trust

The Importance of Trust & How To Address a Lack of It

Andrew Cooke trust , , , ,

The Must of Trust

How trust underpins business, how to gain it, and the costs of losing it

by Andrew Cooke, Growth & Profit Solutions

Hard to earn, and easy to lose – trust underpins business and all our relationships, professional or personal.  It is a must. So how can leaders accelerate the trust that they can engender from others.  What can we do to improve the speed of trust?

Building TrustThe most effective way for a person to build trust is, through their behaviour; to demonstrate their ability and capacity to keep their commitments.  In doing this the individual needs to keep to the process of Make, Keep and Repeat – continually keeping commitments builds trust makes things happen faster, with less stress and makes things more enjoyable. This can be risky for managers to do but it helps them to build trust quickly and efficiently – especially in difficult situations.

Make, Keep and Repeat

So let’s look at the power of each step:

1. Make – making public a clear, defined commitment that is specific, measurable and has a clear date set to it.  This removes ambiguity and holds you to a commitment to which you can be held accountable.  Yes, you as the manager or leader are making yourself accountable to your reports or peers. Making a commitment builds hope.

2. Keep – demonstrating the fact that you have met your clearly articulated commitment as previously defined.  You need to actively publicize this.  People need to know that you have done this; you cannot assume that they will know because you have done it.  Furthermore, proving that you are keeping your commitments gives you right to expect them to reciprocate i.e. they will make, keep and repeat in terms of their own commitments.

3. Repeat – this develops consistency, belief in you, and proof that your actions mirror your words.  When people see a discrepancy between what you say and what you do, they will always follow what you do.  By repeating this process you are establishing and creating an avatar for others to model their behaviours on.

Extending Trust

A good way to increase trust is to trust others.  Trust is usually reciprocated –the more you give, the more you get.  So if management doesn’t trust, then it cannot expect to be trusted.  In doing this you give trust smartly, not blindly.

“Trust Taxes”

Trust taxes are costs that you incur when there is little or no trust. When trust goes down, speed also goes down and cost goes up.  This is a “tax” – and these taxes can double the cost of doing business.

There are 7 types of “trust taxes”:

1. Redundancy & duplication with smaller spans of control – if there is less trust, then you will find that tighter control develops over smaller areas, and that there is unnecessary duplication of resources to offset the increase in perceived risk.

2. Bureaucracy – with less trust so procedures and systems become more cumbersome in order to bridge the perceived gap between what is needed and what is available in providing security and consistency in the work done.  In the US there is the retailer Nordstrom, where its high levels of trust are reflected in its “one card operating manual”: on one side of the card it says – “We have one rule… – on the other side it says “use your best judgement in all situations”.

3. Politics – more silos develop and turf wars become more prevalent.  Less trust results in individuals putting their agenda ahead of others and the business overall, it also creates a “fixed mindset” where people see the pie as fixed, so that they only way they can get a larger slice of the pie is at the expense of somebody else e.g. different departments negotiating for budget allocation will compete against each other for it.

4. Disengagement – a lack of trust reduces staff engagement as they do not believe that their leaders have their interest at heart.  This is reflected in research which shows that 96% of engaged employees trust their leaders, whereas only 46% of employees who are disengaged.

5. Turnover of Employees – as disengagement increases, so staff perceive roles and jobs elsewhere as more attractive which, previously, they might not have considered.

6. Churn – low trust also extends to customers and other stakeholders who now see other businesses as more attractive and less risky.

7. Fraud – with lowering levels of trust there is a lower level of integrity increasing the likelihood of fraud being committed within the company.

How Does Management Address a Lack of Trust?

1. Frame it in economic terms

The issues of trust, or rather the lack of it, needs to be framed in economic terms, otherwise it will become a ‘nice to have’ initiative, not an economic issue.  What is the impact of speed and cost on every dimension of the company; ask yourself if you could improve it then what would the impact be e.g. in innovation, execution, or strategy.

2. Make trust a specific objective

Make so it is not seen as a nice by-product, but rather as a way of improving which inspires trust and confidence.

3. Focus on instilling practicing and applying the behaviours that engender trust in the company.

It is not just the softer behaviours, but also the harder results, that help to drive results.  People need to be seen to be performing and being credible, this gives trust, and helps to drive it.

Trust is key for driving good business, and for avoiding the costly implications of the seven “trust taxes”.  Build trust for yourself, for your managers, reports and peers within your company and for those with whom you have relationships (or want a trusting relationship). To do this Make Commitments, Keep Commitments and Repeat.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

3 Ways to Help Change the Perceptions of Others

Andrew Cooke Business Growth, Leadership, Management, Perception, Performance, trust ,

Perceptions of Business Growth – What is REALLY happening?

by  Andrew Cooke, Growth & Profit Solutions

Is your business growing or not? Do you share the same view as your staff, your manager or your leaders?  How do you know if you do?  This article highlights the differences that exist, examines why they exist, and suggests ways to create a common understanding of the business’ growth potential and opportunity.

ImageA recent Australian study by Leadership Management Australia (June 2012) of over 2000 participants including Leaders, Managers and Non-Managerial Employees highlighted a major problem and disconnect facing business.  The perception as to whether their businesses were growing or not.

The Non-Managerial Employees firmly believed that their businesses were growing (71%) whereas Leaders and Managers have a considerably different outlook – with the belief that growth is declining. Only 47% of Leaders perceived their businesses as growing and 45% of Managers.  So what does this mean for business in dealing with the future?

