{"id":1980,"date":"2014-09-26T07:32:37","date_gmt":"2014-09-26T11:32:37","guid":{"rendered":"http:\/\/www.trustacrossamerica.com\/blog\/?p=1980"},"modified":"2014-09-26T07:32:37","modified_gmt":"2014-09-26T11:32:37","slug":"trust-the-blinder-effect-at-the-top","status":"publish","type":"post","link":"https:\/\/www.trustacrossamerica.com\/blog\/?p=1980","title":{"rendered":"Trust &#038; the Blinder Effect at the Top"},"content":{"rendered":"<p><a href=\"http:\/\/www.trustacrossamerica.com\/blog\/?attachment_id=1005\" rel=\"attachment wp-att-1005\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-medium wp-image-1005\" src=\"http:\/\/www.trustacrossamerica.com\/blog\/wp-content\/uploads\/TAATAW_LOGO_H_color-tagline-300x122.jpg\" alt=\"TAA_R2_EDIT-CS3\" width=\"300\" height=\"122\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p style=\"color: #000000; text-align: center;\"><em><strong>We must reinvent a future free of blinders so that we can choose from real options<\/strong><\/em>. David Suzuki<\/p>\n<p style=\"color: #000000; text-align: left;\"><strong>Question:<\/strong> What role does trust play as a business imperative\u00a0when senior executives are unable to remove their blinders?<\/p>\n<p style=\"color: #000000; text-align: left;\"><strong>Answer:<\/strong> No role.<\/p>\n<p style=\"color: #000000; text-align: left;\">On two separate occasions, I posed the following questions to two senior executives at Fortune 500 companies:<\/p>\n<p style=\"color: #000000; text-align: left;\"><strong>Question #1:<\/strong> \u00a0How is trust in your organization?<\/p>\n<p style=\"color: #000000; text-align: left;\">1. Answer from Executive #1: We have no trust issues<\/p>\n<p style=\"color: #000000; text-align: left;\">2. Answer from Executive #2: We have no trust issues<\/p>\n<p style=\"color: #000000; text-align: left;\"><strong>Question #2:<\/strong> How do you know?<\/p>\n<p style=\"color: #000000; text-align: left;\">1. Answer from Executive #1: Our revenues are exploding and we are expanding globally.<\/p>\n<p style=\"color: #000000; text-align: left;\"><em>Note:<\/em> I call this the &#8220;shareholder value&#8221; answer.<\/p>\n<p style=\"color: #000000; text-align: left;\">2. Answer from Executive #2: Weren&#8217;t you listening during my speech? Our CSR and philanthropy program is one of the best.<\/p>\n<p style=\"color: #000000; text-align: left;\"><em>Note:<\/em> I call this the &#8220;corporate window dressing&#8221; answer.<\/p>\n<p style=\"color: #000000; text-align: left;\">Ask almost any C-Suite executive these questions and\u00a0most likely you will get one of these answers.<\/p>\n<p style=\"color: #000000; text-align: left;\"><strong>Now let&#8217;s take a deeper dive<\/strong><\/p>\n<p style=\"color: #000000; text-align: left;\">Executive #1 works for one of the largest health insurers in the world. Over 500 employees posted the following comments on <a href=\"http:\/\/Glassdoor.com\" class=\"autohyperlink\">Glassdoor.com<\/a>. Overall, the employees rate the company a 3 out of 5.<\/p>\n<ul>\n<li>Horrible health benefits (the company is a health insurer)<\/li>\n<li>Huge cronyism issues<\/li>\n<li>Tons of corporate politics and red tape<\/li>\n<li>Poor appraisal process<\/li>\n<li>High stress<\/li>\n<li>It paid the bills<\/li>\n<li>Management by fear<\/li>\n<li>High turnover rates<\/li>\n<\/ul>\n<p style=\"color: #000000; text-align: left;\">Executive #2 works for one of the world&#8217;s largest pharmaceutical companies. Let&#8217;s see what over 200 employees have to say about their work experience. Overall, the employees rate the company a 3 out of 5.<\/p>\n<ul>\n<li>We played cards to reduce our workday from 8 to 6 hours<\/li>\n<li>Employees not allowed to talk to each other<\/li>\n<li>Too many company meetings and policies<\/li>\n<li>No decent leadership<\/li>\n<li>No morale<\/li>\n<li>Leaders are inept<\/li>\n<li>Bureaucracy and never ending process<\/li>\n<\/ul>\n<p>Do these sound like &#8220;high trust&#8221; companies to you?