Trust and the female boss
By Emma De Vita Wednesday, 01 September 2010
According to our poll, faith in CEOs holds up best when a woman's in charge.
It's the second year of the MT/Institute of Leadership and Management (ILM)'s Index of Leadership Trust survey and although the recession continues to cast a long shadow, the news is mostly good. Of the 5,000 people polled (2,405 managers and 2,595 non-managers), 47% of respondents thought their chief executive officers had handled the impact of the recession either 'very well' or 'quite well'. Another 39% gave their bosses an ambivalent 'neither well nor poorly' performance rating.
All of which means that the CEO index score, as researched by consultancy FreshMinds, has increased by four points to 63 this year. Leaders were rated particularly highly for their ability to create more open and understanding cultures. 'It goes to show that CEOs are doing a lot of work around their own visibility, but are also empathising with the experience their people are having,' says Penny de Valk, chief executive of the ILM. 'It plays to the strategy of "don't be a stranger".'
Of particular interest is the fact that overall trust in female CEOs remains higher than trust in male CEOs, as was the case last year. But the largest year-on-year increase in CEO trust is experienced between male employees and their female CEOs - an increase of eight index points on last year. And most of this increasing level of trust was experienced by non-managers, who registered an increase of a massive 11 index points in their trust for their female CEO between 2009 and 2010. It's a theme we explore in our interviews with Rosaleen Blair, CEO of recruiters Alexander Mann Solutions and Barbara Stocking, CEO of charity Oxfam GB, and some of their male colleagues.
What has fuelled this rise? Women rate more highly than their male counterparts both when it comes to employees having confidence in their boss's ability to do their job and also when it comes to being principled and honest. Female CEOs score higher than male CEOs in these areas by two and three index points respectively. But the really important differentiator is chief executives' knowledge of what their employees have to contend with in their day-to-day lives - female CEOs are seven points ahead of their male counterparts on this measure.
When times are tough, it helps to at least know that your chief executive understands your predicament, even if he or she can't do much about it. Downsizing has meant that people are often doing two jobs: to be able not only to acknowledge that but to understand what it feels like and also help people with their predicament is a big driver of trust.
But, says de Valk, it's wrong to rely on the gender stereotype that women are naturally more empathetic than men. 'We know that women are not likely to put themselves forward for new roles unless they feel 95% capable, whereas men will happily do so at 65%, so what happens is that when women are promoted, they are very familiar with the tasks their people are doing.'
Cost-cutting measures have had a clear negative impact on trust in CEOs. The greater the severity and spread of the measures taken within an organisation, the lower the level of trust felt by employees for the line manager and their CEO - although it's always the CEOs who come off worst, probably because they're not the ones to hold hands and provide shoulders to cry on when bad news is given out.
For employees working in organisations which have suffered no negative recessionary effects - cost- cutting, redundancies or office closures, for example - the CEO trust level score is 68. The score for a CEO whose organisation has been severely affected by recessionary measures is a miserable 51 - a drop of 17 points. 'It just goes to show that there is a massive residual consequence to taking cost cuts in your business by doing that through headcount reductions,' says de Valk. 'You must be able to build that level of trust back up as quickly as you can, because it will have an impact on productivity and engagement.'
There is also a dire warning here for the public sector, which over the next 12 months will be asked to make the eye-watering cuts the coalition government is demanding. According to our survey, out of all the sectors, local and national government employees have the lowest levels of trust in their chief executives. Says de Valk: 'If they are going in with such a limited trust credit in the bank, you've got to ask: how are they going to avoid eroding it further?'
ROSALEEN BLAIR AND ISHPAL BANSAL, ALEXANDER MANN SOLUTIONS
Not many bosses are comfortable admitting that they've made a mistake. But, for Rosaleen Blair, CEO of Alexander Mann Solutions (AMS), making mistakes is part of the culture at the company she founded and key to building trust. 'If people aren't making the odd mistake, they're probably not trying hard enough,' she says.
