High-Trust Culture, #1: It Starts with Integrity

December 23, 2013 /LinkedIn/ – Over forty years in business, I’ve been involved with more than 100 companies, done thousands of deals, and worked alongside countless leaders and team members in multiple industries. In that time, I’ve come to believe that the most important ingredient in a business’s success is, simply, trust.

Because it’s become fundamental to my view of leadership and running companies, I’m going to publish a series of posts here on LinkedIn about the value of trust: what it is, how to cultivate it, and how to protect it.

In firms where people trust their leaders and colleagues trust one another, there’s more innovation and better business outcomes. Mistrust and politics are expensive, time-consuming and dispiriting. When a company has a reputation for fair dealing, its costs drop: trust cuts the time spent second-guessing, worrying, and lawyering. Trust strengthens every part of any deal: its durability, its potential profitability, and its flexibility. Like most things, business works better when the energy spent on doubt, fear and suspicion are reduced.

Early on in my career I made a deal with a savvy and experienced investor several years my senior. As papers were being drawn up, I received a call from him. “I don’t think you meant to set things up the way you did,” he said, referring to a part of the deal that was in his favor. He proceeded to explain to me how the provision could have left my firm in a bind. He was right, and saved me from a bad mistake. From this, we went on to do over a hundred financings together over several decades. Our level of mutual trust became so great that he’d wire money before the papers were complete. Later, I had a chance to sort through some troubled assets for him to ensure that he recovered his investment capital. I didn’t need to, but I never forgot how he’d saved me as a young entrepreneur. Building genuine trust is a long-run investment.

Trust is as important for an established enterprise as for a two-person startup. When teams feel encouragement and support, rather than fear of retribution or embarrassment, they tend to take the kinds of risks that can lead to breakthroughs. In an organization where team members have earned the trust of their supervisors, they can have confidence that if they don’t nail something the first time, there will be a second. Empowered workers can sense they are trusted. For most people, the feeling of being trusted leads to an increased desire to be trustworthy. This virtuous cycle can take your team to great interdependent heights.

But in order for leaders to build and develop trust, it’s important for them to reflect on what it is, and how it works. In my view, there are ten key drivers of trust – from the way leaders display it, to the way team members develop it, and how it requires sacrifice, humility, communication, and accountability. Over this next series of posts, I’ll explore why the sum of these key elements is fundamental to building a great organization.

Trust Principle #1: It Starts with Integrity

The foundation of any high-trust organization is the integrity of its leaders. Having integrity means, among other things, that the gap between what you say you’re going to do, and what you actually do, is small. I call this a “say-do gap.” Leaders in high-trust organizations must serve as living examples of integrity and trustworthiness – and not just at the office and during business hours. Here are a few ways to think about personal integrity as a core building block of trust:

1) A business is only as trustworthy as its leaders. The people who run things must show – by their actions – the way they want business to be done, and the way they want people to be treated. Talking doesn’t cut it. Leaders must embody the spirit they want the team to adopt. People pick up on phoniness. They trust authenticity. Just as kids look to parents for an example, team members watch their leaders. So, miss an opportunity to be that example, and you miss a chance to raise the level of trust.

2) Personal integrity matters. No matter a leader’s competence, charisma, or authority, she’s either trustworthy or she’s not – in all parts of her life. Trustworthy people are trustworthy when it comes to family, friends or colleagues. Obligations to show respect, to consider the welfare of others, and to keep your word don’t end when you leave the office. Leaders who fall short with commitments to friends, family, or close associates are unlikely to establish enduring trust with colleagues, suppliers, or customers. You just can’t fake character.

3) Integrity is a habit. Leaders who strive to do the right thing under all circumstances know that being trustworthy takes effort, awareness and work. Trustworthy leaders have generally worked long and hard on their own character building. They’re often quite intentional about fixing things about themselves, about receiving feedback and about learning from it and making changes. In the same way a mechanic keeps a car in top running condition, high-trust individuals monitor and tune their behavior, always striving to do better by team members and customers alike.

Anyone wanting to build a high-trust organization must start by looking in the mirror. Personal character is foundational for interpersonal trust. And organizations in which leaders have integrity stand a much better chance of building trust from the top down, and bottom up.

By Joel Peterson

Up next: Greater respect, higher trust.

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