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The Importance Of Trust In Business

Why is trust important?

To understand why trust is important in business we need to go back in time. Back to the Industrial Revolution, when people left their rural jobs to head to the big smoke. Urban industrialisation forced them off the land and into factories. People needed to work but the work wasn’t very pleasant and it didn’t have any meaning, they just needed the money. There were a few enlightened employers — like Cadbury’s and William Hesketh Lever with Port Sunlight Village — who built great quality housing for their employees and tried to give life purpose and meaning, but other than that mostly they just wanted to squeeze as much work out of their employees as they could for little or no benefit. You would clock in, you would clock out, you would get paid per hour or per piece and that’s just based on a lack of trust. The view was, as an employer, I don’t need to know you, I don’t need to like you, I don’t need to care, in fact, it’s my money and I don’t trust you so I’m only going to give it to you if you prove you’ve done what you’re meant to. You were paying people for their ‘grunt’. And as much as I would like to say that’s changed in today’s world, I think it’s permeated through.

Employees who do feel trusted are higher performers and exert extra effort, going above and beyond role expectations.

Why do I say that? Well, let’s start with how many companies you know that offer unlimited holidays? It’s still very few, which makes no sense. A company is contractually obliged to give people some holiday, so a contract is drawn up and signed that says the employee will work 40 hours a week (or whatever it might be). Then the company makes sure employees hit that, but it doesn’t track overtime, it doesn’t track the lunches staff skip or the early starts. The company still expects an employee to knuckle down and pull feats of outrageous heroism for clients and customers even though they’re not going to pay extra for it. It’s just what great employees do for great companies. And despite amazing staff doing all that, you’ve got this policy that says people can only have a weeks holiday if you give a weeks notice and you’ve got to give a months notice if you would like this or that….. it’s just complicated. Even in the last couple of years, I’ve worked in organisations without trust where they wouldn’t give you half a day at home if you had a new sofa or a fridge being delivered, you would have to use very limited holiday time to do that. There was just no flexibility. No way to build trust.

trust in business

It seems to me that a lot of companies show a lack of trust that their staff will do their work if no-one is standing over and checking. That’s why flexible working, working from home, still isn’t as common as it should be. As long as employees are doing the work, hitting the targets, making a contribution, should it matter where they are located? When Google looked at what makes an effective team (Project Aristotle) they found effectiveness wasn’t impacted by location. So, they could work anywhere and the team would still be effective. We just need to trust them to do what they say they will because when employees don’t feel trusted, workplace productivity and engagement often suffer. Other evidence of a no trust:

  • Wanting a Doctor’s note if you’re off sick for a few days — no trust
  • Prohibited expenses — no trust
  • Limited web access — no trust

Harvard Business Review has looked at why trust in business is important, exploring the dynamics of building trust in relationships between managers and their employees and research shows evidence of the ripple effects of a manager-employee trust gap. They found that “employees who are less trusted by their manager exert less effort, are less productive, and are more likely to leave the organisation. Employees who do feel trusted are higher performers and exert extra effort, going above and beyond role expectations. Plus, when employees feel their supervisors trust them to get key tasks done, they have greater confidence in the workplace and perform at a higher level.”

    The UK as a nation is becoming less trusting

    The importance of trust 

    In fact, the UK as a nation is becoming less trusting of business in general. The Edelman Trust Barometer 2018 found that 43% of the UK population trust business. And that distrust is driven by:

    • Top executives being overpaid compared to average workers
    • They don’t pay their fair share of tax
    • They do not operate in a transparent and honest way
    • Corruption is commonly accepted
    • The average worker is mistreated or taken advantage of — 42% felt mistreated or taken advantage of. How many of your people feel like that? It’s a question worth asking.

    So what are the building blocks of trust? How do we build trust up?

    Teams. You’ve got to trust your team. You’ve got to trust your manager. If you don’t, why would you go that extra mile without trust? Why would you give your best every day? Why would you pick up the litter, throw out the broken whiteboard marker, notice the toilet rolls have run out — the little things that mean a lot. The little things that either get done or don’t get done by staff, not because of their job description or contract, but because they care. They want to be engaged in the organisation, to help, to give more, and you can’t have any of that if you don’t trust people.

    If I go back to Project Aristotle, the Google research, they found that psychological safety is a big factor in team effectiveness, and to me, that’s the same as trust. You need to feel safe enough within your team to trust them, to say what needs to be said, to work from home, to want to give your all. And trust is so difficult to keep when your organisation gets to the size of Google. That’s when the bureaucracy starts to build up. We have to keep legislating for things that have happened. For example, we may have had unlimited holiday on offer, but then Joe from accounts took 365 days off and we had to bring in new rules that won’t allow that to happen. This, in turn, reduces freedom. And a reduction in freedom is a direct response to a reduction in trust. It brings in a new level of complexity. So, what happens next is your best performers leave because you’ve put in new rules that stop them doing what they want to do, you’ve stifled their productivity, you’ve taken away their motivation. Now you’re on this downward spiral where people who can follow the rules are there but they can’t think for themselves and that’s been driven by a lack of trust.

    Importance of trust

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    Also, within those teams, are they all A-players? One of the three pillars of trust is Competency. We need to know the people we work with, and for, are the best. We need to trust they can do the thing they say they’ll do.

    Dunbar’s Number is a suggested limit to the number of people we can have strong social relationships with or trust. The anthropologist Robin Dunbar set this as somewhere around 150 people. Because of this, WL Gore — the American manufacturing company — will never have more than 100 people in a business unit. In fact, in one town they opened a whole new factory because their other one reached that 100 people limit. So, instead of thinking about industrialisation, maybe we need to think about unlocking value.

    If you look at the Special Forces, they have small teams. They realise smaller is better to build up relationships. To build up trust. And in that situation, you need to trust someone with your life.

    Trust is a deliberate thing. You need to sit down and think about it. I’m sure a lot of business owners/managers/leaders haven’t thought about the importance of trust and whether employees actually trust them. They’ve got other stuff to think about. Plus, they may have worked in large organisations where nobody cared or nobody thought about it, so to them a lack of trust is just normal.

    The 3 Pillars Of Trust

    It boils down to these three things — the 3 Pillars Of Trust:

    1 – Competency — Do I think you can do your job?
    2 – Communication — What filters do we use, can I be honest with you?
    3 – Character — Do I like what you stand for, your principles?

    I was asked, can you trust too much? No. I would rather be disappointed by someone letting me down because I trusted them than be corroded by not trusting people. Let’s not forget –

    “The best way to find out if you can trust somebody is to trust them.”

    Ernest Hemingway

    Written by Scaling Up coach Dominic Monkhouse. Find out more about his work here. Read his new book, ‘F**k Plan B’ here.

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