In today’s business world, the importance of trust cannot be overstated. It is so critical to business success that business leaders regularly say that it is important to earn trust and retain it. Yet, while trust appears to be increasing in value to businesses, it is, at the same time, becoming more elusive. According to the 2016 Edelman Trust Barometer results, one in three of us don’t trust the leaders of our organizations. In addition, the annual Trust Index results from the Great Places to Work Institute support the Edelman findings of a growing trust crisis.
And, there is a growing amount of evidence which shows that trust—or the absence of it—is having an ever-greater impact on the things that businesses care about such as brand equity; customer loyalty and market share; propensity for collaboration opportunities; the ability to be agile, creative, and innovative; and the attraction and retention of talent. Time and again, when we look into what drives the success of businesses, trust is at the heart of it. Here are a few data points:
The Great Places to Work Institute’s 2015 research indicated that company stock of firms with high-trust cultures perform nearly 2x better than the general market. Similarly, another study conducted by the Trust Across America Survey tracked the performance of the most trustworthy companies in the U.S., finding that those firms produced an 82% return vs. the S&P’s 42% since August 2012.
The 2016 Employee Job Satisfaction and Engagement Survey conducted by the Society of Human Resource Management (SHRM) found that that trust was the top two elements contributing to employee engagement. Almost all (95%) of respondent say the “respectful treatment at all levels” is important but only 71% say they are satisfied with it in their organizations. In addition, 94% said that “trust between employee and senior leaders” was important but only 62% are satisfied with this in their organizations.
Individual performance and retention
The 2015 Trust Index results report that individuals in high-trust companies perform 20% better and are 87% less likely to leave their organization than those working in low-trust organizations.
So, trust matters. But what does it actually mean to trust a corporation, particularly when we think about business in its role as a member of society, and not just as a supplier of goods and services? Unfortunately, trust is a slippery concept and hard to define. Warren Buffett has said that trust is "like the air we breathe. When it's present, nobody really notices. But when it's absent, everybody notices." In corporations the underlying notion seems to be putting your faith in a company despite not knowing all the facts: giving them the benefit of the doubt. And the irony is that despite an increasingly information-saturated world, there seems to be more doubt than ever.
Nine actions to develop trust
The following are nine actions to consider for building and developing trust in your organization:
- Build a culture of trust by promoting individual behavior modifications Real change often comes from personal examples multiplied many times over rather than from feeding negativity through resentment, frustration, resignation, or criticism of others.
- Encourage a climate of respectful candor Trust can be encouraged if people have the self-awareness and courage to call trust and distrust what they really are in their organizations and on functional and leadership teams. Too often, people pretend there is trust where there is none, practicing a kind of “cordial hypocrisy,” a term coined by Robert Solomon and Fernando Flores.
- Make a list of senior leadership team trust behaviors and practices Discuss the list with all management and staff, and encourage a common practice of speaking up when the desired trust practices are not followed.
- Stress two-way communication Employees should feel that they know what is happening in the organization and that their voices will be heard.
- Improve organizational and leadership trust behaviors gradually For example, consider selecting one or two areas in which your organization or team would like to improve its trust behaviors and leverage those practices toward the accomplishment of one of your organization’s strategic initiatives.
- Develop a common internal language around trust issues Reliability, sincerity, competence, building, maintaining, and restoring trust effectively open up lines of communications laterally, vertically, and horizontally, and encourages “positive deliberate confrontation” of difficult issues. This type of environment should help ensure that individual and collective promises are kept to a degree that was previously thought impossible.
- Assess your organization’s existing level of trust (e.g., with peers, supervisors/managers, senior management, and leadership teams) through periodic confidential surveys, focus groups, discussion groups, etc. Identify the key issues contributing to less-than-desired business outcomes. Then, highlight best practices and share them across the organization.
- Practice the behaviors of high trust leaders Stephen M.R. Covey has identified 13 behaviors of high-trust leaders. Such leaders take actions such as keeping their commitments, talking straight, extending trust, and practicing accountability.
Seek out and practice other trust-building techniques
Below are 10 trust-building actions for leaders:
- Call distrust by its name.
- Assess trust case by case.
- Distinguish sincerity, competence, and reliability.
- Make clear and effective requests, promises, and complaints.
- Allow mistakes and use them for learning.
- Allow people to say no to requests or to renegotiate.
- Create a mood that supports trust.
- Create a culture where a complaint follows a lack of fulfillment of a promise.
- Generate pockets of trust starting with the Leadership Team.
- Distinguish authentic from blind trust.
Leaders who invest time and thought in building a trust-based culture will attract others to their sphere of influence, and build teams of outstanding competence and confidence. Practice these behaviors in everyday interactions and watch the trust benefits rise. But, always remember that building a trust-based culture can be like walking on eggs; it is very difficult to do and easy to break.
Jay Jamrog is a futurist and the co-founder of i4cp.