How important it Trust in organisational life?

Is it possible to trust an organisation without believing in the people who run it? Can people work effectively in an organisation without trust? Of course they can and do. What’s important is how much trust they need and in what areas do they have to have it?

Trusting in Organizations

The financial crisis of 2008 saw the downfall of banking institutions and an erosion of trust in the industry and people at it’s highest levels. Leadership within this industry has yet to recover and there are still large numbers of people who feel that the banks were bailed out because they were too big to fail and as a result, they never really paid for the consequences of poor performance. Negligence, greed and lack of governance that would have destroyed any other business, did not affect them in the same way as they were bailed out by governments with taxpayers money.

The industry worldwide continues to deal with the effects of this breach of trust whose effects were generally acknowledged as something so large that many saw it as the potential collapse of the Western world’s banking system with all its implications for every society on the planet.

So what is Trust?

Trust is defined as, “a firm belief in the reliability, truth, or ability of someone or something.”

People who work in organisations  have a number of basic assumptions about the world of work and when they come from the same culture there is a good chance they might share the same basic assumptions. (Or so we hope) We can be sure that if they do not come from the same culture, they will not, however, managers in multicultural societies without the proper training have to build trust quickly between themselves and new employees and the team around them and this can be challenging.

A managers job is to forecast and ensure that the future goes according to plan. Planning is fundamental to human beings and deeply rooted as part of a survival skill, we need to be able to predict the future to ensure our safety, and our safety depends on how much we can depend on those around us. Depending on someone means that we can predict what they will do in a particular situation, it’s as fundamental as that.

This aspect of trust – predictability- is profoundly important to us as individuals and organisations. In order to trust someone, one needs to be able to predict their responses in a number of situations. When we trust someone, we feel an emotion, we don’t feel let down when someone acts as we have predicted, and thus we can trust them to fit in with our need to predict their behaviour. The more people whose behaviour we can predict (or rely on) the safer we are likely to feel.  If we surround ourselves with people whose behaviour we can predict, (trust) the safer we feel.

Not everyone knows how to gain Trust

When someone does not act according to our predictions, we tend to mistrust them and this powerful emotion is likely to affect our relationship, often so much so that we feel we can no longer have a relationship with someone whose behaviour we cannot predict.

There are aspects to trust. Trust means sharing something with someone when you do know enough about them to warrant it, nor do you have enough knowledge of them to know their intent and the things they are offering to you. This might mean that what you are getting in exchange does not match the value of what you have given but you rely on them to make it up in some way later. This exchange might be in information or some other currency but the expectation is that it will be repaid at some other time in some way. This delayed reciprocity is an expectation of repayment and often causes conflict because it is often unspoken and unquantified and the repayment time is unspecified.

Trust is also about feeling that you can expose a vulnerability or shortcoming in the expectation it will not be used against you. This feeling of psychological safety allows owning up to a mistake, taking responsibility for errors, these are all aspects of vulnerability that enable people and organisations to make amends and repair relationships.

Trust at one level can be determined in what seems to be quite simplistic behavioural terms. We determine trustworthiness based on what we see or do not see, hear or do not hear a person doing or saying, consistently. We can add to this by asking other people for their views to add to our own evidence and based on this, we feel the emotion of trust. Trusting in someone to do a job may not be as complex as trusting someone to look after our children where the stakes are personal and considerably higher with potentially devastating consequences if we are unable to predict behaviour.

The well know Trust Equation seeks to identify the component parts of Trust and is presented as

T = C + R + I

S

Where:

T = trustworthiness

C = credibility (can they do what they say they will?)

R = reliability (will they do what they say they will?

I = Intimacy (do I feel comfortable with them?)

S = self-orientation (do they care?)

 

An individuals understanding of this important emotion comes from being able to predict the behaviour of our carers and for a lot of people (but not all), these will be our parents. Just as they predict when we will be hungry, we in turn predict when they will feed us. This nurturing relationship is one of many people’s first experience of being able to trust or predict behaviour and has profound and far-reaching consequences and that is why when we talk about organisational life and what makes for successful companies, brands, managers and CEO’s, we are referring to something that taps into fundamental aspects of our individual and collective makeup.

Organisations are constantly evolving, they have to or they will not survive, and of course, this is a Darwinian principle, that any organism that does not change in the face of competition will ensure it’s own extinction. In this age of economic uncertainty, people in general know and accept that strategies need to be continually reevaluated and that workforces need to be agile. In Europe, portfolio careers are the norm in some industries and millennials are acutely aware of the fact that job security lies in being skilled up and ready for change and are often the bane of HR in demanding ongoing development.

Despite what might appear to be a continual state of flux in economic conditions worldwide, some things remain fundamental to the human condition. Trust is one of them. Eight years ago, the author of this article was speaking with the CEO of a major multinational retailing group in the UK who was commenting on Amazon UK’s ability to deliver anywhere in the UK in the shortest of delivery times, consistently. He was convinced then, that compared to his own company’s performance, it could not be profitable, but was part of a longer-term strategy. He was right of course. Amazon in the UK has demonstrated predictability and in turn, trust that has seen them take 37% of online spend in the UK. The rest, as they say, is history.

Understanding and demonstrating trust is fundamental to us at an individual and collective level, and at IMNZ we are able to organise workshops to develop and deepen this all-important aspect of leadership, management and interpersonal success.

Denis Sartain

References:

*(e-commerce consultants Salmon, London 10 July, 2017)

Goffee, R. & Jones, G. (2006) Why Should Anyone Be Led by You?: What It Takes To Be An Authentic Leader. Harvard Business School Press,

Kellerman, B. (2012) The End of Leadership. HarperOne,

Maister et al, 2002 as quoted Henley Business School PCIC core content. The Trust Equation

The Guardian, 27 December 2008, Three weeks that changed the world

McGregor, D. (1966) Leadership and Motivation: Essays. MIT Press,

Nohria, N. & Khurana, R. (2010) Handbook of Leadership Theory and Practice: A Harvard Business School Centennial. Harvard Business School Press,

 

 

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