Do you trust Facebook? The dilemma of Zuckerberg's leadership

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Mark Zuckerberg, the founder of Facebook, recently announced a redesign of the product strategy of his company: Abandon public sharing to private messaging and chat.

This strategic approach follows a difficult year for Zuckerberg and his organization. Although Facebook's highly publicized trust issues did not cause a decline in revenuesthey tarnished the public image of society. After the Cambridge Analytica scandal, for example, Facebook confidence fell by 66%.

Facebook is not the only one fighting the unstable trust of consumers. With the spread of information and the Internet, these problems have become very common – and very expensive. When consulting firm Accenture attempted to quantify the cost of the firms' "confidence effects", he found that, of the 54% of firms in their sample that had experienced a confidence-threatening event, the revenues at stake amounted to at least 180 billions of US dollars.

"In today's world, there's no question of whether a company will experience a trust incident, but when," says Accenture. "Businesses must intentionally create a culture that builds, maintains and preserves trust … the way a business does things has become as important as what it does."

Why trust is an integral part of leadership

Over the years, Zuckerberg has difficulties of transparency negatively affected his leadership influence. Like David Horsager, author of The edge of trust, explained in Forbes"You can have a compelling vision, a solid strategy, excellent communication skills, an innovative vision and a competent team, but if people do not trust you, you will never get the results you want." & Nbsp ;

Trust is one of the most important elements of leadership, so other companies should learn from Zuckerberg's struggles and build a culture of trust today. The research provides convincing evidence of a multitude of tangible benefits for companies that garner trust from their stakeholders. Here are three research findings on the benefits of trust for business.

Trust motivates employees

Research suggests that "confident" employees are "committed" employees. According to a survey of Human Resources Management Company, trust is the third quality influencing job satisfaction; only "respectful treatment of all employees at all levels" and "salary / compensation" are better ranked. In addition, Edelman Trust Barometer found that employees who trust a company are much more likely to advocate (78% vs. 39%), loyalty (74% vs. 36%), engagement (71% vs. 38% ) and commitment (83% vs. 52%) than those who do not.

Confidence can also reduce the turnover. When fortune compiles his "100 best companies to work for85% of the scores are based on "what employees report about their trusting experiences and reaching their full human potential". As a result, Fortune's best-ranked companies are often the most reliable – and according to the World Economic Forumthey know "up to 50% less turnover than their competitors".

For a case study demonstrating the relationship between trust and employee satisfaction, consider Campbell Soup. By the end of the 1990s, the company was suffering from a toxic, non-committal culture, and a falling stock price. Then Douglas Conant joined the CEO position in 2001 – & nbsp; and has made trust its priority. "Before you have the moral authority to lead your team, you have to inspire confidence," he said. Harvard Business School. "Trust is the only thing that changes everything, and in a culture of great trust, it's so much easier to get things done."

& nbsp;His approach worked: Nine years later, there were 17 employees hired for every disengaged employee, according to the Gallup Employee Engagement Index. (Gallup considers a "world clbad" company when it reaches a ratio of 12 for one.) Among Campbell's top 350 executives, the engagement ratio was an impressive ratio of 77 to a.

Trust attracts customers

Only 56% of Americans say they trust companies, according to the 2019 survey Edelman Trust Barometerand 67% said that "a good reputation may require me to try a product, but if I do not trust the company behind the product, I will soon stop it." # 39; buy. "

To put this in perspective, when Accenture surveyed consumers who had changed companies in the last year, 46% attributed their decision to a loss of confidence. "Today's customers have more choices than ever before," the consulting company said. "Companies that can not keep their promises or the transparency of their brand will lose the trust of their customers and, therefore, their business."

Although businesses do not need to be perfect, they must favor trust before profits, even when it is difficult. Take the case of Tylenol: in 1982, pills containing cyanide killed seven people. Jim Burke, CEO of Johnson & amp; amp; Johnson promptly recalled 31 million bottles and started an aggressive marketing campaign. Although the recall (the first of its kind) and the stimulus cost more than $ 100 million, they limited the damage to the company's main long-term badet, namely public confidence. Tylenol's reputation has been restored and since 1985 J & J has had a Compound growth rate of 11%.

Trusts increase profits

In addition to engaging employees and seducing customers – & nbsp; or, more likely, because of these factors – & nbsp;, the establishment of a climate of trust can also increase the profits of a company. Amy Lyman, author of The trustworthy leader, searched for organizations on Fortune's Top 100 Companies to Work list. (As mentioned earlier, trust matters a lot in the selection process.) Between 1998 and 2011, Lyman found that these companies had annual returns of 11.06% – & nbsp; surpbading by more than 300% the S & P 500.

Further research highlights Lyman's findings. A study conducted by Cornell University with 6,500 Holiday Inn employees found that when measuring employees' confidence in their managers, an improvement of one-eighth on a five-point scale was correlated with 2.5% increase in revenue – equivalent to more than $ 250,000 per year per hotel. "No other aspect of leadership behavior that we measured has had such a big impact on profits," wrote one of the researchers at the Harvard business review.

Campbell Soup provides another example. Between 1998 and 2001, before the hiring of Conant, the company's shares lost 50% of their value. However, despite Conant's commitment to trust, Campbell reversed the trend: between 2004 and 2010, the total cumulative shareholder return was 64%.

Trust has a measurable impact on companies' bottom line – and leaders can no longer relegate it to the rank of "soft" qualities. To succeed, leaders need to build self-confidence and create a culture of trust that permeates their entire organization. As JetBlue President Joel Peterson said Insights by Stanford Business: "I believe that trust is more powerful than power itself … You must be willing to create an environment of great trust. It does not happen like that.

