Trust is probably the most valued, yet most highly misunderstood, entity in the world of business.
It is organic to the growth of organizations, and while people and companies strive hard to build trust, few truly understand what engenders it—more so in the highly nuanced and complex Philippine setting.
As a thought leader, EON The Stakeholder Relations Group continues to probe the concept of trust as a key element of leadership—in particular for the business sector—through its Philippine Trust Index (PTI), which is now on its fourth year.
Trust index
The links between leadership and trust are explored in this year’s edition of the PTI. We also looked into the Filipino people’s perceptions of what makes an engaging leader, while also looking at Filipinos’ trust in six institutions—government, media, Church, academe, business and NGOs.
As in the past, not only has this exercise given us a glimpse of the Filipino psyche, it also allowed us to see how Filipinos regard the institutions that have long shaped them over time. For instance, we saw how some institutions simply command trust. For the fourth year, the Church was deemed as the most trusted institution with seven out of 10 respondents claiming to trust the Church very much.
The academe remains a far second with the trust of half of the respondents. Media remains the third most trusted institution, but has the largest trust gap between the general public and the informed public. On the other end of the spectrum, the government, business sector and NGOs remain the Filipino people’s least trusted institutions with only 12 percent of the general public claiming to trust the government very much, and only 9 percent saying they trust businesses and NGOs. Note the glaring 61-64 point trust gap between the Church and these three institutions.
Yet despite the business sector’s low trust rankings, it is worth noting that there are clear victors within this segment. The healthcare, telecommunications, and water services sector are the most trusted industries within the business sector. When asked to list their most trusted companies in the Philippines, manufacturers or malls were mentioned by almost a third of the respondents. Other trusted sectors are banks and utility companies.
Once again, we asked ourselves, what is it in these trusted institutions and their leaders that have made them so credible in the eyes of those around them?
For this piece, let’s zero in on trust for business institutions, which have always been among the least trusted institutions since the PTI began.
Trust levels have, in fact, fallen significantly from 13 percent last year to 9 percent this year.
Employees’ feedback
Since 2011, the PTI results have heavily suggested that trust in businesses is primarily driven by how companies treat their employees—21 percent of respondents believe that a company’s ability to provide good salaries and benefits to their employees is the most important driver of trust, while 17 percent say that the company’s willingness to practice fair labor is another critical trust driver—as well as how CEOs listen to their employees’ feedback and show genuine concern for their people.
What do these findings mean, then? Are Filipino business leaders really not engaging their stakeholders?
Unfortunately, there seems to be a gap in what people want from their business leader from what they see or experience in real life. Filipinos see CEOs as largely unable to embody their most valued leadership qualities.
To illustrate, less than a fifth of respondents say that their CEOs listen to employee feedback. CEOs also received low ratings on consistency, and their ability to practice what they preach.
Clearly, business leaders have a lot to do to better engage their internal audiences, who, many leaders forget, are among their most important stakeholders. Business leaders have to listen closely to what their internal stakeholders have to say, as their feedback and insights, as well as level of engagement, directly influence the performance of the business.
When employees do not believe their leaders, they are not likely to be committed to their jobs as well. This, in turn, will lead to shoddy performance which customers will definitely feel.
Sincerity in communication, as well as frequency of communication, is all very important in earning the trust of internal stakeholders.
A business leader cannot just communicate with the employees once or twice a year.
Engagement is a living process, and the business leader’s voice has to be heard on important organizational developments, as well as on issues affecting people and the company.
When there is a new product, a new manager, or even a new competitor, business leaders have to communicate their thoughts with their internal stakeholders, and listen to what their people have to say.
Business leaders should also be at the company’s communication frontlines.
According to the PTI, Filipinos gave the highest trust ratings to those business institutions whose heads served as their own spokespersons, for both their internal and external stakeholders.
Of course, using the right communication channels will be equally important. Memos are most preferred by business leaders, but these are impersonal.
Regular meetings with staff and key personnel, or even the occasional lunch or breakfast with managers or supervisors, will make for more meaningful communication.
Competence, knowledge
In contrast, the 2015 PTI showed that business sector leaders are rated most highly on their knowledge of their businesses and industries, which have not translated to improve trust ratings.
Clearly, competence and knowledge will never be enough to build trust.
Needless to say, the business sector has to do some self-examination, and ask if it is doing enough to understand their stakeholders, which is the first step to be able to engage them well and respond to their needs, which will help engender trust.
Being able to build trust is the true essence of leadership.
Considering how trust can affect corporate reputation, shareholder value, and brand equity, it is imperative that leaders take a good, hard look at how they communicate with their various publics.
Only then can they begin to seriously engender trust, for their products and the institution.
(The author is governor-in-charge of the MAP committees on (1) Asean integration, (2) CEO Conference, and (3) Trade, industry and tourism. He is the chief executive of the EON The Stakeholder Relations Group. Feedback at <map@map.org.ph> and <junie@eon.com.ph>. For previous articles, please visit map.org.ph)