Trust
The Key Ingredient for Transformation in Business
What is Trust
Trust has been defined by researchers and academics in many different
ways. Some of these definitions include:
• A belief that those on whom we depend will meet out expectations of
them (Shaw, 1997)
• A characteristic of high-performance teams where members believe in
the integrity, character, and ability of each other (Robbins, 1996)
• The willingness of a party to be vulnerable to the actions of another
party based on the expectation that the other will perform a particular
action important to the trustor, irrespective of the ability to monitor or
control that other party (Mayer, et al., 1993)
• A reciprocal faith in others’ intentions and behavior (Kreitner &
Kinicki, 1995)1
Trust can be observed in the context both of individual expectations of a
personal relationship, a business to business relationship as well as an
individual or business’s relationship with any other form of socio-economic
structure.
Studies by various researchers (Bert & Knez, 1996; Lewicki & Bunker,
1996; Mayer, et al. 1993; Mishra, 1996; Robbins, 1996) have led to a set of
dimensions that can be used to measure trust:
• Integrity: honesty and trustfulness
• Competence: ability or technical and interpersonal knowledge and
skills
• Loyalty: concern and benevolence, the willingness to protect and
save face for a person
• Consistency: fairness, reliability, predictability, and good
judgment in handling situations
• Openness: a willingness to share ideas and information freely
• History: a congruent history of demonstrating trustworthiness
• Personality characteristics: underpinned by an entrenched value
system 2
Lewicki and Bunker (1996) 3 identified three sequentially linked types of
trust in the context of professional relationships:
• Calculus-based trust: This is based on “assuring consistency of
behavior; that is, individuals will do what they say because they fear
the consequences of not doing what they say”. This form of trust is
sustained through the underlying threat that possible punishment that
is likely to occur when trust is violated. The management style
appropriate for this form of trust is management-by-exception, with its
emphasis on monitoring and controlling performance.
• Knowledge-based trust: “This form of trust is grounded in the
other’s predictability – knowing the other sufficiently well so that the
other’s behavior is anticipatable”. In this context, trust relies on
information rather than deterrence. Over time, an expectation is
formed about the predictability and trustworthiness of the other
party’s behavior. There are two key processes which contribute to the
predictability of the relationship in the development of knowledgebased trust:
o Regular communication, which maintains a constant exchange
of information about wants, needs and expectations between the
parties, and
o “Courtship” which they define as behavior that is specifically
aimed at relationship development and learning more about the
other party.
A management style that focuses on contingent rewarding and
individualized treatment will increase knowledge-based trust.
• Identification-based trust: This form of trust is based on
identification with the other party’s desires and intentions. At this
level, “trust exits because the parties effectively understand and
appreciate the other’s wants; this mutual understanding is developed
to the point where they can effectively act for the other”. This form of
personal identification literally enables one party to think, feel and
respond like the other party in terms of their needs, preferences,
thoughts, and behavior patterns. This leads to the development a
“collective identity”.
According to Lewicki and Bunker, four types of activities increase
identification-based trust. They are: developing a collective identity;
co-location (working in the same building/neighborhood); creating
joint products or goals; and committing to commonly shared values.
They conclude that in order to develop this type of trust relationship
within an organization transformational leadership behavior is
required from the top, i.e. articulating an attractive vision and having
shared goals to strive for, committing to shared values, and
developing a sense of collective identity. 4
In summary, trust is not a static end state, it is rather a dynamic phenomenon
that is influenced by a multitude factors, internal and external, personal and
socio-economic.
Why is Trust important?
Charles Handy’s Sigmoid Curve has defined the ever increasing pace of
change experienced by both individuals and organizations. Handy contended
that in the past, organizations had much longer average life spans than they
do today, with the average life cycle of an organization during the 1980’s
spanning about 40 years. Today, with the pace of change being driven by
Moore’s Law 5 and the dramatic acceleration of the global knowledge
economy into all aspect of our lives, living and working in an environment
of constant change has become the norm. Handy stated that in the 90s
businesses should reinvent themselves every six years, in the 2000s this
cycle is contracting at an increasing rate.
Tony Powell has expanded on Moore’s Law in relation to the doubling of
information. Whereas in 1900 all the information in the world was estimated
to double every 30 years, in 1980 it was estimated to double every 7 years.
Powell predicts that by the year 2010 all information in the world will
double every 11 hours. The impact this will have on an average
organization’s life expectancy will be dramatic and this creates an
imperative for business to engage in transformation strategies today to meet
the needs of a rapidly changing world.
