Why trust is important
Simply put, organisations that foster trust are more profitable. A Watson Wyatt Worldwide study found that organisations where front-line employees trusted senior leadership posted a 42 per cent higher return on shareholder investment over those firms where distrust was the norm.
You must trust and believe in people or life becomes impossible.
When trust fails
How do you know if you’re experiencing broken trust in your workplace? People may
- Be less engaged, less committed and more cautious and sceptical
- Resist volunteering for assignments
- Be talking about others behind their backs
- Feel discomfort about something you’ve said or done
- Feel caught in the middle of office politics or co-workers’ interpersonal conflicts
- Be just going through the motions at work
- Miss work or often arrive late.
Knowing how to build and sustain trust in your working relationships is essential to your effectiveness on the job – no matter what your level within the organisation, from a frontline employee to the CEO in the corner office. As a manager, building trust is critical to doing your work and getting results through others. On an organisational level, building trust with your people is critical to gaining and maintaining your competitive advantage in a changing marketplace.
- Business is conducted via relationships and working relationships drive business results.
- Effective working relationships are based upon a foundation of trust.
- In trusting work environments, there is open communication, willing collaboration, fluid information and knowledge sharing, and the support for one another that is necessary for delivering business results.
- Employees have more energy, take risks, innovate more frequently, collaborate with co-workers, are responsible, treat customers better and drive results.
In a recent University of British Columbia report, economists found that trust in management is the most valued determinant of job satisfaction. They cite that a small increase in trust of management is like getting a 36 per cent pay increase! Conversely, they found that if the same amount of trust is lost, the decline in employee job satisfaction is like taking a 36 per cent pay cut! Organisations with trustworthy management do not experience the high cost of turnover. Their employees stay.
These examples point to the value of a trusting environment and the competitive advantage it yields. Yes, trust is complex and hard to earn. Yet there is only one thing that builds trust: the way we behave. To earn trust, leaders must become aware of the behaviours that build it and practise them consistently!
We call trust ‘transactional trust’ because it is reciprocal in nature; you have to give it to get it and it is created incrementally over time.
Trust is the foundation of an organisation’s competitive advantage. There are three types, with essential behaviours that build each type...
- Contractual trust sets the tone and direction and shapes roles and responsibilities.
- Communication trust establishes information flow and how people talk with one another.
- Competence trust allows individuals to leverage and further develop skills, abilities and knowledge.
Leaders of high-trust organisations value relationships and link trust-building behaviours to their strategy. Trust-building is an integral part of their work. These leaders reap the rewards of their behavioural choices through employee satisfaction, organisational performance and competitive advantage in the marketplace.