Trust and risk appetite

The CEO of Petrobras recently said that his employees are reluctant to make decisions and take risks in the aftermath of Operation Car Wash.

This should be no surprise. The corruption scandal has led to prosecutions, divestitures and reorganizations. Trust levels are at an all-time low. Why would any employee take a risk if they don’t feel safe?

What the CEO needs to expect next is stagnation. An organization that is unwilling to take risks cannot innovate and is soon taken over by competitors.

The ethical leader understands that building trust is the foundation of a successful business. No stakeholder wants to engage with a untrustworthy partner. And perhaps the most important stakeholder to be trusted by are the employees. They are the ones taking care of all the other stakeholders.

Trust leads to risk-taking, which leads to innovation, which results in superior performance.

This rings true to everyone but those looking for a short-term gain.