The Value of Trust
I am reminded of a moment in Pride and Prejudice when Mr. Darcy tells Elizabeth Bennet, “I cannot forget the follies and vices of others so as I ought, nor their offences against myself.” She then admits, “My good opinion once lost is lost forever.” In our consideration of leadership we must understand that trust is a quality developed over time but easily lost. It is an essential part of the leadership attributes of anyone who leads a business or organization.
Warren Buffet is quoted as saying, “Look for 3 things in a person, intelligence, energy, and integrity. If they don’t have the first one, don’t even bother with the first two.”
Trust in a Small Business
A client of ours is the owner of a small, but successful, business with eight employees. Although the business is small, she is to be admired for her people management skills. We were recently discussing the possibility of adding several employee benefits and wondered which one would be most desirable to the staff. The decision was made to do a simple employee survey to better understand the situation.
During our first meeting, just after the completion of the survey, she announced that she had just provided the employees with bonuses based upon their performance and a very successful month. I asked how she had determined who received the bonuses and how much each person received. She reported that they were based upon her own judgement of personal contribution. It was also apparent that the bonuses were well received, with little question as to the distribution or who received how much. That provided a measure of the degree to which she was trusted by the staff.
This reaction to the bonuses was further reinforced by the results of the survey. Here are some of the results of the survey questions:
- I have confidence in and trust my manager. 100% strongly agreed
- My manager is willing to listen to my problems. 80% strongly agreed. 20% agreed
- I would refer a friend to work here. 90% strongly agreed, 10% agreed
Consider what the tangible benefits to the business are as a result of this trust building:
- Lower employee turnover in a difficult labor market
- Team productivity
- Higher morale
- Less tardiness and absenteeism
Mike Krzyzewski, head coach of the Duke Basketball team, says, “In leadership there are no words more important than trust. In any organization trust must be developed among every member of the team if success is going to be achieved.”
Trust in the Nonprofit World
As important as trust is to leadership within an organization, it is also important to the perception others have of your organization or company. Consider a recent report concerning the Wounded Warrior Project. It was discovered that the organizational leadership had spent an extensive amount of funds on an event to celebrate their success in fund raising. Although the good work from the project could be easily documented, the reporting of this divergence of funds from service made the headlines and has a significant impact on the trust of the organization. It led to the dismissal of key leadership and impacted their ability to raise money.
Trust also pays a major role in business transactions. Do you, as a seller, trust your real estate agent to be properly marketing your house and maximizing the price you expect to receive? Do you, as a buyer, trust your real estate agent, to understand your needs for a new home and have thoroughly researched available properties?
Trust in Business Transactions
Several years ago, I was a minority partner in a business which we had decided to sell to a well-known investment group in New York. As was expected, they sent a team which spent several weeks investigating our business. They did certainly exercise “due diligence”. At the day of the closing, we met at their Manhattan offices with a team of principles and a half dozen attorneys. As we sorted through the necessary documentation, signing here and then there, one of the partners made a statement which I remember vividly to this day. In brief, his comment was that, despite all the formality and legal documentation, the entire transaction was built on trust. He observed that never enter into a transaction where you do not trust the other party.
Trust in Your Career
Think about the importance of trust in building a professional career. It is common practice that a potential employer will do a criminal background check and possibly insist in a drug test but the trust can only be assessed through the interview process and one’s reputation in their field. Can the potential employer trust what the candidate is saying during the interview? Is the candidate known to be trust worthy by others in the field or by acquaintances? Can the candidate trust the trustworthiness on what the potential employer is saying?