One of the most important strategic and cultural levers that exists in an organisation is trust. It is often neglected, misunderstood and badly handled. This costs companies and organisations a surprising amount of time, energy and money.
Strategy
I define strategy as making the best possible use of your resources and capabilities. “Do what you can, with what you have, where you are.” – Theodore Roosevelt. Trust has a massive impact on the way that resources are managed, the most precious of which are time, energy and money, and the people that make your organisation possible. One of the most fascinating resources I have encountered as I have learned and grappled with trust in organisations is the Edelman Trust Barometer which shows graphically, through clear research what trust provides in an economy. This is a global measure, but it plays out in smaller organisations too. Trust is a strategic lever.
Cultural
“Culture eats strategy for breakfast” – Peter Drucker, emphasises that a company’s culture, its shared values, beliefs and employee behaviors, has a greater impact on success than its strategic plan. Trust is at the heart of how people in an organisation behave, which impacts the bottom line and impact that organization is able to have. Edelman believes that trust is the ultimate currency in the relationship that all institutions – business, governments, NGOs and media – build with their stakeholders. As an Organisational Development facilitator and coach, I most commonly work with the internal stakeholders (employees) of organisations. And as is the nature of these things, if internal trust in an organisation is low, it will reflect out into relationships with clients and beneficiaries. This costs money and can sometimes even threaten an organisation. When people don’t trust you, they don’t want to deal with you. Trust is a cultural lever.
Economic sense
Steven MR Covey wrote a book called The Speed of Trust, which unpacks the economic and financial cost of low trust environments. He calculated the cost of fraud, bureaucracy, waste, dishonesty, disengagement, time theft, office politics, unproductive meetings, interdepartmental conflict, policies and procedures and churn of both employees and customers, and found that trust puts a huge frictional cost onto organisational life of billions of lost dollars a year.
When people are wasting time, demotivated or dishonest, the financial consequences for a business become very tangible. Employee churn costs such as hiring, training and firing people are more than people think. It costs far more to engage a new client than to keep clients, so low trust is very expensive. Low trust environments breed dishonesty and time theft. Trust is an economic lever.
How to build trust
Most people relate to trust as something that is given and earned, and once broken cannot be repaired. This is not a useful way to think about it. Trust is generated between people all the time, through many small and big experiences and moments.
Trust is something that can be built, constructed, and maintained. There are some very clear frameworks that can be used to talk about trust as an organisation, or between people in the organisation. Fundamentally it comes down to developing practices and processes that generate trust. This will occur across a number of aspects of an organisation.
There are structural issues that support or destroy trust, such as the contracts, agreements and policies in a business, and there are communication practices necessary to build, maintain and restore trust. It requires careful setup and good maintenance, and it’s an excellent investment in any business.
The advantages of building trust are that you increase productivity and innovation, as well as improving employee engagement and morale. The superpower that trust offers is making better, faster decisions. It also solves some serious problems, like preventing micro-management, solving conflict more effectively and reducing employee and client turnover. It’s an all-round organisational multivitamin!
There are amazing resources available to understand trust better. Brene Brown’s team developed a wonderful tool called BRAVING, which breaks down the behaviours in a useful way.
If you are a leader or manager who suspects that some of your organisational issues might be trust related, contact me for an exploration session to see how I could support you to think about it either on your own in a coaching session, or with your team.
Mignon@thestrategycircle.co.za