Resetting capitalism: How organisations can work for progress, people and planet

Capitalism as we have known it is in crisis. Environmental, social and governance (ESG) concerns are taking centre stage in business as never before, with employees, customers and shareholders expecting so much more from corporations than the pursuit of profit. Analysis by Bloomberg Intelligence shows that ESG assets may account for a third of all assets under management globally by 2025, with a combined value exceeding $53 trillion.

The rise of Black Lives Matter and heightened prominence of the environmental movement led by Greta Thunberg and Extinction Rebellion has accelerated the need to rethink our system to tackle the enormous sustainability challenges we face. Alongside this, unease with traditional capitalism has swelled over the last couple of years, thanks in part to the pandemic shining an uncomfortable spotlight on global inequality.

While many young, low paid and unskilled workers have struggled, a boom in asset values has made the rich richer. According to the Financial Times, in 2020 the collective worth of the world’s five wealthiest individuals increased by over $250bn. There’s a glaring disparity between the privileged lives of powerful, ultra-high-net-worth business titans and the vast majority of people on the planet.

Deeply embedded corporate culture, specifically ‘that’s the way we’ve always done it’ thinking, are big barriers to resetting capitalism that can flummox chief executives and chief people officers looking to deliver audacious transformation plans.

The disappearance of many ‘old jobs’ as they are automated out of existence through the rise of artificial intelligence and robotic process automation risks further polarisation as those in certain roles without the right skills become surplus to requirements, victims rather than beneficiaries of disruptive new technologies. Against such a background, it’s no surprise that most people around the world feel indifferent at best about the work they do and the organisation they do it for. Disengagement is the norm.

But what is the antidote to all this? Klaus Schwab, founder and executive chairman of the World Economic Forum, has championed stakeholder capitalism, calling for a global economy that works for progress, people and planet. “We can’t continue with an economic system driven by selfish values, such as short-term profit maximisation, the avoidance of tax and regulation, or the externalising of environmental harm,” he writes. “Instead, we need a society, economy and international community that is designed to care for all people and the entire planet.”

It’s a view that chimes with the outlook of a handful of prominent industrialists. Anand Mahindra, chair of the Mahindra Group, has adopted a business philosophy he calls Rise, sparked by the realisation that his business cannot rely on a relatively narrow customer base of prosperous Indians to grow sustainably. As he sees it, success lies in creating collective value for Mahindra’s entire spectrum of stakeholders – colleagues, business associates, shareholders, potential consumers across the economy, local and global communities and the planet.

Mahindra elaborated on his approach in a Telegraph article on post-COVID capitalism. “Our core purpose is to enable others to rise by driving positive change in their lives. It does not explicitly mention profits, because we believe that if we enable others to rise we will rise with them and profits will inevitably follow.”

Such thinking would have appalled Milton Friedman, one of the most influential economists of the 20th century, who labelled corporate social responsibility a “fundamentally subversive doctrine”. In a free society, Friedman wrote in his book Capitalism and Freedom “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Some still concur with this opinion but it has become a minority view. Nevertheless, fear of eroding profits remains a brake on transformation. “Often what you find when you talk to senior managers in big organisations is that there can be cost penalties for those that go out on a limb doing it when others in the industry aren’t,” says Mark Fenton-O’Creevy, Professor of Organisational Behaviour at The Open University Business School.

One way around this, Fenton-O’Creevy observes, could be for leaders in large organisations to gently lobby for legislation that creates a fair playing field. In this age of intense pressure to meet sustainability targets, governments around the world may be more receptive to such overtures than was previously the case.

Yet deeply embedded corporate culture, specifically ‘that’s the way we’ve always done it’ thinking, are also big barriers to resetting capitalism that can flummox chief executives and chief people officers looking to deliver audacious transformation plans.

An employee-centric model

The pandemic has certainly been an accelerant but, even before it hit, interesting new models were emerging. One mould-breaker is tech company 10Pines, founded in Argentina in 2010, which now has around 85 employees. In this highly transparent business, salaries are agreed through open discussion with colleagues and every year 50% of profits are shared among staff.

