April 1


Why low trust is costing you dearly

I resigned from a business because I didn’t trust the leader.

I’m not alone.

Nearly a quarter of employees in the UK say they’ve left a business at some stage because of issues around trust1.  That’s about 7.8m people.

When you consider the costs of recruiting a replacement and the lost productivity whilst they get up to speed in the role, the average cost of someone leaving is around £30k2

That adds up to more than £200bn in staff turnover costs caused by trust issues.


What are the hidden costs of a low trust culture?

Whilst it may be hard to believe, employees leaving are not the most significant cost of a low trust culture.

Many companies blame market conditions, new entrants or product obsolescence for increasing costs and slow sales growth. But low trust is often the major contributory factor.

A low trust culture leads to: 
  • Excessive time wasted defending positions and decisions rather than doing the job
  • Excessive bureaucracy making it almost impossible to make decisions quickly
  • People not speaking up for fear of reprimand and reprisal, ultimately leading to avoidable issues and errors, and poor decision-making
  • Opportunities slipping by as no-one wants to risk taking ownership and driving them forward
  • Micro-management and controlling processes preventing creativity and reducing productivity
  • Employees becoming dis-satisfied and unhappy. They do less and care less and customer service suffers
And it isn’t just internal costs.  Do you have a supplier that you absolutely trust?  Compare their performance to one you don’t trust. I bet the former lets you down less often, you spend less time wondering what they’re up to, it’s easier to maintain the relationship, and problems (if they happen) get resolved quickly and easily. 

How do I know if we’ve a low trust culture?

 I have never met a leader who set out to build a low trust culture.  
A decline in trust usually happens insidiously. 
Individual decisions are taken to address an issue without thought to the longer-term consequences for trust. 

Decisions like: putting new controls in place because someone makes a mistake or isn’t doing their job correctly; introducing a tighter expenses policy because someone’s been taking advantage; detailed reviews of people's work because someone let us down before or made us look bad in front of our boss or our peers.
Over time, however, the combined effect of these decisions leads to the issues described above. 
Unfortunately, we’re not always aware that trust is declining (it’s a bit like the boiling a frog fable), so it is worth regularly checking to see if it is happening around you.

The quick check is to see how well the six bullet points above describe the way your organisation operates.  If you agree or strongly agree with the statements, you have a low trust culture.
If you are one of the top leadership team and want a deeper understanding of the trust levels in your organisation, ask your people.  You can find detailed surveys online and organisations that specialise in this area.
However, there is a quick and easy way to do it today. Invite every employee to complete a one-minute survey indicating their agreement with the statements: “I trust my boss” and “I trust the top team”. Give them five scoring options: strongly disagree, disagree, neither agree or disagree, agree or strongly agree.   
You’ll immediately get a snapshot of what your people think. But it must be an anonymous survey if you want unbiased truthful results.  Especially if you have a low trust culture!!!!

How can I build a high trust culture?

At the organisation level, you must change the way the business is led from the top down.  There’s not enough space or time to cover that in this newsletter, but it includes things like having better clarity on strategy, welcoming challenge and debate, involving people in decisions, open & transparent communication, rewriting job descriptions, clear KPI reporting, rewriting processes and policies, and removing people who can't operate in a high trust manner.

As an individual, thankfully, it is much simpler to rebuild trust with your team, your peers’ and your boss. Saj-nicole Joni in her “Geography of Trust” article in the March 2004 Harvard Business Review says that you need to work on developing three types of trust: personal trust, expertise trust and structural trust.  She describes these as:

  • High personal trust exists when we answer yes to the following questions: Is this person honest and ethical? Will he make good on his word? Is he basically well intentioned? Will he handle confidential information with care and discretion? Will he be straightforward about what he doesn’t know?
  • High expertise trust exists when we answer yes to the following questions: Is this person expert in her field? Is her knowledge up-to-date? Does she present credible information to support her positions? Is she able to apply her expertise to our specific situation? Can she offer sage advice on risks, options, and trade-offs?
  • High structural trust exists when we answer yes to the following questions: Given this person’s role and responsibilities, can he offer judgment untainted by his goals or interests? Is he in a position to be fully loyal? Is he unlikely to spin or filter information?

If everyone who interacts with you can answer yes to these questions you will be fully trusted.  And you will find it easier, quicker and less expensive to get things done!

And finally....

There’s a dutch proverb: “Vertrouwen komt te voet en vertrekt te paard” which translates broadly as “Trust arrives on foot and leaves on horseback”. 

In other words, rebuilding trust is a slow process and all your good work can be quickly undone. 

Persevere – it will be worth it!


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