In a recent post, I commented that once trust is lost it is challenging, at best, to restore it.
Trust is an essential ingredient in all relationships, personal or business, whether on the factory floor, the boardroom, marriage or friendship. It is as Steven M. Covey, author of The Speed of Trust says, “it’s the one thing that changes everything.”
He states that trust is a hard-edged economic driver, a learnable and measurable skill that makes organizations more profitable, people more promotable and relationships more energizing. He believes trust is the key leadership competency in today’s global economy.
Yet leader after leader keeps forgetting how critical an element trust is. We forgive mistakes, we don’t as easily forget and forgive “lying, cheating and stealing.” According to Bill George’s True North, Phillip Purcell, the former CEO of Morgan Stanley is a case in point. While he did nothing unethical or illegal, he lost the trust of his stakeholders and eventually a team of his executives lobbied the board and he was unceremoniously ousted.
What led to his “retirement”? Mr. Purcell, a business firebrand, was charged with creating a financial services powerhouse at Morgan Stanley by integrating the investment bank side with the brokerage business. Instead of working with the constituents involved in progressing this initiative, he focused on building his powerbase by maneuvering the newly merged board.
If you challenged his leadership, you were terminated. He changed the culture of Morgan Stanley from performance-based to kowtowing to its CEO. Good people left in droves and eventually the board chose the company rather than Purcell.
Kurt T. Dirks, Vice Chancellor of International Relations and a Bank of America Professor of Leadership at the Olin Business School of Washington University in St. Louis, studies the relationship between trust, leadership effectiveness and organizational success.
His studies indicate that “it is critical that leaders acquire awareness of how they are viewed by their people, establish individualized ways of demonstrating trustworthiness and confront mistakes openly and head on.”
Leaders who do not inspire trust create an environment of “how do I protect myself” rather than directing focus to fulfilling the organizations’ mission. Professor Dirks and his colleagues studied basketball coaches to examine the results of trust in leadership. His findings… the teams that had the highest trust in their leader were the number one teams at the end of a season. Those who had the lowest trust in leadership won about ten percent of the games and their coach was fired by the end of the year.
As I referenced in It’s About Trust Stupid!, a core building block of trust is competence. Does the leader have the skills and ability to solve whatever the company is faced with?
Professor Dirks cites character as the second trust factor builder along with strong values, truthfulness and no surprise ethics.
His third factor is caring. People want to know that they personally matter, that their leaders care about them as a person. Their interest matters beyond their contribution to the company.
People want to know
His studies focused on the research on leadership that has been done over the last 40 plus years to determine the top five drivers of trust in leaders. What people wanted was:
- When a decision is implemented, how am I treated with respect during the process?
- Did I get to participate in the decision-making process?
- Did I get what I deserve– whether it be pay or recognition, an acknowledgment of my contribution? When leadership says something, do their actions correspond to what they say, rather than as a do as I say, not as I do?
- And is there alignment between the leader’s goals and employee goals? Are all individuals aligned and working toward the same direction to accomplish the mission?
What fuels trust is self-awareness; how you are perceived and how you perceive yourself. I am constantly amazed at how leaders do not agree with how they are viewed by others, yet self-awareness is one of the key components of building trust and emotional intelligence.
It should be a concern to us all that some of the professions which should be most trusted are at an all-time low; bankers, lawyers, politicians, reporters, business executives…the trust percentage keeps falling.
According to Gallup’s State of the Global Workplace report, only 15% of employees worldwide are engaged in their jobs. In the United States alone this costs business upwards of $550 billion a year in lost productivity. Many of the factors for this go back to the lack of trust in leadership.
Three key factors Gallup cites must be in place to build trust, are a company’s stakeholders saying:
- I trust my manager and believe they have my best interests in mind.
- My voice is heard and valued.
- I clearly understand the mission and purpose and how I contribute to each.
So, my question to you is, do you trust your leader and if you are a leader how well are you trusted? Your bottom line depends on trust.