<\/p>\n<p style=\"color: #444444;\"><strong>The Costs of Low Trust<\/strong><\/p>\n<ul style=\"color: #444444;\">\n<li><a href=\"http:\/\/www.gallup.com\/poll\/165269\/worldwide-employees-engaged-work.aspx\">Gallup\u2019s research (2013)<\/a> places 13% percent of workers as engaged\u00a0(87% disengaged.)<\/li>\n<li>\n<p class=\"p1\">The disengaged workforce (Gallup, August, 2013) is costing the US economy $450-550 billion a year, which is over 15% of payroll costs.<\/p>\n<\/li>\n<\/ul>\n<ul style=\"color: #444444;\">\n<li>According to\u00a0<i>The Economist Intelligence Unit (2010),\u00a0<\/i>84% of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only 12% of them reported doing anything about this problem.<\/li>\n<\/ul>\n<ul style=\"color: #444444;\">\n<li>According to Edelman globally, 50% of consumers trust businesses, but just 18% trust business leadership.<\/li>\n<\/ul>\n<ul style=\"color: #444444;\">\n<li>And finally, in the United States, the statistics are similar, but the story is a bit worse for leadership. While 50% of U.S. consumers trust businesses, just 15% trust business leadership.<\/li>\n<\/ul>\n<p style=\"color: #444444;\"><strong>Building a trustworthy business will improve a company\u2019s profitability and organizational sustainability.<\/strong><\/p>\n<p style=\"color: #444444;\">A growing body of evidence shows increasing correlation between trustworthiness and superior financial performance. Over the past decade, a series of qualitative and quantitative studies have built a strong case for senior business leaders to place building trust among ALL stakeholders (not just shareholders) high on their priority list.<\/p>\n<p style=\"color: #444444;\">According to\u00a0<i>Fortune\u2019s\u00a0\u00a0<\/i>\u201c100 Best Companies to Work For\u201d, based on Great Place to Work Employee Surveys, best companies experience as much as 50% less turnover and Great Workplaces perform more than 2X better than the general market (Source: Russell Investment Group)<\/p>\n<p style=\"color: #444444;\"><i>Forbes\u00a0<\/i>and GMI Ratings have produced the \u201cMost Trustworthy Companies\u201d list for the past six years. They examine over 8,000 firms traded on U.S. stock exchanges using forensic accounting measures, a more limited definition of trustworthy companies than Trust Across America&#8217;s <a href=\"http:\/\/trustacrossamerica.com\/about.shtml\">FACTS Framework<\/a> but still somewhat revealing. The conclusions they draw are:<\/p>\n<ul style=\"color: #444444;\">\n<li>\u201c\u2026 the cost of capital of the most trustworthy companies is lower \u2026\u201d<\/li>\n<li>\u201c\u2026 outperform their peers over the long run \u2026\u201d<\/li>\n<li>\u201c\u2026 their risk of negative events is minimized \u2026\u201d<\/li>\n<\/ul>\n<p style=\"color: #444444;\">From Deutsche Bank:<\/p>\n<ul style=\"color: #444444;\">\n<li>85% concurrence on Greater Performance on Accounting \u2013Based Standards (\u201c\u2026 studies reveal these types of company\u2019s consistently outperform their rivals on accounting-based criteria.\u201d)<\/li>\n<\/ul>\n<p style=\"color: #444444;\">From Global Alliance for Banking on Values, which compared\u00a0<i>values-based<\/i>\u00a0and\u00a0<i>sustainable\u00a0<\/i>banks to their\u00a0<i>big-bank<\/i>\u00a0rivals and found:<\/p>\n<ul style=\"color: #444444;\">\n<li>7% higher Return on Equity for values-based banks (7.1% ROE compared to 6.6% for\u00a0<i>big banks)<\/i>.<\/li>\n<li>\u00a051% higher Return On Assets for\u00a0<i>sustainable<\/i>\u00a0banks (.50% average ROA for\u00a0<i>sustainable<\/i>\u00a0banks compared to\u00a0<i>big bank<\/i>\u00a0earning 0.33%)<\/li>\n<\/ul>\n<p style=\"color: #444444;\">These studies are bolstered by analyses from dozens of other respected sources including the American Association of Individual Investors, the Dutch University of Maastricht, Erasmus University, and\u00a0<i>Harvard Business Review<\/i>.<\/p>\n<p style=\"color: #444444;\">Do you think the two companies cited about have trust issues? How can we help\u00a0them remove their blinders? How can we help them move beyond quarterly numbers and corporate window dressing?<\/p>\n<p style=\"color: #444444;\">As my friend Bob Vanourek likes to say. <a href=\"http:\/\/www.triplecrownleadership.com\/put-trust-on-your-daily-docket\/\">&#8220;Leaders must place trust on their daily docket.