| Almost everywhere we turn, trust is on the | | | | communicated that trust matters to management |
| decline. Trust in our culture at large, in our | | | | and leadership. It must be expressed that it is the |
| institutions, and in our companies is significantly | | | | right thing to do and it is the economic thing to |
| lower than a generation ago. Research shows that | | | | do. One of the best ways to do this is to make |
| only 49% of employees trust senior | | | | an initial baseline measurement of organizational |
| management, and only 28% believe CEOs are a | | | | trust and then to track improvements over time. |
| credible source of information. Consider the loss | | | | The true transformation starts with building |
| of trust and confidence in the financial markets | | | | credibility at the personal level. The foundation of |
| today. Indeed, "trust makes the world go | | | | trust is your own credibility, and it can be a real |
| ‘round," and right now we're experiencing a | | | | differentiator for any leader. A person's reputation |
| crisis of trust. This crisis compels us to ask three | | | | is a direct reflection of their credibility, and it |
| questions. First, is there a measurable cost to low | | | | precedes them in any interactions or negotiations |
| trust? Second, is there a tangible benefit to high | | | | they might have. When a leader's credibility and |
| trust? Third, how can the best leaders build trust | | | | reputation are high, it enables them to establish |
| in and within their organizations to reap the | | | | trust fast -- speed goes up, cost goes down. |
| benefits of high trust? | | | | There are 4 Cores of Credibility, and it's about all |
| Most people don't know how to think about the | | | | 4 Cores working in tandem—Integrity, Intent, |
| organizational and societal consequences of low | | | | Capabilities, and Results. Part of building trust is |
| trust because they don't know how to quantify | | | | understanding -- clarifying -- what the organization |
| or measure the costs of such a so-called "soft" | | | | wants and what you can offer them. Be the one |
| factor as trust. For many, trust is intangible, | | | | that does that best. Then add to your credibility |
| ethereal, unquantifiable. If it remains that way, | | | | the kind of behavior that builds trust. (see the 13 |
| then people don't know how to get their arms | | | | high trust behaviors below). Next, take it beyond |
| around it or how to improve it. But the fact is, | | | | just you as the leader and extend it to your |
| the costs of low trust are very real, they are | | | | entire organization. The combination of that type |
| quantifiable, and they are staggering. | | | | of credibility and behavior and organizational |
| In 2004, one estimate put the cost of complying | | | | alignment results in a culture of high trust. |
| with federal rules and regulations alone in the | | | | Consider the example of Warren Buffett -- CEO |
| United States -- put in place essentially due to lack | | | | of Berkshire Hathaway (and generally considered |
| of trust -- at $1.1 trillion, which is more than 10% | | | | one of the most trusted leaders in the world) -- |
| of the gross domestic product. A recent study | | | | who completed a major acquisition of McLane |
| conducted by the Association of Certified Fraud | | | | Distribution (a $23 billion company) from Wal-Mart. |
| Examiners estimated that the average American | | | | As public companies, both Berkshire Hathaway |
| company lost 6% of its annual revenue to some | | | | and Wal-Mart are subject to all kinds of market |
| sort of fraudulent activity. Research shows | | | | and regulatory scrutiny. Typically, a merger of this |
| similar effects for the other disguised low-trust | | | | size would take several months to complete and |
| taxes as well. | | | | cost several million dollars to pay for accountants, |
| Think about it this way: When trust is low, in a | | | | auditors, and attorneys to verify and validate all |
| company or in a relationship, it places a hidden | | | | kinds of information. But in this instance, because |
| "tax" on every transaction: every communication, | | | | both parties operated with high trust, the deal |
| every interaction, every strategy, every decision | | | | was made with one two-hour meeting and a |
| is taxed, bringing speed down and sending costs | | | | handshake. In less than a month, it was |
| up. My experience is that significant distrust | | | | completed. High trust, high speed, low cost. |
| doubles the cost of doing business and triples the | | | | 13 Behaviors of High-Trust Leaders Worldwide |
| time it takes to get things done. | | | | I approach this strategy primarily as a practitioner, |
| By contrast, individuals and organizations that | | | | both in my own experience and in my extensive |
| have earned and operate with high trust | | | | work with other organizations. Throughout this |
| experience the opposite of a tax -- a "dividend" | | | | learning process, have identified 13 common |
