Cultivating Trust: The Leadership Advantage

Okay. Good morning, everyone. Hi. Sorry to interrupt your incredible breakfast chats. What I love about this group is it is so hard to get people to stop talking, and I think that is the best thing as three Italians here on this panel can attest. For those of you that don't know me, I am Kristen Stoller. I'm one of our editorial directors here at Fortune. Welcome to this session, which is on cultivating trust, the leadership advantage. We have a fabulous group of speakers here to lead the conversation who you will meet in just a moment. But before we get started, I would like to thank Deloitte for hosting today's session. We, yes, big clap. We very much appreciate it. Thank you. So one of the things I just want to say up front is this is meant to be a group discussion. We really want to get all of you involved. Yes, we're going to ask some questions to the panelists, but we also want to hear from you, your thoughts, your questions or comments. So at any point when you want to speak, please just raise your hand and we have a mic runner in the back over there waiting who will bring a microphone over to you. And a quick reminder, this session is on the record. So without further ado, I would like to introduce our discussion leaders here. So next to me is Simona Spellin, U.S. Human Capital Practice Leader at Deloitte. We have Jennifer McCollum, President and Chief Executive Officer at Catalyst. And Francesca Cornelli, Dean of the Kellogg School of Management at Northwestern University. Thank you three for being here. thank you all for coming at 7 30 in the morning and bringing this level of enthusiasm at 7 30 in the morning I'm really happy about it so to start I want to say you know we we talked briefly but we think that trust is is the most cited leadership word and I also think it is the least defined leadership word so I want to come first to the room because I'm curious call out and just you know you don't have to wait for the mic for this one but just yell out a few words what do you when you think of trust how do you define it what does it mean to you okay okay any others yeah definitely simona how do you define trust so great question you know so it's interesting um a lot of people you think of trust as being a soft word but the reality of it is is trust has a very big but has a lot of power to really figure out like where the direction of the firm your firm or whatever you're doing is going so the way that we define um trust at Deloitte there's four factors it's and some of you said it there's reliability it's transparency it's capability and uh trans and humanity humanity is one of the things Jennifer and I talked about and so what's interesting is and there are studies that have been have been done that say if all four of those factors are at an all-time high for your employees, you're 85% likely to get the most out of your employees. When one of those four factors is lacking, you go all the way down to 15%. So think about that. Like really getting the right balance of those four things is really what measures trust from our perspective. And I think that, you know, part of the the the interesting thing about trust is that it's it's so it seems so easy right it seems like yes if you do these four things of course you'll have a successful organization but people still struggle um and and Jennifer why why do you think that is like what do you think people are getting wrong trust is one of those things that um it takes a long time to build and it takes a moment to lose right and I think um especially at this period of time where you're looking at massive transformation let's just use AI transformation as the example it is a huge opportunity to either engender trust or really screw it up right and I think we just did some interesting research at Catalyst looking at the leader's perception of what they're getting right versus the employee perception and for example it's when you look at leaders saying We are all going to reskill our people, and 70% say, yes, we're doing that. And you ask the employees, and they go, well, only a third of us feel like AI training is open to everyone. So that's just one example of how our intentions are good, but we can really get it wrong. Yeah, yeah. And you bring up AI, and Francesca, I want to come to you next, because I think trust right now is at such a low point, but it's exactly the moment where we need to have more of it. people are these are such uncertain times people are fearful of losing their jobs there's economic uncertainty what practical advice would you give to leaders kind of navigating that that conundrum right now we've been studying that and we're working with also alums who are in a very like for example quantitative hedge fund and so on and the idea is until now the technology could have been a competitive advantage because if you have more resources to put the technology you had such an advantage for people who are hard to pick up, but now with AI, that's going to be less. So actually people need to understand this is the investment on the people in the human capital that makes a difference. And the investment has to make it by making them think of AI, not as something that is going to replace their job. So there's a lot of, our faculty have been talking about, when you announce, oh, this is going to just you know simplify our processes all they hear is you won't need me anymore but if you instead put it as you try to get everybody to learn about it and you just put it as you will all help us the company to be better so just empower people to say with the technology you can be better then they are more invested but it's also true that the evidence is if you just use words people will will see through so you have to actually invest in people and make them see that goes back to the exactly that there's benevolence there's this transparencies but there's also the