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Mark Zuckerberg, the founder of Facebook, recently announced a redesign of the product strategy of his company: Abandon public sharing to private messaging and chat.

This strategic approach follows a difficult year for Zuckerberg and his organization. Although Facebook's highly publicized trust issues did not cause a decline in revenuesthey tarnished the public image of society. After the Cambridge Analytica scandal, for example, Facebook confidence fell by 66%.

Facebook is not the only one fighting the unstable trust of consumers. With the spread of information and the Internet, these problems have become very common – and very expensive. When consulting firm Accenture attempted to quantify the cost of the firms' "confidence effects", he found that, of the 54% of firms in their sample that had experienced a confidence-threatening event, the revenues at stake amounted to at least 180 billions of US dollars.

"In today's world, there's no question of whether a company will experience a trust incident, but when," says Accenture. "Businesses must intentionally create a culture that builds, maintains and preserves trust … the way a business does things has become as important as what it does."

Why trust is an integral part of leadership

Over the years, Zuckerberg has difficulties of transparency negatively affected his leadership influence. Like David Horsager, author of The edge of trust, explained in Forbes"You can have a compelling vision, a solid strategy, excellent communication skills, an innovative vision and a competent team, but if people do not trust you, you will never get the results you want."

Trust is one of the most important elements of leadership, so other companies should learn from Zuckerberg's struggles and build a culture of trust today. The research provides convincing evidence of a multitude of tangible benefits for companies that garner trust from their stakeholders. Here are three research findings on the benefits of trust for business.

Trust motivates employees

Research suggests that "confident" employees are "committed" employees. According to a survey of Human Resources Management Company, trust is the third quality influencing job satisfaction; only "respectful treatment of all employees at all levels" and "salary / compensation" are better ranked. In addition, Edelman Trust Barometer found that employees who trust a company are much more likely to advocate (78% vs. 39%), loyalty (74% vs. 36%), engagement (71% vs. 38% ) and commitment (83% vs. 52%) than those who do not.

Confidence can also reduce the turnover. When fortune compiles his "100 best companies to work for85% of the scores are based on "what employees report about their trusting experiences and reaching their full human potential". As a result, Fortune's best-ranked companies are often the most reliable – and according to the World Economic Forumthey know "up to 50% less turnover than their competitors".

For a case study demonstrating the relationship between trust and employee satisfaction, consider Campbell Soup. By the end of the 1990s, the company was suffering from a toxic, non-committal culture, and a falling stock price. Then Douglas Conant joined the CEO position in 2001 – and made trust his priority. "Before you have the moral authority to lead your team, you have to inspire confidence," he said. Harvard Business School. "Trust is the only thing that changes everything, and in a culture of high trust it's so much easier to get things done."

His approach worked: Nine years later, there were 17 employees hired for every disengaged employee, according to the Gallup Employee Engagement Index. (Gallup considers a "world clbad" company when it reaches a ratio of 12 for one.) Among Campbell's top 350 executives, the engagement ratio was an impressive ratio of 77 to a.

Trust attracts customers

Only 56% of Americans say they trust companies, according to the 2019 survey Edelman Trust Barometerand 67% said that "a good reputation may require me to try a product, but if I do not trust the company behind the product, I will soon stop it." # 39; buy. "

To put this in perspective, when Accenture surveyed consumers who had changed companies in the last year, 46% attributed their decision to a loss of confidence. "Today's customers have more choices than ever before," the consulting company said. "Companies that can not keep their promises or the transparency of their brand will lose the trust of their customers and, therefore, their business."

Although businesses do not need to be perfect, they must favor trust before profits, even when it is difficult. Take the case of Tylenol: in 1982, pills containing cyanide killed seven people. Jim Burke, CEO of parent company Johnson & Johnson, quickly recalled 31 million bottles and launched an aggressive marketing campaign. Although the recall (the first of its kind) and the stimulus cost more than $ 100 million, they limited the damage to the company's main long-term badet, namely public confidence. Tylenol's reputation has been restored and since 1985, J & J has Compound growth rate of 11%.

Trusts increase profits

In addition to engaging employees and attracting customers – or, more likely, because of these factors – building trust can also increase a company's bottom line. Amy Lyman, author of The trustworthy leader, searched for organizations on Fortune's Top 100 Companies to Work list. (As mentioned earlier, trust matters a lot in the selection process.) Between 1998 and 2011, Lyman found that these companies had annual returns of 11.06%, nearly 300% higher than the S & P 500.

Further research highlights Lyman's findings. A study by 6,500 Holiday Inn employees at Cornell University found that when measuring employees' degree of trust in their managers, an improvement of one-eighth over five on the scale is correlated to a 2.5% increase in revenues, more than $ 250,000. per year, per hotel. "No other aspect of leadership behavior that we measured has had such a big impact on profits," wrote one of the researchers at the Harvard business review.

Campbell Soup provides another example. Between 1998 and 2001, before the hiring of Conant, the company's shares lost 50% of their value. However, despite Conant's commitment to trust, Campbell reversed the trend: between 2004 and 2010, the total cumulative shareholder return was 64%.

Trust has a measurable impact on companies' bottom line – and leaders can no longer relegate it to the rank of "soft" qualities. To succeed, leaders need to build self-confidence and create a culture of trust that permeates their entire organization. As JetBlue President Joel Peterson said Insights by Stanford Business: "I believe that trust is more powerful than power itself … You must be willing to create an environment of great trust. It does not happen like that.