Trust is a competitive advantage that’s hard to imitate

May 27, 2014 by in category Employee Engagement, Leadership with 0 and 0

SilhouetteSeveral years ago, I was working late on a project. The company I worked for was closing in on a ten million dollar account and I was in charge of the RFP. The company conference room table was straight out of an episode of Hoarders, stacks of documents balanced precariously across its top.

Sometime late in the evening, I was interrupted by a clearing throat. I turned to find the owner of the company standing in the doorway, holding a carry-out bag.

“The delivery guy knocked and I answered.”

Not only had he answered the after-hours bell for me, he had also paid for my dinner and refused reimbursement from me. I was pleasantly surprised. But it was nothing compared to what came next.

When I explained what I was working on, he immediately removed his jacket, settled in and began sorting an especially precarious stack at the end of the table. When I told him he didn’t need to do that, his response was: “Why? Do you need me to do something else?”

My boss stayed there with me for hours, helping me complete the first draft of the RFP. He never complained. He never showed signs of impatience. As we labored, he even regaled me with stories about his teenage son that made me laugh so hard my teeth hurt. When we were finished, he picked up his jacket and told me he’d see me the next day.

He did see me the next day – in our weekly update meeting with the entire RFP team. His delicate reading glasses balanced on the end of his nose, he solemnly thumbed through the work he and I had completed the night before as my team explained the various sections. Finally, he closed the document, sat back and floored me.

“You pulled this together nicely, Jeff.”

I clumsily tossed the credit back into the collective lap of my team, trying to share a generous amount with my boss for helping me the night before. He waved off my praise with a bemused sort of annoyance.

“You all did 90% of it before I showed up.”

After that, I had his back. Always and without fail. We all did. To this day, I still consider him my mentor and trust him implicitly.

Trust is a rarity today. We don’t trust politicians. We don’t trust neighbors or doctors. Financial institutions? Forgetabouit. Worst of all, we don’t trust our co-workers.

According to author Stephen M.R. Covey’s book, The Speed of Trust, only 51% of employees trust senior management, and only 28% believe CEOs are a credible source of information.

Covey goes on to write: “Think about it this way: When trust is low, in a company or in a relationship, it places a hidden “tax” on every transaction: every communication, every interaction, every strategy, every decision is taxed, bringing speed down and sending costs up. My experience is that significant distrust doubles the cost of doing business and triples the time it takes to get things done.”

In later years, I also worked for a company with zero trust – employees didn’t trust leadership, leadership didn’t trust employees. Coworkers didn’t trust each other. Maybe you’ve seen these same warning signs in your organization?

  • An active, inaccurate grapevine. Rather than tell employees the company couldn’t afford raises, one of the business partners created stories about the other and “confided” those fabricated stories among select employees.
  • A high fear factor among employees. Without accurate information, employees backfill the story. And never with a positive spin. The inaccurate grapevine created by one of the partners made most feel that job loss was imminent.
  • Elaborate approval processes. Leadership has no trust for employees either, so all decisions had to be approved, creating a decision bottleneck.
  • Low initiative. Problem solving was non-existent. Employees kept their heads down. There was no volunteering and, in fact, very little cooperation.
  • High turnover. Effective, efficient employees quickly found other employment leaving only self-centered, negative employees who could not find employment elsewhere.
  • Turf wars. It created a fractured culture with two employee factions. One employee even tracked the movements of co-workers and reported how long people had been at lunch or at a doctor’s appointment.
  • Defensiveness. Finger pointing was rampant. Excuses were created with far more creativity than the work was.
  • Negativity. Everyone bitched. Constantly. Employees eagerly awaited the end of the day just so they could get away from the negative atmosphere.

Many experts agree that leadership is impossible without trust. We can paint our faces, don a kilt and pace in front of our employees shouting truisms about how our competitors can take our clients, but they will never take our freedom! No one follows someone they do not trust. Successful organizations must have trust of leadership, trust of coworkers and even trust of customers.

Trust has an ROI.

There are studies that demonstrate the impact trust has on profitability. For example:

  • A Watson Wyatt survey showed that high-trust organizations had a total return to shareholders (stock price plus dividends) that was 286 percent higher than low-trust organizations.
  • A Russell Investment Group project showed that Fortune magazine’s “100 Best Companies to Work For” (in which trust comprises 60 percent of the criteria and is the “primary defining characteristic”) earned over four times the returns of the broader market over the prior seven years.

