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Four Principles of Organizational Trust: How to Make Your Company Trustworthy

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Here’s a “Golden Oldie” post from 2011. Has anything changed in the passage of five years?

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iStock_000018524776XSmallTrust, in case you hadn’t noticed, has gotten “hot” lately. But much of it sounds very vague—soft, fluffy, nice-to-have, the buzzword du jour.

I’d like to do my part to make it real.

To me, that means breaking it down and making it sound; tapping into the strategy and mysticism, but also staying grounded in the tactical and the practical.

So let’s review some context; then talk about four specific operating principles a business can hone in on to improve its trustworthiness.

Putting Trust into a Workable Context

I’ve suggested elsewhere that “trust” is too vague a term to work with. To do something practical, we need first to identify the trust realm: are we talking about personal trust, or business/organizational trust, or social/institutional trust?

The next question is about the trust role: are we working on being more trusting? Or more trustworthy? They are not the same thing.  And “trust” is the result of them both interacting.

Building a Trustworthy Business

In the realm “personal” and the role “trustworthy,” we can point to personal beliefs and behaviors as indicated in the Trust Quotient. But in business, trustworthiness is built through a set of daily operating principles. Trustworthiness is built from habitually behaving in accordance with a set of commonly shared beliefs about how to do business.

I suggest they can be boiled down to four.

The Four Trust Principles

1. A focus on the Other (client, customer, internal co-worker, boss, partner, subordinate) for the Other’s sake, not just as a means to one’s own ends.  We often hear “client-focus,” or “customer-centric.” But these are terms all-too-often framed in terms of economic benefit to the person trying to be trusted.

2. A collaborative approach to relationships.  Collaboration here means a willingness to work together, creating both joint goals and joint approaches to getting there.

3. A medium to long term relationship perspective, not a short-term transactional focus. Focus on relationships nurtures transactions; but focus on transactions chokes off relationships. The most profitable relationships for both parties are those where multiple transactions over time are assumed in the approach to each transaction.

4. A habit of being transparent in all one’s dealings.  Transparency has the great virtue of helping recall who said what to whom. It also increases credibility, and lowers self-orientation, by its willingness to keep no secrets.

Executing on the Trust Principles

What are the tools an organization has at its disposal to make itself more trustworthy? Any good change management consultant can rattle off the usual suspects, but for trustworthiness, the emphasis has to shift somewhat.

The usual change mantra includes a heavy dose of behaviors, metrics and incentives. Some of that works here, but only to a point.

For example, Principle 1, focus on the Other, is contradicted by too much extrinsic incentive aimed at leveraging self-interest–it undercuts focus on the Other.  And Principle 3, relationship over transaction, forces metrics and rewards to a far longer timeframe than most change efforts employ.

Another great shibboleth of change is that it must be led from the CEO’s office. But with trust, it ain’t necessarily so.  Trustworthiness is a great candidate for infectious disease change strategies; guerrilla trust strategies can work at the individual level, and individual players can lead. Behavior in accord with these principles cannot be coerced; the flipside is, it can be unilaterally engaged in.

The most powerful tools to create a trustworthy organization are things like language, recognition, story-telling, simply paying attention to the arenas where the principles apply—and the will to apply them.  Role-modeling helps; some skill-building helps.  But most of all, it is the willingness to notice the pervasive opportunities to work in accordance with this simple set of four principles.

Trustworthiness breeds trusting (the reverse is true too); the combination is what leads to trust. Which, by the way, is quite measurable in its impact on the bottom line.

The Three Ps of Trust

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Trust is a complex concept in human relationships. In our Chapter 1 of the still-pretty-new The Trusted Advisor Fieldbook, we explore ten fundamental attitudes that take aim at the complexities of trust, breaking it down so that it can be managed and more readily increased. Think of the Three Ps as the short list; they represent the core of our thinking on trust.

Trust is Personal

When trust is discussed, it usually refers to people. Yes, you can trust a company, but when you do, you are typically focusing on just one part of trust—dependability. It makes perfect sense to say a company or organization is dependable or reliable. It does not make much sense to say that a corporate entity has your best interests at heart or is sensitive to your needs, or is discreet. Those are things you would usually say about people. Even when it does make sense to say an organization is credible or careful or focused on your interests, the reference is usually to the people in it. At root, trust is personal.

Trust is Paradoxical

Over and over again, you will discover that the things that create trust are the opposite of what you may think. That is why we say trust is paradoxical—in other words, it appears to defy logic. The best way to sell, it turns out, is to stop trying to sell. The best way to influence people is to stop trying to influence them. The best way to gain credibility is to admit what you do not know.

