A Culture of Trust
While Skinner was fortunate to inherit a company with what he describes as “solid Midwestern values,” new CEOs aren’t always so lucky. Coming into Xerox in 2001, Anne Mulcahy took over a company with enormous debt and five consecutive quarters of losses—as well as correspondingly dismal employee morale.
“When you’re a big company going through massive amounts of change, which we were, employees are kind of like volunteers,” she says. “They have to want to perform, so your job is to make sure that they get it—they know what the story is, feel a part of it and want to make a contribution. That’s the magic that makes big companies work.”
Pressured from all sides, Mulcahy recounts a piece of advice she received from Warren Buffet: “[Focus] on your customers and employees. That’s the only way you’ll get results—and everyone else just cares about results. So don’t get confused about your priorities.”
“There are gazillion constituencies that want the time and attention of CEOs, especially if your company is in trouble,” said Mulcahy. “It’s very clarifying to just push the other stuff aside and say it’s in everyone’s best interest if I’ve got customers who like us and want to do business with us and employees who understand where we’re headed and want to make a contribution.”
Over time, consistently identifying and focusing on key stakeholders will be more effective in building a culture of trust than succumbing to pressure from myriad constituents, agreed Erik Luhrs, CEO of The BOSS Companies. “Your existing customers are far more valuable than people who haven’t used your services yet,” he pointed out. “Instead of trying to do what everyone else thinks we should, we should do what we do best and strengthen what we’ve got. Then if other people are drawn in, great.”
At the same time, CEOs recognize that societal changes in the way we live and communicate complicate the picture. “The advances in society over the last 100 years have contributed to the lack of trust,” charged Bill Hickey, CEO of Sealed Air. “When you live your whole life in a village with a few hundred other people, trust matters because you have to stand behind what you say. But if you’re living in a society where you’re in New York on Thursday, Tokyo on Friday and then flying over to Moscow, you don’t have that same commitment to the people around you.”
John Allen, CEO of Greater China, however, sees America’s CEOs— embattled though they may be—as among the most trusted and trustworthy in the world. “In China, I’ve seen situations where governors of provinces and administrators ask for a percentage of a deal,” he reported. “It almost makes you sick to think how badly they are treating their fellow countrymen, including themselves by being corrupt.”
“The fastest growing economy right now is the economy with the least trust on every level,” noted Anil Gupta, a professor of strategy and organization at the University of Maryland’s Smith School of Business and the author of Getting China and India Right. “It’s not just corruption in the government… China has some fundamental issues with trust, has had them for a long time and will have them 20 years from now. The reason for that is that China may be the only big society in the world without a [predominant] religion. Therefore, there isn’t really a sense of guilt—and when you don’t have a sense of guilt, it’s very hard to value integrity for its own sake.”
For other business leaders, today’s global economy is akin to yesterday’s village. News of breaches of trust and unethical behavior by prominent politicians, business leaders and even celebrities and athletes now quickly travels the globe via YouTube and Twitter and various other forms of media. Several CEOs cited the cumulative impact of such incidents as having a broad and negative impact on public sentiment.
“The younger generation has seen so many things on television and on the Internet,” noted Clare Hart, president of Dow Jones Enterprise Media Group. “They’ve seen Clinton lie; they’ve seen the questions about the weapons of mass destruction. They don’t have the same barometer of trust that we may have been raised with.”
At the same time, the sheer quantity of information and the speed with which it is dispersed dilutes its impact.
“Whatever we say here today is going to be heard 6,000 miles away within seconds,” said Tom Quinlan, president of RR Donnelley. “As a society, we now have so much information on our hands that we have to learn to decipher what’s important. Is the fact that David Ortiz was on steroids in 2003 really that important for the whole world to know today?”
A Metrics Makeover
Broader societal changes are also changing the metrics by which CEOs are measured, roundtable participants agreed. “It’s just not sufficient to be a good, profitable business anymore,” says Mulcahy. “There’s an expectation that businesses will be held accountable in multiple dimensions in terms of community and environment, which I actually think is pretty healthy… If it doesn’t turn around overnight, it’s going to take a long time to rebuild and it’s going to require companies to think about a multidimensional contribution to gain public trust again.”
That morphing of corporate metrics will, in turn, necessitate a different approach to selecting and measuring business leaders. “I sit on a few boards and I can assure you when we look at CEOs we look for competence and other qualities but the list of criteria doesn’t have the word trust,” says Kaul. “There has to be a mind shift, collectively as a society, that ranks trust-based leadership more highly. Yes, we want a leader who can make money, who can build a brand. But fundamentally he or she has got to be a leader who inspires trust.”
That broadening of expectations for both companies and their leadership is particularly apparent among those entering the work force, noted several business leaders. “The younger generation is going to insist that social needs and business needs are tied together,” asserted Howard Brodsky, chairman of CCA Global Partners. “Previous generations wanted to work at companies where you would make a good living for a number of years, but this group is very discerning. As terrible a job market as it is, they do not want to work for companies that they think are not aligned with their social values. They’re going to move the needle for social change more than the older generation because they’re going to demand it.”
And it’s up to today’s business leaders to deliver. “Every generation’s mission has to be to hand a better world to the next generation than the one they inherited,” says Kaul. “So from my perspective, our role now should be to be selfless, forget about ROIs and our paychecks, and think about what we can do over the next 20 years so that the world we hand over once again has that optimism and is something that our children can look forward to.”
