If we think of business as a machine, we can think in terms of its physical infrastructure and its processes. Problems might emerge in both of these fronts. In the first case, the complication could be, e.g. the dysfunction of a division. We could detect this kind of problems with relative ease and we can put more of our attention into fixing them, replacing them or getting rid of them. In the second case where an issue in the process occurs, the problem might not be immediately visible to our eyes, yet it could be equally damaging and affect the ultimate output.
We have thus to be aware of and pay particular attention to process matters. Among the most important ones is related to trust. Trust is like the oil that ensures the proper function of a machine. As food is to health, so is trust to business: essential for the long term survival.
When trust isn’t around
Despite the importance of trust, this intangible asset lacks measurement and has not been assigned any kind of financial value. As Liz Ryan said on Forbes, the important stuff can’t be measured. It should, however, still be managed. We should make sure this fragile feeling does not get broken.
Consequences of inexistent trust could be dire and cause numerous problems to emerge, e.g.:
- High performant employees, whom you hired with much effort and whose compatibility you verified, resign and leave. In extreme cases, people resign without even having secured another job just because they can no longer tolerate the collaboration they have with someone whom they do not trust.
- Disputes intensify and consensus cannot be reached. When there is no willingness to coordinate, situations could get too personal at the expense of the company’s goals and success. How can work be done at all? Without consensus and with everyone pulling to a different direction, the company as a whole cannot advance.
- A sense of insecurity arises in different stakeholders, in particular when they lose a previously established trust and are disappointed by the counterpart. Needless to say, this would result in lowered productivity, since their souls will be haunted by a variety of worries and a general sense of unease. In the worst cases, people might get sick and not be able to come to work.
When business partners lose trust
If the above mentioned problems arise when people inside a company do not trust each other, the complications that emerge when trust with other business partner vanishes is no minor. A single act of trust destruction can impact the type of relationship you will have in the long term.
Imaging if you had a business partner who asked you for a loan and promised to pay back in 3 months. It is now over 2 years and you have asked him over 3 times for the money you need and each time he comes with an excuse of why he cannot yet pay you. How high is your trust level? Would you lend him the next time?
Another example comes from my experience at my previous company, CMC Consulting. Chinese companies are regarded as being flexible and having a less rigorous approach toward contracts than their European counterparts. There happened to be one client, whose name I cannot reveal, who denied the payment after it realized that the service from CMC was long ago delivered and that it would not have any immediate repercussion on its business if it no longer paid. The CEO of the company thought that he could even save some money and show a better bottom line in that year. This is what I would call mental myopia. Such an act seems to bring positive benefits in the short term, but in the long term, after trust is buried, little to no business can be expected in the future. The impact was so big that because of this negative experience, the former CEO of CMC had a hard time trusting Chinese companies in general. You have to know, of course, that most Chinese companies do adhere to good business practices and this particular case was merely an exception.
When trust returns
If the above described scenarios reflect the negative side of the reality image, we also have its reverse and positive side. When trust exists among the parties, all the formerly mentioned consequences are turned upside down, e.g., an employee would want to stay with his/her leader despite any crisis the company might be experiencing and would not even think about leaving his/her position. The feeling of trust also creates loyalty.
With trust, business can be conducted much more easily. Indeed, trust is like oil for business. You might have experienced putting oil onto a key to open an old lock more easily. We can also add trust to our relationships to facilitate our lives and business transactions.
Some thoughts about trust
Trust has the following properties:
- Cumulative: Trust builds upon itself. You have to always keep up with your promises every time to add trust to the trust deposit. With time, trust can become solid.
- Reciprocal: If someone trusts us and we feel the trust is genuine, we tend to reciprocate and trust the other person as well.
- Positive: There are probably no specific tactics that can be manoeuvred to achieve this particular effect; trust rather emerges naturally as a result of a positive relationship.
As leaders, we have a special job of inspiring trust to avoid a multitude of problems, to make business more successful and why not, also, to take a compliment home?
To be trusted is a greater compliment than being loved. – George MacDonald
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