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Want Happier Employees? Build a Culture of Trust

Transparency, right intent, and consistency are critical to building a culture of trust.

By Gustavo Razzetti

April 28, 2022

Trust is at an all-time low – here's what you can do about it

Trust is the foundation of strong interpersonal relationships. It is built through actions, not words – moment by moment, through multiple interactions. In the workplace, trust not only strengthens ongoing relationships but it's also a predictor of high-quality work and performance.

Trust is fundamental for sustainable success. The smartest leaders in today's workplace want to develop and retain employees who are happy and enjoy what they do. Building trust is complex as it involves multiple stakeholders, both internal and external. It requires competence, transparency, the right intent, and – above all – consistency.

Unfortunately, trust in businesses is in decline. One in three people doesn't trust their employer. US, Germany, Japan, and the UK fall into distrust with scores below 50%, according to the 2022 Edelman Trust Barometer. So, how can you successfully build trust in a fast-changing and distributed workplace?

In this post, I share why building trust in the workplace is crucial and how to build a culture of trust in your organization.

Trust And Happiness Go Hand in Hand

Why are Nordic countries so happy? The Nordics consistently win the happiness race, frequently topping the annual World Happiness Report. Finland has been named the current happiest country. So, what's the secret?

Hint: the weather doesn't affect happiness levels regardless of how good or bad it is. Money, genetic predisposition, and frequent laughing and singing don't play a role either.

The WHR authors have uncovered three markers that determine happiness: The quality of government institutions, liberal values (progressive taxation and freedom to make life choices), and trust. Yes, trust and happiness go hand in hand.

Trust is terribly important as it defines the foundation of a healthy society. When we lose trust we stop caring about each other. In the trust study, one of the key questions to capture how people feel about trust is: "If I lose my wallet, will it be returned?"

That's why building a culture of trust is good both for people and business. Happy employees care more about the organization. They are more engaged at work, have a sense of ownerships, and want to ensure their company's success.

Research by the Center for Neuroeconomics Studies shows that not only employees in high-trust organizations are happier with their lives, but they are also more productive and stay longer in their jobs. Compared with people at low-trust companies, people at high-trust companies report: 74% less stress, 106% more energy at work, 50% higher productivity, 76% more engagement, and 40% less burnout.

Trust makes it easier for people to ask colleagues for help, openly address issues that get in their way, and have fun – a predictor of great work.

Smart leaders know that trust is critical to build high-performing organizations but also acknowledge the difficulties of leading in a divided society.

PwC's global CEO survey uncovered that 55% of CEOs think that a lack of trust is a threat to their organization's growth. However, most have done little. They don't know how to neutralize this threat and, most importantly, don't know where to start.

One of the first steps in managing trust is understanding how it can be defined and measured. Trust – just like culture – is something everyone praises but which is a challenge to define. It's an abstract concept that feels hard to grasp. However, the benefits of a culture of trust are very much concrete. Research suggests that trustworthy companies outperform the S&P 500 by levels as high as 30% to 50%.

Trust can become a tangible and critical asset. A paper by Deloitte builds the case for quantifying trust, providing an approach to measuring trust across multiple organizational domains.

Although most domains are important to building trust, some are more critical than others. Product quality, customer experience, financial integrity, authentic leadership, innovation, and culture/ purpose score the highest, according to Deloitte's research.

Building a culture of trust is not a one-off effort. It requires intentional and consistent work.

Trust is built through actions that demonstrate the right competence and the right intent. In addition to capability, building trust requires reliability (consistently delivering on promises made), transparency (sharing not just information but the 'why' behind core decisions), and humanity (caring about others).

Supercharge The Trust Battery

Tobu Lütke, CEO of Shopify, popularized the idea of the trust battery. He believes that when a new colleague joins your team, the trust battery between the two of you starts out at around 50%. Each time the new colleague acts in a positive way, the trust level increases, while negative behaviors lessen trust.  

The trust battery is slow to charge yet quick to drain.