Of course, all of that was before one of the worst economic meltdowns in history and the subsequent layer of mistrust. Even today, as the economy begins flexing its muscle again, the damage done among the U.S. workforce will be difficult to reverse. According to Managing An Era of Mistrust, a poll executed by Maritz Research, only 10 percent of employees trust management to make the right decision in times of uncertainty.

Consider your own trust ROI.

Regardless of the statistics, think about what happens when a customer really trusts you. They take your advice. They seek out your insights. Decisions are fast-tracked and RFPs virtually disappear. You’re asked for your recommendations earlier in the buying process, information is shared and your point of view is no longer suspect.

Also, it’s not surprising to know that client loyalty based on trust is far stronger than relationships based business processes or pricing. It increases the firm’s profitability through reduced sales costs and higher margins. Best of all, it makes your company more effective in helping your customers.

As for talent retention, the Maritz study also revealed that employees with strong trust:

Would be happy to spend the rest of their career with their present company (63%) compared to those with weak trust (7%).

  • Would invest money in their company (51%) versus those with weak trust (6%).
  • Look forward to coming to work everyday (50%).

This is why rebuilding organizational trust has to become a top priority for companies to break from the negative, what’s-in-it-for-me attitude dragging down productivity.

Try these leadership tips for developing organizational trust.

Start with integrity. Trust starts with integrity. Integrity starts at the top. If you establish this foundation, the institutional memory will follow. So keep your promises or explain immediately what is happening if you suddenly cannot keep a promise.

Demonstrate with honesty. Always tell the truth, no matter how difficult it might be. Holding back information can be worse than a lie. It causes employees to fill in the story, and their version is never positive. Explain why you can’t answer questions. Admit obvious mistakes rather than covering up errors. And always divulge as much as you comfortably can in any given situation.

Share your vision and values. When you effectively communicate your vision, you define where you’re going. Your values convey the roadmap for getting there. Share big picture goals. With shared goals, rather than a series of personal agendas, employees trust their teammates. It helps create a community rather than a workplace.

Share your vision and values. No, this isn’t a typo. It bears repeating. Communicating your vision and values cannot be done too often. Repetition creates habit.

Be vulnerable. Share your experiences and your mistakes. It makes you human and trustworthy. Better yet, your stories become part of the collective institutional memory, the “rallying cry” for employees and employees to come.

Display competence. You don’t have to know everything. In fact, admitting you don’t know, but will find out, builds trust more effectively. Employees forgive a lack of knowledge, but they won’t forgive a lie.

Act consistently. Don’t create an impression of unpredictability by being inconsistent.

Think of your employees as partners. If every employee were your partner, you would build trust the old fashioned way. By talking to them regularly. Learning about their lives. Respecting and soliciting their opinions and ideas. And giving them credit for successes. Remember the story of my former boss.

Involve employees in decision-making. If you consider your employees as partners, you automatically give them input on both big and small decisions. They own the decisions and thus the outcomes so they work harder to achieve them.

Leave your office. To say you’re too busy is like saying you’re too busy to work with your customers. By never leaving your office, you create a perception of aloofness which, in turn, breeds suspicion and distrust. It seems like a minor thing, but nothing is as effective as meeting your employees in their office and asking about their life.

Hire and promote trusting and trustworthy people. Supervisors who are trustworthy create trustworthy employees.

Protect everyone. Sure, we all like some people better than others, but don’t let it influence how you manage. Most importantly, don’t gossip, allow gossip, or allow others to point fingers. Lead by example.

Terminate negative employees. If training fails, negative employees must be eliminated. Your employees are watching your actions. Let them stay and these employees will become a cancer in your culture. Remember, negativity tends to spread faster than the positive.

Criticize privately. Allow your people to make mistakes. Then constructively correct them in a personal meeting, not in front of others to avoid humiliation. Ask for their ideas about how to avoid the situation in the future. Also if you can avoid it, don’t call them to your office for these corrections, visit them in their office, take them to lunch or talk after hours.

Train for trust. Yes, organizational trust can be taught. For our clients’ employees, we use our processes to train and develop trust and emotional intelligence skills, especially those of managers and people desiring a promotion.