Crisis of confidence

We live in a time of limited trust and growing distrust. The term "leader who can be believed" has become contradictory. People are beginning to widely believe that in the business world, trust is pure fiction. Leaders, once adored by all, are beginning to see suspicious glances from their subordinates: "Did he sign a severance agreement?", "Did he keep anything from us?", "Can I trust that my employers will take care of me, keep their word, not break their promises - or is everyone supposed to take care of only themselves"?

A handful of studies

Major authorities believe that the widespread skepticism today about the competence, character and credibility of business leaders is part of a broader phenomenon. Survey after survey shows that increasingly few professional groups are seen as trustworthy. Brokers, bankers, lawyers, congressmen, journalists, TV presenters and even clergymen - none of them can be believed uncritically.

The cost to an organization of low levels of trust among employees is both obvious and difficult to define. A number of studies conducted in recent years have shown that people who do not trust the organization in which they work do not exert themselves in the performance of their duties, take unnecessary risks, are cynical about management's plans and promises, are more likely to leave their jobs and are likely to leave at the first opportunity. A study by the consulting firm Accenture, for example, found that 63% of middle managers prepare their resumes for recruitment hoping that the job market will improve.

Perhaps the most surprising finding is that there is a correlation between employee confidence and a company's economic performance. A 2002 study by international consulting firm Watson Wyatt found that companies with the highest levels of trust among employees boasted profits that were 42 percent higher on average. As Napoleon Barrigan, an executive at New York-based Dial-A-Mattress, stated: "People confined to five-square-foot cells won't make an effort to satisfy customers unless they place their trust in us."

Based on the results of 25 individual research projects and studies, three main conclusions can be drawn. Trust is a critical factor when it comes to both workplace relations and market performance, and employees' attitudes toward work and the quality of their work depends on it. There is no consensus on the elements that make up a sense of trust. And let's not forget that individual trust, for example, in the immediate boss, is different from trust in the entire organization.

Key principles of trust

Charles Handy, a lecturer at the London Business School and author of "The Hungry Spirit" ["The Hungry Spirit," Broadway Books, 1998] believes that in order to create and maintain trust in an organization we should apply seven basic principles:

• Trust is not blind
  Trust takes time. Small, connected groups that have been working together for a long time have high levels of trust.
• Trust requires boundaries
  Trust is a belief in one's own and others' abilities, not an uncritical faith in the unknown.
• Trust requires awareness
  Teams working together should be flexible and ready to change, but they need to know what the changes are for.
• Trust is demanding
  People must strive to meet expectations. Otherwise they will be removed from the group.
• Trust needs ties
  A sense of community, good communication and a clearly defined goal and mission bind the group together.
• Trust needs understanding
  Personal, direct contact between people creates trust.
• Trust needs leaders
  Leaders set the vision, the rhythm of work and bring energy. They do not create trust per se, but by keeping their word and proving their competence they foster trust.

Applying these simple principles in their daily practices is a high probability of creating a team full of people who trust each other. As the cited research results show, a group acting in the spirit of these rules has a huge impact on the financial results of our activities, so it is very important to follow them conscientiously.