Contributor, Korn Ferry Institute
Purpose Without Corporate Trust Is Irrelevant
Daniel Goleman is a senior consultant at Goleman Consulting Group, author of the best seller Emotional Intelligence, and host of the podcast First Person Plural: Emotional Intelligence and Beyond. He is a regular contributor to Korn Ferry.
In 2006, Robert Hurley, a Fordham University professor and one of the top thought leaders on trust, shared research on society’s declining trust in leadership and in business. In a survey of 450 executives from 30 companies around the world, Hurley found that close to half of all managers didn’t trust their leaders. This came after decades of similar research: In 2002 the University of Chicago found that more than four out of five Americans had “only some” or “hardly any” confidence in the heads of major corporations.
This crisis of trust is increasingly relevant to how a company talks about purpose. Over the past decade, purpose-washing—when companies use purpose as just a marketing tactic—has fueled skepticism.
When the pressure is on, can an employee trust that their workplace will stick to their espoused values, and do what they said they would?
At The Great Place to Work Institute, the research consultancy behind Fortune’s “100 Best Companies to Work For” list, trust is two-thirds of the criteria for being nominated as a top-tier workplace. Their research shows that “trust between managers and employees is the primary defining characteristic of the very best workplaces.” Meanwhile, these companies outperform “the average annualized returns of the S&P 500 by a factor of three.”
Hurley’s trust model, based on work with hundreds of top executives, identifies ten things that are present when someone is deciding to trust someone else. The first three—risk tolerance, resilience, and power—are about the decision-maker themselves. These are qualities or competencies that differ from person to person.
The other seven are situational– things people look for when determining whether or not to put their faith in a leader or organization. Of these situational factors, three are particularly relevant to the purpose-driven organization:
If a company proclaims its interest in mitigating climate change but puts little to none of its resources towards environmental protection, then climate change is not actually the company’s purpose.
In her work, Thinking In Systems, Donella Meadows writes, “If a frog turns right and catches a fly, and then turns left and catches a fly, and then turns around backward and catches a fly, the purpose of the frog has to do not with turning left or right or backward but with catching flies.
“Purposes are deduced from behavior,” Meadows reminds us, “not from rhetoric or stated goals.”
To be real about purpose—reaping the benefits that come with purpose—companies will need to focus on building trust. Are they aligning interests, showing empathy and concern, and acting with integrity? Are they making choices in deference to more than the bottom line?
Meanwhile, Korn Ferry’s own research on organizational transformation found that a company’s financial performance is strongly linked to how much people trust the senior leaders. According to its research, among highly transformational companies, 22% of the difference in financial performance, over a five-year period, correlated with trust in leadership.
When it comes to doing things differently (i.e., centering purpose), trust IS the bottom line—the key to making meaning a sustainable place to focus.
Co-written by Elizabeth Solomon