Editorial

“Increasingly, trust is the glue that holds companies together at the core.”

John J. Grumbar
Chairman & CEO, Egon Zehnder International

IN THE NOBEL Lecture of 1954, Peace Prize laureate Albert Schweitzer spoke the memorable words: “For any enterprise, confidence is the capital without which no effective work can be carried on.” While the legendary medical missionary and philanthropist was doubtless thinking of humanitarian rather than commercial enterprise, his words hold true for the business sector as well – and perhaps more so today than over half a century ago.

In complex global organizations that work in rapidly changing environments where no individual can be aware of, let alone control, all the risks, confidence – in the form of self-confidence and trust in others – is a vital asset. Where hierarchies are flattened out of existence and lifelong employment contracts are a thing of the past, this asset is rapidly becoming the glue that holds companies together at the core. All the more dramatic, then, it seems, are the multiple breaches of trust that have shaken the business community to the roots in recent years and continue to do so – from the untenable promises of the dotcom era to corruption scandals in companies that were previously considered role models and the current crisis in the financial sector.

Time and again it is top management that attracts most criticism in such situations – reason enough, we thought, to dedicate this issue of THE FOCUS to shedding more light on how top executives deal with the sensitive topic of “trust.” The importance of relationships built on trust for a company and its commercial success is spotlighted by the prominent executive coach Theo Compernolle. In his research, Compernolle found that in companies with high staff turnover, low-quality products and services, and low profits, a substantial majority of employees do not trust senior management, while more than half believe that their superiors lie to them.

Aware of the power of trust, Fred Hassan, CEO and Chairman of the pharmaceutical group Schering-Plough, never takes the trust of his employees or his customers for granted. Trust must be earned, again and again. And how? Through leading by example. When times get tough, Hassan argues, a CEO has to stand by his people.

Keeping in touch with the work force, listening and communicating your goals in good time – that is the how Patrick Cescau, CEO of consumer goods giant Unilever since 2005, has successfully mastered the most dramatic changes in the history of the company. 50,000 jobs were lost and the number of top managers was halved. The key to maintaining trust in such situations, Cescau declares, is to reassure people that the medicine, while bitter, is effective.

These two examples document how, even when times get tough, trust can be sustained. Questioning whether we are indeed actually experiencing a “deep public crisis of trust,” the British philosopher Onora O’Neill warns instead of a spreading culture of suspicion. Breach of trust, she says, has been around since the Garden of Eden. But there is no such thing as absolute safety, and the culture of accountability that we are busily building damages trust rather than supporting it. Plants don’t grow so well, O’Neill reminds us, when we pull them up too often to check on the roots.

I hope you find that this issue makes interesting reading.