What would you say if I told you the secret in every superior firm of any size or longevity was something you can’t buy? Something that, when present, accelerates business and relationships, makes teams function at the highest level, causes the best clients to stick with you, retains your best employees and brings a refreshing level of health and calm to your firm? It’s completely free to create, although it takes time to build if you don’t already have it.
That secret is trust.
Trust is complicated, though. It’s slow to establish, but can be destroyed in an instant. When it’s not present there is turbulence, friction and chaos. But where trust is present, magic happens.
So what is it and where does it come from? Simply put, trust is the foundation of positive, successful relationships and organizations. There are several dimensions of trust and each plays out differently in a firm environment. Let’s explore each in the context of your firm.
Trust begins with individuals
Each employee’s life experiences and innate instincts shape their ability to build and maintain trusting relationships.
Many accountants are analytical, numbers-centric people. Think of trust as a moving average in your firm resulting from the actions of individuals that come through, leaving their mark either above the line or below the line. Moving the needle higher is steady and slow. One single person who erodes trust can drive the needle down precipitously and exponentially.
In firms, trust takes two forms
Organizational (strategic) trust is the confidence of the workforce in the company’s activities. Multidimensional and fragile, between departments, office locations and throughout the org chart, informal networks of individuals will amplify organizational trust (good or bad) through gossip.
High organizational trust means that workers experience and feel alignment, fair and equitable treatment, and a culture of inclusion and transparency, led by ethical leaders who act in good faith.
Personal trust, on the other hand, is the trust individuals have with each other. Does this person act in good faith with me? Are they transparent with me? Do they treat me fairly compared to other individuals? Do they actually do what they say they will do?
When thinking about a coworker or manager, three key factors determine how much you trust them:
- Intent: What are their motives? Will they act selfishly, or will they put the needs of the team or organization first?
- Competence: Can they do the job without being micromanaged? This one is interesting because you can have mixed trust in an employee. You can trust their intent but not trust their competence and vice versa. Everyone has known someone who was competent at their job but you couldn’t trust them personally!
- Integrity: Will they do the right thing when no one is looking?
The business case for building trust
Within the context of daily operations in our firms, does trust really matter if work is transactional, meaning you pay individuals a salary to produce a particular output within a given timeframe? Is there a business reason to foster trust in your organization?
Most certainly. The hit to your organization if there is low trust is very high. Whereas if you have high trust, the payoff is huge.
Simply put, firms run on people. We aren’t hiring lemmings to complete discrete tasks. Instead, we hire smart human beings with unique perspectives, motivations, belief systems and emotions. Inspiring them to work at their highest and best use takes a strong foundation of mutual trust, and comes with a huge payoff when achieved.
In his book “The Speed of Trust,” Stephen M. R. Covey uses the metaphor of “dividends” and “taxes” to describe the impact of trust in organizations.
High levels of trust pay high dividends:
- Higher morale: High trust leads to higher morale, job satisfaction and a sense of community. This creates greater employee engagement, motivation and loyalty to the firm.
- Increased productivity: When employees trust leaders and colleagues, they tend to collaborate, communicate effectively and work toward common goals. Work is completed faster. Trust is an important accelerator for firms.
- Enhanced reputation: Trustworthy firms have better reputations and retain clients longer.
- Reduced costs: High-trust firms experience reduced costs from turnover, recruitment and training. As with clients, the cost to retain employees is significantly lower than the cost to replace them.
When trust is lacking, firms pay a “tax:”
- Speed of business: When trust is low, communication and decision-making slow, leading to delayed results and missed opportunities. Also, protectionism of “my book” means that cross-selling opportunities are limited.
- Increased costs: Low trust creates increased friction everywhere in the firm related to fiefdoms, silos, bureaucracies, turnover of employees and clients.
- Reputational damage: Low-trust businesses struggle to retain clients and top talent. How long can a business survive in that situation, much less thrive?
- Reduced innovation: Low-trust environments can stifle innovation and creativity, as employees may be reluctant to be vulnerable and share their ideas or take risks.
Covey’s book should be on the shelf or e-reader of every person with even the slightest interest in their organization’s success.
Is trust granted or earned?
We often say we want to “earn your trust,” but my stance is that you really don’t get trust — even if you’ve done everything to earn it — until it’s granted by the other individual. Trust should be recognized in the context of the situation rather than with the person as a whole. You can trust a person in general but not trust their ability to execute, for example. Because trust is granted by individuals, everyone should examine their actions within a lens of, “Am I building or breaking down trust by my actions?”
Fostering increased trust in an organization takes commitment — but it doesn’t have to break the bank! Here are just a few methods:
- Build relationships: Take time to get to know your employees on a personal level. Understand their goals and aspirations, as well as any challenges they face. Show you care and are invested in their success.
- Lead with transparency: Be open, honest and transparent about the company’s goals, challenges and decisions. Answer the “Why?” questions openly. This helps employees understand the big picture and feel like they are part of the team. Coach and praise in a timely way. No hidden agendas or ulterior motives allowed. People can spot those a mile away!
- Follow through: When you do what you say you will do, it builds trust and credibility.
- Growth opportunities: Employees want to feel like they are progressing in their careers. Providing opportunities for growth and development shows them you are invested in their success.
- Lead by example: As a leader, your actions speak louder than words. Model the behavior you want to see in your employees. Be accountable for your actions, admit when you make mistakes, and show that you value the opinions of others.
In conclusion, trust is a critical component of successful relationships, teams and organizations. Prosperity in your firm can’t come from hard work and billable hours alone. Leaders who foster trust create a more positive workplace culture, increase employee engagement and drive productivity. While building trust takes time and effort, the benefits are well worth it. And you don’t have to spend a dime!