Lack of trust and freedom comes at a high price

Freedom and accountability are two sides of the same coin. When people are not delivering up to your expectations, it’s tempting to try to enforce accountability. Unfortunately, the more you try to control people, the less accountable they’ll become.

A few years ago, a mill was losing about $1 million a year due to employee theft. Stealing had become a company norm and people were taking tools even if they didn’t need them.

There was an implicit sense of pride in getting away with murder – especially trying to stealing the biggest piece of equipment. Management installed video surveillance and threatened retaliation. Rather than backing off, the challenge made the experience of stealing even more thrilling for people.

Accountability is always a sign of trust. It took a mindset shift to drop the stealing to almost zero. Instead of trying to control people, the company chose freedom.  

Not Trusting People Is More Costly than the Risks of Trusting Them

Company rules send a clear message about how organizations perceive people. By installing cameras and threatening people, management were treating all employees as thieves. Thus, adding more fire to the fire.

The mill hired an organizational psychologist to uncover the root cause. After interviewing people, Gary Latham realized that employees didn’t want to get revenge on the company or make money. They were stealing simply for the thrill of it.

Latham’s advice was not to punish people, but to kill the thrill instead. He created a policy that is both effective and genius: “Employees can borrow equipment from the mill anytime they want.”

By making it officially allowed to remove equipment from the premises, the thrill was gone. It also cleared the past and rebuilt trust. Employees could return previously “borrowed” equipment without retaliation – no questions asked.

Your company norms say a lot about your assumptions about people – the more you control, the less you trust them.

It's not easy for leaders to admit their mistakes or that something is wrong.

Cynical managers micromanage, withhold information, and create limiting policies, harming trust and engagement. It’s no surprise then that organizations are facing a trust issue, according to the Edelman Trust Barometer. None of the four types of institutions are seen as both competent (delivering on promises) and ethical (doing the right thing).

Small businesses are not immune to this phenomenon. Only 43% of employees trust their business leaders and managers, according to Breathe’s Culture Economy Report –  a 16% decline in trust since 2018.

Because employees don’t trust the companies they work for, employers have to take the first step and rebuild trusting relationships with their employees.

I can feel your skepticism. There's a risk in trusting people, but the cost of not trusting them is much higher.

As Stephen M. R. Covey wrote in The Speed of Trust, “When trust goes down, speed goes down and cost goes up. The inverse is equally true: When trust goes up, cost goes down and speed goes up.”

That’s what the CEO of French manufacturing company FAVI realized when talking to one of the operators. To get a new pair of gloves, the employee had to go through a cumbersome process that took him one hour. The process to prevent people from stealing a $6 pair of gloves actually costed FAVI $600 – the cost of not operating a machine during that time.

The CEO realized that this limiting rule had more costly implications. The “gloves rule” was harming trust. It was treating people as if they were thieves, lazy, and not dependable.

Building a culture of freedom and accountability requires trust. Start with positive assumptions about your employees.

Don’t Kill Freedom; Change Your Mindset Instead

Most executives find it risky and foolish to create a culture of freedom without top-down control, especially when money is involved. That’s one of the key points Frederic Laloux makes in Reinventing Organizations. The choice between trust and control is not debated at a rational level. It’s a decision that leaders make based on unconscious assumptions about people and their motivations.

To build a culture of trust and freedom, make explicit all the assumptions under which your organization operates. Get ready to be caught off-guard.

That’s what happened to Dennis Bakke, the founder and CEO of Fortune 500 AES, when he realized how employees feel treated:

• Lazy – if they aren’t watched, they won’t do their work
• Transactional – they just work for the money and nothing else
• Selfish – they put their own interests over the organization’s
• Incapable of making good decisions – that’s why bosses must make them instead
• They need to be told what to do, how, and when – without bosses, there’s no accountability

Sounds harsh, right? But that's probably how most of your employees feel treated, too. Over my many years helping organizations design fearless cultures, I’ve observed firsthand how distrust harms not only morale and performance, but also self-esteem.

Most companies operate with a what gets rewarded gets done mindset. That’s why they struggle to increase accountability. Executives use perks, salary increases, and bonuses to motivate people, but a carrot-and-stick approach is ineffective to increase accountability.

Purpose, mastery, and autonomy are the best way to reward your team. Intrinsic motivation is more effective than extrinsic to drive people.

Mastery is the desire to improve. Seeing our potential as unlimited drives us to learn and practice. Getting better at what we do is more rewarding than any medal or award. As John R. Katzenbach wrote in Why Pride Matters More than Money, in the long-term, it’s what is rewarding that gets done.  

A shared purpose drives people; they want to be part of something bigger than themselves. As Patty McCord wrote in Powerful, “The greatest motivation is contributing to success.” However, people want autonomy to achieve the mission in their own, best way.

Existential philosophy states that freedom is a fundamental condition of human existence. We are autonomous and love to make our choices, not to follow orders. Even when we receive one, we are free to decide whether or not we will carry it out.

With freedom comes accountability. That’s the premise behind Koestenbaum and Block’s Freedom and Accountability at Work. People are responsible for the choices they make. Accountability cannot be forced on anyone. Managers cannot motivate people either. However, they can create the right conditions for members to feel motivated.

