Restoring trust in the context of strategic change
How can managers repair lost trust after strategic change? In a recently published study, FOCUS researchers Therese Sverdrup and Inger Stensaker propose a three step model for leaders to follow.
Sverdrup and Stensaker summarize the main findings in the paper as follows:
Trust is a driving force in change processes, and a loss of trust is a fairly common phenomenon during change. By investigating strategic changes related to a merger, we were able to capture in real time how a group of employees lost trust in senior management and subsequently how senior management worked to regain trust. Our findings provide new insights on how to deal with the loss of trust occurring in the midst of a change process. Based on empirical data we develop a model showing that if the parties perceive loss of trust as a psychological contract breach, they can repair trust, first, by restoring reciprocity between them; second, by renegotiating the psychological contract and its transactional terms; and third, by expanding the psychological contract to include relational elements.
What is new in relation to existing knowledge on the topic?
Our model provides an alternative to existing trust repair models by suggesting that in an organizational change context, trust can be repaired through steps other than those typically recommended (apology and penance).
What can managers learn from this?
Leaders may follow our three step model when repairing trust: Stage 1 in our model, restoring reciprocity, involves reestablishing a sense of balance in the relationship. Three specific management actions helped restore reciprocity in the merger we studied: (1) in light of its more powerful position, management made an offering to the employees; (2) management appealed to future-oriented thinking rather than rehashing the past; and (3) a new business unit manager was appointed. Stage 2 in our model, renegotiating the psychological contract, involves preparing for future collaborationby clarifying the rules and expectations for collaboration. Doing so requires that management creates an opportunity for collaboration. Compared with previous research on change and trust repair, stage 2 emphasizes the importance of the parties sharing their perceptions of how to collaborate and explicitly agreeing on what the transactional components of the psychological contract mean. Stage 3 of restoring trust involves extending and deepening the (renegotiated) psychological contract to include terms that are relational in nature.