Organisation and leader trust impacts bottom line.

Stephen Covey (2006) in Speed of Trust defines leadership as achieving results in a way that inspires trust.  As organisational leaders we can understand the achieving results part, but how does inspiring trust impact a company’s performance, success and effectiveness.  At its essence, we can all probably come to the idea that building trust within an organisation and between employees and leaders should ultimately result in better performance and a more engaged workforce.  If we reflect, we have all probably experienced broken trust in our working life and how that becomes all-consuming, and let’s face it, will impact your ability to be effective and innovative for the organisation. 

So how do organisations go about increasing trust? Research has shown that individual leadership can improve organisation performance and that organisational trust impacts job satisfaction which will ultimately effect job turnover (Joseph & Winston 2005).  Organisational trust is similar to leader trust in that there are core behaviours leaders demonstrate that help to build organisational trust.   Leaders will influence organisational trust through their ability to effectively communicate and inspire employees on the company’s vision and goals and by honouring promises and commitments, showing fairness and respect across the organisation, having open and honest communication and being transparent.  Leaders need to remember that a simple step such as giving an employee due credit for a great idea and thanks for a good job goes a long way towards building trust with employees.

Employees want to be able to trust where the organisation is heading. They want to trust in their leaders to assess their skills objectively, to provide prompt and accurate feedback and to listen to what their needs and goals are.  Of course employees trust in their leaders will be a direct result of their leader’s actions. 

Not all leaders will be able to understand what is required to start building trust within their organisations and this is where human resource management needs to develop strong partnerships with the business and leaders at all levels to help coach and train leaders in defining and developing trust leadership towards a trust culture. 

Trust can be established; it can be developed and restored and will improve the bottom line.

Watts Ahead - A thought leadership blog

Covey, S 2006, ‘The Speed of Trust’, FreePress, CoveyLink, New York

Joseph, Error E & Winston, Bruce E. 2005, ‘A correlation of servant leadership, leader trust, and organizational trust’, Leadership and Organization Development Journal; Volume 26; Issue 1 2005.