The leaders of businesses, governments and other major institutions throughout the developed world face a major challenge: how to rebuild trust between themselves and their key stakeholders. The 2017 Edelman Trust Barometer makes for sobering reading, revealing the biggest-ever drop in public trust in business and political leaders: Trust in trust major U.K. institutions is at an historic low of 29 percent. For business leaders, it languishes at 33 percent, while CEO credibility is at an all-time low of 37 percent.
It is not hard to see why. Trust requires a shared belief that each party in a relationship is acting for some mutual benefit and is not solely driven by self-interest. Many large organizations appear to have lost sight of this basic truth. Take the case of the recent scandal at Wells Fargo in the U.S., where a target-driven culture of customer mistreatment finally collapsed, and cross-selling performance that seemed to be too good to be true revealed itself to be just that.
Singling out this organization is, however, unfair. There is a seemingly never-ending series of corporate scandals that have caused people to doubt the words and intentions of those in charge. Think Volkswagen and its emissions scandal, still unfolding with a multi-billion dollar price tag. Take Deutsche Bank’s US$7.2 billion settlement for selling toxic mortgage securities in the U.S. In the U.K., some former Tesco directors were charged with fraud over false reporting because of the way they went about recording various deals with suppliers. Major corporations like Apple, Amazon and Google make the headlines for operating in ways that minimize their corporation tax liabilities in markets where they are clearly hugely profitable by setting up an intricate network of subsidiaries in countries with more favorable tax regimes. Then there are the recent bribery allegations and settlements involving firms such as Rolls Royce. And so it goes on. Consumers, regulators and other stakeholders are drawing the only logical conclusion they can: These organizations, and those who lead them, are in it for themselves and are not to be trusted.
A worrying factor underpins many of these scandals—namely that the wrongdoing eventually revealed had been known by many inside the offending organizations for some time, in many cases years, but had become accepted practice and therefore “un-discussable.” In other words, these were organizations in which a particular version of the “truth” had taken root, one that could not be challenged or openly discussed.
Transparency and “speaking truth to power” are generally considered to be good things, and most leaders would claim to lead organizations in which employees are free to speak up and challenge senior managers. They recognize that the absence of honest dialogue across the hierarchy gets in the way of performance and organizational truth-telling. And yet these scandals continue to take place.
“Truth to Power” research study
In a recent major 18-month U.K. study by The Right Conversation’s John Higgins and Ashridge Business School’s Megan Reitz, Being Silenced, Silencing Others: Developing the capacity to speak truth to power, the barriers to transparency were laid bare. The findings show “truth-telling” is not driven by having processes in place (the default response of most organizations), but rather is something that happens in the moment and in the context of specific relationships. In other words, it needs someone who feels able to speak up and someone, usually someone with more power, to listen. One of the startling findings of the research was that while 80 percent of managers in one organization believed in the value of what they had to say, only 40 percent of these same managers were convinced that their direct reports were worth listening to.
We are living with the legacy of the top-down communication cascade, the managed message and the effects of rank and hierarchy. The research suggests that organizations need to stop hanging on to the belief that formal processes, such as whistle-blowing, are going to deliver any meaningful increase in communication transparency. People have been schooled into being passive, and if the only option they are given when they feel something is wrong is the nuclear one—i.e. initiating a full-blown whistle-blowing procedure—they are unlikely to do so because more often than not it means the end of their career.
For example, a recent survey in the U.K. National Health Service showed that despite the implementation of a formal whistle-blowing procedure (including the appointment in every major trust of a “Freedom to Speak Up Guardian”), around 50 percent of staff still say they are unwilling to raise issues for fear of the consequences. If a whistle-blowing process is the answer to your truth-telling challenge, ask a better question.
Power listening to truth
The research clearly highlights that speaking truth to power is a two-way street. It requires people speaking up and, crucially, senior leaders listening. And here lies the problem. The very words “speaking truth to power” suggests that the problem (and therefore the solution) lies with those who don’t speak, rather than with those who don’t (or won’t) listen. It appeals to the courage and moral conviction of more junior staff to “do the right thing” and so puts all the risk on those people who have the most to lose. Powerful people like senior leaders often don’t remember what it is like to feel powerless—especially in settings where for years people have been spoken at (rather than listened to) and the only forum for questioning the elite is the intimidating surroundings of the town hall meeting, where leaders have been prepped to within an inch of their lives as to what answers to give and not give.
It starts with the leaders
In a recent workshop for a major London hospital, the researchers in the Being Silenced and Silencing Others study witnessed the COO legitimize speaking the truth by revealing herself to be ashamed about a recent incident in which she felt she should have spoken up about the sexist behavior of a senior colleague. Suddenly the more junior people in the room felt able to share their own moments. The COO had freed them from the need to talk about the organization as if it were perfect and instead made the truth discussable.
