Trust— A Profit Multiplier?

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What gets in the way of higher performance in organizations?  What stands in the way of desired business results? My view—one formed working with companies around the world—is that it is fractured trust that inhibits organizational performance.

Why should leaders care about trust? Two main reasons: First, trust enables higher performance and second, we have a widespread trust problem in businesses today. Consider these facts:

 

  1. Trust enables higher performance:

 

Studies suggest there is definite business case as well as a financial case for building high trust environments in organizations. The Trust Across America-Trust Across the World Survey (TAA-TAW) studied the performance of America’s most trustworthy companies and found that these firms produced an 82% return vs. the S&P’s 42% over a four-year period (since 2012).

 

A second study substantiates the TAA study, indicating that trust is a performance and profit multiplier. 2015 Research from the “Great Places to Work Institute” revealed that company stock in firms with high-trust cultures perform nearly two times better than the general market.

 

  1. There’s a widespread trust problem in businesses today:

 

Year to year Gallup surveys consistently show that only about 25% of employees are actively engaged in their work.

 

80% of Americans believe top executives will take improper actions to help themselves at the expense of their companies (USA Today/CNN/Gallup Poll).

 

58% of employees trust strangers more than their boss (Harvard Business Review Survey).

 

Dictionaries define trust as the belief in the character, strength, or truth of someone or something; a person or thing in which confidence is placed. A definition I prefer is: Trusting someone means that you think they are reliable; you have confidence in them, and you feel safe with them physically and emotionally.

 

Simple isn’t it? When employees feel safe in the hands of their leaders the result is higher performance.

 

Does broken trust inhibit your organization’s performance? Ask yourself these questions:

 

  • Do people around you let their personal agendas get in the way of work performance?
  • Do functional teams operate in silos pursuing what’s in their own best interest?
  • Are there misaligned goals due to misaligned motives?
  • Do you suffer situational ethics in the organization?
  • Does an entitlement – you owe me – mentality exist?
  • Do employees or managers tend to say what is expedient or self-serving, not necessarily what is true?

 

If any of these are true of your organization, you most likely have a trust a problem.  Why? Because trust is the basis around which all human relationships revolve … without trust there can be no relationship. No relationship means work simply does not get done, or at least it doesn’t get done well.

 

Here’s the good news: With intention, focus and effort trust can be established, nurtured and maintained. One proven way to establishing trust is to implement Values-Based Leadership (VBL) throughout your organization.

 

VBL involves three key elements:

 

  1. Each individual understands and embraces his/her own unique value proposition (individual strengths, traits, attributes, motivations);
  2. Employees, and especially the leaders, commit their talent and full effort to achieving organizational goals in pursuit of the company mission – not for personal gain; and
  3. Everyone in the organization strives to live-out organizational values, always striving to do what is right to do.

 

In short, values govern behavior; behavior determines performance; performance establishes trust. It’s that simple.

 

What can you do to promote trust within your company? Are you leading a values-based organization?

 

Davis H. Taylor, TAI Incorporated, davis.taylor@taiinc.com

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