ability to deliver so this is all these things but the evidence is is really gonna make a huge difference how you introduce the AI in a company because ultimately the people and how invested they are will be your competitive edge i would love to go for it yeah it's there's an interesting statistic um that a hundred percent of ai investment right 93 percent goes to the technology and only seven percent goes to the human so everything you just said right you can sit there and say yes we're invested but if you're only spending seven percent on what the impact is to the work to the workforce or the workplace you're really missing the mark and you know you you mentioned it right technology is going to continue to get democratized right and i might even argue that knowledge is going to get democratized right because it's all out there and our tools have it but the way that we empower the human to show up and to continue to focus on those enduring human capabilities like empathy curiosity judgment like all of those things that's what we need to get right um and so i i mean it's it's just proven and your and your employees will see if you're only investing seven percent they're they won't be fooled well you mentioned you know the fear of people losing their jobs which i think is is probably the number one fear right now and i think a lot of the the reason that people are also fearful is that But when people were first doing layoffs last year, it was, you know, the immediate answer was, oh, we're doing layoffs because of AI. There was all this AI washing and people started to lose trust in their leaders being like, is it actually AI? Is it something else? I feel like we might be being lied to here. So what what do you think the single most important thing a leader can do when they must do layoffs to build trust? How do you how do you walk that line? So maybe I'll enter it because I have some faculty. It's less about building the trust. What they are showing is actually that if you build trust, it's easier to deliver bad news. So, like, the fact that you have to do layoffs, it doesn't mean you lose trust. But what you need, you need to be very transparent. And there are examples. I think it's an old example, but Airbnb did it. I admitted I was going against their own sense of belonging, and now we lay people off. But this is the challenge we are having. This is the options we are having. The more you lay out, first of all, you can't build the trust just when you're doing the layoff, right? So you have to invest in before. But if you have it and you're transparent and you're showing, and also the competence, you're showing that you have thought through this is the issues, actually the evidence is that employees understand and keep the trust. So of your four-part framework, I'd say this is where the transparency and the humanity definitely comes in. But interestingly, employees have more trust in the institutions than they do in their leaders. And so I found this fascinating. We just did the study out of Europe, and over half employees say, oh, I trust our organizations to handle AI concerns responsibly, but only a third say they trust their leadership to act with integrity during a disruption. And so this gets back to how are we investing in the people, not just the technology, really starting with the leaders well in advance of, you know, whether it's layoffs for real because of AI or whether you're positioning it. And Jennifer, why do you think that is? I think that's such a weird dichotomy between them i mean i think it's because um and the last piece is um leaders stay confident and supportive during AI disruption 16% of employees are saying they don't and i think that's part of why it is they're watching us during this disruption and saying wait a minute like do my leaders act with confidence and are they acting with support through this transition so that's what i would think i just wanted to the point on transparency one of the one of the things that comes up a lot is how much to communicate and when um because i think transparency is interesting and tricky like one of the rules of thumb for me is um when i share with my leaders and then the cascade that happens is how much information is relevant and how much of it is noise because what you don't want to do is put information out in the system that's just going to generate noise everybody has a lot of work to do and so what I've tried to do is to kind of say this is yes I know this is what you're hearing about and I promise to bring you on the journey on when it's relevant and when it's you know all of the issues have been thought through because otherwise you're creating this noise in the system and so I always say communicate often especially during these times and to also say, I don't know. It's okay to say, I don't know. And I think what we're finding, especially in the environment that we are in, is you mentioned it, right? Like as leaders, you sit at one part of the organization and your perception of the organization is so different than someone that's in the business, right? And so taking a moment to understand, how am I perceiving something versus someone that might be at a client site or that might be in an internal function and understanding what that is is super, super important. And I was going to say one more thing, but I lost my train of thought. It is 7:30 and I did not work out. I'm like... Thank you, Jess. Thank you. Here, I'll pull the thread and then I'll pass it on. But I think what you're getting at are what are the evolving capabilities that are required as we look at this incredible technological transformation so the technical skills are kind of the base layer we all are developing those skills at different rates but that's as we continue to look at what's going to make this succeed it's the the inclusive leadership skills ironically are even more important now so is it safe to uh like when do