“Trust is like the air we breathe. When it is present, nobody really notices. But when it’s absent, everybody notices.” - Warren Buffett
Many of us have experienced low trust working environments where people become unreliable, disengaged, disloyal or uncommunicative. When trust breaks down the focus shifts to self-preservation undermining business results.
Trust matters because is is not just additive to performance it is a multiplier. Stephen Covey Jr.’s research demonstrated that the standard formula “strategy + execution = results” is in fact:
(STRATEGY + EXECUTION) x TRUST = RESULTS
The need for trust has been amplified during the Covid pandemic. Leaders were forced to trust their people as business has adapted to remote working. To the surprise of many, they found that their people can not only be trusted to work remotely, but that they’ve also frequently shown heroic levels of effort, rapidly embracing change to keep the show on the road.
The freedom to innovate
People innovate and take risks when they feel safe. Paradoxically we most need to innovate when the world around us is fraught with ambiguity, changing rapidly and the world feels distinctly unsafe. Neuroscience shows that stress generates a “threat state” in which the sense of threat is generalised and our focus narrows. This undermines the ability to collaborate and innovate at the point it is most needed.
In a low-trust relationship, you can be measured, even precise in your communication and you’ll still be misinterpreted. Leaders who create high-trust relationships, create an environment in which, even if you say the wrong thing, people will still correctly grasp your intended meaning. This helps you to maintain a “reward” state in which people collaborate to create new possibilities that address the current challenges.
As your company returns to the office – will you be tempted to tighten your control again and let new-found trust slip through your fingers?
Leaders who create safe environments delegate the authority to act without abdicating their ultimate responsibility for the outcome. Their people respond by having the confidence to exercise their own judgment in pursuit of the goal. The safe environment enables a greater degree of risk-taking and willingness to consider new approaches and ideas.
The pandemic has forced leaders to delegate and their people have enjoyed the increase in autonomy. As we feel our way towards a new way of working, we need to strengthen these positives by consciously nurturing the trust that makes it safe, to innovate and take risks. We need to resist the temptation to take back control.
40% of workers are considering changing jobs
Trust is increasingly a key factor in attracting, engaging and retaining staff. Millennials in particular expect more participatory, collaborative and transparent workplaces – all qualities of a trust-based cultures, which typically enjoy staff turnover rates that are c. 50% lower^ than industry competitors.
Keeping the customer satisfied pays dividends
High-trust companies earn customer satisfaction ratings that are higher than their competitors. Part of the secret lies in their ability to delegate their decision-making authority down to the frontline customer interface. An increase in customer satisfaction yields c. 1.6% increase* in Return on Assets.
Trust results in 106% more energy at work
Research conducted by Paul Zak shows that people working at high-trust companies report:
o 74% less stress
o 50% higher productivity
o 76% more engagement
o 40% less burnout
o 17% higher salaries
With happier, more motivated staff, Zak found that companies with high trust environments enjoy stock market returns that are two to three times greater than the market average.
The circle of trust
Trust works both ways. It’s not just about your employees trusting you as a leader, it’s about you reciprocating that trust: allowing them to get on with the job you’ve employed them to do, with the freedom to do that job well.
As we move to permanent hybrid working, ask yourself this - will you nurture the trust that was created out of necessity?