There are some challenges with this employee-centric model, concedes 10Pines co-founder Emilio Gutter. One is cultural mismatch with certain clients – it is hard for its people to work with clients who show little trust in their employees. Plus, egalitarianism has a downside when it comes to weighing up risk.

“Our decision-making process requires a lot of alignment,” says Gutter. “Allowing everyone to express their opinions also opens the door for expressing fears. Some decisions are uncertain by nature and require taking some risks, so it’s a challenge to avoid creating a very risk-averse environment when everyone can point out all the reasons an idea might fail, which are plenty when diving into the unknown of something new.”

However, Gutter says the advantages outweigh the drawbacks. He is a firm believer that more organisations should stop talking about people as resources and become more employee-centric by giving more autonomy to their employees and showing greater trust in them. This can begin with small things, like letting people decide whether they want to go to the office or work from home and plan their schedule…but extends to bigger things, such as involving employees in major decisions that will affect the future of the company.

“CEOs and top executives should spend more time listening to their employees, not just the senior-level executives but everyone in their companies,” says Gutter. “It’s really hard to be an employee-centric organisation without knowing how employees really feel or what they think.”

10Pines’ model applies some principles of sociocracy, an employee-focused approach which aims to hold in balance being productive and being equals by ‘packaging’ authority into domains and distributing that authority into teams, often called ‘circles’.

In this way, explains Ted Rau, operational leader, Sociocracy for All (SoFA), no member’s voice can be ignored, and people start taking each other more seriously because they know that by the end of the discussion everyone has to find consent. This includes decisions on leadership: to stay in the role, a leader needs the consent of the team they lead.

“This system rewards different behaviour from hierarchical systems because now the trusted and knowledgeable people get selected into leadership and not the loudest,” says Rau. Plainly, this is not a system that will appeal to noisy and ineffective leaders.

Evolving to community capitalism

Another model that has gained some traction in recent years is community capitalism which, as the name suggests, prioritises the wellbeing and sustainability of the community – whether that be geographically local or a community of shared interests. An interesting example is Buurtzorg, which in a little over a decade has revolutionised healthcare in the Netherlands through 1,000-plus small, self-organising teams that deliver home nursing care all over the country. They use Buurtzorg’s ‘onion model’ to leverage a variety of available resources to provide clients with the best possible care.

Founder Jos de Blok believes capitalism has brought a lot of damage to healthcare professionals and patients. He created Buurtzorg so that nurses could work based on their professional ethics with the autonomy to do what’s needed. It’s a model he argues could work across many sectors, even in banking. “As a bank, your purpose is to sell many financial products to earn a lot of money. But a bank could say, ‘now we have a higher purpose as a bank. We want to reduce the financial problems of people and find good solutions for that. Then we will have a connection with clients based on trust and sustainable value for the future’.”

In de Blok’s opinion, moving to a community-centric model requires the right “worldview” – one with less focus on earning money. Making it happen may need businesses to become more selective about their shareholders, although the rise of ethical and ESG-driven investment should make finding investors who are keen on the model less of a problem than was once the case.

“If you want to not only talk the talk, then you have to be transparent about what you are doing – clear on the way you are doing it and on how you will share your profits,” advises de Blok. “You can’t hide behind a marketing way of doing things. If it’s not real, people will see that in the end.”

“I am very fond of saying that most large organisations are finely tuned to meet the challenges they faced 20 years ago,” says Fenton-O’Creevy. “Mindset does need to change. There are a lot of things that people take for granted in their industry and these have become so entrenched that you don’t think about them anymore, they are part of the invisible background. Rethinking those kinds of things is quite difficult, although the pandemic has loosened up a great deal of that. People have managed to do in organisations things they didn’t believe possible.”

So will we, as organisational leaders, help to reset capitalism? Or will the new post-pandemic world of work reset us?

The Research into Employment, Empowerment and Futures group (REEF) is proud to be partnering with The People Space. This article was originally published on The People Space website; click to read the original article.

Nicola asks if companies ‘spend more to spill more’?

PhD graduate Nicola Croxton has discussed her research looking at how firms use their corporate social responsibility (CSR) and corporate political activity as a means to improve their overall performance. You can watch Nicola talk about her research and why she chose OUBS here.