Distrust is now our default emotion. According to Edelman Trust Barometer 2022, nearly 6 in 10 people say their default tendency is to distrust until they see evidence of trustworthiness. An empty trust battery by default can lead to damaging relationships and a hostile work environment.

Empathy is crucial to building trust. The more we get to know and understand our colleagues, the more we can trust each other. Stories are the perfect way to increase a sense of belonging and start building psychological safety among teams.

When we experience a sense of belonging, our body activates "happy hormones" – like serotonin, dopamine, and oxytocin – that promote happiness, pleasure, and even love. This increases trust, connection, and collaboration.

On the other hand, studies have found that social isolation evokes cravings similar to hunger and social exclusion has been located in the same region of the brain as where we experience physical pain. That's why it's not uncommon for remote teams to feel emotionally as well as physically distanced.

Working in a hybrid environment requires trusting employees more than ever. This is critical for success. Trust requires that someone takes the first step. Leaders should be the first to demonstrate real trust in their employees.

Trust emerges as the glue that holds the entire operation together.

In a high-trust culture, employees don't have to explain if they need to take time off or skip a meeting to focus on something more important. To understand how trust works, remember that trust is granted, not earned. Great leaders trust first.

Here are some ways for you to build a culture of trust.

Trust more–even if it's not comfortable

For most leaders, the trust battery starts at around 50% when a new colleague joins the team. To increase that trust level, new members must prove that they are trustworthy through their own behavior.

However, fifty percent is not enough—leaders need to supercharge the trust battery.

As Brenna Loury, CMO at Doist, writes, "The most important lesson you can imbue in a new team member is that trust is assumed, not earned." She suggests a list of gestures that managers can make to help the new person feel trusted from day one:

  • Communicate honestly and frequently
  • Assign meaningful work to new members
  • Clearly define expectations from day one
  • Encourage people to get to know each other
  • Simply be available

Great leaders focus on building the right environment. They grant trust rather than force people to earn it.

Information should be fuel, not power

Transparency and clear communication are vital to build a culture of trust. In my research for my new book, I interviewed hundreds of employees to understand what transparency means to them. The common theme is not only what senior executives do, but also what they don't do.

Transparency has to do with strong communication, sharing issues in the open, and also the 'why' behind key decisions. Most importantly, transparency means not hiding critical information – or lying. Transparent leaders are not just great communicators but also want to ensure everyone understands their vision and reasons.

Airbnb CEO Brian Chesky practices management by visibility. He has a hands-on, open management style. Chesky is known to send weekly emails to all employees with whatever's on his mind. This leads to open dialogue across all levels of the organization.

At Airbnb notes from executive meetings are shared with everyone within 24 hours. As Mark Levy, former Global Head of Employee Experience at Airbnb, shared:

"We distribute that very broadly, and people really appreciate knowing what we're talking about and ask questions, share thoughts and ideas. That stems from our communication philosophy that we want to have an honest, open, and two-way dialogue between everyone in the company."

HubSpot has also built a culture of trust by heavily banking on transparency. Its culture was built on the principle that power is gained by sharing knowledge, not hoarding it. The marketing and sales software company doesn't have an "open-door" policy but a no-door policy. Everyone has access to everyone in the organization.

When HubSpot became a publicly traded company, SEC regulations prohibited the company from continuing to share all information with employees. Chafing at the limitations imposed on its policy of full transparency, the company got around them by naming every employee an insider. At HubSpot, all information is once again open unless there is a legal requirement to keep it confidential or if it's not owned by the company.

Align your policies with your values

Often organizations promote trust but their rules then send the opposite message.

Basecamp made a strong statement in the spring of 2020 when it stood up against employee surveillance. Third-party developers were using its API to develop software that recorded and monitored remote workers' activities.

Basecamp's revised policy stated: "We're about remote work within an environment of trust, not spying our employees. It's recently come to our attention that some third-party integrations go beyond traditional time tracking functionality to surveillance. We're not okay with that, and we're codifying that stance in this policy update."

Basecamp chose doing the right thing even over incremental revenue—right in line with its stated value of "Be fair and do the right thing."

