Designing Trustworthy Organizations

How do organizations and their leaders earn and maintain trust — and then repair it after a violation? Why do trust failures continue to occur with such frequency? How can they be reliably prevented?

Those are the questions that drove 12 years of research by authors Robert F. Hurley (Fordham University), Nicole Gillespie (University of Queensland, Australia), Donald L. Ferrin (Singapore Management University) and Graham Dietz (Durham University, United Kingdom). A lot of the literature about trust supports commonsense notions about how individual leaders can earn the trust of followers. But building and sustaining organizational trust turns out to be different from building and sustaining interpersonal trust, and not nearly as intuitive.

“A new model is required to understand how to manage trust in large, complex organizations operating in highly diverse global environments,” write the authors. They found that companies often blame trust violations on 'rogue employees,' but that these violations are predictable in organizations that allow dysfunctional, conflicting or incongruent activities to take root. One common cause of trust failures: a company strategy or culture that serves the interests of one stakeholder group at the expense of others.

Once trust is broken, repair requires understanding the systemic causes of the failure and reforming the organizational system. “Organizations that weave trustworthiness signals into all elements of their infrastructure and core processes, over time, earn reputations of trust with their stakeholders,” write the authors. Rebuilding a reputation often means confronting deeply embedded mindsets. “In successful repair efforts, systemic reforms need to be reinforcing and congruent so that trustworthiness becomes embedded in the organization's culture over time,” the write. Ironically, trust failures can act as positive catalysts for creating a high-trust organization.