Beyond the bottom line, one of the biggest casualties of the global recession is workplace trust. True or false?

Sounds true but, according to management research from City University London, workplace trust was already deeply damaged before the recent meltdown exposed the stench of various executive practices and brought down financial titans.

Dr. Veronica Hope Hailey, a professor at City University’s Cass Business School, has tracked the erosion of workplace trust over the last 10 years and her findings are unsettling for those who care about innovation.

“We are in real danger if we think the breakdown in trust in the workplace is because of the recession,” Hope Hailey told the International Association of Business Communicators (IABC) recently in Toronto. “Simply going into recovery is not going to solve this problem.”

The problem – in the wake of intense globalization and voracious waves of mergers and acquisitions – is that senior corporate managers seem ever more remote from employees, either geographically or politically. (Politically, in that corporate goals and priorities often appear murky from a distance.)

Add to that the death of the job-for-life social contract as well as corporate change initiatives that often fizzle out after launch – or fail to connect with their regional audiences – and there is a deep lack of confidence and growing cynicism among grassroots corporate employees. This permeates many large public- and private-sector employers, Hope Hailey noted.

So what’s the impact of this lack of trust in leadership? The benefits of trust in business are well-documented: greater information-sharing; better problem-solving; greater willingness to change. Most distressingly, as Hope Hailey described, companies simply cannot innovate in the absence of trust.

Think about it: we trust leaders who demonstrate ability, integrity and benevolence. Leaders who show employees that they are not only skilled but they do the right thing and they care about people all the way down the line. They don’t just care once a year at the company picnic or in the quarterly podcast.

Real leaders know that trust is not a one-off creation. During good times they make real deposits to the bank of trust, creating a reserve to draw on when times are bad. They grow those reserves not by wielding high-end titles – Hope Hailey’s research shows that job title has no bearing on trust – but by hearing what employees think, even when they cannot solve their problems.

Down the hall at another business communications session, Craig Kielburger – Toronto’s own child philanthropist turned rockstar global development and ethical living advocate – calls it the “drink tea philosophy”: Listen to each other. Learn from each other. Avoid making assumptions.

What does this mean for corporate leaders? Open the door to real dialogue with employees, act fairly and you’ll build a brand your employees care about. So will your customers.

Linda Quattrin

Linda Quattrin was a newspaper reporter and editor before applying her interest in science as communications director at Robarts Research Institute. A member of the Canadian Science Writers Association, she was responsible for media relations and corporate communications at MaRS. See more…