A Secret Weapon for Your Business?

By Paul C. Donehue

Trust is “the soft concept producing results that are hard to beat,” wrote our associate Shiela Julien in a recent newsletter.

The role that trust plays in an organization’s success has been written about before by keenobservers of human and organizational dynamics. Patrick Lencioni in The Five Disfunctions of a TeamI dentifies the lack of trust among a management team as the root cause of most poor performance. Stephen M. R. Covey in The Speed of Trust: The One Thing That Changes Everything passionately echoes this view, citing research indicating high-trust organizations out-perform their low-trust competitors by 300%, because a lack of trust increases costs while simultaneously reducing an organization’s speed and agility.

What’s different about Ain, CEO of Kronos, a leading global provider of workforce management cloud solutions, is that he can tell us how trust is working in action today, and about the tools and methods in place to support the practice and enhance the effectiveness of trust. At Kronos, everyone is expected to give trust both within and outside their functional areas and to practice behaviors that earn the trust of their employees, teammates, and managers. According to Ain, the culture of trust contributes to much more than high engagement and retention, as important as those are, but to amazing business results.

The results at Kronos are strong evidence, as the company has flourished across the board in areas ranging from employee engagement and retention to innovation and revenue growth.

Why Trust Matters

To many of us schooled in facts and data, trust may seem too soft a concept to produce a competitive edge. Not so. A high level of trust is essential to creating an agile, highly competitive organization and here are some reasons why.

No Trust, No Speed: In a world where new challenges arise very quickly, it is the failure to act, failure to improve, and failure to innovatethat poses the biggest risk to a company – not the risk of making a mistake.

However, to an individual in a low-trust environment, by far the biggest risk is making a mistake. For these individuals, trying something new is much riskier than doing what’s been always been done. Innovation or even simple improvement is not going to happen. The whole organization slows down.Covey, in The Speed of Trust, puts it this way: “When trust is low… it places a hidden ‘tax’ on every communication, every interaction, every strategy, every decision.”

People don’t fully hear what their leaders are saying, because they factor in guesses about the leader’s intentions. They wonder how transparent their leader is being. Employees don’t buy-in to decisions that they don’t trust.

Ain points out that lack of trust places “a huge overhead burden on a relationship.” He insists that when you employ someone, you should go ahead and trust them! Will you get burned on occasion when trusting people? “Absolutely!” Ain says, “But almost always my trust in team members has proven well-founded.

And the benefits are numerous.”By building a culture where employees know they are trusted and where they trust their managers and teammates, Kronos has created an organization where it is safe for people to be creative and to aim for the best possible outcomes, continuously getting better and better.

No Trust, No Exposing Reality. Exposing reality is a practice Kronos has consciously worked on for over a decade. Exposing reality means trying very hard to look at things the way they really are, rather than the way we wish they were. As Ain points out, “the faster you see things as they really are, the faster you can get to work on improving them.”

But in a low-trust environment, people are especially motivated to gloss over uncomfortable truths and to declare victory and move on rather than checking to see if they did or didn’t get the results they expected.Trust enables us to admit what we don’t know, recognize and recover quickly from mistakes, and to put uncomfortable information, questions, and contrary opinions out in the open, where the team can work through them with honesty and passion to arrive together at the best strategies and decision.

No Trust, Poor Results. In a low-trust environment, employees hold back information or ideas that seem risky to share, so leaders make decisions based on incomplete information and without knowing all the potential consequences. And when employees believe their managers are making decisions without all the relevant input and information, they often question or even slow-walk the decisions.

Covey cites polls showingthat only 45% of employees have trust and confidence in senior management. Lencioni, in The Five Dysfunctions of a Team, places lack of trust at the foundation of his pyramid of dysfunctions culminating in poor results. Without trust among a team, people keep their cards close to their chests. They are afraid to admit the limits of what they know, afraid to admit any vulnerabilities.

Because they don’t trust one another, they fear conflict and withhold uncomfortable information and dissenting views. Without complete information, these teams make poor decisions, and the decisions they do make are poorly executed because they do not arrive at a shared commitment to the decision unless they have aired and resolved dissenting views. Thus, a lack of trust leadsto both flawed strategies and poor execution. When these organizations fail, Lencioni says, the press may point to poor strategy or poor execution while the root cause is lack of trust among the team.

Trust Inspires & Engages. Covey observes that “trust is one of the most powerful forms of motivation and inspiration. People want to be trusted. They respond to trust. They thrive on trust.”

This is exactly what Ain sees happening at Kronos.

“Because we place so much faith in employees,” Ain explains, “they return the favor, placing a remarkable degree of trust in us. Their trust in turn leads to far better performance – more innovation, quicker recovery from mistakes, more energy and enthusiasm at work.” While many factors contribute to Kronos’ financial and market achievements, Ain strongly believes that the culture of trust has been fundamental to the success Kronos has had in innovating, growing, and engaging.

Building a Culture Of Trust – It’s Not Easy

Trust may seem like a “soft” concept, but it requires hard work.

“We’ve worked incredibly hard to instill trust throughout the organization, one manager at a time, starting with me,” Ain tells us.

“First, we give employees atypical degrees of latitude and freedom. Until proven otherwise, we assume their competence, judgement, and good intentions.”

Kronos also deploys tools that support the creation of a high-trust organization, such as Predictive Index, to help people get to know one another, and a performance feedback and rating system that gives substantial weight to an employees’ effectiveness at building trust.

They also establish HR policies that demonstrate trust as an organizational philosophy, such as work-at-home options, and unlimited time off.

In addition, the management at Kronos works very hard on three specific management behaviors that support effective deployment of trust:

Overcommunication – trusting people to just do what they think is best for the organization doesn’t work out nearly as well if internal communication is weak.
Courage to Lead – Lencioni says a leader must have the courage to be vulnerable and to tolerate and work through conflict. At Kronos, the concept of courage has an even higher profile. Kronos requires that managers learn to lead with genuine courage.
Studying results – trust doesn’t mean assuming everything will all work out as planned. At Kronos they plan carefully, try out an innovation or improvement, then study the results, and act on what they learn.
Kronos has demonstrated that creating a high-trust culture is worth the investment – just as Covey predicted in The Speed of Trust.

Thanks to a culture of trust – supported by great overcommunication, courage, by measuring results and exposing reality – the talents and creativity ofthe highly engaged workforce at Kronos have been set loose to accelerate improvements, solve challenging problems, innovate and disrupt to better meet customers’ needs and help Kronos thrive.

Now that the “secret” is out, who wouldn’t want to copy that?

About

Paul C. Donehue is a Senior Associate at Conway Management Company, a global consulting firm that helps clients of all types and sizes to improve operational effectiveness.