She successfully passed her PhD viva in October 2020 with her thesis, ‘The internationalisation of corporate social responsibility: Nonmarket strategy in a global context’. The chair was Professor Jean Hartley, the external examiner was Professor Nicholas O’Regan (Aston Business School) and the internal examiner was Dr Richard Godfrey. Her supervisors were Professor Liz Daniel, Professor Devendra Kodwani and former OU academics Professor Thomas Lawton and Dr Raquel Garcia-Garcia.

Innovation adopted during COVID-19 is now “business as usual” according to OU research

The Leading school learning through COVID-19 and beyond project, led by Dr Jacqueline Baxter, together with Dr Katharine Jewitt and University of Reading colleague Professor Alan Floyd, are investigating online learning and strategic planning through, and post, lockdown in English secondary schools.

Early findings indications

New and innovative practices adopted during COVID-19 born out of necessity are reported as now being ‘business as usual’. An example of this is a wider curriculum offering by schools collaborating to run some subjects online. Another example is parent evenings, once held face-to-face and often poorly attended, particularly in schools in challenging areas, have been much more successful online. Several school leaders state their intention to continue this practice, along with governor meetings and staff meetings.  

There is considerable evidence of pedagogical innovation and creativity. Leaders report evidence of new ideas being tried and tested by teachers, free from the normal constraints. Schools are working more collaboratively, sharing resources, running online book clubs for Continuous Professional Development and co-facilitating staff development online events. They also report new roles being created as a result of an enhanced focus on digital learning.  

In terms of quality assurance, some schools have introduced strategies for peer observation of teaching, virtual learning walks, and other innovations in order to promote and sustain good practice. Some respondents reported using online engagement statistics in order to measure learner engagement. 

I can see a tremendous opportunity for schools to develop their creativity in more diverse ways through online collaboration than perhaps they have been able to explore individually. My hunch is that the digital environment may make people think in ways they have not been able to think just by the nature of its virtual-ness, to play, to explore, the unregulated-ness of it, compared to a lot of educational spaces which are constrained by politics and culture.

Dr Katharine Jewitt, Postdoctoral Research Associate

This article first appeared on the open.ac.uk website. Click here to read the original article.

Related content

OUBS leads ground-breaking £300k project on online learning and strategic planning through, and post, lockdown in English secondary schools.

The Bourne Legacy – there’s more to come from MBA alumnus Des

On the 20th anniversary of Des Bourne being celebrated as The Open University Business School’s 10,000th MBA graduate in July 2001, he outlines in his own words how his studies have helped him in the intervening two decades.

After graduating as the OU’s ‘10,000th MBA’ in 2001, the qualification broadened my horizons and changed the course of my career. An MBA transformed how employers viewed my potential and put me on an equal footing in a business world that was dominated by executives and managers who had formal academic qualifications.

Looking back, I always had a burning desire and ambition to succeed and prove people wrong. A manager at the time told me that I would never get to be the boss – that was one of the driving forces for my study journey with OUBS.

Des Bourne

I was very much on a journey from supervision to junior operational management when I graduated. I had done very well to get this far but always felt I wanted a bigger stage and that there was a bigger purpose for me.

Moving into business development, I was more than willing to accept the challenges of winning work via strategic relationships and business management. My success in this area meant I went from Bid Manager to Business Development Director through to Managing Director within 10 years.

The learning, knowledge and discipline from my MBA supported this change in the direction of my career. It helped me test this drive and determination on bigger stages, shaping my success and achievements and influencing career milestones and leadership successes.

Many managers and executives get promoted in the construction industry because of a technical specialism or technical qualification, rather than an ability to lead people and organisations through change, for example. Managers and leaders had to comply with a fixed stereotypical profile. I did not fit this mould.

My background, focused drive and determination, practical hands-on experience, and formal MBA learning has continued to differentiate me from those around me.

What we see today are construction businesses desperate to harness the power of diversity and inclusion. Construction is an industry that needs to change and transform the way that it works. Many construction businesses benefit from the added value that different thinking offers and the value-added innovation created for their clients. The construction industry has evolved a lot in these last 20 years. I hope I have influenced some of these changes.

The continuing value of my MBA studies

The MBA’s focus on strategy and planning ignited a passion and enthusiasm for a long term, big picture way of thinking with me. My professional and modern management understanding gave me insight and knowledge into people, organisations and processes.

