Wednesday, April 22, 2009

Results from Stakeholder Trust Poll of LinkedIn Users

More than 100 LinkedIn users responded to my poll that asked "What should business leaders do to improve stakeholder trust?" by selecting one of five possible answers: Nothing; Manage risks better; Improve conditions for trust; Both of the above; or Other things.


Their answers surprised me:
  • I did not expect to receive more than 100 responses in two days.
  • I thought the most popular answer would either "Improve conditions for trust" or "Both of the above" and that it might be close.
  • I never imagined that "Other things" could be more popular than "Improve conditions for trust"
  • I was blown away by, and am very grateful for, the quality of the comments that people provided to explain their answers.

Here are the results:
  • Nobody felt leaders have "Nothing" to do to improve stakeholder trust.
  • The most popular answer was "Both of the above", referring to both "Manage risks better" and "Improve conditions for trust". However fewer than half felt that some combination of these management disciplines was the solution.
  • A quarter of respondents felt that leaders should do "Other things" to improve stakeholder trust.
  • Only about a fifth of respondents felt the best solution would be for leaders to "Improve conditions for trust".
  • Fewer than 10% of respondents felt leaders should "Manage risks better".

So what can we discern from these results? Well, here's my interpretation:
  • Creating rich conditions for trust is more important than managing risks, but both are needed;
  • There are "Other things" that are more important than "Improving conditions for trust" (we'll examine these in the comments below);
  • Almost two thirds of respondents believe that leaders need to improve conditions for trust;
  • More than half believe leaders need to improve their risk management practices to improve stakeholder trust; and
  • About one third think the solution is not in improving conditions for trust.
So what are those "Other things" people felt were most important for improving stakeholder trust? I believe there are two common threads for this third leg of the trust stool. They appear to be:
  1. Behaviours and actions of the leaders and their organizations (highliged in red below); and
  2. Other conditions for trust that respondents may or may not associate with being "conditions" (highlighted in blue below).
[Note: both behaviours and the factors that influence behaviours can be considered to be "conditions" for trust]
  1. Maslow's hierarchy applies. Trust is a "higher order" state that can only be achieved when one feels safe, i.e. not at risk.

    By Trevor MilesDir, Product Marketing at Kinaxis

  2. Most people in leadership roles today don't have the training or complete skills to juggle risk-taking with trust-building. It's important to know how to do both effectively or the business won't prosper.

    By Dave CrispSpeaker, coach, consultant - Leadership & Talent Maximization Strategies

  3. Trust is that which "makes", while risk is that which "breaks". Defining a risk implicitly assumes some extent of trust, which may have been falsely assessed. Option (4) is the "safe" answer.

    By Ed GerckCXO at NMA, Inc.

  4. Stick to the strategy and not over-react to every wave that roacks the boat.

    By Dave CodackHead, Employee Technology and Network Services at TD Bank

  5. Trust is best achieved through building relationships based on high quality reciprocal social exchanges.

    By Charles WatsonPrincipal Information System Eng. at The MITRE Corporation

  6. They should tie their incentives to long term success and also take a hit when the business takes a hit.

    By Ed PoundCOO at Factory Physics Inc.

  7. In my opinion, two things are most critical. Personal integrity and candid communications. Too many leaders either don't "walk the talk" or they put a spin on the bad news, both of which destroys trus.

    By Jim CareyLearning Manager at IBM

  8. It starts in the mind. Expouse the benefits of trust through developing your clients' personal experience with risk. Help your clients, internal or external, build confidence in risk-taking so that a)they can personally identify risk and take an appropriate actions, and b)know what to look for and then expect in their partners' or stakeholders' processes and outcomes.

    By Trevor TownsendSentinel House Security Corporation, President and CEO

  9. Stakeholder Trust can be achieved through Collaborative Business Partnerships (CBPs) with suppliers and corporate business units.

    By Alan BerminghamManaging Partner at ACRM Cynergi inc

  10. If trust is the coin of the realm, then transparency is the mint. People trust processes and people when they can see how things work and realize that the outcomes can be predicted with some certainty. Trusting how someone will act towards or how a business will perform or how your investments are safeguarded requires confidence that a predictable response can be relied upon. We can't build a "trust mint" overnight but we can start installing transparent walls around more of what we do and think.