The paradoxical qualities of trust arise because trust is a higher-level relationship. The trust-creating thing to do is often the opposite of what your baser passions tell you to do. Fight or flight, self-preservation, the instinct to win—these are not the motives that drive trust. The ultimate paradox is that, by rising above such instincts, you end up getting better results than if you had striven for them in the first place.

Trust is Positively Correlated to Risk

Ronald Reagan, the fortieth president of the United States, was known to quote a Russian proverb, “Trust, but verify.” For our purposes, the opposite is true. Real trust does not need verification; if you have to verify, it is not trust.

Sometimes businesspeople forget this and try to ameliorate or mitigate all risks. This is particularly true in professions like law, finance, or banking. But the essence of trust contains risk. A trust relationship cannot exist without someone taking a chance—and it is your job to lead the way. If you think, I can’t take that kind of risk yet because there’s not enough trust in the relationship, check your thinking. It is the very taking of risks that creates trust in the relationship.

Ready to start your new trust-based mindset? Mind your Ps.

 

A Trust-based Organization: Bangor Savings Bank

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In the talks I give about trust in companies, I nearly always get asked for examples of companies that do it well. And I almost never have a good answer. I can identify plenty of very trustworthy, and trusting, individuals; but I have a much harder time pointing out trust-based organizations.

What do I mean by a trust-based organization? I mean an organization that actively encourages trustworthy and trusting behavior in its employees and with its various stakeholders. 

Why are there many personal examples; but so few corporate?

Unfortunately, the reason for that is very simple.  Fear.  Very few corporate organizations in the United States these days are willing to walk the talk, to put their money where their mouth is. I’m not talking about CSR initiatives: I’m talking about entire organizations that, as an organization, believe in:

  • People who live according to the trust equation, who focus on always being credible, reliable, intimacy-safe, and with low self-orientation;
  • Interactions that are based on respect and listening before giving advice;
  • Approaching problems by being client-focused, collaborative, long-term oriented, and transparent.

I wrote earlier this year about one such possible organization, Pediatric Services of America. Now I’ve got another for you: the Bangor Savings Bank, of Bangor, Maine.

I had the privilege and the pleasure of spending most of a day with about a quarter of the bank’s employees at an annual sales event and pizza / rewards night last week. And it was a sight to see.

This, my friends, is what a trust-based organization looks like. Let me give you some verbal snapshots, some big, some little, no particular order:

  • It’s a blue jeans western-themed event; my host, EVP John Edwards, encourages me to wear my best blues, and matches me;
  • The strategic plan is drenched in trust principles: long-term, customer-experience-based, direct communication, shared cultural values;
  • The annual numbers and the new year’s goals are passed out in local offices: this event is for celebration—of people, of success, and of principles (oh yeah, bonus checks get discreetly handed out too);
  • The event features 8 video profiles of 8 employees chosen as best representing 8 key values of the firm: including customer focus, long-term values, listening, caring and acting in customers’ best interests;
  • For four years, the leadership team has been pounding home a simple message: it is about customer experience, we believe in trust, it is about people, behaviors start with attitudes. All content in the event is anchored in these themes. They really mean their catch-phrase slogan: You Matter More.
  • (It’s worth mentioning the Bank involved another great change agent a few years ago, the making-miracles-in-the-trenches bank consulting firm of St. Meyer & Hubbard; Bangor SB is a feather in their cap)
  • EVP Edwards says, "Our CEO Jim Conlon repeatedly reminds our associates and our clients that: "The only reason we exist is that the people, businesses and organizations in our markets have chosen to do business with us. If you do the right things for the right reasons, good outcomes will ensue." Hear that? He talks of outcomes as results of principled behavior–not as goals per se.
  • These are definitely Mainers, but of a special type: not afraid to emote, and not afraid to directly confront issues. I heard a story about the courage it took to say ‘no’ to a motivated and profitable borrower;
  • I heard about a borrower who walked away from a loan deposit because he changed his mind about the project; the bank, with no need to do so, refunded his deposit.
  • Want to know what long-term and community-focused means? At Bangor SB, it means “we invest in these communities because we want our children to have good jobs in this state—it’s personal.”
  • The quote that opens and closes the strategic plan: “Customer experience is the reason we are here, it is everything.”
  • Edwards says, "We have learned that defining the customer experience is an organic exercise – our culture and personality is embedded within our own colleagues and we can best learn from each other. We must constantly strive to get better as there are always ways to improve.
  • You want numbers? The bank is beating its competitors on key metrics—market share, loan losses, growth in assets.

