Where do you need TRUST in (and around) the Organization?
Updated: Dec 21, 2022
Trust is needed in every organization. Much research was done about the benefits of high trust to the organization, whether to the employees, teams within the company, or company outcomes. Trust is needed everywhere in the organization and outside of the organization. This article addresses all the areas in (and outside) the organization where trust is needed and why it is important in each one.
The ability of a team to hold constructive disagreement directly affects that team’s creativity and productivity. This trust is typically symmetrical among the different members of the team. The overall level of trust within a team is limited by the level of trust in the least trusted member of that team. One untrusted team member would prevent the entire team from being vulnerable to one another, provide direct, unfiltered feedback, and be receptive to such feedback.
Trust between different levels in the organization
This type of trust is asymmetrical. Downwards, when leaders trust their subordinates, they give them autonomy which directly impacts those employees’ creativity and productivity, not to mention increased engagement, reduced stress, and overall higher job satisfaction. Upwards, employees are more accountable for their actions and are willing to try new things, take risks, and fail, when they trust that their supervisors will accept failure.
Between functional/business silos
Different teams and organizations within a company tend to keep to themselves. As such, even when they build trust among themselves, there might be a lower level of trust across organizational boundaries. This happens mainly due to functional differences, personalities, and conflicting agendas. However, organizational success depends on cross-functional cooperation, and trust must exist between those organizations.
It is relatively simple to explain why when customers trust a company, they will buy more. A survey shows that customers are often willing to pay a premium (on average, 29.6%) when they buy from a company (or salesperson) they trust. When customers trust the company, they are more loyal to it. However, customers must be trusted as well. Untrusted customers get unfavorable payment terms and are often deprioritized when supply is low, in favor of trusted customers.
The same relationship exists on the other side of the value chain but in the opposite direction. Here, the company is the customer, and when trusted by the supplier, it will receive favorable payment terms and be prioritized when supplies are low. When it trusts the supplier, it will remain loyal and be willing to pay a premium.
Often companies have to partner with other companies to deliver a whole product (or service) to the customer. One example is computer companies and software companies. There is a mutual dependency between them that leads to 1+1=3. Each company must trust the other company (and be trusted by it) to deliver its deliverables on time, on budget, and as agreed upon. It’s enough that one of them doesn’t do that for the relationship to fall apart.
Investors, distributors, retailers, and others
Companies don’t operate in a vacuum, and there could be other entities that the company may rely on and other entities that rely on the company. Different companies in different industries, different types, or at different stages of their existence may depend on entities such as investors, distributors, retailers, and others. In every relationship, trust must exist for different reasons, and each relationship should be analyzed, and trust be built in it individually, uniquely, and independently of the other relationships.
Same techniques for building trust
However, certain things are common to trust in all relationships, no matter how different they are. Trust behaves in the same way in different relationships, and the 8 laws of trust (trust being continuous, contextual, personal/relative, asymmetrical, transferrable, reciprocal, dynamic, and two-sided) apply to all of them. Similarly, the 6 components of the relative trust model apply (competence, personality compatibility, symmetry/fairness, positivity, time, and intimacy), albeit in different ways because trust is, after all, relative. Finally, increasing trust in any relationship typically requires forming new habits that change old behaviors to build trust and transform organizations.
Want to hear more? Listen to the podcast episode: https://podcasts.apple.com/us/podcast/s7e11-where-do-you-need-trust-in-the-organization/id1569249060?i=1000589761287
Dr. Yoram Solomon is a trust expert, author of The Book of Trust, host of The Trust Show podcast, a two-time TEDx speaker, and facilitator of the Trust Habits workshop and masterclass that help build trust in organizations. He is a frequent speaker at SHRM events.