i share information is it safe to experiment how do we encourage shared learning? And if we fail, how do we respond to that? And then the third set of skills are around this flexible mindset. So are we able to be curious? Are we able to pivot quickly? And so we're trying to isolate what are the evolving expectations of leadership? And some of the ones that aren't being talked about now are actually the most important. I'm glad we went down this transparency road because I want to do one more question on that and then I'm going to turn to the room for any questions so start thinking now um but on transparency we have this conversation a lot at at Fortune at our Workplace Innovation Summit not only just around you know transparency and leadership also pay transparency um transparency and what Gen Z wants so there's a lot of different ways that i think this new generation of the workforce is looking for information but is there anything you think that a leader should never be transparent about or really keep to themselves is there one thing well I would say usually we don't recommend that because eventually it will come out and and you went once you lose your integrity you lose your trust right so you may want to more as Simona was saying about say I don't know or not volunteer necessarily information before you're actually sure but it's much more about like we talk about the illusion of transparency people think like going back like people don't necessarily know everything so explaining more if you can't really say some information because you're still figuring it out you can still explain the process you are going through in order to get eventually to an information but one piece of information that eventually is the future of people to actually hide it it's it's not it's not a good yeah good advice it's not a good yes relevancy is important like is the information relevant to the person that's asking the question because I do think that information should be shared if it's relevant to the person and what it means for them to move forward and that it's you you know you're you're able to share it right but I do think that sometimes there are a lot of questions that are asked when something is terribly relevant you're just looking for gossip gossip yep exactly and I do think that that's an important you know differentiation to to really understand yeah that makes sense uh do we have any questions I see one over here hi good morning oh and if you could say your your name and title and company hi yes I'm Christina I'm with Thrivent. Just a question for you as you share that statistic about 16% of employees don't feel like their leaders are comfortable or confident in a change. Like how do you walk that fine line between, I mean, as a leader, you're experiencing the change too, and you might not be always comfortable and confident. So if leaders are looking, sorry, if employees are looking to leaders for confidence, but the change is new to leaders as well, like how do you be authentic and live into that while you're also going through the change such a good question i the opportunity for leaders to demonstrate both the ability to test and learn and take risk and fail and be vulnerable is i think more important now than ever before so specific to um you know the ai transformation are we creating safe places where leaders and their teams can come together and say, I tried this and it was a mess. But what did you try? So that's one example. Another one is putting some real ground rules around what is it okay to, how are we going to use AI and when are we not going to use it? And when we do use it, how are we going to talk about the learnings? There's a whole other set of research that we're putting out at the end of the month around the real significant hidden cost for women specifically. I won't go now, but I will later if you guys want to talk about it, the hidden costs that we're seeing and actually the double bind that women are facing when using AI, their credibility is questioned, and when not using AI, their capability is questioned. And so the double bind evolution is, it gives me a little pause to think that we're going to solve these challenges as generations enter the workforce. I just think the challenges are going to shift. Think about that double bind in your organization. It's like just, you know, in your space right now, just think about if you're seeing that already, because it's, I love, I mean, it's an interesting conversation. The other way that I would think about it, and it kind of mentions what you just said, it's this co-creation. And so early on, you know, even 18 months ago, when we first started rolling out AI tools, like it was really interesting to talk to practitioners and to ask them, like, how are you, you know, how are you using it? and it was interesting because it really went back down back to culture like what's the culture of the organization have you created a culture of trust so that people can share the only way that we as leaders are going to figure out what the right mix is is if the practitioners are sharing with you what how they're using it right because they're the ones that are going to unlock the power for the future. So if you can say to them, you know, like we don't have the answers, but working with you closely together, co-creating this really does make a difference, but you have to have that transparency and the evidence to say, if I share with you, you're going to do good things with my data. You're actually going to use it for good. And that really goes back to the culture of confidence that you instill in your practice but if they give you have to be ready to give back to them because it's that quick that you can lose the trust in a day but over time if you're consistent you're going to start to get that co-creation more and more double bind and culture are two very i want to pin those because i think we need to