To work properly, trust must be a two-way thing: Blair and her top management team have to be trusted by their employees, but, equally, they have to trust their staff to make the right decisions. 'If I didn't have faith in the leadership, it'd be very difficult for me to put my heart and soul into the company,' says Ishpal Bansal, the recruitment firm's head of client services (pictured, with Blair). 'Rosaleen tells people it's OK to make a mistake; it's OK to falter.'
Vic Khan is director of global client service centres and responsible for 500 staff. He has been with the company for 13 years and is currently working in Poland. In his time at AMS, he has completed two masters degrees and built operations in the UK, Krakow and Manila. 'That culture of trust and entrepreneurial spirit made it possible,' Khan says.
This culture has been dented over the past few years. Not only did the firm feel the effects of the global financial meltdown, but Blair had just engineered an MBO. It was a lot to contend with and as a result she and her top team took steps to streamline processes across the business. 'Frankly, we probably went too far - we lost some individuality and agility,' she admits.
Blair is now taking steps to address this - what she calls 'putting the heart back into the business', including reinstating an employee awards scheme.
Bansal says that people within the organisation understand that certain things change during a downturn. He says that colleagues recognised that to continue to take big risks would be foolish. 'In a funny way, battening down and being a bit cautious helped foster trust, because at least we realised that the company was being responsible.'
The respect and trust for Blair are palpable from both these male managers. Bansal says he isn't surprised at the findings from the MT/ILM survey which show that female CEOs are more trusted than their male peers. 'Because it's not very often that you see a woman taking the top job, there's a recognition that when they do, they must be very competent.'
Blair herself feels uncomfortable being put into the category of female CEO. 'I just see myself as a businessperson,' she says. 'I'm lucky, because I've been able to create an environment that I want to work in and where I can be successful, as can other employees - regardless of whether they're male or female.'
BARBARA STOCKING AND CHRIS ASHWORTH, OXFAM GB
[BX] For an organisation such as Oxfam, trust is vital. Not only does there need to be a high level of trust among employees, but with donors, corporate partners and beneficiaries too. The charity's CEO, Barbara Stocking, says the key to being trusted by staff is demonstrating personal integrity. 'I don't just mean being honest, what I mean is that you are who you say you are and do what you say you will do.'
Chris Ashworth, corporate partnerships manager, one of Stocking's indirect reports, agrees. Despite his neatly managed response, it is evident he respects his leader. He has been with the organisation for four years and says that transparency is vital for him. 'You know the integrity's there, but it's about making it visible.' Stocking is good at this - she operates an 'open door' policy, to ensure staff who want to see her about a serious issue can, and communicates directly with employees every month by email letter.
Remaining visible and accessible is even more important during these straitened times. As the MT/ILM survey shows, the cost-cutting measures taken during the recession have stretched trust to its limit. Certainly the impact of the downturn was felt at Oxfam: the annual staff survey found that motivation and satisfaction were down slightly on two years ago, which Stocking attributes to the economic malaise.
Despite giving the orders for 70 redundancies in 2008 and implementing a pay freeze, Stocking doesn't feel that she is being held directly responsible. 'It's not a nice thing to do,' concedes Stocking, 'but again, it's about explaining.' She also says it was made easier by the fact that people were accepting of the external factors forcing her hand. Moreover, the nature of the organisation dictates that people are more understanding when it comes to saving cash. 'Donors give us money not to spend in Oxfam House, but to do good work in Pakistan or Afghanistan,' she says. They trust her to make the right call and ensure money goes to where it should - to the projects on the ground.
The downturn and its impact on male CEOs may help explain one of the most interesting findings of the research, that female bosses remain more trusted than their male counterparts. Ashworth suggests that the revelations around MPs' expenses and a procession of disgraced male CEOs being in the spotlight may have played a part. 'Male leaders have taken a real battering over the past year,' he says.
Stocking is hopeful it signifies a step-change in the way female bosses are viewed. 'Men may be just getting used to having women CEOs,' she offers. 'People haven't been accustomed to women in top positions. Now they can see more examples - and that they're doing a good job.'