Prelude - A game of discovery and learning.

On Trust

August 28, 2011

According to Dr. Kurt T. Dirks, “trust is an issue, to one degree or another, in most organizations.” His research examines the effect trust has on productivity and performance in groups.Three basic conditions are needed for us to trust our leaders and each other - Competence, Character, and Caring. Dr. Dirks also identifies four  ”trust divers” that enable us to gage trustworthiness in action.

Respect – How are we being treated?

Decision Making – Are our inputs sought and welcome?

Outcomes – Are our contributions recognized?

Alignments – Are our words and actions aligned? Are our goals and outcomes aligned?

According to Dr. Dirks: “How people are treated when decisions are made matters a tremendous amount in almost any type of organization.” Established trust is critical during crisis periods when people naturally worry about their own welfare.  Dr. Dirks also examines how trust develops in temporary work groups or task forces. This is a growing trend across sectors. It’s worth noting the root of ‘trust’ is the Gothic trausti for “agreement, alliance.”

There is a notable erosion of trust in contemporary life. “Many people are unwilling to trust because of their life experiences. In many workplaces, people are taught to mistrust as they are repeatedly misinformed and misled.” This is mirrored more widely given the erosion of public trust in financial and business institutions globally.

In 2009, the Arthur W. Page Society and Business Roundtable Institute for Corporate Ethics conducted research and conferences to address the ‘crisis’ of public trust in business. The resulting reports underscored how “a lack of trust has weakened the world financial system”. A new dialogue is called for “as trust becomes increasingly crucial to business and society in the twenty-first century.”

Trust within an organization, or its lack, directly impacts on the financial bottom line. In one study in the hotel industry, this amounted to a 13% difference in profitability between those with it and those without. Trust is essential for innovation.  “It “plays a key role in bringing individuals together to create value that no one person could create on her own …A study conducted among the business units of a large multinational electronics company showed that trust among particular units led to greater resource exchange and combination—i.e. sharing of information or product ideas; use of another unit’s products and services; or undertaking joint projects. In turn, this higher level of resource exchange created additional value for the firm ‘through a significant positive effect on product innovations’.” The report also underscores that the stakeholder model is “one of the most adaptive models we have for understanding mutuality of relationships.”

Schools and organizations can help foster  empowering, team-oriented environments through trust building and team building activities.