Do you trust your employer? Colleagues? Customers? Suppliers?. I think we all need to take TRUST very seriously in our professional lives.
One of the things I try to frame my goals around for The Mentor+ Project and now our new mobile app, Hitch+, is a focus on trust. Mentoring and trust go hand in hand. I have spent the past few years studying trust and how it’s so important in any organization. One of the best resources I found is from the FranklinCovey organization. They have built a well-defined process and have a book out called The Speed of Trust by Stpehen M. R. Covey.
Below are some highlights taken from Covey’s business case for trust if you or your organization is considering improving in this area. It’s definitely worth taken a look at for both personal and organizational growth… and I think we all want to do better at what we do, right?
Any trust-related problems like redundancy, bureaucracy, fraud, and turnover put the skids on productivity, divert resources, squander opportunities, and chip away at a company’s brand. On the other hand, leaders who make building trust in the workplace an explicit goal of their jobs elevate trust to a strategic advantage—accelerating growth, enhancing innovation, improving collaboration and execution, and increasing shareholder value.
By framing trust in economic terms you will establish a new paradigm for achieving results. Trust always affects two measurable outcomes – speed and cost. When trust goes down, speed goes down and cost goes up. This creates a Trust Tax™. When trust goes up, speed goes up and cost goes down. This creates a Trust Dividend™. It’s that simple, that predictable.
3 Big Ideas About The Speed of Trust™
› Trust is a Measurable Economic Driver
Trust is more than a nice-to-have, soft, social virtue, it is a hard-edged economic driver. In reality, trust not only makes the markets work—trust makes the world go ‘round. Take away trust, and everything grinds to a halt.
› Trust is the #1 Competency of Leaders Today
We define leadership as “getting results in a way that inspires trust. The first job of any leader is to inspire trust; the second job is to extend it.
› Trust is a Learnable Leadership Skill
Trust is both a noun and a verb. Trust as a noun refers to an outcome, a value, a state of being. But trust as a noun is a direct result of trust the verb—the behaviors and actions we take that create and inspire that state of being. In other words, trust the verb is a competency—a leadership skill that can be developed! It is a learnable and measurable skill that makes organizations more profitable, people more promotable, and relationships more energizing. The Speed of Trust is the road map to establishing trust on every level, building character and competence, enhancing credibility, and creating leadership that inspires confidence.
7 Low-Trust Organizational Taxes™
When trust decreases: speed decreases and cost increases. When trust is low, relationships suffer, production is sluggish, customer retention erodes, employee turnover increases, stocks plummet and the costs are enormous.
Once we understand the hard, measurable economics of trust, it’s like putting on a new pair of glasses. Everywhere we look, we can see quantifiable impact. If we have a low-trust organization, we’re paying a tax. While these taxes may not conveniently show up on the income statement as “trust taxes,” they’re still there, disguised as other problems. Once we know where and what to look for, we see The 7 Low-Trust Organizational Taxes™ everywhere:
- Redundancy: Redundancy is unnecessary duplication.
- Bureaucracy: Bureaucracy includes complex and cumbersome rules, regulations, policies, procedures and processes.
- Politics: Office politics divide a culture against itself. The result is wasted time, talent, energy, and money. In addition, they poison company cultures, derail strategies and sabotage initiatives, relationships and careers.
- Disengagement: Disengagement occurs when people put in enough effort to avoid getting fired but don’t contribute their talent, creativity, energy or passion.
- Turnover: Employee turnover represents a huge cost, and in low-trust companies, turnover is in excess of the industry standard – particularly of the people you least want to lose. Performers like to be trusted and they like to work in high-trust environments.
- Churn: Churn is the turnover of stakeholders other than employees. When trust inside and organization is low, it gets perpetuated in interactions in the marketplace, causing great turnover among customers, suppliers, distributors and investors. Studies indicate the cost of acquiring a new customer versus keeping an existing one is as much as 500 percent.
- Fraud: Fraud is flat out dishonesty, sabotage, obstruction, deception and disruption – and the cost is enormous.
7 High-Trust Organizational Dividends™
When trust increases: speed increases and cost decreases. When trust is high, customers buy more—more quickly, more confidently, and more often. They stay longer and they refer more of their friends. High trust enables relationships to grow, employee loyalty to soar, stocks to rise, and organizational dividends naturally increase.
When trust is high, the resulting dividend you receive is like a performance multiplier, elevating and improving every dimension of your organization and your life. High trust is like a rising tide, which lifts all boats. In a company, high trust materially improves communication, collaboration, execution, innovation, strategy, engagement, partnering, and relationships with all stakeholders.
Just as the taxes created by low trust are significant, so the dividends of high trust are equally as compelling. When trust is high, the dividend we receive is a performance multiplier, elevating and improving every dimension of the organization. The 7 High-Trust Organizational Dividends™ include:
- Increased value: Watson Wyatt shows high-trust organizations outperform low-trust organizations in total return to shareholders by 286 percent.
- Accelerated growth: Research clearly shows customers buy more, buy more often, refer more and stay longer with companies they trust. And, these companies actually outperform with less cost.
- Enhanced innovation: High creativity and sustained innovation thrive in a culture of high trust. The benefits of innovation are clear – opportunity, revenue growth, and market share.
- Improved collaboration: High-trust environments foster the collaboration and teamwork required for success in the new global economy. Without trust, collaboration is mere coordination, or at best, cooperation.
- Stronger partnering: A Warwick Business School study shows that partnering relationships that are based on trust experience a dividend of up to 40 percent of the contract.
- Better execution: FranklinCovey’s execution quotient tool (xQ) has consistently shown a strong correlation between higher levels of organizational execution and higher levels of trust. In a 2006 study of grocery stores, top executing locations had significantly higher trust levels than lower executing locations in every dimension measured.
- Heightened loyalty: High-trust companies elicit far greater loyalty from their primary stakeholders than low-trust companies. Employees, customers, suppliers, distributors and investors stay longer.
So what is the role of leaders with respect to trust?
- First, recognize the business case for trust – be an advocate instead of an obstacle.
- Second, see leadership as “getting results in a way that inspires trust.” In other words, personally model trust through character and competence and demonstrated behavior.
- Third, align organizational systems and structures around trust. In the words of Campbell Soup CEO Doug Conant, “The first thing for any leader is to inspire trust.”
Nothing is as fast as the speed of trust. Nothing is as profitable as the economics of trust. Nothing is as central to leadership as relationships of trust. It truly is the one thing that changes everything.
I encourage you check out Franklin Covey’s Speed of Trust site.
Please comment on your experiences with trust at work and how it has effected your professional growth. Do you think that some level of social mentoring would impact an organization’s level of trust?
“A star wants to see himself rise to the top. A leader wants to see those around him rise to the top.” – Simon Sinek