Why Companies Don’t Create Trust Internally
The Institute for Corporate Productivity (i4cp) sets out to answer that question in a recent survey. They report:
"Most organizations recognize that trust is an important consideration in their company’s success, but many employees don’t feel it is being nurtured internally. The main culprit? Top management…
… A full 40% of low-performing companies feel their organizations do not nurture trust, while only 16% of respondents from high-performing companies feel the same.
“Trust is a core building block in developing a high-performance culture,” says i4cp Leadership Pillar Director Mary Key. “When employees don’t sense an environment where they can trust others, especially the leadership, productivity and morale spiral downward. It’s no surprise that those who reported higher levels of trust also rate their companies as high-performing.”
It’s nice to have empirical data linking trust and economic performance—one of the biggest trust misconceptions in the corporate world is the implicit belief that trust is a costly indulgence, related somehow to charity, a nice-to-have if you can afford it, but certainly not a competitive factor.
The study goes on to say that management credibility is falling—and the biggest reason is “failure of senior leaders to deal with low-performing individuals or teams.”
Let’s connect the dots here. Phil McGee, a small-company CEO, says nearly all management failures boil down to two failures. The first, he says, is "an inability to confront."
McGee is dead right. Trust comes in large part from courage and from the ability to constructively confront reality. Which leads to high performance. Which leads to trust. Just like the survey respondents said. (David Maister has written extensively and persuasively about the link between facing hard truths and generating performance and trust).
McGee’s other leading cause of bad management is "a tendency to blame. " And here I see a dichotomy between the survey-makers and the survey-takers.
In the survey report-out, the authors say:
Despite the issues, there are very few formal programs inside of organizations today to restore trust. A full 87% of respondents say their organizations do not offer training programs that address this issue, 69% don’t utilize an ombudsman program to deal with concerns or complaints, and more than 60% report that employee surveys or audits on trust issues aren’t in place, or are in place to only a small extent.
Methinks the i4cp is falling here into the trap of modern management practices—the belief that, if you have a trust problem, you need surveys, training, processes and programs. The default corporate response to a complex issue has come to be:
a. Design a survey instrument
b. Use it to execute a needs analysis
c. Identify competency models, complete with levels and behaviors that indicate them
d. Train employees in the new behaviors
e. Implement measurement and reward systems to incent the above.
I can’t say strongly enough what hokum this is when it comes to trust. A competency model does for a low-trust company what a report card does for a recidivist criminal—just about nothing.
What would be the effect of doing a “needs analysis” of people walking into church? (“How well would you say you’re doing on the 4th commandment? OK, sit in the 3rd pew, front, left. And how much reward will it take for you to behave unselfishly this quarter?”).
Low-trust organizations don’t need more of the same stuff that makes for "best practices" in process design. They need values, principles, passion, introspection, leaders who actually believe what they say and aren’t afraid to say what they believe. They need inspiration, a conversion, ah-ha moments, and a hard kick in the soul.
But i4cp does good work, and they also report out the answers of those surveyed:
…most respondents said that better communication practices, both informal and formal, need to be implemented across all levels of the organization. Many also specifically cited the need for better top-down communication from upper-level management and management’s need to “walk the talk” on trust issues.
This is McGee’s “tendency to blame and inability to confront” themes being echoed by the real people in the trenches. Don’t blame the process; don’t passively wait for others. Step up to the plate. Be a mensch. Earn your pay. Do the right thing despite the incentives, not because of them—then fix the incentives later.
The only thing left is to remind all the employees that the same advice applies to them as well. “I can’t do it until it’s led from the CEO’s office” is more of the same: a tendency to blame, and an inability to confront. It doesn’t smell any better just because you’re lower in the organization.
You don’t need your boss’s permission, a business process, or a quarterly incentive program to be more trustworthy. Just do it. It’s not just good karma, it’s good business.
This is more visible in visionary / tech startups who just cannot accept that their model has not captured the market.
good karma is what leads you to do good business and in that sense, good karma builds up as you build trust.
Nice post on a very important issue Charles – I selected it as one of the top five blog posts to read from the past week which can be found here.