Part of my MBA studies was about creativity, innovation and change. I have thrived upon transformational change, challenging conventions and looking for ways to do things better and differently.

I also chose to study knowledge management as part of my MBA, which I often use to help with sensemaking and problem-solving. I get to the issue or the problem quickly. Many people only see the consequence; I also know the causality.

How this has led to starting my own business

I have been privileged to work with some fantastic businesses and worked with some great people in the construction sector. The only unrealised ambition left for me was to be bold and brave enough to fulfil my entrepreneurial desire to go it alone.

I created Ariaconsult Limited in October 2020, a small West Midlands-based business start-up offering strategic business development, competitive advantage and business management consultancy for construction leaders. I work as a helping hand for my clients to plan growth, create value and improve leadership skills, using focused, driven and different change agent ideas.

My business creates an outlet for me to continue my passion and enthusiasm for providing ideas, insight, tips, viewpoints and knowledge. My consultancy advice helps people deal effectively with business management and competitive advantage issues and problems.

The learning and knowledge from my OU MBA and the practical experiences gained over my exciting career all helped me reach this point in my business life – to offer simple, practical ideas to make your business plan better and your business life easier.

Please get in touch via LinkedIn or my website if you’d like to learn more about my experiences since graduating or to find out about my new business.

Jo’s on The One Show talking about the menopause

OUBS academic Professor Jo Brewis was a guest on the BBC’s primetime television programme, The One Show. The Professor of People and Organisations spoke to BBC Breakfast presenter Louise Minchin in a feature on the menopause and working women last Thursday (1 July).

Jo was chosen as an expert on menopause at work on the basis of her co-authorship of the UK Government report, The impact of menopause transition on women’s economic participation in the UK, as well as more recent publications. These include an Advance HE briefing, co-authorship of a Business in the Community toolkit and a guest editorial on the effects of working from home on menopausal women during the pandemic.

Her other academic publications in this area include co-authored papers on: the experience of writing the report; an intersectional political economy approach to menopause at work; the results of a major survey into attitudes towards and experience of this reproductive life-stage in organisations; and the pitfalls of gender- and age-blind performance management approaches.

Jo is currently a member of the expert panel for Menopause Friendly Accreditation and is writing papers on time and menopause at work, and menopause as an important element of inequality regimes in organisations, among other activities. She is also working with People Services and others at the OU on a menopause initiative at the institution.

Watch Jo on The One Show here (she appears in the 12th minute of the menopause feature which lasts from 10-15 minutes).

OUBS PhD graduate marks Refugee Week

Marco Distinto, an Open University Business School PhD graduate, marked the beginning of Refugee Week 2021 by discussing his PhD research, which looks at the human stories behind the 2015 refugee crisis in Italy. 

As a migrant from the South of Italy, Marco wanted to challenge current ideological discourses around migration by sharing the real stories of migrants and the people who support them. 

His thesis ‘Refugee reception centres and the integration of the migrant: an exploratory study of discourses and practices of not-for-profit organizations working to support refugees in Italy’, was supervised by Dr Cinzia PriolaDr Alexandra Bristow and former OU academic Professor Peter Bloom. Marco passed his PhD viva with no corrections on 21 October 2020.

You can listen to Marco talking about his research in more detail here.

Impact of COVID-19 on weddings reinforces need for marriage law reforms, experts say

Coronavirus disruption to weddings has highlighted the complexity and antiquity of marriage law and reinforced the need for reform, a new study shows.

During the pandemic the ease and speed with which couples were able to marry has depended on their chosen route into marriage – religious or civil – experts have found.

Rules to prevent the spread of the pandemic attempted to strike a balance between getting married as a legal event and a wedding as a social event, and this has failed to please anyone, according to the research.

As lockdown loomed, couples marrying in the Anglican church were able to apply for a common or special licence rather than waiting to have their banns read. During the first lockdown alone, the Church of England’s Faculty Office issued 104 special licences in order to enable the marriages of those who were terminally ill, or who had a close family member who was terminally ill, whereas it would normally issue only 40 for this purpose in a whole year. By contrast, the Registrar-General – who is responsible for civil weddings – issued fewer licences than usual for this purpose.

