Consider this research published in Harvard Business Review from Paul J. Zak, a Professor at the Claremont Graduate University and author of The Trust Factor: The Science of Creating High-Performance Companies:

Compared with people at low-trust companies, people at high-trust companies report:

• 74% less stress and 29% more satisfaction with their lives.
• 106% more energy at work and 50% higher productivity.
• 13% fewer sick days and 40% less burnout.

Here we explore what trust means in the leadership context, why trust is at risk, and the important ways leaders can build trust for higher-performing and engaged teams in the year ahead.

The decline of trust

Trust does not come easy and, right now, trust is on a downward spiral. Edelman’s newly released Trust Barometer – which has tracked trust levels for more than 20 years – shows trust in the media and government, both once revered as beacons of trust, has eroded. Globally, two-thirds of respondents believe they are being lied to by journalists and government leaders and nearly half now view media and government as divisive forces in society.

This “cycle of distrust” in government and media institutions has important trickle-down effects for business leaders. Employees and wider society are looking at those at the helm with new eyes. While business executives have historically been expected to lead their companies to new heights, they are now expected to do so in a manner that helps build a better, more sustainable world. They must now deliver not only on profit, but on societal impact for their employees, their customers, and wider society.

Notably, Edelman’s research showed that distrust has become the new default, with 59% of respondents saying they tend not to trust something until they see evidence to the contrary. Business leaders are unlikely to be immune from this default position. Reinforcing that trust is earned over time, with consistent authenticity and transparency.

The four types of trust

Trust takes on various dimensions in the leadership context. It isn’t just about whether frontline employees trust those at the helm. It’s also about whether teams trust each other. And, critically, whether leaders trust themselves to get the job done.

Do teams trust their leader? If they do, they are more likely to engage in the leader’s vision and apply their best thinking and efforts to deliver against it. This dimension of trust is particularly important during times of business transformation, where employee engagement and buy-in are often the difference between success and failure—and return on investment.

Do teams trust each other? If teams operate in an environment of trust, they learn to have confidence in their ability and others, leading to a positive culture of cohesion and collaboration. On the flip side, when teams don’t trust each other, there’s a higher chance of infighting, duplication of efforts, credit-grabbing, and overall slower performance. This scenario is also linked to toxic culture.

Does the leader trust their teams? The capacity to trust others enables leaders to align their teams around a common purpose, take risks, and communicate openly and honestly—the bedrock of high performance. Conversely, if leaders don’t trust their teams, they are more likely to micromanage and block innovation, creativity, and progress.

Does the leader trust in themselves? When leaders score highly in this area, they tend to be more resilient. They stay the course in the face of setbacks and are less likely to dwell on mistakes. For them, bumps in the road create new learning experiences. This is a particularly important, but often overlooked, dimension of trust. When colleagues and teams see self-trust is missing, it prompts the question: “If they don’t believe, why should I?”

Common traits of trusted leaders

Unfortunately, there are no shortcuts to building trust. Trust can only be earned. And it takes time to build. Yet there are certain traits that leaders who inspire the confidence of their colleagues and teams possess that will help you as you begin to foster your own culture of trust.

A human-centered approach. Former Apple CEO Steve Jobs was a famous proponent of “bringing your whole self to work.” And it’s easy to see why: people always follow people. So, while the idea that leaders must always show courage and strength may have succeeded in the past, today’s employees expect their leaders to show other sides of their personalities, too. Winning employees’ trust will require you to develop softer skills, like authenticity, humility, honesty, and self-awareness, alongside the technical skills traditionally demanded in leadership roles. We know that adopting these skills does not always come easily. In a recent global survey, we found that only around (40 percent or 4 in 10) C-suite leaders thought the senior-most leaders at their organization showed authenticity, empathy, or self-awareness. Even fewer said their senior leaders show humility or lead by example.

Showing humility. If the pandemic taught us anything, it is that the long-held myth that leaders should have all the answers is no longer relevant. When we looked at how leaders could navigate this crisis, we found that while it was important to honestly accept the gravity of the situation and communicate openly, leaders also needed to be humble enough to admit they didn’t have all the answers. When you do this, it not only gives you credibility, but also the opportunity to share an authentic vision that is both reassuring and realistic. In turn, employees and colleagues are more likely to believe that you are the right person to steady the ship and navigate a path forward.

Delivering on your promise. One of the most critical bedrocks of trust is the ability to do what you say you are going to do. Today, this is perhaps most acute in the shift towards sustainable business. As more and more companies commit to lofty net-zero goals, employees, consumers, and the media will be looking for clear evidence that leaders will not only talk the talk on sustainability but also walk the walk. In the absence of any global standard for ESG reporting, leaders are standing squarely on trust—trust that they will do the right thing and deliver on their promises. As you look to 2022, ensuring you have a clear roadmap for change to support your sustainability vision should be high on the priority list. After all, you can only lose trust once.