come back to those but any other questions before we do yeah hi nikki bush from mars um that sounds weird so my my question is one thing i've noticed is that people are looking for a lot of certainty from their leaders and what can or certainly what what i can find can happen is it becomes a almost like a parent child they're looking for please tell me everything's going to be okay um and and you can't do that but it is you're also trying to i think what you were saying you're trying to show transparency credibility but how do you balance that not falling into that trap of saying so everyone's looking for you to tell them the or just be the parent and having that adult-adult conversation because I feel like right now it's even harder particularly when the world is so stressful they're looking for you to say it's going to be okay and I don't sometimes I fall into that trap. Well I can tell you some of my faculty what they recommend is keep going back to your values whatever your values your culture and going back to that because even if you can't you know say everything is going to be okay what you need to say is but this is the direction and the more you can go back and say we are thinking in these terms and this is what we are going at least reassure people that they know which directions you're going versus a generic like you cannot reassure people versus a generic shock but you can reassure that that's the direction you're taking and they can be confident in that and there's a lot of it in this it does work if you over time they see you then that you are consistent with that and speaking of values and culture to go back to some of your culture point you know I was talking with the University of Michigan professor I want to say last month who told me that the reason that cultures fail at companies is because the values and the actions don't line up so you can say you know our value is x we believe x but then you could encourage sales people to do shady practices you could encourage this and there's just a misalignment of of it how how would each of you recommend solving this and how do you define that culture so i i love the question and i also want to address your question a little bit so um just a little little story um my background is i started as a program programmer 31 years ago as a COBOL programmer any COBOL programmers out there yes And most of my career has been on the systems engineering side of the house. Just five years ago, I was asked to step into human capital, completely different discipline. I was like, I'm not sure I know how to spell human capital, but sure, I will do it. And the question came to me, I was the leader, lead us, you must have all of the answers. and it was a really it was a pivotal moment in my journey because I had to stand up in front of all of these people that were expecting me to lead to say I don't have all the answers but here's what I can do here's the promise that I can make to you I can promise you that we are in this together I can promise that I will create the space for us to challenge the status quo to cope to be collectively successful all of those things but I also need you to promise that back to me right and it just can't be that that the leader always has to be accountable but being vulnerable and being able to say here's what I know here's what I don't know and here's what I would love from you can we do that together and so I will tell you that that promise still still is on everyone's desktop because we go back to it and we say are we really focusing on relationships and not transactions are we really thinking about the facts and not buying into the politics right and so it was it was something that simple but six years later i think it is six years six or five um here we are and the relationship has shifted because guess what we are in it together and we're going to rise together and if there's a blip we'll fall together but we're going to pick each other back up and i think that that's the part of the human side of the equation that we're going to have to start seeing more of um so that would that would be my yeah my answer the concept that you're bringing forth around shared ownership as well like this is what i am promising and this is what i hope from you we uh another personal story when i took over at catalyst a couple years ago we had to make, as many new leaders, like massive change. And then the external environment was changing so quickly. So, so much change. And in our engagement surveys, I just noticed, you know, it's like those leaders don't know what they're doing and those leaders I don't trust. And I thought, who are those leaders? Like it's me and three other people. And so the shared, I created an operating team pretty quickly to say, well, wait a minute, we are the leaders. And how does it, yes, we have a direction and we want everyone to understand they're part of it. but I also want you to feel like you're in it with us, and we don't have all the answers. That flexible mindset and that curiosity in this transformation, I don't know exactly where it's going to end. I can squint and see a vision, but can you be in it with me? Can I ask a follow-up question on that? Because I think a lot of people in this room have a similar experience where they do these engagement surveys, and sometimes the response is overwhelmingly negative, and these leaders don't know what they're doing. They, you know, they were confused. How do you address that? How did you address that? And how do you kind of turn it around? This is, again, great that it's on the record. But we dug down with the operating team just, this was literally like a month ago, and said, okay, like we've seen now two or three years of data. There are a couple things that we can't solve. As a smaller organization, we can't have precise career pathing all the way up. But what we can do is we can break down silos and work collaboratively