is any hidden agenda.
- Exercise smart trust by approaching work interactions and information you receive with goodwill, while applying common sense and reasonable care to ensure you ask the right questions.
- Celebrate successes and acknowledge where small things went well. Business often focuses on problem solving, which can lead to spending the majority of time on issues and taking wins for granted. Breaking this pattern will allow you to build trust by showing genuine gratitude for the contribution of others.
- Be patient as earning trust can be incremental. While it may look as if things are just moving along, others may be watching closely. Being trustworthy in small matters can pay off big when it comes to important decisions down the road.
Building trust requires a genuine investment. Having a mutually trusting relationship between the board and management can accelerate not only what the organization delivers, such as decisions, actions, and results, but also how it delivers it. Consider the degree of trust in your current organization and take steps to make a difference in building and maintaining trust.
Read more about trust in parts two and three of our series for some practical tips on rebuilding trust and on fostering trust within the board.