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Soundview Live Presents Dr. Robert Hurley Discussing “How to Create A Soundview Live presents Dr. Robert Hurley Discussing “How to Create a High Trust Organization” [0:00:00] Interviewer: Hello and welcome to Soundview Live, an interactive conversation that puts to you in touch with today’s top business authors. My name is Andrew Clancy, Senior Editor for Soundview and I’ll be your host for today’s event. And before we introduce today’s guest, I want to remind everyone that our best events are driven by the question that you submit. To submit a question for today’s guest, you go to the chat window on your player. It should appear on the lower left hand corner of your screen. You can select private and select leaders and assistance. If you type your question into the box that appears and click the arrow you’ll be able to send us your question. Our event today is scheduled to run for 60 minutes but we’ll probably go a little beyond the hour to have enough time for questions so our advice is submit your questions throughout the course of the event. If you wait till the end of the program to ask your question we may not have time to answer it. Also we frequently receive questions about the availability of the slides from today’s presentation. The slides from today’s event will be made available to you. What’ll you need to do to get the slides from today’s presentation is to send an email to our guest. So send an email to [email protected] – all one word [email protected]. And if you send the email to Dr. Hurley and request the slides he will send you a copy of them. Now for our guest, 2012 presents another year of challenges for businesses around the globe. So what will separate the high performers from those who struggle to survive? Our guest would argue that trust, the common thread that runs through all world-class organizations. His book The Decision to Trust is receiving high praise from notable names such as Bill George at Harvard Business School and Rod Kramer at Stanford Business School. Soundview is pleased to welcome Fordham University professor and President of Hurley Associates, Dr. Robert F. Hurley. Bob, welcome to Soundview Live. Interviewee: Thanks, Andrew and welcome to all of you from various parts of the world and thanks for coming and joining the conversation about trust. I’m going to be talking about this book which is the culmination of about 20 years of research on trust, academic research and research in the field. What I’d like to do is I’d like to help you with five things during our conversation. First, as a result of our talk, I hope you’ll understand more clearly why trust has been declining. Second, you will learn how to make better trust decisions to reward the trustworthy and shrink the market to the untrustworthy. Third, you’ll learn what trustworthy leadership looks like and gain some ideas on how to model trustworthiness as a leader. Fourth, you’ll learn what’s some successful leaders in organizations are doing to embed trustworthiness into the very fabric of their organizations, to embed trustworthiness into the DNA of their organization. Then finally, you’ll gain a new perspective on the role of regulating distrust in creating high trust system. So let’s dive in. Let me start with just describing the structure of our conversation. We’ll start with a definition of trust. Not a bad place to start by being clear about what we’re talking about and then I’ll talk about why trust has declined in nearly all industrialized democracies and in many businesses throughout the world and I’ll offer a four-part solution on how we solve the trust problem and then a vigorous Q&A and I can stay a little bit longer to answer questions. Let’s talk about definition of trust. This picture appeared in a Wall Street Journal I wrote in October, 2011 entitled Trust Me. I define trust as confident reliance on a person, group, organization, or system when there is vulnerability. So when I talk about system, you think about financial system, air traffic control system where all familiar with people, groups and organizations are. This picture is interesting, right? The lion tamer is in a very precarious position, his vulnerability. This dangerous lion has its teeth wrapped around the head of the lion but yet the lion tamer looks confident, looks relaxed. This lion tamer has confident reliance on the lion. Now let’s hope that this lion tamer has made a good trust decision and we’ll talk quite a bit in this session about how to make a good trust decision. So with our definition clear, let’s step back and look at what’s happened to trust over a number of years and let’s just look at the U.S. Congress for example. We’ve been measuring trust for quite some time now and you see rather alarming trend of general decline in trust in congress. These numbers represent the percent of people who say they have a great deal of trust in congress and right now we’re below 10% of people who trust congress. Now, let me point out one other thing about this chart. [0:05:00] There are periods where trust increases. All right? A couple of periods. One in the mid 80s when congress saves social security, another in the early leading up to the dotcom crisis where there was prosperity. So it’s good for us to know that when trustworthiness increases, signs of trust actually increase also. We’ll come back to that. Now let’s show you some evidence that if we increase trustworthiness and perceptions of trustworthiness, increases in trust will follow. Let’s take a look at business. Isn’t it any better? Unfortunately, the same general decline. About 15 percent of people today say they have a great deal of trust in business. I can add to this and talk about the Edelman Trust Barometer that looked – well showed 20 percent as point declined in trust after the global financial crisis. We’re seeing declines in trust in the credibility of what CEOs say, declines in trust of business to “do what’s right.” But I will be belaboring a point that you all know. Trust is in short supply today, but if we’re going to understand trust, it’s really important that we understand why it declined, and I will make the point that some of the reasons for the decline of trust can actually be fixed. Some of them can’t be solved in the short term but there are things that we can actually do to increase trust and that will be what I’ll really focus quite a bit about in this session to try and increase trust. So why has trust declined? One reason is generation declines. The picture that you see in your screen is a picture what [inaudible][00:06:35] called The Great Generation. Now these people had higher levels of faith in others and trust. Why? Because they came together, they relied on each other during some very difficult times to overcome adversity. What am I talking about? The Great Depression and World War II that developed in that generation a sense of optimism, a sense of trust and we know from research that optimists are 36% more likely to be trusting than pessimists. So this generation developed the sense of optimism that if we trust each other, rely on each other we can overcome great things. But fortunately, every generation since that level of trust and optimism has declined. Another reason for the decline of trust is more uncertainty and risks in a shrinking pie and trust becomes more problematic and difficult and when there are more risks and we’re usually seeing this in some trust issue in the Euro Zone, Occupy Wall Street and this is obviously something we’re not going to change in the short term. Another reason for the decline of trust is what I call extreme capitalism. What am I talking about? Short- termism, opportunism versus sustainability, long-term benevolence. We certainly saw this during the global financial crisis when we learned of the expression IBG YBG “I’ll be gone, you’ll be gone.” What is that about? It’s about get in, get yours and get out before things crash. Now, it’s clearly capitalism has been enormously successful in creating wealth but we’re now starting to have conversations about how capitalism needs to evolve to enhance public trust. So you’re hearing terms like the new capitalism, conscious capitalism, constructive capitalism and all of these is really about how do we strike a better balance between wealth creation, well-being, public justice, fairness and trust. And this conversation is not going away even though we haven’t heard much from Occupy Wall Street recently. Another reason for the decline of trust is unfortunately there is a shortage of trustworthy leaders and organizations. Now by this I don’t mean that leaders and organizations are less ethical. What I mean is that the environment is so fraught with change and complexity that it’s very challenging to be a trustworthy leader and organization today. Let me give you an example. The European Leadership Program surveyed thousand mid-level executives in the U.K.
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