The Importance of Trust – Part 3: Organizational Trust

Organizational Trust

When my boss reneged on a promise, it was the catalyst for my departure from the company.

Here’s what happened: The telephone sales staff had worked for minimum wage for over five years. My department was profitable and it was time to compensate them fairly. I worked with the VP of finance for over a year to accomplish this well-deserved salary increase, which was approved by the Board of Directors and announced to the staff. On the day the checks were distributed, the raise was not included! When confronted, my boss stated that he had changed his mind and was not able to honor the raise.

Trust is the foundation of loyalty within an organization. It inspires engagement, collaboration and creativity. According to a survey taken in 2006 by Robert Hurley for his book, The Decision to Trust, over half of all managers don’t trust their leaders.

Why is trust within organizations so important? Because work environments characterized by low levels of trust tend to be stressful, threatening, divisive, unproductive and tense. On the contrary, high-trust environments are mutually supportive, motivating, energetic, productive, accountable, supportive and transparent. They even inspire fun!

Trust is the confident reliance on someone when you are in a position of vulnerability and is a critical ingredient if an organization is to thrive. Not surprisingly, the higher the stakes and the more people have to lose, the less likely they are to trust.

Here are key principles for how leaders demonstrate trustworthiness:

  • Aligning interests. Trustworthy leaders accomplish their goals by serving the interests of all the stakeholders. They must clarify and align stakeholder interests and demonstrate their commitment in a fair manner.
  • Demonstrating genuine concern for others. People trust leaders who show respect for the welfare of others and who do the right thing, even if it puts them at risk.
  • Keeping commitments. Trust is earned one action at a time. Good intentions, likability and ethical conduct don’t earn trust if leaders do not deliver reliably and competently on their promises.
  • Honoring one’s word. Consistency and honesty over time earn trust. A trustworthy leader will admit, apologize for and repair mistakes or trust that has been breached or compromised.
  • Communicating honestly and often. Frequent, clear and open communication is a means of delivering elements of trust, as is consistent and congruent behavior between words and actions.

The trust level within this organization was low, and this episode was the tipping point for me. Because I was excited and challenged by the work and I loved my staff, I learned how to work within the system to accomplish goals and create value. However, my loyalty to my boss and to the enterprise eroded each time trust was broken by misalignments and broken commitments.

I wanted to be part of something larger than myself, to contribute to making things better and to developing people. When leadership betrayed my trust regarding the raise for my employees and made no effort to repair the situation, it was then time for me to go.

I’d love to hear about what it’s like to work in your company.

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