How important is the trust factor to business success?
One of my earliest childhood memories is of standing at the top of the stairs at home, my dad at the bottom encouraging me to jump. To this day I am not sure what was going through my mind; it was probably the simple thought that my dad is telling me to jump and I trust him, so I did. Years later he did tell me of his surprise that I did, good that he caught me!
We know trust is important. However, how much difference does it make? This question has led me to look in depth at how important trust is to business success. To help you navigate the topic I will take you through a series of questions at the end of which, you can make your own mind up about the importance of trust to business success.
Why build trust?
There is good research available on the impact trust has on the workplace. EY conducted their third annual Global Generations study on trust in 2016. What they found was striking, less than half of global professionals trust their employer, boss, or colleagues!
- Only 46% place “a great deal of trust” in their employers
- 15% indicate “very little” or “no trust at all”
- 39% say they have “some trust” which isn’t negative but hardly a ringing endorsement
Paul J. Zak reported his findings on trust in Harvard Business Review in the Jan/Feb 2017 issue. Compared with people at low-trust companies, people at high-trust companies report: 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, 40% less burnout.
The research indicates that high trust environments do have an impact on the key factors that feed into productivity and profitability. Do we pay enough attention to trust in the workplace?
When you are trusted people will engage with you more readily and more importantly will buy products and services from you. As business owners, the smart thing to do is to invest in building an environment of trust around you.
Trust what is it?
It is difficult to define trust. It is almost easier to know when it is absent. I came across this definition of trust by Brené Brown:
“Trust is choosing to make something important to you vulnerable to the actions of someone else.”
When thinking about trust in the context of building teams, Patrick Lencioni gives this specific definition: “… trust is the confidence among team members that their peers’ intentions are good, and that there is no reason to be protective or careful around the group.”
Both these definitions point to the fact that risk is involved in placing your trust in another individual. Someone else in effect is being given power over you because you choose to involve them in something that is significant and important to you.
Trust formula
This formula from Stephen M R Covey’s book The Speed of Trust is a simple way to remember the impact of trust in teams and business relationships.
High Trust = high speed + low cost
Low Trust = low speed + high cost
When trust is low in a team then people become cautious which means things take longer. This pushes the cost of tasks and projects up. When clients don’t trust us then we lose business and reputation things that are hard won can be easily lost if we don’t pay attention to the things that maintain trust.
What undermines trust?
The best way I can think to illustrate the value of trust is to make it clear what happens when there is a lack of trust in relationships on the team. If trust is low, then you will question whether your colleagues or the team leader have your back. You will be second guessing what they are saying and whether they will deliver on their promises. All of this slows down the process. When trust is high people are free to collaborate knowing that you have each other’s back, that you can trust what is being said, and that people will not cut across you or humiliate you. The slower the team moves, the more costly it becomes.
Has a think for a moment: How much time do you think is wasted in teams and organisations because of a lack of trust? If you are business owner/manager what is the cost to you of losing clients through lack of trust?
I like to think of trust as being like a bank account, you need to make deposits of trust in those around you so that in times of challenge there is something to draw on. What will you do to build trust in those around you?
How can you build trust?
Stephen M R Covey said: “It (trust) is a learnable and measurable skill that makes organizations more profitable, people more promotable and relationships more energizing.”
The important fact to pick up from what he is saying is that building trust is something you can learn to do. Here are a few things you can do to make trust in you and around you more likely:
1. Leader/Owner Goes First
It is counterintuitive however if you are to be trusted then you need to trust others. In any kind of leadership role that means you go first. Trust is a two-way street placing trust in someone else creates the environment for the same in the other direction.
2. Own your mistakes
Have you ever made a mistake? As a leader when you make a mistake it can have an impact on the people you lead. Here’s the thing: if you have banked trust in your team then your mistake will still have an impact, but, because you have deposited trust, people are more willing to forgive you and move on. Often, we think mistakes have not been noticed, in reality they will be. People you lead will be watching what you do. Better to own it, and take responsibility, make it a learning experience.
3. Have the highest good of others in mind
When you are looking to serve others or act to their good then trust will be the return on that investment. It leads to relationship rather than a transactional approach. For the small business far better to build a long-term relationship with your clients, it may take longer but the revenue reward is much greater.
4. Listen
It is often hard to be present and genuinely listen. You might be thinking of the next thing you have got to do. When you are present the person you are speaking to will pick that up. Being heard is a basic human need and can often take the heat out of challenging situations. Use communication to understand better the person you are talking to rather than to get your point of view across.
Originally posted 2021-11-04 17:15:53.
As the founder of Smart Culture Ltd, he is passionate about unlocking people potential. His aim in setting up the company is to provide quality training and coaching to leaders and their teams. Mark wants to help leaders to be more effective in their leadership. This transforms team culture, and relationships around them, so all can bring their best contribution in a safe environment.
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