Treat people like adults

Most CEOs love the principles of autonomy. But when it comes to pulling the trigger, they panic; they can't trust that their employees will behave responsibly. In Reinventing Organizations, Frederic Laloux explains how this irrational belief is based on the unconscious assumptions that traditional hierarchies make about people.

If you assume people are lazy, you won't give them more responsibility. If you believe they aren't trustworthy, you won't provide them with confidential information. The more you withhold, the more withdrawn people will become. The more withdrawn they become, the less engaged with work they'll be and the less likely you are to trust them.

The assumptions organizations have about people are one of the great obstacles to creating a flexible workplace—one that requires freedom and accountability.

The solution is simple: start by examining your assumptions.

Do you believe people are good? Do you believe people add value? Or do you think they just want to make money? Are your assumptions based on perceptions or facts? What do your company rules say about your people?

Autonomy is the foundation of trust.

Focus on outcome, not input

Historically, organizations have rewarded input – visibility, effort, presenteeism, etc. – over outcome. Employees who worked late, sent a lot of emails, or were always in meetings were perceived as hard-working, committed team players.

Busyness in the workplace is more than a badge of honor – it's a way to seek appreciation in low-trust cultures.

When presenteeism and workload are success metrics, employees are afraid to step away. If you switch off, people think you're lazy. You feel guilty if you can't be available 24/7. But just because you can always be on doesn't mean you should be. If you never take time to wind down then motivation, productivity, and creativity suffer.

Organizations can benefit enormously by shifting their focus away from these traditional input measures and focusing on impact. Don't reward presenteeism or long hours. Evaluate people based on goals and results, not on how late they stay in the office or how many Zoom calls they attend.

Leaders must trust that employees will get the work done even if they aren't as visible or looking busy.

Trust your hiring system

Steve Jobs is often quoted saying, "It doesn't make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do." In others words, trust your hiring system – if you did the right due diligence, you should grant new employees the trust they deserve.

In most companies, you must earn trust over time to earn benefits. However, you don'y have the luxury of time in a high turnover, distributed workplace.

The Australian software company Atlassian offers new employees a holiday before they even start working in the form of a travel voucher for a "holiday before you start." This is more than just a perk; it's a clear message that Atlassian trusts its people. It's also an act of empathy: the company acknowledges that changing jobs is stressful.

What signals can you create from day one to show new employees that you trust them?

Speak out on controversial issues

Companies are no longer spectators but active players in a society where neutrality is no longer an option.  

Most people believe that businesses are not doing enough to tackle societal issues such as climate change (52%), economic inequality (49%), and trustworthy information (42%). Respondents to Edelman Trust Barometer 2022 believe that business leaders cannot stay neutral and play an active role in rebuilding trust at a societal level.

60% of employees expect CEOs to speak out on controversial issues. A vast majority of the population (80%) want CEOs to be personally visible to discuss how their companies are benefiting society. They are expected to shape conversation and policy on global warming, wage inequality, and technology automation.

Businesses must play a leading role in breaking the cycle of distrust. People believe that leaders are not doing enough – expectations are higher and will increase over time.

Recently, the invasion of Ukraine put many companies' trust to the test. What matters the most: doing business in Russia or standing up to defend one country's independence? Neutrality was not an option. While many companies adopted a wait-and-see approach, pausing their business, many others took a stand. Although it's hard to tell which were motivated by moral concerns, many went above and beyond the legal requirements.

Building a Culture of Trust

Distrust has become the default mode for most people. This is affecting business credibility and employee happiness. While your organization cannot control the overall environment, you can still play a major role in rebuilding trust in the workplace.

Transparency, right intent, and consistency are critical to build a culture of trust. Leaders model the right behavior by supercharging the trust battery. You organization's actions should match promises. Stand up and act upon – neutrality is not option. Either your organization is trustworthy or it's not.

If you enjoyed this post, check out my new book Remote, Not Distant: How to build a strong culture and succeed in a hybrid workplace.

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