    By Paul GibsonEVP & Chief Human Resource Officer at Mattamy Homes Ltd.

  11. Transparency,full disclosure and frequent communication to all stakeholders is imperative to improve trust. If leaders see that this takes too much time they should choose not to lead.

    By Fran BlancoVice President Marketing at Media Sciences International

  12. "Other things" = Communicate, deliver, be consistent and honest, no surprises

    By Julie Rossall CMA, MBA (formerly Ratcliffe)Finance and Operations manager

  13. manage their concerns. Then comes understanding and consideration and sometimes, later, trust.

    By Sebastien VincentGroup technology unit manager at Nestle Malaysia

  14. As my concern “transparency” should be there. Yes when business plan successfully implemented then it will improve the stakeholder trust. (But keep in mind; it should be in fair manner in term of audit/compliance)

    By Amit DubeyJD Edwards CNC Admin at Arthur J. Gallagher & Co.

  15. Be brave and astute in building sustainable relationships, returns and risk mitigation.

    By Michael WinwoodExperienced senior director and change strategist

  16. Trust takes time to build, but can be broken in an instant. It is more than the conditions. The culture must be right and measures must reflect the desired behaviour - not be short term and "Wall St" responsive. Recognise that each stakeholder group has different needs and set out to understand them all - then each individual stakeholder may have different needs, so you may need to prioritise. Highly complex but vital area.

    By Nick LittleAsst Dir, Executive Development, Eli Broad Graduate School of Management, Michigan State University

  17. Business leaders should first learn more about the concept of “trust “ in its relation to the individual, corporation and community at large. In the book “Power Vs. Force” we find what could be the worlds first system of measurement for the levels of consciousness. The ability to measure and predict a person/business through their levels of evolution from base to high order, is a strong example for our future ability to evaluate Truth. A Base personality will have a very different understanding of truth, transparency, and open communication then will a high order evolved person. And both will be absolutely correct in their beliefs and understandings. “A Man convinced against his will, is of the same opinion still”. Jim Rhone

    By John MehargDirector of Research & Development at

  18. Nowadays, it is ethical behavior, integrity, tranparency, honesty, to give the example and enforce that values along the chain of command.

    By Mario Luis Tavares FerreiraOwner, International Business Development

  19. Tell the Truth!

    By Cynthia GardnerPresident at Boots-Walker & Associates

  20. communication is key. Transparency is another word at risk of becoming a cliche, but business leaders need to develop a more transparent, real time view of risk, activities, and results.

    By Bill MaginnInternational Operations Executive

  21. To build trust, business leaders need to harness the power of relationships and increase their resiliency so that they can handle the transitions we're all experiencing. Relationships are at the heart of everything. When two or more people come together for a common purpose, a relationship system is born. Both spoken and unspoken rules and values evolve and govern ‘acceptable’ behaviour within that relationship system. The teams, groups, departments, and/or organization’s experiences, events and behaviours are inextricably linked to one another and are affected by everyone involved. The impact extends to and influences all internal and external stakeholders in the larger relationship system, leading to either tight or loose strategic alignment, high or low productivity, high or low morale, a strong or weak capacity for managing complexity, and a positive or negative internal and external customer experience. To generate momentum, leaders must cultivate the relationship system(s), rather than just managing the individuals. That means including all ‘voices’ in the system, even (or especially) the most unpopular. It means developing a culture where explicit, shared values and rules of engagement are co-created by the members of each relationship system (team or group). It also means enabling each team (relationship system) to co-design agreed upon ways of dealing with communication toxins that hamper spirit, contribution, and effectiveness. To achieve immediate and sustainable results, start at the top, with the senior team to create role models who are open, transparent, fair, compassionate and well equipped to leverage diversity and manage adversity. Then, the collective suggestions provided by all contributors to this poll will naturally fall into place.

    By Robin Lee KennedyExecutive Coach and Performance Consultant - Equipping Executives & Teams for Top Performance

  22. Understand what your stakeholders expect from you, then exceed it. To figure out what they expect, talk to them. Be candid, open and clear. The very act of talking to them will increase stakeholder trust. Unless of course you're a slime ball, then by talking you'll reveal yourself for what you are.

