The carrot or the stick? 5 steps to building better trust in your organisation

For leaders and those in HR roles, it’s important to build and maintain trust within the organisation

For leaders and those in HR roles, it’s important to build and maintain trust within the organisation by seeking feedback, maintaining integrity at all times, and ensuring senior executives are not working in silos or out of political self-interest, writes Stuart Taylor

When there is a foundation of lack of trust within an organisation, it is truly a case of a rotten apple spoils the bunch. Distrust can permeate through all levels of the business and jeopardises the organisation from the inside out; it affects relationships between employees and the organisation, causes negative public perceptions and ultimately damages the bottom line.

The effective functioning of modern society largely depends on trust, yet it remains a fragile and elusive resource in many organisations. In only the first half of this year, we’ve already seen massive violations of trust across the sporting world, politics, and private industry. One only needs to examine commentary on the recent events in Canberra to see how perceived breaches in the public’s trust can adversely affect an organisation very quickly.

Whether you’re repairing a problem or trying to build a strong foundation for your business, many experts agree that trust is the most important aspect of a collegial and effective workplace so it’s well worth the investing time and effort into building trust among your employees. Trust is a leader’s currency in building a sustainable, high-performance organisation. And yet, according to Edelman’s Trust Barometer, more than 50 per cent of staff don’t trust their leaders.

Improving developmental leadership
Indeed, it is a fundamental building block for interpersonal relationships and an essential component in effective developmental leadership. Research has shown that high intrateam trust positively affects performance. Organisationally, it has been shown that when compared to people at low-trust companies, people at high-trust companies report 74 per cent less stress. The state of internal trust within an organisation is also reflected in trust between the organisation and its external stakeholders.

“When there is a foundation of lack of trust within an organisation, it is truly a case of a rotten apple spoils the bunch”

Interactions which have trust as their foundation enable flow, action, creativity and innovation. Working on developing trust with frontline leaders ‘trickles up’ to trust for the CEO and the organisation. This is imperative, as perceived trust often diminishes the more senior the person sits in the organisation. Trust allows people and organisations to work at their best, and leaders to influence.

By deepening your awareness and self-knowledge in relation to trust, you can become more effective at building trusting relationships and have a greater impact in your personal and professional life.

The benefits of high trust relationships within organisations include:

  • Higher collaboration and willingness to be vulnerable
  • Lower levels of negative stress and higher levels of positivity
  • More effective problem solving
  • Higher employee engagement, creativity, job satisfaction and retention
  • Minimise politics and costly mistakes

In an HR context, trust can be defined as “the extent to which one is willing to ascribe good intentions to and have confidence in the words and actions of another, particularly positive expectations regarding another’s conduct in a context of personal or professional risk(as defined by Dietz, G., & Hartog, D. in Personnel Review)

Passive observations of someone’s trustworthiness do not necessarily translate into risk-taking action by team members or employees. In a workplace, it’s the two other components in the definition of trust that creates productive outcomes for businesses. Firstly, do employees intend to act on the basis of their leaders’ trustworthiness and secondly, do they consequently invoke risk-taking action?

Improving trust in action
More usefully, trust in the workplace should be discussed and measured as ‘trust in action’. This interaction of ‘trustworthiness’ and its conversion through ‘intent’ to ‘action’ is key in measuring how trust operates within relationships, teams and organisations.

“Without a culture of high-trust, a leader’s ability to lead is curtailed – often resulting in a commanding leadership style or an environment of indifference or contempt”

It takes a consistent investment over time to build a high-trust culture. In fact, it takes an average of seven months for employees to build their trust in a leader, but less than half that time for them to lose it.

For newly fledged leaders, sure-fire ways to lose employee trust over time include a lack of perceived fairness, leaders whose actions do not match their words, poor communication, disregard for the feelings and emotions of others, lack of transparency or honesty, or values incongruent with how they position themselves.

Building trust in action requires investment from both the organisation and leadership in the following five areas:

  1. Where leaders and the organisation consistently and reliably maintain competent, calm, effective and reliable interaction with people and the environment, regardless of change.
  2. Where leaders interact with others in a caring, respectful and professional manner consistent with the values and purpose of the team or organisation
  3. Where leaders adhere to a set of moral principles around honesty, credibility and ethical behaviour and fairness acceptable to stakeholders.
  4. Where the organisation creates a context to support a feeling of belonging and engagement.
  5. Where leaders align personal and organisational values to creating a sense of purpose that invites and inspires others to safely participate.

For leaders and those in HR roles, it’s important to build and maintain trust within the organisation by seeking feedback, maintaining integrity at all times, and ensuring senior executives are not working in silos or out of political self-interest.

Without a culture of high-trust, a leader’s ability to lead is curtailed – often resulting in a commanding leadership style or an environment of indifference or contempt. Remember, an astonishing 81 per cent of employees would rather join a company that values “open communication” than one that offers perks such as top health plans, free food, and gym memberships. Without doubt, the reinforcing loop between a compassionate leadership style and creation of a high-trust culture paves the way for thriving people and a sustainable high-performance organisation.