&#8221;<\/a><\/p>\n<p>Business leaders may choose to\u00a0ignore\u00a0the business case for trust but the evidence is mounting, not\u00a0only\u00a0for the\u00a0business case but also\u00a0the financial one.\u00a0 Trust works.<\/p>\n<p style=\"color: #000000;\"><strong>Barbara Brooks Kimmel<\/strong>\u00a0is the Executive Director of\u00a0<a href=\"http:\/\/trustacrossamerica.com\/index.shtml\">Trust Across America-Trust Around the World<\/a>\u00a0whose mission is to help organizations build trust. She is also the editor of the award winning\u00a0<a href=\"http:\/\/trustacrossamerica.com\/order.shtml\">TRUST INC.<\/a>\u00a0book series. In 2012 Barbara was named &#8220;One of 25 Women Changing the World&#8221; by Good Business International.<\/p>\n<h5 style=\"color: #000000;\"><\/h5>\n<p style=\"color: #000000;\"><a href=\"http:\/\/www.trustacrossamerica.com\/blog\/?attachment_id=1233\" rel=\"attachment wp-att-1233\"><img decoding=\"async\" loading=\"lazy\" class=\"wp-image-1233 alignleft\" src=\"http:\/\/www.trustacrossamerica.com\/blog\/wp-content\/uploads\/TrustInccover313-e1402235843856.jpg\" alt=\"Print\" width=\"141\" height=\"212\" \/><\/a><a href=\"http:\/\/www.trustacrossamerica.com\/blog\/?attachment_id=1225\" rel=\"attachment wp-att-1225\"><img decoding=\"async\" loading=\"lazy\" class=\"wp-image-1225 alignleft\" src=\"http:\/\/www.trustacrossamerica.com\/blog\/wp-content\/uploads\/ND-Trust-CEO-cvr-140602-ft-e1401989324478.jpg\" alt=\"ND Trust CEO cvr 140602-ft\" width=\"151\" height=\"212\" \/><img decoding=\"async\" loading=\"lazy\" class=\"wp-image-1826\" src=\"http:\/\/www.trustacrossamerica.com\/blog\/wp-content\/uploads\/914Trust-front-Cover-206x300.jpg\" alt=\"914Trust front Cover\" width=\"151\" height=\"211\" \/><\/a><\/p>\n<p style=\"color: #000000;\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<strong>Coming Soon!<\/strong><\/p>\n<p style=\"color: #000000;\">Should you wish\u00a0to communicate directly with Barbara, drop her a note at\u00a0<a href=\"&#x6d;&#x61;&#x69;&#x6c;&#x74;&#x6f;&#x3a;&#66;&#97;&#114;bara&#64;t&#x72;&#x75;&#x73;&#x74;&#x61;&#x63;&#x72;&#x6f;&#115;&#115;america&#x2e;&#x63;&#x6f;&#x6d;\" class=\"autohyperlink\">&#x42;a&#x72;b&#x61;&#114;&#x61;&#x40;t&#x72;u&#x73;&#116;&#x61;&#99;r&#x6f;s&#x73;&#97;&#x6d;&#101;r&#x69;c&#x61;.&#x63;&#111;m<\/a><\/p>\n<p style=\"color: #000000;\">Copyright \u00a9 2014, Next Decade, Inc.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p style=\"color: #444444;\">\n<div class=\"wp-best-social-bookmark\"><ul class=\"socials\"><li class=\"oknotizie\"><a href=\"http:\/\/oknotizie.virgilio.it\/post.html.php?url=https:\/\/www.trustacrossamerica.com\/blog\/?p=1980&title=Trust &#038; the Blinder Effect at the Top\" title=\"Share this on oknotizie\"> <\/a><\/li><li class=\"twitter\"><a href=\"http:\/\/twitter.com\/home?status=Trust &#038; the Blinder Effect at the Top &raquo; https:\/\/www.trustacrossamerica.com\/blog\/?p=1980\" title=\"Share this on twitter\"> <\/a><\/li><li class=\"delicious\"><a href=\"http:\/\/del.icio.us\/post?url=https:\/\/www.trustacrossamerica.com\/blog\/?p=1980&title=Trust &#038; the Blinder Effect at the Top\" title=\"Share this on del.icio.us\"> <\/a><\/li><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>Question: What role does trust play as a business imperative when senior executives are unable to remove their blinders? Answer: No role.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[45],"tags":[122,18,202,201,11,61,174,148,136,116,99,3,5,6,246,167,121],"_links":{"self":[{"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/1980"}],"collection":[{"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1980"}],"version-history":[{"count":4,"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/1980\/revisions"}],"predecessor-version":[{"id":1984,"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/1980\/revisions\/1984"}],"wp:attachment":[{"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.trustacrossamerica.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}