Leadership Update - August 2006

Update is published by the Bresnahan Group in cooperation with the Integro Leadership Institute. It is designed to provide information on what organizations are doing to get employees engaged and committed to achieving the company vision.

The Four Elements of Trust

I was talking with Larry, the President of a small Philadelphia based company, right after I had finished presenting an executive briefing on Increasing Employee Engagement.

He had been particularly interested in the topic because a recent staff survey had shown that engagement in his organization was poor, and employees had rated trust for senior management as very low. He was so concerned about the lack of trust that he had brought three of his senior executives to the briefing.

Larry called me over to his group after the session and said: "We just could not figure out why our employees don't trust us. Our management team is very conscientiousness, work long hours, and do their best for the organization. We're an honest, ethical group of people who put the organization's interests ahead of our own. How could they not trust us? When you presented the four Elements of Trust it all made sense. We were really only focusing on two of the four."

The Elements of Trust Larry was referring to are:

1. Congruence - being straightforward, honest and ethical.
2. Openness - being willing to listen to others ideas and feedback and to disclose your own thoughts, feelings and opinions.
3. Acceptance - being nonjudgmental of people; treating them with respect and dignity.
4. Reliability - keeping commitments, meeting deadlines and doing your best in everything you do.

Like many senior executives, Larry and his team were focused primarily on Congruence and Reliability - running an honest, ethical organization and achieving results. What they did not realize is that while employees want the senior team to be honest and ethical, and run a financially sound organization, Congruence and Reliability are not as important to them as are Acceptance and Openness.

First and foremost in the employees' minds is Acceptance - how the senior team treats them and their coworkers. They need to feel valued and respected, and know that their work is important; that their ideas will be listened to. Most organizations say "Our people are our most important asset", but how many treat their employees, individually, as if they are? To many employees, that statement demonstrates a lack of congruence.

Confront the Brutal Facts

One of the factors that contributed to the leap to greatness of the eleven companies Jim Collins wrote about in his best selling book Good to Great was their willingness to confront the brutal facts. Are there any policies, procedures or practices in your organization that send a clear message to employees that they are not trusted?

Let me give you an example. A five-star hotel in Melbourne, Australia, was a client of ours for a number of years before it changed ownership, and their Director of Training regularly purchased behavioral profiles from us. Her purchases were never more than a few hundred dollars, and yet every purchase order had four signatures on it: hers, the HR Director, the CFO and the General Manager of the hotel.

This practice demonstrated a lack of trust for the Director of Training by assuming that she was not able to be trusted to operate within her budget. It also demonstrated a lack of trust in the HR Director and the CFO. The General Manager had to sign off on every purchase order produced in the organization! You would think he would be able to find more important things to do with his time and his intellect.

Behaviors that Diminish Trust

I don't think many managers intentionally set out to diminish trust with their team members, and yet many of them successfully do that every day. Here are some of the more common behaviors that managers don't realize are diminishing trust:

• Being solely focused on meeting his or her own needs; usually at the expense of their team member's needs.
• Using information as a source of power, withholding information from team members in a way that they feel they are not important or trustworthy.
• Not communicating openly with employees about their performance so they never know where they stand, except for the "surprise" they get at the annual review.
• Treating mistakes as a crime rather than as a learning experience.
• Assigning blame without first checking the facts, rather than focusing on solving the problem and learning from it.
• Avoiding responsibility for their own actions or decisions; it's never their fault when something goes wrong.
• Treating employees as insignificant by not asking for their input, and not listening when it is offered.

Trust is the foundation of all relationships, and significantly impacts on organizational performance. Any lack of trust employees or customers have for the leaders of an organization, based on all four Elements of Trust, is affecting their bottom line. Here is an example.

Cornell University's Hotel Administration School did a study of 76 Holiday Inn Hotels in North America to measure the cost of a lack of trust in management. The results were stunning to say the least:

Hotels that scored highest in trust for management had:

• The highest levels of customer satisfaction
• Lowest levels of staff turnover
• Highest profitability

The researchers concluded that a one-eighth point increase in trust on a five-point scale (2.5 percent) would translate into an increased profit of 2.5 percent of revenues... which in this case was $250,000 per hotel per year!

If you are not working at building trust by focusing on all four elements, you may well be unintentionally diminishing it.

Check out your organization's policies, procedures and practices to see whether they are contributing to reduced trust from employees or customers. Build the four Elements of Trust into your decision making process, by asking yourself: "Will this decision build trust, or diminish it?"

The cost of lost trust, in the long run, is not worth any short term gains.

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