The most trusted companies today are thriving, according to Harvard Business Professor Frances Frei. The ones not trusted? “Their market valuations are plummeting.”
Frei stresses there is no ‘faking it until you make it’ when it comes to trust.
“If you’re doing it for performative reasons, it will never work,” says the former First Senior Vice President of Leadership and Strategy at Uber.
She advises chief executives that building trust in their organizations requires logic, authenticity and empathy. Every leader in every organization should embrace these three characteristics, she says, going a step further. “It’s the foundation of every single relationship that we have,” she says.
“If you really believe that being empathetic and authentic is going to take away from your profits, you’re never going to get there,” Frei says. “You have to genuinely believe.”
If you doubt that trust will accelerate market cap or profits, she suggests you consider your employees. “Do they perform better or worse in the presence of trust?”
She names three CEOs who have done well at building trust in their organizations – Doug McMillon, Walmart; Satya Nadella, Microsoft; and Julie Sweet, Accenture.
All three executives met challenges at their respective organizations, and, as Frei puts it, “All three of them have been a stunning success, and there’s not an ounce of performative. They have authenticity, logic and empathy. They do it all day; every day.”
What do all leaders who have successfully built trust in their organizations have in common?
“They have learning at the core,” she says. “A growth mindset helps tremendously here.”
Rebuilding trust
If trust has been broken at your organization, it can be rebuilt, Frei says. This is when using logic, being authentic and showing empathy are critical. Logic needs to be used when making decisions, for one. Then, you must do what you say you’re going to do – not say one thing but do another.
Referencing recent challenges at a large social media company, she says, “If you say you’re going to have a safe place for free speech, and then promote hate speech – well, come on.”
That’s a simple example of not being genuine, she explains. The new CEO then needs to show he cares about people being attacked on his platform.
— Harvard Business Professor Francis Frei share
More generally, she says, “You have to take care of every single stakeholder relationship. That’s the empathy part.”
Frei isn’t ready to write off anyone or any organization.
“I actually think everything is fixable. The only thing people need is a willingness to change,” she assures. “Trust is as well understood as supply chain issues, as everything else, but we just have to have the desire.”
Frances Frei addressed business leaders at EDGE, YPO’s premier annual event and the largest gathering of CEOs in the world. For three days in New York City, more than 2,500 chief executives from 80 countries gather with influential thought leaders and experts to learn about and discuss critical topics in business and beyond. EDGE fosters a culture of trust, respect and inclusivity, where global leaders emerge with solutions to drive change and help shape our collective future. YPO EDGE returns to New York City in 2023 and 2024 and is open to all YPO members. Learn more about EDGE
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