Handy calls the period of transition between old and new business models a
period of contextual disintegration or chaos, where the old context is no
longer intact but the new one has not yet fully taken shape. More and more
organizations today are finding themselves in this transition phase and
people, who are predominantly change averse, are experiencing higher stress
levels as a result of their feelings of anxiety, depression, anger, worry and
insecurity.
In order to acclimatize people to the inevitable ongoing change they will
experience and its associated contextual disintegration, a dramatic internal
mindset shift is required. A clear and inspirational picture of the future needs
to be painted and sold to everybody within the organization. This is the task
of leadership. However, a compelling picture of the future has little
substance if it is not accompanied by a sustainable supported program to
develop personal leadership and ownership of that compelling future within
each employee.
Effective leadership is key to managing and facilitating change within an
organization. The type of change required from businesses today cannot be
achieved through an incremental, transactional leadership approach, but
rather requires a transformational leadership strategy to be effective.
Kouzes and Posner (1993) suggest that there is more to leadership than
intellectual intelligence, power and strategic thinking. They believe that the
answer lies in how leaders address values within their organizations. They
strongly advocate that the foundation for effective leadership is found in
establishing credibility between the leader and the constituents who choose
to follow. Credibility and credit share the same root origin, "credo" meaning
"I trust or believe". Therefore, for leaders, building credibility is about
investing in themselves, to increase credit worthiness in establishing
sustainable relationships. Building credibility is about creating trust, and
creating trust is about values-oriented leadership (Kouzes and Posner, 1993).
6
Leadership is about aligning the beliefs and values of people with the overall
goals and vision of the organization. Leaders facilitate change by providing
direction, setting an example, motivating through inspiration and building
teams based on respect and trust. They cannot be effective in this without
demonstrating positive intention, commitment and most importantly
congruence in everything they do.
Carol Stephenson (Jan/Feb 2004) states that leaders must not only talk about
their ethical values, they must live those values-every day-and in every
action they take. Leaders must create a climate of trust and compassion
based on open communication-from what they say, to how they listen, to
how they act on what they learn. And finally, leaders must embrace a strong
vision or purpose for their organizations, and that vision and purpose must
take into consideration both the economic and the social impact of business.
7
How do you build Trust?
According to Vangen and Huxham (March 2003), trust building is a cyclical
process and that with each positive outcome, trust builds on itself
incrementally, over time, in a virtuous circle. 8
They ascertain that when people or businesses enter into any form of
relationship together, they take a risk and form expectations about the
intended outcome and the way others will contribute to achieving it. Each
time an outcome meets expectations, trusting attitudes are reinforced. The
outcome becomes part of the history of the relationship, increasing the
chance that these partners will have positive expectations about joint actions
in the future. The increased trust reduces the sense of risk for these future
actions.
They place a great emphasis on the importance of communication as a
prerequisite for establishing and growing trust. This involves the need to
share information openly and honestly on a range of issues, as well as
leadership’s responsibility for the ongoing management of communication
between all the stakeholders in an organization.
Many employees today are experiencing what leading business and
management researcher Peter Frost calls "toxic shock." He believes that
events in companies such as downsizing, restructuring and cost cutting aren't
toxic in themselves. It's how the pain is handled that determines whether the
long-term effects are positive or negative. He also believes that the most
important influence on workplace toxicity is a company's leader. As he says,
"Fish stinks from the head." The higher up the toxic person is, the more
widely spread the pain and the more people behave like the toxic boss. It
poisons the working environment and ultimately the company. 9
How to regain Trust once it is lost
In the March/April 2003 Ivey Business Journal, Ivey professor Pratima
Bansal and Ivey MBA student Sonia Kandola presented a research paper on
corporate social responsibility. They wanted to uncover why good people
sometimes behaved badly in organizations. They observed that good people
might act irresponsibly at times "because of the context in which their
actions occur." They also found that "irresponsible actions often beget
further irresponsible actions, which can cause a contagion of
irresponsibility."
