In their August 10th blog “Trend to Watch: Trust in Business Is Running Out” on HBR Now, Eric Beinhocker & Elizabeth Stephenson discuss the strained relationship between us and the businesses we deal with every day. They found that “the relationship between business and civil society was showing signs of strain even before the crisis. Since the recession began, there has been a precipitous decline in trust. The Edelman Trust Barometerfound that 62% of adults in 20 countries trusted corporations less in December 2008 than they had a year earlier.”
But how does that impact the leader of a small or midmarket company? You are not the bank, broker or insurance company that fed this economic crisis but unfortunately, because you are in business, you’re swept up in this potential death spiral of mistrust.
I could not agree more with Beinhocker and Stephenson when they ask “why should this concern strategists? Because a low-trust environment makes everything about doing business more difficult. For an individual company, loss of trust leads to higher transaction costs, lower brand value, and greater difficulty attracting, retaining, and managing talent. Ultimately, it can mean boycotts, negative publicity, and unwanted regulation”.
So what can a midmarket leader do to build trust in the place that matters most, their workplace?
Take the word TRUST and create a mnemonic to remind you of just what to do to build a trusting workplace environment.
T stands for TEACH. Teach everyone in your organization just how things work. Make it as transparent as possible. If you want front line leaders making decisions that will make a positive impact on the value of the company, teach them how the place works.
R stands for REWARD. Make sure your rewards systems are aligned with your corporate values and corporate goals. I see too many companies rewarding behavior that might have a temporary positive impact on the bottom line, but not create long term value for the company.
U stands for UNCONDITIONAL SUPPORT. Consider your role as a leader as a position of vulnerability. Too many midmarket execs feel they have to be perfect and this creates an environment where mistakes are hidden and new ideas are discouraged (they can’t be any good if the leader didn’t think of them.) Mistakes should be like tuition. Get them out in the open and learn from them. Talk about them and you’ll foster an environment of openness and creativity.
S stands for SHARING INFORMATION. If it’s not personal information or the secret to Coke or Pepsi, then get the information out there. Creating a trusting environment where employees know what they have to do everyday to impact the bottom line means they need to have enough information to make good decisions.
T stands for being TRUSTWORTHY. As a leader, you’ll build trust by making and keeping commitments. Chances are your emails are being saved and your speeches are being recorded and posted on YouTube so you might as well come clean. Keep every commitment you’ve ever made and trust will become viral in your organization.