I recently was looking through blogs from McKinsey Quarterly and ran across one of my…
Trust in any organization is a big deal. We have consulted companies around the world, and it is obvious that when trust is present in an organization, performance is far superior than if trust is missing. Trust is an expression of and evidence for a good organizational culture.
There are two key elements to work with when organizations want to elevate levels of trust:
- Behaviors and actions of people in the organization = are readily seen (like symptoms of a disease)
- The source of those behaviors and actions = are invisible to the organization and consist of deep-rooted mindsets about trust (like the causes of a disease)
Changing Trust in an Organization
In his article in Forbes, David Horsager wrote:
“Trust garners better output, morale, retention, innovation, loyalty, and revenue, while mistrust fosters skepticism, frustration, low productivity, lost sales, and turnover. Trust affects a leader’s impact and the company’s bottom line more than any other single thing.”
If trust is so foundational to the health of a culture, transforming an organization’s trust levels will have a significant impact on the culture. Professors John Kotter and James Heskett performed a Harvard Business School study documenting the significant impact of culture on performance over an 11-year period. The financial performance differences were “staggering”, to use one of Dr Kotter’s descriptions.
“For example, the companies with good cultures achieved 756% growth in net income during the same time period that companies with poor performing cultures saw just 1% net income growth.”
Recently, I heard of a large multinational company that is in the process of generating more trust in its people and operations. From looking at the potential returns, it is understandable why the executives want to improve trust levels in the organization. However, their approach is to drive a change in employee behaviors within the organization through a series of training programs and follow up modules. In our experience, this effort may have some positive outcomes – getting people to learn about trust and how they behave is certainly going to make some difference. However, this approach of focusing only on employee behaviors and actions is just “the tip of the iceberg,” Real transformation will only come when the source of the behaviors is discovered, thought through, and transformed. Once this occurs, people then create changes in behaviors and actions consistent with this new way of thinking about trust and the organization. Both are required for a successful transformation.
Getting to the Source of Trust Issues
A good question to ask yourself :
What might the mindset of an organization be if executives, managers and employees are not trusting each other?
From an organizational perspective, the mindset would come from some learned experiences from the past, generally among positions or groups. Examples of mindsets we have heard before:
- “Sales doesn’t trust manufacturing”
- “Marketing doesn’t trust sales operations”
- “Finance doesn’t trust anyone”
- “Management can’t be trusted”
- “Unions can’t be trusted”
These mindsets are very generalized statements that likely began at some point a long time ago. Additionally, these mindsets have little to do with specific people in any of the functions. Clearly, if these are the prevalent mindsets within an organization, no amount of new behavior changes will make a significant difference. Focusing only on behavior changes will lead to checklist activities, no substantive change, and a high degree of cynicism.
Being Trusting and Trustworthy Requires a New Mindset
To be trusting and trustworthy starts with the senior executives of the organization. They must actively engage in understanding and transforming their own mindsets around trust among each other as well as their managers and employees. In transforming their mindsets, they must create new behaviors that they will apply consistently to demonstrate and model the new ways of being trusting and trustworthy with people in the organization.
These new behaviors and actions will start to manifest themselves in profound ways, such as:
- As an executive, you can own what has happened in the past, and that it happened on your watch; that you recognize the negative impact you may have had on employees in the past, and that you are committed to changing the mindsets, the behaviors and the culture for the benefit of everyone in the company.
- As an executive, you can acknowledge that trust has been an issue, that you are looking to improve trust, and that you recognize that you will need to change too. That you also need everyone in the company to embrace the change knowing that there may be times that it is not easy to do so, but you ask for their help and efforts.
These are two examples – the key is that whatever the message, executives are being trusting of them and trustworthy for them.
However, for trust to be the norm throughout the organization, relying only on the senior executives will not be enough. All leaders throughout the organization must be engaged in these new mindsets. This include the leaders of the business who have authority and titles, as well as the thought leaders, influencers, and people in the organization who are widely respected. These leaders must also be engaged in this new way of being trusting and trustworthy with new actions invented and taken.
A global manufacturing organization with whom we worked was committed to a transformational growth strategy. Part of the transformation had to start at the top of the organization. The leaders of the business had to transform their mindsets about the unions from “they can’t be trusted” to “they are our partners for growth”. The leaders could see where the old mindsets came from – painful events happened when the company was going through a major downsizing a decade before, resulting in broken trust between the executives and the unions. By recognizing this, they were able to authentically commit themselves to adopting and behaving consistent with the new mindset.
A great example of this new mindset’s behaviors in action was demonstrated by interactions with one of the former union presidents who was a “known troublemaker” in the company and was very vocal in his distrust of the leadership of the company.
Steeped in this new mindset, the president of the company met with this person along with other informal leaders and had several conversations with them to establish a new baseline of trust. The president’s behaviors demonstrated to these employees that he was committed to the transformation and growth strategy and was being humble and authentic in his new mindset and behaviors. It was only a matter of months and we began to see that the former troublemaker was becoming the biggest advocate of the transformational efforts and growth strategy. During a large town hall, he stood and shared his support in quite an emotional way, influencing many of those in the audience to begin to make changes in their own mindsets and behaviors around trust.
As more formal and informal leaders are transforming their mindsets to being trusting and trustworthy, getting employees engaged will be supported by the formal and informal leaders.
The need for any organization to have high levels of Trust as part of its organizational culture is fundamental and will make a significant difference to the performance and bottom line of the organization. In order to make a transformational and lasting impact on this kind of change, the two elements to consider:
- The behaviors and actions that we can see. That is, what the executives, managers and employees are doing and how they are behaving.
- The source of these behaviors and actions. That is, what are the mindsets and fundamental beliefs that are driving those behaviors and actions?
A change in behaviors is definitely an outcome that must be seen from any change initiative. However, focusing only on behaviors will likely result in an expensive, time consuming and marginally effective undertaking. Discovering the source of behaviors and actions can be incredibly hard to pin down. That is what we here at KingChapman have been doing with organizations globally for the past 30 years and is one of the great tools that we provide.
It is imperative, possible and doable, and well worth the effort, to transform the source of trust in an organization, creating new behaviors and actions to drive significant value.
Building trust is just one element of transformation, performance and growth. Growing a business is a daunting task for many, if not most, executives. While growth is considered fun, and what executives dream of being engaged in, achieving sustainable growth is another story.
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