Let’s get to the point. What is the one essential that you must attend to as a business owner or leader in 2017? I would argue that it is Trust.
Consider the following facts:
- Companies with high trust make more money.
The Great Place to Work Institute creates the “100 Best Companies to Work For” list. Trust comprises two-thirds of the criteria since their research shows that “trust between managers and employees is the primary defining characteristic of the very best workplaces.” These companies with high trust beat the average annualized returns of the S&P 500 by a factor of three.1
Not convinced? A 2015 study by Interaction Associates shows that high-trust companies “are more than 2½ times more likely to be high performing revenue organizations” than low-trust companies.
- Companies with high trust move faster and save money.
Building trust within your company affects two measurable outcomes: speed and cost. When trust goes down in any relationship, be it on a team, within an organization, or with a partner or customer, speed goes down and cost goes up. When there is a dearth of trust between any two parties, each will ask more questions, want more assurances and the ability to move quickly diminishes. Stephen Covey calls this a “low-trust tax.”1
But the converse is equally true. When trust goes up, costs (think legal and other risk reduction activity costs) go down, and speed of execution goes up. This results in what Covey calls a “high-trust dividend.”
These trust taxes and dividends are real and essential for business leaders to take into consideration. Building trust in your firm in 2017 is not a leadership competency “nice to have,” but a business competency “must have.”
- Trustworthiness shapes both first impressions and sets the foundation for the relationship.
According to Harvard psychologist Amy Cuddy in her new book, Presence, people evaluate first impressions of others based on the psychological dimensions of warmth and competence. They quickly answer two questions when they first meet someone:
- Can I trust this person?
- Can I respect this person?
While most business leaders believe that competence is most important, in fact, warmth, or trustworthiness, is the most important factor in how people evaluate you.
According to Cuddy,
If someone you’re trying to influence doesn’t trust you, you’re not going to get very far; in fact, you might even elicit suspicion because you come across as manipulative. A warm, trustworthy person who is also strong elicits admiration, but only after you’ve established trust does your strength become a gift rather than a threat.2
If you’d like to know how your company is doing on the “Trust Quotient,” be sure to take advantage of our complementary “Toolkit” offer below.
This week’s toolkit is “Our Company Trust Quotient Inventory.” Write us at firstname.lastname@example.org – “Requesting ABA’s Trust Quotient” to receive your complimentary copy.