These are people who are passionate, engaged, profitable, and making a difference in their lives and those of their communities. If I had to boil it down to one thing, it is this: the consistent application of a core set of trust principles to all the bank’s affairs.

The fascinating question it raises is: why can’t won’t other companies do this? 

Why It’s So Hard To Collaborate

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Many words are written in an attempt to describe the next new thing. These days that list includes: trust, authenticity, collaboration, holistic, personal, sustainability, engagement, and relationship capitalism.

You could make a case that the ‘most likely to succeed’ is collaboration.

Why Collaboration Seems An Obvious Winner

For one thing, the economic benefits of collaboration seem somewhat obvious. Philip Evans of BCG has written about the massive cost advantage accruing to Toyota vs. the US auto producers due to their ability to collaborate with their suppliers. Steven M.R. Covey Jr. has written about the stark cost and speed savings available to those who seek it. I’ve written about it at some length too and in fact collaboration is one of the Four Trust Principles in my own work.

Furthermore, it’s not hard to understand what collaboration looks like. It means cooperating, not fighting. Our mothers taught us that regarding our siblings, and our teachers taught us about playing nicely together in the playground. There’s a sense that ‘we know how to do this.’

So—Why Don’t We Collaborate?

We know why to do it. We know how to do it (or at least we think we do). So why don’t we do it? I learned an axiom about ten years ago from Phil McGee: if you see negativity happening, the odds are good that you’ll find fear at the heart of it. Personal fear.

At this level, I can’t presume to speak for others, so I’ll have to just put out there why I fail to collaborate. And I do fail—constantly. The more calm I get, the more I am capable of noticing just how anti-instinctive it is for me to collaborate.

Let’s say someone calls me to say, “Hi, I see you wrote something about collaboration; maybe we could collaborate on writing more about that, get to know each other, maybe work together in some way?”

My first instant reaction—if I’m honest—is negative. This person is trying to steal my thunder, trying to get something from me. I careen back and forth between dismissing the person and fearing they’ll overpower me. Are they worthy of my time? Worse yet—am I worthy of theirs?

I know the benefits: I’ll learn and grow, and have more chances for good things to happen by behaving collaboratively than not.

And I know how to do it: just say, “Hey that could be really interesting, let’s talk,” and then do so, from a place of curiosity.

And yet—those first instincts rise in me.

I’ve gotten much better at it. I almost always notice those instincts now, right away. Not that long ago, I just lived in them.

Sometimes I get over it and say/do the right thing within 30-60 seconds. Other times it may take up to a day of thinking on it before I end up doing the right thing.

Yet there are still those times I have managed to put things off indefinitely. Or others where the opportunity is now long-gone, and exists only on my should’ve guilt list.

The Logic of Avoiding Collaboration

I don’t really think it’s just me. In the face of astonishingly obvious economic benefits, and a fairly obvious set of “how-to’s,” I think the main reason we don’t collaborate is simple. Simple fear.

There are two simple approaches to lowering fear. One is to mitigate risk. The other is to stop being so fearful. The first one is getting most of the press; we need more of the second.

Does Your School Trust Its Students? Do You?

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Companies work hard articulating their values. For example, take a look at a short excerpt from Johnson & Johnson’s Credo.

  • Everyone must be considered as an individual.
  • We must respect their dignity and recognize their merit.

Thinking about and articulating values aren’t limited to big companies. A couple of years ago, one of my kids attended a school where the 8th grade students collaborated to create rules for their own behavior – values in action. The class worked hard together, and then voted on the rules the students would follow.

The rules the students created bear a passing resemblance to those quoted from J&J’s Credo – a document developed in an exercise that I would imagine took J&J many committee meetings and people hours to formulate. Here are the rules from the students as I recall them from parents’ night: ·

  • Be inclusive, share and work together
  • Talk things out
  • Don’t pull other people into your fights
  • Don’t get stressed out if an assignment is too hard
  • Always encourage fellow classmates
  • Include everyone all the time
  • Respect everything and everyone: classmates, teachers, and their belongings
  • Work hard to do your best.

I have to hand it to the school administrators. They believed in their students. They trusted that their students would create great rules for themselves. They also trusted that their students would both follow those rules, and impress upon each other the value of obeying or living by the rules.

And it worked! Designing rules collaboratively enabled both buy-in and self-enforcement. When these kids finished eighth grade they had a great start collaborating on, creating, and living values. I look forward to seeing how they bring their collaborative skills and values into the working world in a few years.