Building the Trust-based Organization
Do your eyes glaze over at that title? Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So I set out to tighten up the perspective.
Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. More often, however, it’s more a situation of the blind men and the elephant: all describe a key component of the answer, but none have a holistic perspective.
The Parts of the Elephant
This is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into these categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.
Trust as Communication. “Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”
This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.
However, the communication approach begs one huge question – the content being communicated.
Trust as Reputation. The Edelman PR firm’s annual Trust Barometer has been a major communications success. A sample statement:
Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the 2012 Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.
This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee. It is also inherently corporate, and therefore impersonal.
Trust as Recipe. There are probably more approaches that fall into this camp than any other. It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.
A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language. They offer four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.
Trust as Rules-Making. A Harvard Law blogpost titled Rebuilding Trust: the Corporate Governance Opportunity, Ira Milstein points out the critical roles that can be played by boards and shareholders in increasing trust.
A similar point is made from an Asian perspective, in Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.”
While these views may appear slightly narrow, they’re part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.
The strength of this view lies in its linkage of business to society – the implicit statement that there is no Natural Law that says business has any right to stand alone outside a broader social context.
Trust as Shared Value. In Michael Porter and Mark Kramer’s notable 2010 HBR article Creating Shared Value, Porter auto-performs a conceptual sex-change operation on his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.
Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. (Incidentally, this view reclaims Adam Smith from the clutches of the Milton Friedmans and Ayn Rands who suggest competition is purely about survival of the fittest, and restores to him a sense of Smith’s broader views as reflected in his Theory of Moral Sentiments).
They are not entirely alone. The Arthur Paige Society a few years ago published The Dynamics of Public Trust in Business, which similarly stated:
…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.
Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.
Seeing the Elephant Whole
All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”
So what would constitute a good answer? It must have three parts: a Point of View, a Diagnosis, and a Prescription.
Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.
In Part II of this post, I offer my suggestion for how to best answer the question across all three dimensions.
I click on articles about trust, often to my disappointment. I can’t help myself . I even click on those that provide a clear warning in the title like ” Five ways to build Trust”. I have learned to avoid those that offer trust building exercises or games, but I seem hooked on trying to see different takes on trust. Thank you Charlie for sharing your experience, but even greater thanks ( if that is possible) for analyzing the different offerings. Perhaps my quest – reading various perspectives on trust- is my attempt to get the whole elephant. A Don Quiote like mission. It is a bit like trying to understand the nuance of communication by reading books about conversation. Can trust be understood by breaking it down into component parts? Or is it better understood as a whole?
Hazel- it depends how simple (or complicated) one wants the subject to be. I like to think of trust in a pretty simplistic way.
At both the individual or organizational level, trust is built by those who have high integrity and character. Individuals who consistently keep their word and their promises are seen as trustworthy. Same goes for leaders.
At the organizational level, the most trustworthy ones are those where the CEO creates a set of long-term values (not just a credo etched on the lobby wall at corporate headquarters), gets stakeholder buy-in and those values are lived every day. Think Zappos or Ritz Carlton.
Great post and reply. Trust can be simple as you say. And yet it is in the day to day context of communicating the job well done, the expectation missed, the problem that needs fixing and the problem avoided. I really connected with your comments about trust as communications. It is in communications that we share and connect with values. And Trust as relationship. I mean without the relationship would there even be a need for trust.
As usual I enjoy your take on the topic.