The research was carried out by Professor Rebecca Probert, from the University of Exeter, and Dr Stephanie Pywell, from The Open University. They surveyed 1,449 people whose plans to marry in England and Wales had been affected by COVID-19 during the first lockdown in summer 2020.

Of these, 625 had been unable to marry on their intended wedding date as it fell during the period of lockdown. Just 10 managed to bring the date forward and marry before the start of lockdown, while 615 had to postpone their plans. A further 793 couples had been planning to marry between the end of lockdown and the end of 2020 and had had to change their plans in some way.

The remainder had either been prompted to marry in England and Wales on account of COVID-19, or had decided to postpone their wedding indefinitely, were no longer planning to marry, or were unable to marry.

The limited number of venues in which couples can marry made it impossible for most couples to marry during the pandemic, although they were able to do so in some other countries. We argue that the laws governing marriage in England and Wales must be fit for purpose in the twenty-first century, so that couples can marry with relative ease if there is a similar nationwide crisis in the future.

Dr Stephanie Pywell
Senior Lecturer, The Open University Law School

The survey asked couples whether they would have wanted to marry in a virtual ceremony. One in 11 said they would have considered a wedding via video-link had this been available. Couples were also asked if they would have been willing to marry in a socially-distanced ceremony with the minimum number of persons present required by law for a valid marriage. One in nine would have been happy to do so outdoors, and one in seven would have considered doing so indoors if different households were separated by screens. Overall, one in five would have considered at least one of these options.

The researchers say all these options deserve serious consideration, and that legislation should be amended to make this option available during any future emergency.

For those couples who simply wanted to be married, having to wait until weddings were permitted to go ahead with 30 guests was particularly frustrating, especially since pubs, restaurants, and gyms had been able to open earlier. Allowing marriages to go ahead earlier, with the minimum number of persons required by law, would have mitigated some of their anger and upset.

Dr Stephanie Pywell
Senior Lecturer, The Open University Law School

Reform is clearly needed, but any such reform has to be holistic rather than piecemeal, and we hope that our findings will strengthen the case for making weddings law simpler and more flexible for the future. The fact that for much of 2020 and for 2021 so far couples were either unable to marry, or unsure as to whether their planned wedding would go ahead, led many to reflect on just how important it was to them. A wedding should be available to couples at the best and worst of times.

Professor Rebecca Probert
Professor of Law, University of Exeter

Well done to Cristina on her viva success

Congratulations to Cristina Mititelu who passed her PhD viva on 7 May 2021 with her thesis, ‘The commissioning for social value and voluntary sector organizations: tensions in implementation’. The panel was chaired by Prof Les Budd, the external examiner was Prof Joyce Liddle (Northumbria University) and the internal examiner was Dr Francesca Calo. Cristina’s supervisors are Dr Alessandro Sancino, Prof Edoardo Ongaro and Prof Siv Vangen. She plans to attend the International Society for Third-Sector Research conference in July to present a paper based on the findings of her PhD, and also intends to submit a paper for publication to a journal based on her thesis findings.

Alessandro deserves his place in the top 40

An OUBS academic has been named as one of the best 40 under-40 business school professors by the prestigious Poets&Quants. Now in its ninth year, this identifies the most talented young professors currently teaching in MBA programmes around the world.

 Dr Alessandro Sancino is a Senior Lecturer in Management with OUBS and Associate Professor at the University of Milan-Bicocca. Alessandro was one of the most nominated professors and most impactful researchers, with more than three dozen nominations and nearly 1,200 Google Scholar citations. With American institutions dominating the list, Alessandro’s balance of strong research background and classroom effectiveness ensured he is in good company alongside academics from the likes of Harvard, Yale and Columbia.

More than 2,200 nominations were received for nearly 150 professors this year with each nominee evaluated on teaching (70%) and research (30%). Once the professors were scored, the 60 outstanding ones were trimmed down to the top 40.

It’s good to see The Open University name alongside some of the world’s top institutions, and I’d like to acknowledge the great support I received from my OU colleagues who nominated me after hearing of this opportunity. It’s fantastic to be representing research areas in business schools such as social enterprise, collaborative governance and public leadership. I am currently researching the role of local and place-based leadership and how to organise at the local level for social impact and around grand challenges.