To ensure that employees can and will act with integrity, they concluded that
organizations need a strong and consistent set of values that dictate
appropriate individual actions. "These values establish a framework for what
is considered to be acceptable within an organization." They further
concluded that it is critical for a company to practice its values. “A company
cannot simply list its values in the annual report or post them in the staff
lounge and expect employees to follow suit. Values must be lived by
everyone in the company. Otherwise, they're just good intentions. Leaders,
above all, must walk the talk.”10
Howard Gardner, a Harvard psychologist, examined the fundamental
influence that leaders have as "role models that employees identify with and
can emulate." Gardner believed that authentic leaders create a "sense of
trust" at the core of their relationships with employees, through "open,
honest, candid and empathic communications." This he theorized leads to
"strong relationships that create stability amidst uncertainty and change." 11
A strong sense of vision and purpose is especially important to employees.
The Globe and Mail's report on the "50 Best Companies to Work For in
Canada" cited the best employers as the ones who articulated a clear and
consistent vision, starting with the CEO. This vision kept their employees
focused on the company's goals. 12
However, as Stephenson points out, vision without action is meaningless.
Edward De Bono talks about “operacy” – the need to take action. A
transformation model is required for mental operacy – to get people to take
active charge of their own compelling futures within the structures of the
organizations in which they work.
The role of trust in business transformation
Retrenchments and restructuring as a result of socio-economic realities and
transformation imperatives have affected many large businesses over the
past few years. This has left a lingering sense of mistrust amongst the staff
of the effected organizations.
Historically, people “outsourced” their future security to the organizations
they worked for, believing that they would have a “job for life”, but as the
current reality of the ever-increasing rates of change has filtered into the
business environment, a need has developed to congruently bridge the
perceptual gap for the people left floundering in contextual disintegration.
To facilitate the mental transition from a mindset that finds security in
outsourcing its future to an external force (the organization), into a sense of
security within an internal locus of control, or a mindset of future fitness.
Conclusion
In their book, “Consciousness: how matter becomes imagination” the
neuroscientists Gerald M Edelman and Giulio Tononi wrote: “Doing
generally precedes understanding”, and “theory cannot replace experience:
being is not describing.”13
The human brain has the most incredible capacity to pre-live an experience
through visualization. Einstein was a master at this, although according to
James Gleik in Time magazine of 29 March 1999, he did not invent the
thought experiment, but rather “raised it to a high art.”
Leadership can create a compelling vision for the future, but if the picture is not painted
in the minds of followers, if an emotional connection is not made to the vision and if that
vision is not translated in a tangible way into action, then true transformation in an
organization cannot take place.
1 Journal of Industrial Psychology, 2000, 26(3), 27-31 - Nico Martins - Developing a Trust Model for Assisting Management During
Change
2 Journal of Industrial Psychology, 2000, 26(3), 27-31 - Nico Martins - Developing a Trust Model for Assisting Management During
Change
3 SA Journal of Industrial Psychology, 2002, 28 (4), 29-34 - The Impact of Leader Behavior on Trust in Management and Co-Workers
4 SA Journal of Industrial Psychology, 2002, 28 (4), 29-34 - The Impact of Leader Behavior on Trust in Management and Co-Workers
5 Faster – James Gleik – London – Little Brown – 1999
6 A research and skills training framework for values-driven leadership - Dennis James Mussig. Journal of European Industrial
Training. Bradford: 2003. Vol. 27, Iss. 2-4
7 Rebuilding trust: The integral role of leadership in fostering values, honesty and vision - Stephenson, Carol. Ivey Business Journal.
London: Jan/Feb 2004. Vol. 68, Iss. 3
8 Nurturing collaborative relations Building trust in interorganizational collaboration - Siv Vangen, Chris Huxham. The Journal of
Applied Behavioral Science. Arlington: Mar 2003. Vol. 39, Iss. 1
9 Rebuilding trust: The integral role of leadership in fostering values, honesty and vision - Stephenson, Carol. Ivey Business Journal.
London: Jan/Feb 2004. Vol. 68, Iss. 3
10 Rebuilding trust: The integral role of leadership in fostering values, honesty and vision - Stephenson, Carol. Ivey Business Journal.
London: Jan/Feb 2004. Vol. 68, Iss. 3
11 Paul Wieand, the founder of the Center for Emotional Intelligence in Ottsville, Pennsylvania, Ivey Business Journal, London:
July/Aug 2003
12 Rebuilding trust: The integral role of leadership in fostering values, honesty and vision - Stephenson, Carol. Ivey Business Journal.
London: Jan/Feb 2004. Vol. 68, Iss. 3
13 Consciousness: how matter becomes imagination – Edelman, Gerald and Tononi, Giulio – Penguin Press, London, 2000