Trust in Leadership

September 10, 2010

Leadership

trust image | Trust in Leadership

I know a lot has been written over the years about leadership and trust and the importance of both. Lately I have been witness to a number of situations that have highlighted what happens when trust is in question around the ability of the leader to be effective. Seeing this prompted me to get my thoughts together on the topic in both individual and team situations.

In a recent University of British Columbia report, economists found that trust in management is the most valued determinant of job satisfaction. They state that a small increase in trust of management is like getting a 36 percent pay increase. Conversely, the researchers found that if that same amount of trust is lost, the decline in employee job satisfaction is like taking a 36 percent pay cut. [...]

Simply put, organizations that foster trust are more profitable. A Watson Wyatt Worldwide study found that organizations in which front-line employees trusted senior leadership posted a 42 percent higher return on shareholder investment than those firms in which distrust was the norm.

It’s arguably safe to say the first job of any leader is to inspire trust. Trust has 2 dimensions; character and competence. The highest levels of trust cannot be achieved without both. Character is about motives, a high level of integrity and how you deal with people. Competence captures capabilities, history  and consistency of results, and proven skills that are brought to the table. As an example you might think a person is sincere and straightforward with you but you might not fully trust them if you don’t believe they can get the results required. The opposite is also true. Competent successful people might not warrant your trust if they aren’t honest and their intentions in the relationship are not sincere or supportive.

A lot of people don’t look at the “competency” side of the equation in evaluating or considering trust. It’s there whether we see it or not and impacts our assessment of trust at both an individual and organizational level.  I think this is the difference between believing in an individual or an organization and trusting them.  Think about how many times you believed someone’s intent was to bring that new deal in but you didn’t trust that they would or could.

Building trust within an organization starts with the belief that trust is essential for success and a non-negotiable value. It has to be a cornerstone for the business and everything the company does must pass the “trust litmus” test. Highlighting and promoting behaviors of trust are essential and appropriately dealing with the opposite is required. Trusting organizations are ones in which examples of “behaviors of trust” are highlighted and business metrics support the need for trust..

A great way to start building an organization of trust is to communicate its importance in terms of both personal behavior and business results. Equating trust to economic terms and specifically the impact of both extremes is a great way to align the importance of trust to results. Let’s face it – companies take more time and spend more money with individuals and organizations that lack trust. There is unnecessary rework, reviews, challenges, and questionable alternatives highlighted in an environment that lacks trust.

Organizations that trust still have high levels of accountability and responsibility. I refer to accountability as having the ultimate ownership for a function and desired result. Responsibility is the often task-level ownership to get work done. It is important that trusting organizations do not lower the standards for accountability. People and functions need to beheld accountable for results as this will assure ownership and the necessary innovation occurs when a business owner is 4 weeks away from “missing the number”.

Trust at the individual level is the single biggest impacting item to a person’s reputation. As we all know we can change jobs, companies,where we live and who we interface with throughout our lives but we can’t change our reputations. Fortunately or not it tends to follow us around wherever we go. We want to understand this and take it seriously. It is who we are and how we are perceived.  If someone is trustworthy (worthy of our trust) they are competent and have character.Trustworthy organizations must have trustworthy people throughout it. It just can’t be the leader who is trustworthy.

Have you ever been in a meeting where something critical is being negotiated? It might be a price over a service or product under consideration, a service level tied to a critical aspect of the business,someone’s starting salary for a potential new hire, or a manager pushing for a promotion for a key employee. Regardless, people involved who have earned the level of trust will negotiate most effectively in what they are promoting.Their credibility in doing things the right way for the right reasons will impact everyone who is listening. They start from a greater point of leverage based solely on their level of trust they have. It’s that simple.

So you might say this all makes sense and who can argue with it but what are the behaviors and attributes of individuals and organizations that are Trustworthy? Over the years I have observed many companies, business units and individuals. Here is what I believe is necessary:

-Respect of others

-Sincere humbleness

-Honor commitments

-Demonstrate consistent high standards in work activities and results

-Facilitate an environment of high productivity

-Are totally accountable for the good, the bad, and the ugly

-Great Listeners

-Unselfish

-Respect everyone around them

-Deal with the reality of the situation appropriately

-Own up to mistakes

Trust must come from the top down. Assume it’s there and if it isn’t it will become apparent. Starting the other way just doesn’t work. The saying “trust is earned” while true should not be confused with early assumptions people can and should take. In the end trust will be earned. Additionally trust doesn’t get turned on when we go to work and off when we leave. Instead trust transcends our lives each and every day, in work and out.  Trust is within us and around us. It is not just the trust in one direction. Organizations that are “trustworthy” will perform better. They will innovate around obstacles, exceed targets more frequently and get to decision points sooner. They will also bounce back from failures, learn more quickly and completely from them and make the same mistake again far less frequently than non-trusting organizations. Trusting organizations will attract the best and brightest people and keep them satisfied and productive longer.

Leaders must realize the importance of trust from more than just a personal integrity and value perspective and include the business impact and opportunity for significantly better results. Embrace the importance and impact of trust and do whatever it takes to build a trustworthy organization. In the end you’ll win all the way around.

About Frank Picarello

Frank is a well-respected leader in providing technology services to small and medium-sized businesses. He is currently COO for TeamLogic IT, Chairperson for CompTIA's Small Business Owner's Group, and a member of CompTIA's Unified Communication Committee.

View all posts by Frank Picarello

No comments yet.

Leave a Reply