Dr Alessandro Sancino, Senior Lecturer in Management

Read Alessandro’s profile here – and the other talented academics here.

With the largest team of journalists covering business schools, Poets&Quants publishes more articles, series and videos on MBA programmes and management education than any other media outlet in the world.

Resetting trust in work

The pandemic cast a spotlight on much-hyped corporate purpose statements. In the glare of scrutiny, when the chips were down, organisations saw an uncomfortable question come to the fore: were they living up to the ideals they espoused? Some clearly weren’t.

Remote working has shown that many managers and businesses struggle to trust workers when out of sight. Or indeed expect them to work relentlessly. Investment bank Goldman Sachs recently made headlines for the horrendous workloads of its younger staff, some of whom were burning out due to hellish 18-hour shifts.

Crisis tends to hold a mirror up to organisational ethics and responsibilities, and the COVID-19 pandemic has been particularly revealing when it comes to what organisations say about their responsibilities towards their employees and other stakeholders and what they actually do when times get tough. In some ways the uncertainty and resource scarcity frequently associated with crisis events magnify what is and what isn’t working within an organisation, says Dr Layla Branicki, senior lecturer in HRM and organisation studies at The Open University Business School.

“In a recent study my co-authors Dr Senia Kalfa and professor Stephen Brammer and I found evidence to suggest that if there was underlying antagonism between employers and employees about pay and conditions prior to COVID-19 the chances are that these experiences have been intensified throughout the crisis,” says Branicki. “In contrast, for some organisations their handling of COVID-19 suggests a congruence between their values and actions, as they have gone to extraordinary lengths to provide safe and flexible working conditions during the crisis.”

It’s important to underline that while there have been notable examples of organisations squandering trust, many employers have succeeded in burnishing their reputation during the pandemic. The 2021 Edelman Trust Barometer goes so far as to describe employers as a “mainstay of trust” given that globally they outperform governments and the media, with business more trusted than government in 18 of 27 countries. Notably, trust in ‘my employer’, at 76%, scores even higher than trust in business in general (61%).

HR has to be a guardian of culture and purpose, but every part of the organisation needs to do the same. HR is, however, uniquely positioned to facilitate that culture by keeping a finger on the pulse of employee sentiment, helping the organisation hold itself accountable for how well culture and purpose are penetrating.

“Overall, the employee experience is key to trust,” observes Heather Cooper, chief people officer at financial services company Hargreaves Lansdown. “As we’re coming out of lockdown, we’re really making sure to listen to colleagues about what they need, whether that results in recruiting more staff into service areas or making sure there is a hybrid model of home and office working in the future. I’m laser-focused on assisting managers in continuing to create the right culture throughout the colleague journey, from the point where we put out a job advert through to when colleagues leave us or retire.”

The rise of environmental, social and governance (ESG) as a factor in investment decision making means businesses that cannot substantiate the claims they make regarding sustainability are skating on very thin ice. Alan May, chief people officer at information technology firm Hewlett Packard Enterprise, agrees that ESG is of increasing interest to both directors and investors. In his view, a big part of ESG is how you treat people – internal and external to the organisation. Building a culture of trust therefore isn’t a ‘nice to have’ – stakeholders today expect it. It may be that, just over 50 years since economist and Noble laureate Milton Friedman argued that the business of business is to make a profit the dial is finally shifting towards value being determined by improving outcomes for a broader set of stakeholders, such as an organisation’s workers, suppliers and society as a whole.

“HR has to be a guardian of culture and purpose, but every part of the organisation needs to do the same,” argues May. “HR is, however, uniquely positioned to facilitate that culture by keeping a finger on the pulse of employee sentiment, helping the organisation hold itself accountable for how well culture and purpose are penetrating.”

HR professionals often find themselves stuck between the proverbial rock and a hard place of employer and employee interests, and this has been particularly true during the COVID-19 pandemic. The current crisis has precipitated the need for both urgent HR actions – such as enabling a rapid move to mass homeworking – and what will likely be enduring changes to how and where work is done while refraining from monitoring homeworkers through technology or regular online meetings to check noses were kept to the grindstone.