    By Keith ThirgoodPartner, Capstone Communications Group

  23. If those in leadership positions cannot juggle both risk and trust, it is incumbent upon them to make sure that they have people in the organization who can. As stated by Trevor. They are interrelated.

    By Alan Hunter, CCP, CFESenior Financial/Operations Professional - {LION} - Top-Linked

  24. Want to improve trust? Be trustworthy.

    By Bill BrownAssociate Professor of Accounting; Planning Commissioner; CPA; CITP

  25. Maintain your strategy and execute on it consistently.

    By Luc BongaertsSupply Chain Problem Solver at i2 Technologies

  26. First - figure out what the stakeholders most want and them demonstrate alignment with their goals and desires. Nothing builds trust faster than showing you're playing for the same stakes.

    By Susan Wright-BoucherGetting the right people in place and inspiring them to top achievement

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In my opinion, business leaders should eliminate spreadsheets from the decision making processes.
Posted by Jorge Couto

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I agree. Savvy business leaders know that long term stability and growth cannot be achieved with short term - quarter-by quarter -- thinking. It's reactive, knee-jerk. Stakeholders (investors, employees and key vendors) gain trust when they know that solid, well-developed strategies consistently implemented and broadly communicated are in place.
Posted by Jim Roberts

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What should business leaders do to improve stakeholder trust?

Bill Brown wrote:

1. Be honest.
2. Disclose bad news as quickly and completely as good news is disclosed.
3. Accept responsibility.

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What should business leaders do to improve stakeholder trust?

John Jason Woods Jocson wrote:

Communication is key!

I am very cautious of perpetuating the notion that communication is a panacea but it is pertinent here.

Fostering trust through communication must start with a true dialogic exchange (Buber) between people. To illustrate, think of how we develop friends, we engage in information exchange that all parties participate in doing. As more of these exchanges occur, trust begins to develop. This is exemplified in politics during campaigns, organizations that promote through various mediums, and leaders with his or her direct reports.

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What should business leaders do to improve stakeholder trust?

John Novak wrote:

First make sure you live up to the minimal standards of the stakeholder agreement. For example if you are purchasing something make sure you pay the correct value on time. Second find time to talk face to face and look for areas where you can help each other. Building stakeholder trust means that you are fulfilling a need for them as well as them for you. I believe if you start with these two elements the relationship can grow.

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Current business leaders adhere too much to the MBA mantra "Maximize the wealth of the Shareholders.” I thought this mantra myopic when first exposed to it in the late 70s, as an MBA student, and I believe it is largely responsible for the economic quagmire in which we now find ourselves. Marching to this mantra seems to have compelled executive management to focus too much on the next quarterly statement and the shareholders is simply the wrong target.

Trying to put the best spin on the next quarterly statement leads to short-term thinking and rewards the short-term rather than the long-term performance of an enterprise. This myopic view contributes to inefficient and ineffective use of resources.

As an MBA student, one of the Lincoln brothers (of Lincoln Electric) visited my class and presented his thoughts on the role of management. He was so impressive, it has remained with me to this day. He decried the above MBA mantra arguing there were more important stakeholders than the shareholders. He outlined the management of a company’s profits across the stakeholders as follows: 1) reinvest in the company, 2) reinvest in the employees, 3) reinvest in the community, and then and only then, 4) share the remains with the shareholders.

By focusing the profits first on the company, management would be assuring the enterprise would be there not just tomorrow or for the next quarter’s statement, but for years to come. He spent significant effort differentiating this focus from the “quarterly mind set” which today seems so prevalent. Employees were the heart of his enterprise. He clearly understood that harnessing the engagement of his employees would drive and greatly determine his success. He also understood that many of his employees spent more time at work than at home and they do so because they are committed to his enterprise. In today’s management world, it is all too easy to manage to the next quarter’s financials by executing a RIF. I believe today he would argue for an improved focus on long-term execution and he would predict fewer RIFs as a result. The community, he explained, is the home of the company as well as that of the employees. Efforts to improve the community result in a better company too. If the enterprise are well led and well managed, over time there will be plenty of profits left to distribute to the shareholders.