If organizational leaders want to hear the truth, they have to be serious about doing so, rather than simply going through the motions. Naïve but well-intentioned invitations to step into the CEO’s office, because their door is always open, ignore some essential qualities of organizational life. Organizations are political, hierarchical and status-driven. This is not a good or bad thing, it is simply a fact. So for a senior person to say “My door is always open” is a two-edged sword. It may appear inviting, but it also says: “Come and meet me on my territory” and “You’re not important enough for me to bother to come and see you on your turf.”
When people of lower rank meet people of higher rank, they tend to be nervous and anxious and so less able to be at their best. They are likely to be more cautious than usual. As Robert Fuller explores in his seminal work on the use and abuse of rank (Somebodies and Nobodies: Overcoming the Abuse of Rank), senior people may get around this by proclaiming that their organization has no hierarchy, supporting the useful lie that it is possible to have such a thing as a flat organization. As an ex-factory worker told the researchers, even in a factory setting where all people do is push buttons and turn dials, there’s a hierarchy—dial turners have higher status because they have more discretion.
Listen to more voices—or pay the price
If an organization really wants to encourage transparency, the first move has to be made by the powerful. They are the ones who must take the necessary steps to reduce the power-distance that their social and organizational rank gives them. It may be as simple as going to meet someone in their office and listening to what is on their mind, a simple and obvious technique used by one senior military leader we interviewed who asked his driver to speak to him “off the record” whenever they were in the car together. He said he heard more truth about his organization during these short conversations than he did from his management team during all their formal meetings.
However, this assumes that leaders attach equal weight to the views of junior people and to those of their senior colleagues or peers in other organizations. This is not always the case. Speaking to one U.S.-based activist investor as part of the research, researchers in the study noted how many senior leaders of major companies really only seemed to care about the opinion of other senior leaders and the so-called “Davos set.” In other words, they do what many of us do: They listen to people like themselves, people who hold similar views and are therefore less likely to provide challenge or alternative thinking.
This “echo chamber” has of course played out recently to a dramatic extent in the political world, with the political establishments in both the U.K. (with the Brexit vote) and the U.S. (in the election of Donald Trump) failing to hear the truth about what the majority of the electorate really felt. The reality was that many people felt the establishment did not listen to them and that their concerns about issues such as immigration and globalization were not taken seriously, and so they took their revenge at the ballot box. Elites not listening to inconvenient truths has profoundly changed the political landscape as a result. Business leaders would do well to heed this warning. After all, the truth will always out eventually.
Case in point: Naming the larger issue
One organization in the study recently introduced “transparency training” for all staff. The need for the training was triggered by several cases of front-line malpractice that suggested a degree of complacency had crept into the system. It had become clear the automatic cultural response to incidents such as these was to blame and punish one individual, and to ignore the larger systemic truth, which turned out to be that line managers were too busy to provide the close supervision essential to their business model. Being busy had become an acceptable excuse for not listening, for managers not being available to speak to. Only when senior management openly acknowledged this truth could change be discussed.
Three baby steps
Hearing the truth starts with senior people daring to be ordinary and interested in ordinary things, to take the subway and rub shoulders with ordinary people, as an activist investor put it. It requires senior leaders to be extremely self-aware, and have an iron grip of self-control when they hear things they don’t like or disagree with, because junior people watch every gesture of those in charge. If they see a message doesn’t land well, they think twice about raising it again.
Transparency happens when people meet across divisions of rank and share views openly and without fear. This means recognizing this is at heart an intensely human issue and any intervention needs to take that as its starting point. We suggest the following three steps to start the journey.
1. Focus on people, not process.
Simply defaulting to the easy option of introducing whistle-blowing procedures or open-door policies or any other process to increase transparency has demonstrably not worked. Only by seeing the whole human first are we able to establish the social connections that make it possible for people to be honest with each other—to speak up and listen without fear. Many years ago, the psychologist Martin Buber observed that our culture had turned people into “things” and people hate being treated as things. Only when we turn to each other as fellow humans first can we establish the necessary conditions to speak truth to power, and for power to listen to truth.
2. Help leaders to take the first step.
It all starts with those who hold most power. Leaders need to reflect on their own behaviors to raise awareness of instances when a) they choose not to speak out on a particular issues (i.e. they silence themselves) and b) when and how they behave in ways that might silence others, be that inadvertent or deliberate. The researchers have worked with a number of organizations on this, including with the U.K.’s most senior police officers, and it really is where the journey needs to start. Power in organizations is real and unless its potentially silencing effect on others is explicitly recognized and explored, the temptation will always be to blame those who don’t speak rather than those who cause the silence in the first place.
3. Focus on one conversation at a time.
Finally accept that this is a tough nut to crack. Creating a culture where people genuinely feel safe to speak up, and where leaders genuinely want to hear the truth, is at odds with the prevailing cultural norms in many organizations. Speaking and hearing the truth happens in moments when people either decide to be open—or not—and changing the default behaviors in these moments will take time. It requires training, ongoing feedback and a genuine commitment. We all know that habits take a long time to change and that there are no shortcuts, but we also know that, with perseverance, they can change.
Dik Veenman will be speaking at the upcoming IABC EuroComm conference, happening 27–28 March in London.