An individual’s perception of a situation is their reality, no matter what you think.  It is how they ascribe meaning to a situation and is based on their beliefs, feelings, ideas and experience.  As such we are looking at how to overcome a clear difference of opinion and belief. Failure to do so can cause major problems between these groups.

So what can we do?

Firstly, the differences may be due to the time-scale that the respective groups look at the work of the business – employees focusing more on the immediate and short-term, managers for the mid- and short-term, and leaders for the mid- and long-term.  The longer the time-scale that you are working to the greater the level of uncertainty that you need to incorporate into your forecasts and plans.  We need to understand this.

Uncertainty comes from a variety of sources.  Externally to Australia there is growing uncertainty in relation to economic, environmental and even political conditions in a number of countries, whose ripples are being felt on Australia’s shores.  Within Australia there are internal uncertainties including the carbon tax and the mining tax which is exacerbated by a government suffering in the polls.

Secondly, employees need to understand the perspective of managers and leaders.  To do this the leaders and managers need to clearly and consistently communicate what the issues, opportunities and risks are and in doing so create trust.

Trust creates high-performing organisations (HPOs) and helps the business to achieve high revenues, profits and market share than low-performing organisations where trust is low.  These HPOs are also more effective at accomplishing their goals in critical areas including customer loyalty and retention; achieving predictable results; business agility and practicing innovation and creativity.

Thirdly, the business needs to actively engage employees in coping and dealing with these changes and engendering trust.  Key to this is establishing clear priorities and being able to cascade them to people so that they are meaningful, relevant and measurable; and building these priorities into their work creates alignment, traction and results.

To enable the business to grow requires more than leadership and good management.  It requires good communication, developing trust across and throughout the business, and the establishment of a commonly shared and understood perception of the business and its future growth. Creating this enables the business, holistically and at all levels, to engage proactively and develop opportunities and options for business growth.

Do you know how perceptions vary across your business and why?  What perception do you want to create for your business and how will you do it?  Share your ideas, experiences and examples of what has worked and what has not – ask your questions and let’s see what answers we can come up with.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

What a Lack of Trust Can Cost You

Andrew Cooke Growth and Profit Solutions, Leadership, trust

Trust “Taxes”, the Costs of a Lack of Trust

Trust taxes are costs that you incur when there is little or no trust. When trust goes down, speed also goes down and cost goes up.  This is a “tax” – and this tax can double the cost of doing business.

There are 7 types of “trust taxes”:

  1. Redundancy & duplication with smaller spans of control – if there is less trust, then you will find that tighter control develops over smaller areas, and that there is unnecessary duplication of resources to offset the increase in perceived risk.
  2. Bureaucracy – with less trust so procedures and systems become more cumbersome in order to bridge the perceived gap between what is needed and what is available in providing security and consistency in the work done.  In the US there is Nordstrom where its high levels of trust are reflected in its one card operating manual: on one side of the card it says – “We have one rule… – on the other side it says “use your best judgement in all situations“.
  3. Politics – more silos develop and turf wars become more prevalent.  Less trust results in individuals putting their agenda ahead of others and the business overall, it also creates a “fixed mindset” where people see the pie as fixed, so that they only way they can get a larger slice of the pie is at the expense of somebody else e.g. different departments negotiating for budget allocation will compete against each other for it.
  4. Disengagement – a lack of trust reduces staff engagement as they do not believe that their leaders have their interest at heart.  This is reflected in research which shows that 96% of engaged employees trust their leaders, whereas only 46% of employees who are disengaged.
  5. Turnover of Employees – as disengagement increases, so staff perceive roles and jobs elsewhere as more attractive which, previously, they might not have considered.
  6. Churn – low trust also extends to customers and other stakeholders who now see other businesses as more attractive and less risky.
  7. Fraud – with lowering levels of trust there is a lower level of integrity increasing the likelihood of fraud being committed within the company.

If you have a lack of trust, then you are likely to incur some or all of these taxes.  If you have a lack of trust then you need to address this. This is the subject of another blog.

To view or download a PDF version of this blog click here.

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

3 Steps to Building Trust

Andrew Cooke trust

“Trust takes years to build, seconds to lose, and forever to repair” – Anon

There are three key steps involved in building trust. These include:

  1. Make – making public a clear, defined commitment that is specific, measurable and has a clear date set to it. This removes ambiguity and holds you to a commitment to which you can be held accountable.  Yes, you as the manager or leader are making yourself accountable to your reports or peers. Making a commitment builds hope.
  1. Keep – demonstrating the fact that you have met your clearly articulated commitment as previously defined. You need to actively publicize this.  People need to know that you have done this, you cannot assume that they will know because you have done it.  Furthermore, proving that you are keeping your commitments gives you right to expect them to reciprocate i.e. they will make, keep and repeat in terms of their own commitments.
  1. Repeat – this develops consistency, belief in you, and proof that your actions mirror your words. When people see a discrepancy between what you say and what you do, they will always follow what you do.  By repeating this process you are establishing and creating an avatar for others to model their behaviors on.

Demonstrate these three behaviors on a regular basis so that you can not only create trust, but you are seen to be more trustworthy.

To view or download a PDF version of this blog click here

Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

If you found this article of use or interest please don’t hesitate to share it with others.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.