together. So, hey, operating team, this one's on us. And we're going to look at really trying to drive that score differentially next year. So that's just one example. We broke it down into the two things we thought we could do together. Any other questions from the room? This has been a lot of fun, Heather Riley Deloitte. We've talked a lot about internal trust and how we build trust internally. We'd love your thoughts on how to build trust with a brand, especially in the world of cancel culture, geopolitical environment. I'm sure everyone in this room's OGC is starting to, you know, tamp down on what can you say. So how do you have that trust and transparency with the brand? With the, like, our, any brand. I'll give you guys a really interesting point. So my daughter is, does anyone know what a Jellycat is? Yes. So my daughter somehow happened to become a Jellycat influencer. she has like 40,000 followers on TikTok. I'm not sure. I mean, I think I know how it happened because I see my credit card. But what happens is, so she's been doing this over the past couple of years and she's got this amazing following, right? So her brand has been around Jellycats. And for her birthday this year, she's, by the way, she's 21. So we can talk about that later. But so on her 21st birthday, she decided that she was going to stop focusing on Jellycat content. And she was very authentic and honest on her on her TikTok. And she said, you know what? I'm 21. I've decided that I'm going to change my focus. I don't enjoy posting this content every day. And here's what I'm going to focus on. And overnight she lost like 5000 followers. And it was because and she was trying to understand and dissect. and it was because she realized that she broke a promise she was showing up every day for two years with the promise that if you enjoyed Jellycats that you were gonna get your dose of Jellycat that morning and when she decided that that's not what she was gonna do anymore she was like mom I I broke a promise that I didn't even realize I had made with those 40,000 followers and so she lost them overnight and so she goes and so she goes back and she you know tries to engage but it's there and I think that I think it has to be consistency and I think you have to stay true to your word but you have to be narrow too I mean that's kind of what it's taught me it's you can't be all things to all people but if I can add one thing which is however a bit of a danger right now because we have a lot of faculty because I live you know on the marketing how you reach out and you have many however I just saw a presentation about the faculty the problem is right now because there's a lot of evidence that you actually like if if the ad is given by someone who looks like you or I says exactly something you you tend to have more trust and the danger is because of AI now you can say like you don't have to be everything to everybody else you can send such a customized message which is different to other people that we can be manipulated into trusting and not seeing the inconsistency so I think that is something to be to be afraid because we are all thinking about exactly oh we have to be consistent and there's people with different but the more you can actually send such messages which are totally you know around your characteristics your uh your purchasing behavior everything you ever did because that's where the data are and you send it i mean eventually will break but you can actually really manipulate people so i think that is one of the dangers in a like we will have to revisit a lot what does it mean to do trust in a brand i feel by coming to you right now can you talk about that a little bit more i mean talking about sort of the messages that people are getting from leaders the messages they're giving back i mean we're all sort of trained right now to even look at the email address make sure that it's actually from your company because it might be an ai bot that's manipulating you into being socially engineered and so everybody is very hyper vigilant and loathe to trust i mean it can you can lose it in a second but it's also harder it seems like to gain it even if you are And just going back to those four pillars that you talked about, Simona, if you could, like, in this context where we're all hyper-vigilant about what we can trust, how do you maintain those four pillars? So it's interesting. So Deloitte has this trust ID index. And it really looks at 7 million customers, 31,000 employee surveys that kind of go across the role, the function, the industry, right? And it actually measures that, well, this is monthly and yearly data that comes in, and you measure it for the brand, for the company that you're working with to really determine where your employees, where the customers, where the brand is responding to determine where you're falling on those four factors, right? And, you know, a lot of people try to say, like, if you blend them together, you have the right answer, but it's not, right? Because you're going to answer a capability problem that you have much differently than you're going to answer a transparency problem that you have or a reliability problem. And so depending on what the company is going through and what score they have, you're going to manipulate, not manipulate, you're going to create your action plan according to what that is. Does that make sense? Did I answer it? Okay. I wish we had more time because this discussion has been so incredible. thank you three thank you all for your incredible questions um and a huge thank you of course to Deloitte for hosting this really important session on on trust and leadership um the main stage conversation is going to kick off in just a few moments at 8 30 in the ballroom we're going to kick off with the big get to know you which is a lot of fun uh and you don't want to be late for that so please make your way there now and thank you thank you