1. Preview

2. Executive Summary

3.  Practical Ways of Managing Trust

4. Helpful Hints

1. Preview

2. Executive Summary

3. Practical Ways of Managing Trust

Robert Hurley in the HBR September 2006 issue has written an interesting article about the mental calculations we make before trusting someone else. He estimates that about half of all managers in corporate America don’t trust their leaders. This is an amazing statistic, if found true, because the trust issue speaks to loyalty and values. Whether one is deep in a hostile takeover, friendly merger, bringing a new product to market, or introducing the next patent or trademark, trust is critical to the success of corporate culture. Think back a few years when Ken Lay told his employees that they had nothing to fear; in fact, buy more Enron he told them (as he and his executive staff dumped their stock).

With outsourcing, age discrimination, paranoia around new products, internet security, and securities fraud common to our corporate environments today, it’s no surprise that employees are looking over their shoulders, not sharing information, and maintaining status quo to keep a low profile. This bunker mentality tanks employee morale and leaves employees fearful and anxious. How much teamwork does one imagine will take place under these conditions?

Hurley posits decision-maker and situational factors that influence trust along a continuum. Higher trust is predicated on more risk tolerance of the decision-maker, along with better emotional adjustment and relative power he or she may have. Regarding situational factors increased trust is correlated with: the security each party feels, the similarities between them, how well aligned their interests, showing benevolent concern, leadership capability, and good communication.

For those managers showing low risk tolerance, leaders should spend more time explaining options and risks while offering some sort of safety net. An example might be offering more 401k options from conservative to more volatile investment strategies that factor in income averaging and portfolio diversity. Those leaders who publicly recognize manager achievements are more likely to be trusted. Leaders should act more like mentors and coaches than dictatorial figureheads. Emphasis on common values such as employee safety, consumer satisfaction, and branding of staff also increases trust between managers and leaders. Focusing on strategy, vision, and goals brings a long-term perspective and puts managers at ease rather than quarterly profits and quotas that breed competition and rivalries. Above all, be fair with your managers. Don’t show favoritism and lead by example. There’s nothing more debilitating than giving plum assignments and insider information to the same managers. It’s sure to foster resentment among the remaining managers. Pairing less experienced managers with more experienced mentors fosters knowledge transfer and trust rather than the “boot camp” approach where junior managers are “put to the test” as if it were a fraternity or sorority initiation. Another approach is to promise less and deliver more. This gives managers a comfort zone from which to operate while at the same time tolerating more risk in future assignments. Finally, successful leaders are human and share their mistakes with staff in a constructive way that invites risk-taking behaviors while personal competence is deemphasized.

Unconditional loyalty in corporations is a relic that has outlived its usefulness, because managers expect more from their leaders. Charisma may land a job for top leaders but their performance is measured by the way they conduct themselves in good times and bad times. Nine-eleven was a testament to the mayor’s leadership which led to heroic efforts on the part of New York firemen and police officers. Rudy Giuliani showed courage under fire as he walked the streets of lower Manhattan giving encouragement to all emergency response personnel who risked their lives to minimize loss of human life.

Helpful Hints:

1. Pick a successful company and do a psychological profile on its CEO. What leadership qualities are apparent and in what situations?
2. On your next 360 evaluation discuss with your staff how much they trust you and have them provide examples to support their assessments.
3. Tape record your next talk with your staff and count the number of times the word “we” is used instead of the word “I.”

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