Adherence to Mr. Lincoln’s priorities would go a long way to restoring the trust that has been sapped as management has focused on the next quarter’s bottom line and maximizing the wealth to the shareholders.
Posted by Tim Krupa

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Relentlessly pursue the "BALANCE" among all the areas of the supply chain integrated and to get the right balance between the "Short-Term" and the "Long-Term" Strategic Planning to ensure the "Sustainability" of the Organization & Business.

Regards.
Posted by Carlos G. Fernandez

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What should business leaders do to improve stakeholder trust?

Kevin Harville wrote:

An interesting strategy may be to be trustworthy.

How can you make a dead rat smell good? The whole rat needs to be changed out for a better solution. Most answers execs are seeking would merely be perfume.

The problem is that we reward people for selfish behavior. We are in a competition paradigm, so that often the attitude is self-interest and corporate interest in competition with the interests of humanity. That is taking the competition paradigm too far. Ethics are determined to be self-interest only, as if magically ethical obligations to humanity disappear at the corporate veil.

Bottom line: 80% of your answer is to BE trustworthy, and since they haven't even got that part down, we are just dealing with the window dressing.

A movement, however large or small, is based on such things as the book Redefining the Corporation. The paradigm switch is that a corporation must be a contributing part of humanity, not a self-serving cancer upon it.

1. Stop rewarding CEOs for failing.
If someone like Ken Lay or an AIG exec fails, the hell with them. They claimed to be worth milllions a year for being business geniuses, so if they go down with the ship, that is the flip side of the same deal. Why does it appear execs are just a bunch of fellow back-scratchers covering each others asses? Could it possibly be....because they ARE?
2. Pay equity. CEOs are E M P L O Y E E S. If they want to get rich, do something original. Take a real risk. CEOs propagate a myth they are geniuses far beyond us. No, they are simply people who do something different, and who generally couldl be easily replaced. AIG execs said they couldn't be motivated without these big failure bonuses, yet someone is supposed to be happy working at the 7-11 for $8.00 an hour. If all Ayn Rands followers left for the hills they would quickly find nobody gave a damn and we had leaders and followers and they had no staff.

3. Long term thinking. I know a business consultancy firm that stopped dealing with execs because 3/4 of them were only concerned with their image and profits. Now they deal with small business as the owners are more sincere.

4. Never reward a company for serving itself at the EXPENSE of humanity or the environment. Sure they can negotiate a fair price, but not pollute EVERYONES water or take EVERYONES natural resources as their own. Many corporations have a "polluted water? Good, we can sell water too..." mentality.

5. Replace the Any Rand, Adam Smith paradigm of self-interest = good with a Value Economics mentality that you profit fairly only by serving humanity. Self interest of Smith always ends up with masters a la AIG who become all powerful and servants who have to pay all their income just to have a house. It is the game of monopoly. AIG had Boardwalk and Park Place and nobody could pay the rent anymore. Replace "Profit=good" with "Service to humanity, at a fair profit = good."

6. Remove corporate personhood. Corporations have been given HUMAN rights...and THEN SOME. AIG has MORE rights than you or me.

When we live in a world where someone is seen as more deserving of a million-dollar bonus for shoving money around than a worker is of being able to afford a house and health care, it is a sick economy indeed. It was festering for years and finally, and rightly, came to a full diseased boil.

We are in a system where if someone fails in an economic competition, that is just too bad in a competitive world (unless you are an AIG exec in his welfare line).

I propose Value Economics. The premise is that you are rewarded for true service, and that all parties in an economic transaction, such as workers who have no home ownership or health care, must be fairly rewarded.

We will trust when we are treated in a trustworthy manner.

Links:
http://www.bevaluable.com

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What should business leaders do to improve stakeholder trust?

Mark Soanes wrote:

This article may help

Links:
http://www.corporate-training-events.co.uk/knowledge-centre/management-articles/achieving-a-one-team-ethos/

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Do what you say.....and trust will follow.
Posted by Annie Mathew

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