Why trust should be the foundation of your business
Lessons in how to avoid letting mistrust derail your growing business.
Whatever part of the news you watch right now, the same themes keep on coming: lack of trust in 'the system,' growing inequalities, leadership actions, and decisions, that at their best could be called questionable, at their worst, downright immoral. Time and again, we are forced to acknowledge that so many of our institutions cannot be trusted to do the right thing.
Surely, we can trust justice to prevail?
Take, for instance, the recent conviction of Derek Chauvin for the murder of George Floyd. In isolation, we can share our relief with the family who has seen justice for their son or brother, whose life was cut short in the most appalling way. We can praise the US justice system for delivering on its purpose and seeing justice carried out. We can celebrate a system that has done the right thing.
Scratch beneath the surface, and there are many reasons to be less than comfortable with the underlying rules of the system:
The incident only came to light because a 17-year old girl filmed it on her phone and posted it online.
The world outrage that followed reignited a global movement, putting heightened pressure on the system to take action against Derek Chauvin.
Only a fraction of deaths caused by police ever lead to charges, far less convictions.
To support this last point, an article in the Financial Times, Philip Stinton, a criminologist at Bowling Green State University in Ohio, reveals that less than 2% of the 1,000 deaths caused by the US police each year result in charges. Since he started his research in 2005, out of just over 140 cases of murder or manslaughter, only seven have resulted in murder convictions: many more were dismissed or acquitted. Only now, having achieved justice for George Floyd's murder, is a wider investigation into systemic racism and police force brutality being conducted.
Would the outcome of the court case have been the same had it not been for the persistent cries for justice across the globe?
The recent quashing of 39 former postmaster's convictions by the UK's Court of Appeals is another case in point. The happy images shared across the media show the relief, congratulations, and delight that justice has prevailed. Names have been cleared. A reason to celebrate? Indeed.
But the sheer extent of the miscarriage of justice that went before this is disgusting. According to Nick Wallis, an investigative journalist who is writing a book on the scandal, between the years 2000 and 2013, the Post Office prosecuted 736 individuals over Horizon-related discrepancies. A rate of one per week for 14 years. Perhaps some of these will prove to still be lawful and upheld. But how many lives have been destroyed through a default distrust of employees? To what extent is this miscarriage of justice a result of systemic mistrust?
How is it right to take nearly 20 years to reverse such a miscarriage of justice?
What does this mean for growing tech firms?
You might feel these examples are wildly unrelated to you as a founder or leader of a growing tech firm.
So, what about Uber, as yet another case in point? Everyone knows about Uber.
Launched in 2009, Uber quickly established itself as a darling in the tech start-up world: the holy grail of unicorn status. In 2013, USA Today named it 'Tech company of the year.' As it grew, it was not without controversy. There were numerous lawsuits and challenges to its contention that drivers were self-employed and therefore not entitled to any protective rights, benefits, holiday pay, or minimum wage. It was fined $8.9m in 2017 for not conducting complete background checks on drivers. But 2017 also marked a pivotal point in Uber's history for an altogether unsavoury reason.
Susan Fowler published a blog post that shone a light on her working experience in Uber. Entitled “Reflecting on one very, very strange year at Uber,” she had no idea that posting her blog would be read by over 6 million people and would prompt the independent review into Uber's working practices.
The Covington report recommended 47 actions to improve the firm's culture based on four key themes:
"tone at the top, trust, transformation, and accountability.”
Within weeks, the founder and CEO, Travis Kalanick, had taken an extended leave of absence before announcing a forced resignation. With a new CEO, and a significant investment in diversity and inclusion, the company has made some strides towards a more inclusive culture, but not without suffering huge reputational damage and losses.
Undoubtedly, Uber is one of the most well-known tech unicorns to come under fire but not the only one.
The dramatic rise and fall of Elizabeth Holmes, founder, and CEO of Theranos, has led to accusations from the SEC of "massive fraud" and an upcoming trial that was only postponed due to the Covid pandemic. She is reported to be facing a potential 20-year prison sentence and a $2.7m fine, as well as several other civil suits. Besides false claims about the efficacy of the technology, she is also accused of severe mistrust, instructing her assistants to monitor when people arrived for work and left to make sure people were working as hard as she believed they should.
This cultural intensity and aggressive hard work was also a feature of WeWork, with staffers joking that they "worked like slaves." Inside this candid Vanity Fair exposé are stories of a leader who wouldn't listen, excessive arrogance, and a culture of fear and anxiety. Driven by Adam Neumann's insatiable drive and energy, things began to unravel in the lead up to its IPO. Once potential investors began to tug at the loose threads, the IPO imploded, $40 billion of 'value' was wiped out, and over 3,000 employees lost their jobs.
What does this mean for you?
As the founder or leader of a growing tech enterprise, there are important lessons to be learned as you develop your leadership role within your firm. Building a business doesn’t need to be like this.
The decisions you make as you are growing your business can lead to very different outcomes:
Build a culture of trust and psychological safety: It is not sufficient to simply focus on your growth aspirations without a strong sense of developing the culture and your teams' experiences. To enable innovation and growth, trust needs to be a foundational core of how you rally your team around your vision. People need to not only buy into and engage with your organisational purpose, but they need to believe in your motives and feel psychologically safe enough to speak up and share concerns.
Develop your ‘people-first’ leadership style: Putting the needs of your people as your #1 priority creates an entirely different dynamic around how you grow and develop your business. Hero leadership can be very intoxicating, but you need to recognise the strengths and talents of those around you and give them freedom and autonomy to do what is best for the growing business.
Distribute accountability through your organisation: As you grow your business, you need to think about how to best structure your teams to optimise results. Traditional growth plans typically organise around hierarchical structures, with founding employees often being promoted into management tiers without understanding how to lead. Power imbalance results to lower engagement and less ownership of issues and outcomes. If not checked, it can lead to system malaise and acceptance of how things are done around here (even if they aren't right).
If you want to talk more about this, get in touch. Feel free to share, if useful.
Till next time.