Over the past year, our ability as a country, as
a workforce, and as individuals to trust in our most basic institutions
has been deeply and repeatedly shaken. Our government, our religious
institutions, and many high profile businesses are lying, denying
and justifying actions that are reprehensible. No longer do they
happen at a distance: few people were touched by the junk bond
debacle; the savings and loan scandal cost the government money
but happened at arms length from most of us. But the recent events
of WorldCom, Enron, Anderson, Tyco, Global Crossing, and possibly
others, have touched most of us in
some way. Economically, we look at the effects on the market; personally,
we look at our own investments, 401K’s and retirement funds.
Globally, we look at ravaged savings plans and thousands of
layoffs. Personally, we wonder whom we can trust anymore.
And this
is not a problem affecting only big corporations. Construction,
engineering and architectural firms are impacted by employees that
wonder whether the “party
line” they hear represents truth, and
whether security is a myth. Trust is on the run. And it is an expensive
race. What is the Return on
Investment (ROI) of Trust? Why is it so critical to maintain and
so difficult to rebuild?
In our work with A/E/C firms and with executive
teams around the world, issues of trust between
individuals, within project teams, or between companies are commonplace,
usually supercharged, and
often difficult to resolve. Part of the reason for this is that
the experience of trust and distrust goes very
deep. Trust involves risk, and with it often a sense great vulnerability – and
we feel betrayal and
tremendous anger when these bonds are broken. Trust involves a
suspension from the tremendous
psychological linchpins of Predictability and Control, which serve
to minimize anxiety and allow us to
put a large piece of our lives in the hands of others. As the saying
goes, people will throw themselves in
front of a bus for you if they trust you but will push you under
the bus if they do not.
Let’s define Trust:
· Like integrity, it’s what you do when no one is watching.
In its pure form Trust involves a
lack of monitoring – a belief that people will do the ethical
and “right” thing without your
looking over their shoulder. Micromanaging never engenders or communicates
trust.
· Trust involves a sense of benevolence – the
belief that your interests will be well represented
by another. So even if you are not present, the person or trusted
institution will watch out for
you.
· Trust also requires “say-do” parity – the
belief that what is said, or promised, is what will be
done. This is credibility at its finest and a foundational aspect
of building, maintaining, or
repairing Trust.
While we could continue to define
other variables related to trust, let’s look at cost.
The cost to
investors of the latest scandals is documented every day. But what
are some of the other costs to
companies and organizations that employ people, and who ask their
workforce to be loyal and committed
to the espoused values of the company? What is the ROI of Trust
here?
· Recruitment / Retention – One of the great
ironies is when we read of 15,000 layoffs in a
company and have a discussion with a CEO of an A/E/C firm who is
describing the struggle
to get good people to stay and great people to come. Keeping good
and high-potential people
is essential for an organization’s future. Cost of replacement
is generally at least one year’s
salary, plus the expensive indirect costs such as learning curve,
organizational memory,
morale, internal and customer relationships, etc. The “character” of
a company and of its
management is a selling point to potential recruits. A bad track
record is difficult to recover
from.
· Commitment / Loyalty –We ask people to work
monster hours, to be committed to their
work, to ascribe to the values of the firm. Ask yourself why an
employee should be more
committed to your firm than your firm is to her. What are the overt,
hidden and opportunity
costs of an employee who does only his job description and nothing
more? Generally, the
· Customer service – This is an obvious ROI,
as secure and happy employees deal more
effectively with the lifeblood of the company, your customers.
Internal customer service and
team participation are also impacted by trust issues and make a
huge difference in
productivity.
· Competitive advantage – There is a huge spectrum
of ROI here. A workforce with low trust
will not be creative. A workforce already anxious about an acquisition
or merger cannot
commit to or implement new behaviors at speed. An executive team
dealing with a crisis
cannot devise and implement good strategy. And the energy required
to manage an anxious
and distracted work force is tremendous.
Is there more here about
ROI?
Certainly. And most of it is obvious. The main point is that
Trust is not
soft and fuzzy. It is not a luxury or a “side dish” that
can be ignored. The impact of Trust is very real
with significant bottom-line impact. And it affects companies of
all sizes and shapes. So what is the
answer? What do CEOs, COOs, CFOs, key managers and others need
to do to ensure that trust is
maintained?
· Act with integrity and walk your talk. People will be watching
what you do, especially when
trust is low. Credibility is key here. “Say must equal do.”
· Get out in front and communicate. While this may
sound like management “pablum,” your
workforce and stakeholders need to know that you know what issues
are important and worth
talking about. If there are problems, explain them. If there is
any history, admit it (they
know anyway). Let people know how you operate. Reinforce your values
and talk about
how to live them.
· Make realistic commitments – and keep them! Don’t
over-promise and under-deliver.
· Trust, but verify. Trust does not mean “blind trust.” Put
rigorous measures in place. Ensure
there are checks and balances. Reinforce all activities designed
to keep your company safe
and protected.
· Enforce the “No Sycophants” rule. Do
not surround yourself with people who automatically
agree with you. Vigorous dialogue, tough truths, and high transparency
make for better
decision-making and greater honesty.
· If you have a Board – make sure they know what
is going on and that they have both
financial literacy and big teeth.
Finally, get your Executive Team
together and talk about the issue of building and maintaining Trust
within your organization (real dialogue!). Get some outside perspective
(interviews, surveys, focus
groups) on how you are viewed by employees and customers. Be real
honest. Decide on clear operating
behaviors, enforce your processes, and craft an open communication
plan that allows you to dialogue with
your employees. Bottom line -- Trust is no longer optional – it
is way too expensive.
AUTHOR’S NOTE
Lawrence Levin, Ph.D. is founder and CEO of The Levin Group, LLC.
He works as a consultant and
facilitator with large and mid-sized construction-related businesses
and complex projects. Larry has over
20 years of experience in understanding and accelerating implementation
of major business change
initiatives. He teaches executives and managers how to think through
and implement essential change
efforts within the construction industry. He can be reached by
E-mail at LSLevin@TheLevinGroup.com
or by phone at 404 377-9408.
COPYRIGHT 2002 by The Levin Group, LLC
The Levin Group, LLC
1609 S. Ponce de Leon Avenue, Atlanta, GA 30307
404 377-9408 www.TheLevinGroup.com
©2008 TABIC.
All rights reserved.
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