You might say I am on a “trust” kick.
In last week’s blog, I highlighted a US decline in social trust (a precipitous drop of 46% points from 1964 to 2016). I also opined on the critical role of trust in strengthening the social contract between businesses and customers. Finally, I asserted that trust begets trust. As such, I suggested business leaders should take the first step by trusting customers out of respect and gratitude for them.
Value of Trust
So this week, I thought I’d look at the “value of trust,” first from the perspective of shareholder returns and then from the vantage point of benefits to the entire business ecosystem. In his seminal work, “The Speed of Trust,” Stephen M. R. Covey cites a study conducted by Watson Wyatt that showed, “Total return to shareholders in high-trust organizations is almost three times higher than the return in low-trust organizations.” In other words, when employees feel they can trust their leaders, investors tend to reap greater returns.
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In addition to investor returns, high trust organizations are good for leaders, team members, and even customers. I depict this relationship in the formula:
High TRUST = Happy Employees = Happy Customers =
Happy Shareholders = Happy Leaders
In support of my formula, Neil Davey, the managing editor of mycustomer.com recently cited David Ulrich’s research on the value chain of trusting and engaging employees. David Ulrich is a professor of business at the Ross School of Business at Michigan. Neil cites David’s research noting that it demonstrates, “For every 10% increase in employee engagement levels, a company’s customer service levels go up by 5%, and profits by 2%.”
By contrast, employee distrust, disengagement, and neglect for development create the environment for most customer complaints. Neil notes, “A recent survey of 3,000 consumers by the Institute of Customer Service (ICS) reveals that staff attitude and staff incompetence are rated the ‘most annoying or frustrating’ service problem, while ‘people-related issues’ account for a whopping 62% of all complaints.”
I have often said, if something doesn’t live inside an organization, it won’t be perceived outside the organization.
Key Leadership Behaviors
What do great leaders do to build the trust of those they serve? While the list is long, I will focus this blog on three key behaviors:
- Share a Vision
- Make Promises in Keeping with that Vision
- Honor Your Promises
Share a Vision
It’s hard to trust a captain without a compass or an Uber driver who is unwilling to use a map or navigation guidance. By taking the time to create and articulate your vision you offer your people navigational bearings or a sense of “true north.” The delineation of vision allows them to choose if they want to join you on the journey.
In the context of working with leaders at Mercedes-Benz and writing my book Driven to Delight – Delivering World Class Experience the Mercedes-Benz Way, I witnessed first-hand the trust-building power of crafting a vision for the desired future state. In the case of Mercedes-Benz leadership, that vision was shared both through words and in the form of a visual roadmap.
Make Promises in Keeping with that Vision
Once people know where you want to take your organization, you must commit to the steps needed to help them get there. While consulting at Mercedes-Benz, I watched this willingness to verbally commit to a course of action build incredible trust with employees and dealer partners. Then CEO, Steve Cannon, promised the following through a video known as The Standard:
“<This year> will see the introduction of the most comprehensive pledge to an extraordinary customer experience in the history of Mercedes-Benz. Every department will be mobilized. Every touchpoint in the brand will be examined and refined. Every employee in every dealership will be trained and equipped. We will begin immediately and will not rest until we are viewed as the global benchmark…”
Honor Your Promises
Nothing erodes trust more quickly than false promises. It may be better to commit to nothing than to commit and fail to act in accord with one’s commitments. In the case of Mercedes-Benz, despite many possible distractions, leaders stayed their course and provided touchpoint mapping, toolkits to activate the maps, and training for every corporate and dealership employee.
Trust, Engagement, and You
What are the trust and engagement levels of your workforce? I suspect those trust levels are impacting customer engagement and your ROI. Moreover, I believe you can drive trust in your organization through vision creation, commitments, and actions in support of those commitments. What do you think?