How employee trust affects the bottom line

Building a culture of trust — among employees, as well as between employees and the leadership — has a direct impact on a company's productivity and financial performance. Contrary to popular belief, establishing a high-trust culture is not a "soft" leadership skill; rather, it’s a foundational element of successful organizations, according to the Harvard Business Review.

While few leaders would contest that trust is essential to organizational performance, many disregard trust-building as a secondary priority. However, "without it, every part of your organization can fall, literally, into disrepair," Stephen M. R. Covey, co-founder and global practice leader of FranklinCovey's Global Speed of Trust Practice, and Douglas R. Conant, founder and CEO of ConstantLeadership, wrote in the Harvard Business Review. "With trust, all things are possible — most importantly: continuous improvement and sustainable, measurable, tangible results in the marketplace."

Employee trust affects business results because it influences two measurable outcomes, according to Mr. Covey and Mr. Conant: speed and cost. If trust diminishes, speed declines and costs rise. The inverse is equally true.

There are three keys to building a high-trust culture, according to Mr. Covey and Mr. Conant.

1. Communicate your intent. "The most effective declared intentions are genuine and anchored in a clearly defined mutual benefit," they wrote. Effectively communicated intentions also foster credibility, because by getting your intent on the record, stakeholders have the words against which to measure your actions. Doing this is especially important for newly instated leaders, when employees' perceptions of the leader's intentions may be muddled.

2. Show respect. The second element is demonstrating respect for all stakeholders. Despite the obviousness of this notion, "it's startling how often this practice is neglected or abandoned altogether," wrote Mr. Covey and Mr. Conant. To truly show others your respect, it's not enough to say you respect people's opinions or contributions; you have to show it repeatedly.

3. Deliver results. Finally, you must consistently and confidently deliver the results you declare you intend on achieving. However, accomplishing tasks is not the only important aspect of delivering results: it's also imperative to "do the right thing, in the right way, for the right reasons, in the way that you said you would," wrote Mr. Covey and Mr. Conant. "Only when this much attention is paid to the passion and purpose behind the results does it earn the necessary confidence from stakeholders."

More articles on leadership:
Theranos hires execs to oversee quality and compliance
Arianna Huffington: Why leaders must dispel their 'sleep delusion'
5 healthcare layoffs so far in July

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Featured Webinars

Featured Whitepapers