The Must of Trust – Growth and Profit

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The Must of Trust

The Must of Trust

By Andrew Cooke | July 1, 2013

The Must of Trust
How trust underpins business, how to gain it, and the costs of losing it
by Andrew Cooke, Growth & Profit Solutions
Hard to earn, and easy to lose – trust underpins business and all our relationships, professional or personal.  It is a must. So how can leaders accelerate the trust that they can engender from others.  What can we do to improve the speed of trust?
Building TrustThe most effective way for a person to build trust is, through their behaviour; to demonstrate their ability and capacity to keep their commitments.  In doing this the individual needs to keep to the process of Make, Keep and Repeat – continually keeping commitments builds trust makes things happen faster, with less stress and makes things more enjoyable. This can be risky for managers to do but it helps them to build trust quickly and efficiently – especially in difficult situations.
Make, Keep and Repeat
So let’s look at the power of each step:
1. Make – making public a clear, defined commitment that is specific, measurable and has a clear date set to it.  This removes ambiguity and holds you to a commitment to which you can be held accountable.  Yes, you as the manager or leader are making yourself accountable to your reports or peers. Making a commitment builds hope.
2. Keep – demonstrating the fact that you have met your clearly articulated commitment as previously defined.  You need to actively publicize this.  People need to know that you have done this; you cannot assume that they will know because you have done it.  Furthermore, proving that you are keeping your commitments gives you right to expect them to reciprocate i.e. they will make, keep and repeat in terms of their own commitments.
3. Repeatthis develops consistency, belief in you, and proof that your actions mirror your words.  When people see a discrepancy between what you say and what you do, they will always follow what you do.  By repeating this process you are establishing and creating an avatar for others to model their behaviours on.
Extending Trust

A good way to increase trust is to trust others.  Trust is usually reciprocated –the more you give, the more you get.  So if management doesn’t trust, then it cannot expect to be trusted.  In doing this you give trust smartly, not blindly.

“Trust Taxes”
Trust taxes are costs that you incur when there is little or no trust. When trust goes down, speed also goes down and cost goes up.  This is a “tax” – and these taxes can double the cost of doing business.
There are 7 types of “trust taxes”:
1. Redundancy & duplication with smaller spans of control – if there is less trust, then you will find that tighter control develops over smaller areas, and that there is unnecessary duplication of resources to offset the increase in perceived risk.
2. Bureaucracy – with less trust so procedures and systems become more cumbersome in order to bridge the perceived gap between what is needed and what is available in providing security and consistency in the work done.  In the US there is the retailer Nordstrom, where its high levels of trust are reflected in its “one card operating manual”: on one side of the card it says – “We have one rule… – on the other side it says “use your best judgement in all situations”.
3. Politics – more silos develop and turf wars become more prevalent.  Less trust results in individuals putting their agenda ahead of others and the business overall, it also creates a “fixed mindset” where people see the pie as fixed, so that they only way they can get a larger slice of the pie is at the expense of somebody else e.g. different departments negotiating for budget allocation will compete against each other for it.
4. Disengagement – a lack of trust reduces staff engagement as they do not believe that their leaders have their interest at heart.  This is reflected in research which shows that 96% of engaged employees trust their leaders, whereas only 46% of employees who are disengaged.
5. Turnover of Employees – as disengagement increases, so staff perceive roles and jobs elsewhere as more attractive which, previously, they might not have considered.
6. Churn – low trust also extends to customers and other stakeholders who now see other businesses as more attractive and less risky.
7. Fraud – with lowering levels of trust there is a lower level of integrity increasing the likelihood of fraud being committed within the company.
How Does Management Address a Lack of Trust?
1. Frame it in economic terms
The issues of trust, or rather the lack of it, needs to be framed in economic terms, otherwise it will become a ‘nice to have’ initiative, not an economic issue.  What is the impact of speed and cost on every dimension of the company; ask yourself if you could improve it then what would the impact be e.g. in innovation, execution, or strategy.
2. Make trust a specific objective
Make so it is not seen as a nice by-product, but rather as a way of improving which inspires trust and confidence.
3. Focus on instilling practicing and applying the behaviours that engender trust in the company.
It is not just the softer behaviours, but also the harder results, that help to drive results.  People need to be seen to be performing and being credible, this gives trust, and helps to drive it.
Trust is key for driving good business, and for avoiding the costly implications of the seven “trust taxes”.  Build trust for yourself, for your managers, reports and peers within your company and for those with whom you have relationships (or want a trusting relationship). To do this Make Commitments, Keep Commitments and Repeat.
Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

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Leave a Reply 2 comments

Patrick McFadden - July 1, 2013 Reply

I often say, “at the heart of every transaction is trust. And there’s a big difference between someone trusting you and being aware of you.”

Mark Maclean - July 5, 2013 Reply

Great piece, Andrew. Comprehensive, clear and compelling.
IMO trust is not ‘only’ essential for effective business, but /crucial/ to enacting change programs.

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