On any given day, one can open the newspaper and find several examples of untrustworthy behavior from individuals performing acts of violence to corporate executive’s creative financial reporting and mismanagement of funds.
The rise of unethical corporate actions highlighted in the media over the last few years has taken their toll on trust in the workplace.
According to the 2013 Edelman Trust Barometer which looked at 26 different markets globally, only 50% of people trust businesses to do what is right. However, only 18% of that global population believes business leaders will tell the truth. How much trust exists within your organization?
The Harvard Business Review posted an article written by Tony Simons in which Simmons and Judi McLean Parks researched the impact trust has on productivity (http://hbr.org/2002/09/the-high-cost-of-lost-trust/ar/1). The study looked at employees within the hotel industry and examined manager integrity. Hotels whose managers were deemed more reliable and who followed through on their promises were more profitable.
The study looked at various factors which impacted profitability and found integrity of the manager made the largest impact to the bottomline, with a one-eighth point improvement increasing profitability by 2.5% or $250,000 per year per hotel. So, does trust matter? This study would indicate that it does.
Building trust in the workplace between employees and leaders within an organization creates a culture that breeds success. Personal and team effectiveness begins with trust or respect. Higher levels of trust and cooperation lead to synergy and outstanding results.
The CMOE Trust Model focuses on four key ingredients: inner character traits, caring and relationship building, competency and expertise, and consistency in execution. These ingredients lie at the very core of leadership effectiveness and interaction.
Trust increases the focus on leadership instead of management, increases partnerships between all types of people by developing a culture of respect and increased cross-team collaboration, improves employee commitment and loyalty, and supports and facilitates effective communication.
Strong leaders within an organization who operate with consistent and effective leadership skills are essential. Establishing trust takes time, energy and consistency. It is important to remember that trust is fragile and can be lost in a moment. Therefore, it is essential to develop leaders within the organization so they are able to build high performance workforces.
While a competent manager can handle many of the functional aspects of the job such as making decisions and solving problems, administering details, and establishing order while being responsible for results. A leader leverages talent through developing and motivating a team. They develop trust through effective communication and mutual respect giving feedback and operating with integrity and honesty.
In a study on credibility conducted by James Kouzes and Barry Posner among 186 respondents working in accounting and finance, engineering, research and development, manufacturing, sales and marketing and information technology; honesty ranked the highest as the most desirable characteristic for a leader.
Max DePree, Retired Chairman and CEO of Herman Miller, Inc., said “People build trust.” As we look at the importance and influence of our corporate leaders, we see how vital true leadership qualities are to building, maintaining, and growing trust and the success of the organization.