Trust, Transparency and the Next Economy

The third post in our next economy series – a call to brave up and emerge stronger post-COVID, Junxion President & CEO Mike Rowlands explores the fundamental role trust and transparency will play.

“The road to hell is paved with good intentions.” The lesson of the cliché is simple: despite our most positive intentions, trouble may come, and the impacts of our actions are our responsibility. Empathy encourages us to attend to intentions. Responsibility requires us to attend to impacts. Which is right?

Consider the last time you made a mistake—a serious one that perhaps hurt or upset someone, or resulted in some other kind of serious loss. To what degree are you inclined to put it behind you, based on the quality of your intentions? Of course you’re sorry, but it wasn’t wholly in your control, right? Now consider the last time you were the one that was hurt—when you last suffered a serious loss. To what degree are you inclined to hold the perpetrator accountable for the impacts of their actions? Are their intentions sufficient to excuse the pain?

For most of us, these episodes are normal, manageable facts of life. We quickly put them behind us through a caring conversation, and perhaps an apology. But how do such experiences differ when these episodes are at the scale of your organization—when the impacts can be significantly greater?

Corporate Social Responsibility (CSR) is a long-standing field of study, practice, and organizational influence that starts with conscious efforts to be an ‘engaged corporate citizen’ and builds through a series of clearly defined stages (See our guide to CSR, Corporate Social Returns). Some companies eventually get to a point where their engagement with social issues transcends the bounds of the corporation. Consider, for example, Unilever’s environmental commitments, or their brand Ben & Jerry’s, and its #stophateforprofit campaign of 2020.

In both cases, the companies’ work to understand their own purpose and to follow their social impact commitments to their logical conclusions arguably led them to rethink the role of their businesses—and the business sector writ large. They’re not the only ones….

Trust is eroding precipitously across society.

Over the past decade or so, we at Junxion have been talking about a ‘next economy,’ an economy we see emerging from countless grassroots movements around the world—and that will emerge even faster as we all come out the other side of COVID.

In this next economy, all organizations adopt ‘blended missions’ to create both financial and non-financial value for all of their stakeholders. Economic and social institutions are grounded in the reality that our planet’s resources and capacity to support life are finite. And leaders eschew extractive, zero sum, profit-taking in favour of generative, positive sum, progress-making.

This is the third post in a series on the fundamental principles of the next economy. Last week, we wrote about embracing values, and the difference between table stakes values and truly meaningful ones. Trust and its related principles (honesty, integrity, and respect) is one of those table stakes values. And it’s eroding precipitously in our current economic paradigm.

Last year, in their annual Trust Barometer report, PR firm Edelman found that 56% of respondents to their international survey agreed with the statement, “Capitalism as it exists today does more harm than good in the world.” In their newly released 2021 report, they note that trust has declined yet further: “people are looking for leadership and solutions as they reject talking heads who they deem not credible. In fact, none of the societal leaders we track—government leaders, CEOs, journalists and even religious leaders—are trusted to do what is right.”

How should leaders confront this crisis of mistrust?

“Transparency is the politics of managing mistrust.”

Bulgarian political scientist and founding board member of the European Council on Foreign Relations Ivan Krastev offers this: “Transparency is the politics of managing mistrust.” We at Junxion believe transparency is the key to unlocking a values-driven culture. It’s another fundamental principle of the next economy.

It’s also something so many in business have been talking about, experimenting with, and perhaps been fearful of for many years. Indeed, centuries ago, Francis Bacon first observed, “knowledge is power.” Knowledge closely held concentrates power, which is fundamental to the individualistic definition of success in today’s hierarchical economic paradigm; transparency fundamentally threatens that, sharing knowledge and thereby distributing power.

Beyond this moral principle, though, how might transparency help your company prepare for the next economy—and establish its leadership?

It isn’t hard to make the business case for transparency.

Forbes published a useful list of 10 benefits of embracing transparency that includes elevating employees’ happiness and engagement, sourcing better solutions to business challenges, and fundamentally smoothing and accelerating operations. Countless other lists are easy to find. Perhaps the deeper question is ‘How do we do it?’

Start by showing your work. Remember your elementary school math teacher—the one that graded you in part on finding the right answers, and in part on showing how you found them? Take a page from their book and show your work at work. Embracing openness as you strive for solutions to your organization’s challenges and toward making decisions does two things. First, it invites participation; colleagues can see how their work and knowledge can contribute to your deliberations and decision-making. As a result, you’ll make better decisions. Second, it showcases your intentions. If the impacts of your decisions don’t ultimately turn out as you expected, you’ll recover much more easily if your intentions have been clear.

Embracing transparency does not equate to eroding privacy.

Name your boundaries. Moving toward transparency does not equate to eroding or betraying privacy. There’s a lot of information that legitimately must stay private in our organizations. Personnel records are one obvious example. Intellectual property is often another. Where are your boundaries? What’s shareable and what must be held more private? Why? This clarity will help people know how to engage with the challenges and opportunities ahead. 

Maintain accountability. Upholding standards of transparency—and of privacy—is a team affair. Leaders must hold themselves accountable to being more open, to showing their work and naming their boundaries, and to leading by example. At the same time, everyone in the organization must be accountable to the same commitments. Transparency is one imperative step toward building a trusting culture, and culture is everyone’s work.

Enhance transparency in your organization and you’ll inspire trust among your colleagues and other stakeholders. Inspire trust, and you’ll engender more engagement, active participation, and better ideas. Engender better ideas, and you’ll achieve better performance. And isn’t that ultimately your role and responsibility?

Author Mike Rowlands, President & CEO at Junxion

Do you want to emerge stronger but need help with inspiring trust and enhancing transparency in your business?  Reach out to Mike via [email protected] to get the conversation started.

 

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