While HR professionals have played a key role in helping employees navigate these changes, they have also been directly affected by them. A recent Open University Business School study found that some HR managers were themselves experiencing workplace precarity. Under certain conditions, this made it difficult for them to speak up against proposed changes that were not perceived as congruent with an organisation’s culture and values.

“At the same time,” says Branicki of this study, “many of the HR managers we spoke to were optimistic about a more inclusive and sustainable future and had found strategies that enabled them to feel empowered when necessary to challenge their organisation despite the challenging conditions. These strategies included articulating the long-term implications of short-term decisions, leveraging the external perceptions of organisational actions, and handling uncertainty on behalf of other employees. COVID-19 shows us that HR managers continue to play a pivotal role in determining how responsible organisations and their leaders continue to be.”

Dr Oleg Konovalov, author of THE VISION CODE: How To Create And Execute A Compelling Vision For Your Business, takes the view that ‘resetting’ trust involves three critical elements: listening to people, confidence and credibility, and enabled decision making. People will, he maintains, engage only if the company is fully engaged in them. If no care exists in relation to employees, then no engagement can be expected in return.

“Care is a verb expressing actions for others, in which involvement in people, concern for their future, emotional comfort, physical comfort and safety are critical elements,” says Konovalov. “The real nature of the company and its vision is seen in its ability to care for people. No team can execute a vision if the culture is fragmented and everyone is pulling in his or her own direction. Only people who combine their energy together can achieve great goals.”

Paul Hucknall, HR director at wealth management company Quilter, concurs on the importance of listening, asserting that the best businesses are the ones that took time to listen to their people when the world went into lockdown. The process of “active listening”, he elaborates, is taken seriously at Quilter, including through weekly micro-surveys to check sentiment among its people on a range of issues.

These employee soundings play into many of the FTSE-250 company’s initiatives, one of which is the development of its Thrive wellbeing programme. Hucknall also believes the thorny issue of reward has a big impact on trust and that many businesses need to take a more holistic view on remuneration. “In terms of reward, there have been numerous examples in recent history of poorly designed incentive schemes that put short term rewards ahead of other stakeholders and have decimated consumer trust. And while that trust arrived on foot, it leaves on an express train. To build back trust, remuneration should be linked to the values you expect people to uphold and designed to promote reward structures that encourage appropriate behaviour, avoid excessive risk taking and support the creation of sustainable value.”

Manufacturing conglomerate Halma was named Britain’s Most Admired Company in 2020. Unsurprisingly, the business is big on purpose, which it articulates succinctly as growing a safer, cleaner, healthier future for everyone, every day. Jennifer Ward, chief talent and communications officer, says the board plays a vital role in ensuring the group’s alignment with its values, purpose and strategy, offering constructive challenge and diversity of thought. Because of the strategic importance of purpose to Halma’s strategy, the board plays an active role in ensuring that as the business grows, it does so in a way that fulfils its purpose. Part of this entails maintaining a constructive and ongoing dialogue with investors increasingly focused on ESG issues.

In keeping with Konovalov’s point on enabled decision making being a fundamental criterion for building trust, Halma is a big believer in empowering its workforce. “Our model is to bet on talented people and allow them to make critical strategic and operational decisions,” says Ward. “This fundamentally places the trust at all levels in our organisation and our belief is that our employees will do the right thing. We have also found that establishing peer networks – where employees can connect and share their experiences and best practice across the globe – is an effective way to empower.”

It’s easier to sustain trust than it is to repair it and this poses a significant responsibility challenge because without trust it’s unlikely that employees will feel empowered to hold their organisation to account. While resetting trust is massively challenging, taking an inclusive approach to decision making that involves not only employees but other key stakeholders can be a useful first step, as it signifies that an organisation is willing to have the challenging conversations necessary to move forward.

“Silencing dissent and concealing conflict may seem to reduce antagonism between stakeholders in the short run but, as the COVID-19 crisis has demonstrated, organisational problems seldomly stay hidden,” says Branicki. “The true path to trust comprises openness, employee care and empowerment and consistent adherence to corporate values.”

The Research into Employment, Empowerment and Futures group (REEF) is proud to be partnering with The People Space. This article was originally published on The People Space website; click to read the original article.