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LEADERSHIP: The Effect of Trust on Speed and Cost

Every organization today is focused on increasing the speed of its processes and reducing the costs associated with making and delivering products or services to the customer.  For many, it has become a mantra posted on bulletin boards, coffee mugs and screen savers.  Many companies, in fact, have internal continuous improvement gurus who are applying Lean, six-sigma, the visual factory, Toyota Production system and a host of other improvement tools and methods to drive faster, higher quality performance.

SOTThe one thing rarely mentioned as a driver of efficiency is the notion of Trust.  Most people, in fact, would not think to put efficiency and trust in the same sentence.  Yet, as Stephen R. Covey suggests in The Speed of Trust, trust has a huge impact on speed and cost:  the greater the trust, the faster the speed;  the lower the trust, the higher the costs.  Covey suggests writing down the first five words that come to mind about someone you trust and then the first five words that come to mind with someone you distrust.  High trust is a dividend that speeds things along; low trust is a tax that adds cost and delay.

When a high trust environment exists, people are willing to speak freely, share information across the “fence” and give the benefit of the doubt to others.  They speak in a short-cut language, use the phone more than email, and are more inclined to support change initiatives.  When trust bankruptcy exists, people use email as a way to protect themselves (“I told you so on this date…”); they withhold negative information, and avoid taking responsibility for driving change.  As someone recently shared with me, in the military you learn to never volunteer.  All of this behavior slows down processes and adds cost.

One of the greatest worries for HR professionals in today’s work environment is the impact that chronic unemployment and frequent lay-offs are having on employee morale.  Employers are learning how to get by with fewer people, requiring existing employees to pick up the burden.  With the ever-present threat of job loss, many people believe it is unsafe to speak up in the workplace.   The universal employer has become untrustworthy, seen as out for their own benefit at the expense of employees.  For younger generation employees, the focus is on “filling the backpack” with as much training and experience as possible while keeping a roving eye on how to move on.  Loyalty is becoming a dying attribute.

This same employer may simultaneously be stressing the importance of efficiency and productivity without ever seeing the negative correlation between those objectives and the existing trust deficit.  For example, the employer holds meetings to encourage employee improvement suggestions and wonders why none are forthcoming.  Or, the employer asks for feedback from one department to another on internal customer service and finds that no one will report anything negative.  Covey’s book suggests that only 36 percent of employees believe their leaders act with honesty and integrity.

Rupert Murdoch, CEO of News Corporation stated, “The world is changing very fast.  Big will not beat small anymore.  It will be the fast beating the slow.”  But fast will be in direct proportion to the amount of trust that exists in the workplace.  So how do we work to repair the loss of trust?

1.  Recognize Trust as a key driver of speed and cost and work hard to communicate in an open, honest and direct manner.  Talk straight and often about realities.  Most importantly, practice accountability and keeping commitments before asking it of others.

2. Remember that Trust is a balance between the “give” and the “get.” If the employer only does the “get” part, employees will try to reduce the “give.”   Years ago, I remember an employee in an organization who confiscated an entire garage worth of anti-freeze from his employer as a way to balance what he saw as an injustice in his pay.  Right or wrong, it shows the degree to which employees will go to equal things out in their minds.  I encourage you to look at the “give” and the “get” and see who is winning.  As an employer, if you see yourself as winning – you may actually be losing.

3. Focus more on listening than talking. One of the best ways to ask employees how to improve a process is to ask them what frustrates them about a process.  As you listen to their feedback, see it all as a gift.  The more they talk and the less defensive you are, the more trust will be built – or rebuilt.  The more you listen, the more you demonstrate respect for the world they live in.

4. Acknowledge mistakes. One of the great ideas Ken Blanchard suggests in his “redirecting” approach to supervision in Whale Done, is the idea of taking some of the blame.  A leader who can say, “I can see where I didn’t communicate well enough in the past” and acknowledges his or her own errors will cause people to change their position.   Interestingly, if we admit a mistake, an employee will often admit his or her mistake (another example of the balancing of the “give” and the “get”). We all recognize that no one is perfect and respond generously when people can admit their mistakes.  Most recently, former President George Bush has taken this approach in his new book, acknowledging mistakes that he refused to own years ago.

5. Extend trust to others. When we micromanage others or fail to delegate in some misguided belief that we’re the only ones who can do work correctly, we send a message that we don’t trust others.  It should be no surprise then, when others don’t trust us.  The old expression – “what goes around, comes around” – applies here.

I believe we are at a very critical point in the employer/employee relationship paradigm.  Short term wins may result in huge losses as soon as the market is viable enough for people to walk.  The new workforce generations are learning to trust people on Facebook or LinkedIn above their own employer.  If we can see, however, the importance of trust in the ultimate game of success, then we can begin to act differently.  It can’t happen soon enough.

 

Interested in finding out the trust factor in your organization?  Contact us to learn more about our Trust Survey and how we might partner with you: info@newdirectionsconsulting.com

 

If you liked this, you may want to read these:

The Well of Distrust

Workplace Trust

The Art of Listening

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