Organizational success: A matter of trust

Leaders will reap dividends if they align their organizations with core principles and behaviors that increase trust

The hidden variable of success
Management consultant and author Stephen M.R. Covey describes trust as one of the hidden variables in the formula for organizational success. A high level of trust in an organization — whether it’s a business, not-for-profit or government agency — provides numerous “trust dividends,” while a low level of trust imposes “trust taxes” that sap energy and effectiveness.

“When trust is high, the dividend you receive is like a performance multiplier, elevating and improving every dimension of your organization and your life,” Covey writes in his book, “The Speed of Trust” (published by Free Press). “High trust is like the leaven in bread, which lifts everything around it. In a company, high trust materially improves communication, collaboration, execution, innovation, strategy, engagement, partnering and relationships with all stakeholders.”

In the following excerpt, Covey describes how individuals and organizations can identify and address those taxing trust problems. His approach is structured around four cores of credibility and 13 behaviors. As Covey explains, the key in building those is alignment — linking an organization’s design around those cores and behaviors.

Organizational design expert Arthur Jones has said, “All organizations are perfectly aligned to get the results they get.” I would add: “All organizations are perfectly aligned to get the level of trust they get.” So if you don’t have the level of trust and the high-trust dividends you want in your organization, it’s time to look at the principle of alignment. It’s time to look at the structures and systems that communicate — far more eloquently than words — the underlying paradigms affecting cultural trust.

Even if you are not the formal leader of the organization, there are things you can do to influence it. And if you can’t influence, your first step is to return to the Four Cores as an individual and increase your own credibility so that you can.

Some of the same Four Cores application ideas that work on the individual level will help create alignment on the organizational level as well. For example:

To increase organizational integrity, you can create or improve your organizational mission or values statement, engaging everyone in the process to ensure that it’s more than just some platitude hanging on the wall. You can also work on creating a culture of making and keeping commitments within the organization. This is particularly important for leaders, and it’s especially important in the small things. I’ve known of situations where leaders did not take seemingly small commitments seriously, and it spread to the extent that before long, everyone was treating internal commitments lightly.

To improve organizational intent, you can ensure that your mission and values reflect motives and principles that build trust. You can also set an example of caring. Remember the impact in an organization when even one person — particularly a leader — demonstrates respect or shows concern. In addition, you can work to create systems that carry out a mutual benefit agenda — systems that use stewardship accountability agreements, reward cooperation instead of competition and demonstrate trust.

To increase organizational capabilities, you can take steps to ensure that the structures and systems in your organization (including recruiting/hiring and compensation systems) are designed to attract and retain the talent you need to be competitive in today’s market. You can provide ongoing training and mentoring (development systems) to ensure relevancy an the satisfaction that comes from growth. You can make sure that information and decision-making systems are aligned with efforts to meet organizational and customer needs.

To improve organizational results, you can help people create a shared vision concerning desired results through a system that includes cascading goals and getting everyone on the same page. You can also create a “balanced score card,” in which results reflect meeting the needs of all stakeholders, not just owners. In addition, you can create a culture in which people have the opportunity to account for results — not activities — on a regular basis.

I guarantee that if you will put on your trust glasses and see the impact of strengthening these Four Cores in your organization at whatever level you define it, you will be amazed. And if you actually do the things necessary to strengthen the cores, the positive results in terms of alignment — and the dividends of trust that flow from it — will be remarkable.

After you address the Four Cores organizationally, consider the degree to which your organizational culture manifests and encourages the 13 Behaviors.

Now, if your organizational culture is [weak] in one or more of these behaviors, ask yourself why. What is it in the systems and structures of the organization that’s rewarding — either formally or informally — low-trust behavior?

A few weeks ago, a friend of mine returned an unopened stereo he had received as a gift to the customer service department of a large retailer. He had his receipt with him, and it was obvious that the box had never been opened. After he had waited in line for several minutes, a customer service representative told him, “I’m sorry, but I can’t refund this until we get someone from our electronics department to come here and check out this box.” Frustrated, my friend pointed out that he was in a hurry and it was obvious that the box had never been opened. The customer service representative completely agreed with my friend that the box had never been opened but said it was the policy of the company to have [the] electronics [department] check it out, and she had to follow it. It took more than 10 minutes for someone from electronics to arrive. When he did, he simply looked at the box, declared that it was obvious it had never been opened and said that no inspection was needed. My friend walked out of the store determined to never return, and he recounted this story to many others.

As you can see, this company’s policy was internally focused, and it was clearly not aligned with the principles of customer service and extending trust to its own employees to exercise good judgment. And this absolutely impacts the bottom line.

A careful analysis of all your structures and systems — including information, communication, decision-making and compensation — will pinpoint areas of misalignment. It will show you where you’re being taxed, where you’re losing speed and increasing cost, and where you’re throwing away the dividends that could come from high trust.

Ultimately you’ll want to make sure that leadership paradigms are aligned with the principles that create trust. When leaders fundamentally don’t believe people can be trusted, they create systems and structures that reflect that belief, such as hierarchy, multiple layers of management and cumbersome processes. In turn, these systems and structures ultimately help produce the distrusting behaviors that validate the leaders’ perceptions that people can’t be trusted in the first place. It becomes a vicious, downward cycle.

David Packard [co-founder of Hewlett Packard]validates the reality of this cycle from his experience in working for a company that zealously guarded its storerooms and tool bins. He said: “I learned, early in my career, of some of the problems that can be caused by a company&r quo;s lack of trust in its people. … Faced with this obvious display of distrust [the locks on the bins], many employees set out to prove it justified, walking off with tools or parts whenever they could.”

By contrast, when leaders such as David Packard, Blake Nordstrom [Nordstrom Department stores], and David Neeleman [Jet Blue airlines] fundamentally believe that people can be trusted, they create systems and structures that reflect that belief, such as open storage bins, one-page employee manuals, and home reservationists.

These systems and structures reinforce and ultimately help produce the trusting behaviors that validate the leaders’ perceptions that people can be trusted to begin with. Thus, the paradigms and the behaviors work together to create a virtuous, upward cycle.

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