Trust drives performance

Facing growing consumer expectations and rapid technological change, company leaders still struggle to find and hold onto the talent they need to fully recover. In a recent MHI-Deloitte survey, supply chain executives ranked hiring and retaining qualified workers their number one challenge. Yet, our research finds many organizations are performing with high reliability in this difficult environment.¹ The secret to their success? Building trusted supply chains via more human relationships with their internal stakeholders.

Our research highlights the business impacts of trust and provides insights into solutions that can help organizations enhance trust. We have found: The most trustworthy companies outperform their peers by up to 400% in terms of total market value. Customers who trust a brand are 88% more likely to buy it again, and employees who trust their employer are more motivated to work and less likely to leave.2 In our most recent study, we hypothesized that trust is a powerful driver of performance throughout the supply chain ecosystem. To explore the connection, we surveyed roughly 1,500 supply chain executives, managers, and front-line employees across industries, with a focus on planning, sourcing, procurement, logistics, and distribution functions. We asked them to rank their organizations’ performance relative to competitors’ in terms of reliability, speed, agility, asset efficiency, and innovation and used these rankings to segment the companies on a best- to worst-in-class scale. Then, using our TrustID trust measurement system, we asked front-line employees about their trust in the companies’ supply chain leaders, and we asked all respondents in supply chain roles to gauge their trust in non-supply chain departments such as sales and marketing.3

We found that the best-in-class supply chain organizations are, on average, six times more trusted than their lowest-performing counterparts. One of the largest trust gaps turned up in front-line workers’ ratings of leadership’s “humanity” (its kindness, empathy, and fairness in the workplace) where we saw a sevenfold difference in scores between highest- and lowest-performing organizations. Similarly, we observed a significant trust gap among supply chain departments regarding how they view other internal department's "humanity." What’s more, the highest-performing suppliers we studied were more than three times as likely as other companies to prioritize employee development and growth. In short, if you want to create a reliable and effective supply chain, developing better relationships—with kindness in the workplace—is key.

Who benefits most from the humanity advantage

Many of our studies have proven that humanity matters. Employees who give their leaders high scores on humanity are 2.6 times more motivated to work. However, we were surprised by the significant role that humanity plays in supply chain relationships, especially those within the organization itself (such as the relationship between frontline workers and corporate supply chain). We expect that demonstrating humanity will grow in importance over time as more Gen Zers enter the workplace. In separate research on younger generations’ trust, we found that one-third of Gen Z say they don’t feel cared for at work. At the same time, those who do feel that leadership demonstrates empathy and kindness in the workplace are 3.3 times more likely to look forward to coming to work and less likely to plan to leave their job.4 While employees of any generation appreciate expressions of humanity at work, our research suggests that this is more important for Gen Z and other younger workers than for older generations. As Gen X and boomers retire and younger workers move in, expressing humanity will become increasingly important in attracting, motivating, and retaining talent. And given the striking impact of humanity on building trust in supply chain ecosystems, there will be a premium on expressing more kindness in the workplace.

What leaders should do

Our findings clearly show that to achieve or maintain best-in-class standing, supply chain leaders should double down on enhancing humanity.

Building trust in the supply chain means creating stakeholder relationships by showing them kindness, empathy, and respect in the workplace—particularly with internal departments and the front lines. In addition to the direct benefits of treating employees with humanity (such as increased employee engagement and retention rates), focusing on humanity is tightly linked to better reliability. When employees give their supply chain departments high humanity scores, they are 3.7 times more likely to also rate their supply chain departments high for reliability, a measure of how well supply chain departments consistently and dependably delivers on their promises.

As the global supply chain continues to experience disruptions, building trust in supply chain organizations is increasingly important. The greater that workers trust, the greater their engagement, motivation, and loyalty—and the better the organization will likely perform. By enhancing trust, lower-performing organizations can become more competitive and best-in-class companies can reinforce their advantage. As it turns out, kindness in the workplace really is differentiating.

Endnotes

¹ Mark Solomon, “Labor shortage, retention top list of supply chain concerns,” FreightWaves, March 23, 2023.
² Ashley Reichheld and Amelia Dunlop, “4 questions to measure—and boost—customer trust,” Harvard Business Review, November 1, 2022.
³ Deloitte, “HX TrustID Workforce Survey,” 2022.
⁴ Amelia Dunlop and Michael Pankowski, “Hey bosses: Here’s what Gen Z actually wants at work,” Deloitte Digital, March 28, 2023.