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Inspiring Trust is Good for the Bottomline

Excerpt from Cool Companies www.coolcompanies.ca By Catharine Wright

Read PDF version that appeared in the Cool Companies industry guide [PDF]

Trust is big. It underlies every relationship and organizational culture. It’s also a strategic asset that directly affects the bottomline. Many leaders state trust is one of their company’s values, but creating trust is a lot more work than making this claim. Using a new book by Stephen W. R. Covey called The Speed of Trust, we explore what trust means, and look at the different behaviours of people in high trust and low trust organizations. In typical Cool Companies fashion, we put the theory to the test through interviews with Canadian entrepreneurs on their experience creating high trust organizations, and we uncover some of their tactics for inspiring trust.

AN UNRECOGNIZED PROBLEM

Most CEOs and company executives assume that their team trusts them—that people in their organization are generally happy with their performance. Prepare to be surprised: Many companies have a trust problem and haven’t recognized it. The facts are:
• Only 51% of employees have trust and confidence in senior management.
• Only 36% of employees believe their leaders act with honesty and integrity.
• Over the past 12 months, 76% of employees have observed illegal or unethical conduct on the job—conduct which, if exposed, would seriously violate the public trust
Source: Book The Speed of Trust, Stephen M.R. Covey, page 11.)

THE INVISIBLE ELEPHANT

If you dig beneath every opportunity lost, every deal turned sour, every grievance, you will find distrust lurking there somewhere. The existence or absence of trust is the fabric of every relationship and every organizational culture.
Given it’s magnitude, it is rather strange that trust usually isn’t identified, talked about or intentionally manufactured. In environments that lack trust, trust is like an invisible elephant—people know it’s there but it’s not addressed directly. It’s an “undiscussable.” Without addressing trust, people have to settle for lack luster results and a growing desire to discover practical solutions or they leave in search of environments and relationships that inspire trust.
It’s clear that people can recognize the symptoms of a low-trust environment. Why do so few people step up to the plate and give trust a name? Maybe they just don’t yet know it’s name and that a lack of trust is the cause of the symptoms they experience.

WHAT IS TRUST?

Defining trust is a bit of an elusive task. For one person, it’s the emotional glue that binds people to an organization. For another, it’s the cumulative behaviour of individuals that create confidence. However it is defined, it is an inherently interpersonal experience. In the words of Jack Welch, former CEO of General Electric, “You know it when you feel it.”

Lower organizational trust equating to higher costs makes sense. An example is in the arena of attraction and retention. The more a company successfully brands itself as a good place to work (meaning it can be expected to treat its employees well and provide meaningful work and direction), the less effort and expense it will need to attract quality employees.

Simply put, trust means confidence. The opposite of trust—distrust—is suspicion. When you distrust people, you are suspicious of them—of their integrity, their agenda, their capabilities, or their track record. It’s that simple.
           —Stephen W.R. Covey, Cofounder and CEO, CoveyLink

It’s about a great place to work
Trust is a critical differentiating factor that sets apart great places to work from not-so-great places.

Trust is the bedrock of a positive organizational culture. A high trust culture defines great workplaces, regardless of an organization’s size, sector or country. Employees trust managers who are concerned about their well-being, listen and respond to their input, are open and honest about change, and consistently act the organization’s values.
           —Graham Lowe, a founding partner, Great Place to Work Institute Canada

It’s about a bigger bottomline
High trust organizations outperformed low trust organizations in total return to shareholders (stock price plus dividends) by 286%.
           —Watson Wyatt 2002 study
Greed destroys wealth. Trust and integrity, by contrast, foster prosperity.
          —Patricia Aburdene, author of Megatrends 2010

It’s about speed and lower cost
Trust is the ultimate root and source of our influence. When trust is low, speed goes down and cost goes up. When trust is high, speed goes up and cost goes down.
           —Stephen W.R. Covey, Cofounder and CEO, CoveyLink
Our distrust is very expensive.
           —Ralph Waldo Emerson

It’s about character and competence
Any trust-building effort starts with creating trust in oneself. At its core lies the ability to be believable and credible—to oneself and to others. In his book The Speed of Trust, Stephen W.R. Covey identifies 4 elements that create credibility:
1. Integrity: Are you honest and walking your talk?
2. Intent: What’s your agenda? You need to have clear and mutually beneficial intentions.
3. Capabilities: Is your knowledge, skills, attitudes and competencies revelant?
4. Results:  “You can’t create a high trust culture unless people perform.”—Craig Wetherup, former CEO, PepsiCo

In other words, trust is about character and competence. Integrity and intent are matters of character, and capabilities and results are the essence of competence.

It can be restored
Trust is something you can do something about—and probably much faster than you think!
           —Stephen W.R. Covey, Cofounder and CEO, CoveyLink

It’s really important
You can’t have success without trust. The word trust embodies almost everything you can strive  for that will help you to succeed. You tell me any human relationship that works without trust, whether it is a marriage or a friendship or a social interaction; in the long run, the same thing is true about business, especially businesses that deal with the public.  
         —Jim Burke, former Chairman and CEO, Johnson & Johnson

As you go to work, your top responsibility should be to build trust. 
        —Robert Eckert, CEO, Mattel

BEHAVIOUR DIFFERENCE

High trust organizations

•  Information is shared openly
•  Mistakes are tolerated and encouraged as a way of learning
•  The culture is innovative and creative
•  People are loyal to those who are absent
•  People talk straight and confront real issues
•  There is real communication and real collaboration
•  People share credit abundantly
•  There are few “meetings after the meetings”
•  Transparency is a practiced value
•  People are candid and authentic
•  There is a high degree of accountability
•  People can feel the positive momentum

Low trust organizations

•  People manipulate or distort facts
•  People withhold and hoard information
•  Getting the credit is very important
•  People spin the truth to their advantage
•  New ideas are openly resisted and stifled
•  Mistakes are covered up or covered over
•  Most people play the blame game, bad-mouthing others
•  There is an abundance of watercooler talk
•  There are numerous “meetings after the meetings”
•  There are many “undiscussables”
•  People tend to overpromise and underdeliver
•  There are violated expectations, and excuses over these
•  People pretend bad things aren’t happening or are in denial
•  The energy level is low
•  People often feel unproductive tension—sometimes even fear

COST DIFFERENCE

High trust organizations

•   Increased value for customers and shareholders
•   Accelerated growth in sales and profits
•   Enhanced innovation in products and corporate culture
•   Improved collaboration
•   Stronger partnering
•   Better execution
•   Heightened loyalty among employees, customers, suppliers, distributors, investors

Low trust organizations

•   Redundancy (unnecessary duplication)
•   Bureaucracy
•   Politics
•   Disengagement
•   Employee turnover
•   Churn of customers, suppliers, distributors, investors
•   Fraud