Building a culture of freedom and accountability starts by reframing the corporate mindset. Here’s how AES leadership defined a new set of norms about its people:

• Are creative, thoughtful, trustworthy adults, capable of making important decisions
• Are accountable and responsible for decisions and actions
• Are fallible; we make mistakes, sometimes on purpose
• Are unique
• Want to use our talents and skills to make a positive contribution to the organization and the world

Treat people the way they want to be treated, not based on your assumptions.  

How to Balance Freedom and Responsibility in Your Organization

Each organization has its own culture. Be ready to experiment and see what sticks with your team. As I tell my clients, rather than copying what others are doing, create a framework that works for your organization. Use the following ideas as inspiration.

Avoid a one-size-fits-all approach:

You cannot impose freedom. Instead of developing a single plan for the entire organization, allow managers to consider what works best for their teams. Give them the freedom to work with their colleagues on how to approach freedom.

At Decathlon, the CEO understands that a culture of freedom is a philosophy, not a rigid model. Each of the business units of this 80,000-employee sports retailer co-create their unique freedom and responsibility culture.

Align on the mission, provide freedom to execute:

Having a shared purpose brings people together. When everyone is part of something bigger than themselves, freedom feels less risky.

Morning Star employees don’t have a boss. The mission is their boss. People have the freedom to act and make decisions without getting approval from their boss. They simply ensure everything they do is aligned with their purpose.

Freedom requires discipline:

Removing limiting policies and distributing authority doesn’t mean that your culture becomes a free-for-all. You need to define clear priorities, expected behaviors, and what’s promoted and rewarded, too. Designing a culture of freedom requires a framework.

It took Netflix several years to build a culture of freedom and responsibility. The leadership team was relentless about identifying expected behaviors, instilling the discipline of doing them, and consistently communicating them. And, of course, to model the behaviors leaders expected from team members.

Establish peer-to-peer systems:

Building a culture of freedom is not a free-for-all approach. Self-management organizations have systems in place to provide some structure. It’s not about removing control but building collective accountability.

At 10 Pines, people decide their salaries. In this Argentinean software development company, employees can put themselves forward for a raise. However, every proposal is openly and fiercely debated. People think twice before asking for a raise that they cannot justify in front of their colleagues.

Take the first step:

In most organizations, you have to earn trust. Many benefits and perks are dependent on your tenure – the longer you work there, the more trustworthy you become. Although this an established rule, it doesn’t make sense at all.

Atlassian offers a “Holiday before you start” to all new employees. People receive a voucher for a vacation to get reenergized before starting their new jobs. People are trustworthy; that’s why they were hired. The Australian software company has taken employee trust to a new level.

Turn managers into coaches:

A culture of freedom and accountability doesn’t require control over people. The role of managers should shift from overseeing people to providing advice and context rather than orders.

In one of Michelin’s plants, teams self-organize and managers act as coaches. Operators can set their work schedules, monitor their performances, take vacations without approval, and more. As a result, the global tire manufacturer has doubled its free cash flow since 2015.

Establish a conflict-management system:

People’s disputes and conflicts usually land on HR or managers’ desks. This established habit quickly escalates things. Managers end up resolving most conflicts rather than encouraging people to solve them by themselves.

At Morning Star, the largest global tomato processor, individuals can’t use force against others. Its conflict resolution process encourages two people disagreeing to sit together and figure things out. If they can’t find a solution, they nominate a colleague they both trust to help them. This mediator facilitates the discussion but can’t impose a solution. If mediation fails, a panel of colleagues is assembled. Although it can’t force a decision, its moral weight helps resolve the conflict.

Focus on outcome, not presenteeism:

Micromanagement is more pervasive than we think. The pandemic has only made things worse, making it more tempting for managers to micromanage remote employees.

There are three levels of accountability, as Timothy R. Clark explains: task, process, and outcome. Organizations that score low in psychological safety focus on tasks or processes – bosses micromanage people to ensure they do things their way. On the other hand, companies with high trust focus on outcome. They don’t monitor what people do or how many hours they work, but what they get done.

Set up an advice process:

People don’t need empowerment; they need authority to make decisions and move forward without going through multiple approval levels. The advice process balances freedom with diverse perspectives – it seeks input and advice from those affected or those with expertise.

Buurtzorg’s CEO uses social media to get input from their 9,000 employees before making company-wide decisions. Within 24 hours, his posts get dozens – sometimes hundreds – of comments that inform his analysis. Similarly, informed captains at Netflix have total freedom, but must consult with those affected. It’s up to the captains to decide whether or not to tweak their ideas based on people’s feedback.

Increase Trust to Increase Accountability

When trust issues affect your organization, you can respond in two ways. You can add a surveillance system to control people or make it okay to borrow equipment.

Trust is a two-way street, but someone has to take the first step.  

Start by reframing your assumptions about people. Do you think your employees are thieves, lazy, and selfish? Or hardworking, trustworthy, and dependable?

What about your company norms and rules? Do they treat people as grown-ups or kids? Do they promote autonomy or control?

Building a culture of freedom is not about removing accountability, but replacing a command-and-control approach with a system. Rather than enforcing accountability, create a culture of distributed responsibility.

When you doubt people, trust the system. It always self-corrects.

Don't know where to get started? Reach out and let's discuss how we can help you build a culture of freedom and accountability.