| that is like a performance multiplier, enabling them | | | | behaviors of trusted leaders around the world |
| to succeed in their communications, interactions, | | | | that build -- and allow you to maintain -- trust. |
| and decisions, and to move with incredible speed. | | | | When you adopt these ways of behaving, it's like |
| A recent Watson Wyatt study showed that high | | | | making deposits into a "trust account" of another |
| trust companies outperform low trust companies | | | | party. |
| by nearly 300%! | | | | 1. Talk Straight |
| I contend that the ability to establish, grow, | | | | 2. Demonstrate Respect |
| extend, and (where needed) restore trust among | | | | 3. Create Transparency |
| stakeholders is the critical competency of | | | | 4. Right Wrongs |
| leadership needed today. It is needed more than | | | | 5. Show Loyalty |
| any other competency. Engendering trust is, in | | | | 6. Deliver Results |
| fact, a competency that can be learned, applied, | | | | 7. Get Better |
| and understood. It is something that you can get | | | | 8. Confront Reality |
| good at, something you can measure and | | | | 9. Clarify Expectation |
| improve, something for which you can "move the | | | | 10. Practice Accountability |
| needle." You cannot be an effective leader | | | | 11. Listen First |
| without trust. As Warren Bennis put it, | | | | 12. Keep Commitments |
| "Leadership without mutual trust is a contradiction | | | | 13. Extend Trust |
| in terms." | | | | Remember that the 13 Behaviors always need to |
| How do the best leaders build trust? | | | | be balanced by each other (e.g., Talk Straight |
| The first job of any leader is to inspire trust. | | | | needs to be balanced by Demonstrate Respect) |
| Trust is confidence born of two dimensions: | | | | and that any behavior pushed to the extreme |
| character and competence. Character includes | | | | can become a weakness. |
| your integrity, motive, and intent with people. | | | | Depending on your roles and responsibilities, you |
| Competence includes your capabilities, skills, | | | | may have more or less influence on others. |
| results, and track record. Both dimensions are | | | | However, you can always have extraordinary |
| vital. | | | | influence on your starting points: Self-Trust (the |
| With the increasing focus on ethics in our society, | | | | confidence you have in yourself -- in your ability |
| the character side of trust is fast becoming the | | | | to set and achieve goals, to keep commitments, |
| price of entry in the new global economy. | | | | to walk your talk, and also with your ability to |
| However, the differentiating and often ignored | | | | inspire trust in others) and Relationship Trust (how |
| side of trust -- competence -- is equally essential. | | | | to establish and increase the trust accounts we |
| You might think a person is sincere, even honest, | | | | have with others). |
| but you won't trust that person fully if he or she | | | | The job of a leader is to go first, to extend trust |
| doesn't get results. And the opposite is true. A | | | | first. Not a blind trust without expectations and |
| person might have great skills and talents and a | | | | accountability, but rather a "smart trust" with |
| good track record, but if he or she is not honest, | | | | clear expectations and strong accountability built |
| you're not going to trust that person either. | | | | into the process. The best leaders always lead out |
| The best leaders begin by framing trust in | | | | with a decided propensity to trust, as opposed to |
| economic terms for their companies. When an | | | | a propensity not to trust. As Craig Weatherup, |
| organization recognizes that it has low trust, huge | | | | former CEO of PepsiCo said, "Trust cannot |
| economic consequences can be expected. | | | | become a performance multiplier unless the leader |
| Everything will take longer and everything will cost | | | | is prepared to go first." |
| more because of the steps organizations will need | | | | The best leaders recognize that trust impacts us |
| to take to compensate for their lack of trust. | | | | 24/7, 365 days a year. It undergirds and affects |
| These costs can be quantified and, when they | | | | the quality of every relationship, every |
| are, suddenly leaders recognize how low trust is | | | | communication, every work project, every |
| not merely a social issue, but that it is an | | | | business venture, every effort in which we are |
| economic matter. The dividends of high trust can | | | | engaged. It changes the quality of every present |
| be similarly quantified, enabling leaders to make a | | | | moment and alters the trajectory and outcome |
| compelling business case for trust. | | | | of every future moment of our lives -- both |
| The best leaders then focus on making the | | | | personally and professionally. I am convinced that |
| creation of trust an explicit objective. It must | | | | in every situation, nothing is as fast as the speed |
| become like any other goal that is focused on, | | | | of trust. |
| measured, and improved. It must be | | | | Copyright © 2009 Stephen M. R. |