Professor Sim Sitkin explains why leaders need to explain difficult decisions and acknowledge conflicting expectations to build trust

You expect a company to deliver consistent service, but you also want it to adapt when your needs change. You want a company to listen to your opinions, but you also expect it to rely on experts when making decisions. These competing expectations can erode trust even when an institution has done nothing intentionally wrong.

In this episode, Professor Sim Sitkin of Duke University’s Fuqua School of Business discusses why institutions lose trust and how leaders can address the contradictions behind that erosion. A professor of management and faculty director of Fuqua’s Coach K Center on Leadership and Ethics, Sitkin explains how trust makes everyday life more functional and enables collaboration. Trust is “a willingness to be vulnerable under conditions of uncertainty,” he said. When people trust an institution, they can rely on it without constantly questioning whether their interests will be protected.

Sitkin identifies five inherent contradictions institutions face: stability versus adaptability, inclusion versus exclusivity, standardization versus customization, expertise and authority versus participation, and protection of sensitive information versus transparency. Meeting one expectation can violate another. For example, customers may expect quick, standardized service while also wanting special treatment for their individual needs.

To address these tensions, Sitkin outlines four actions: explore people’s concerns, explain the contradictions and the institution’s responses, experiment with different approaches, and execute decisions well. Leaders should understand what makes people feel vulnerable and explain why difficult choices are necessary. His leadership research shows that leaders do not explain enough, and those with more power explain less. “I need to explain if I want to get trust,” he said. When a department must absorb budget cuts for the organization to survive, leaders should explain the alternatives considered and provide support to those affected.

For business leaders, building trust requires ongoing interaction, acknowledging mistakes and being willing to adjust as circumstances change. Sitkin points to distrust in science and universities as examples of why explaining experimentation matters: new findings can improve today’s best answer. For MBA students, he recommends learning from classmates who disagree with them and choosing courses and projects that stretch their abilities. Trying unfamiliar approaches, including those that fail, can create opportunities to learn.

Duke Fuqua Insights features digestible conversations with our faculty about the most impactful research from their careers, including studies they teach in Fuqua classes. New episodes every other week in season.

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