Three Ways to Measure Trust

May 22, 2017

 

In my last post, I discussed the need for building trust in your organization. If you need help developing trust, give me a call! I can help you develop the habits you need to begin developing trust in your workplace, with your employees, and with your peers. 

 

I think we can agree that trust is important in our professional relationships - whether developing trust between you and your employees, a client or a vendor. Trust is critical to developing business relationships. But how do you know if trust exists? How do you measure the level of trust that exists in your organization between different people, departments or external entities?

 

Unfortunately, because trust is a perception, it is often a hidden variable that is difficult to understand,

measure and improve. It doesn’t have to be that way—particularly when we understand

the economics of trust. The economics of trust simply state that trust always affects two

measurable outcomes: speed and cost. When trust goes down, speed will also go

down while cost will go up. This is a tax. When trust goes up, speed will also go up

while cost will come down. This is a dividend.

 

Every interaction, every work project, every initiative, every communication, every

strategic or tactical imperative we are trying to accomplish is affected positively or

negatively by trust. If our organization enjoys a trust dividend, then trust becomes the

great ‘performance multiplier’. If, on the other hand, we are paying a trust tax, then

everything we do takes more time, costs more money and the outcome in terms of

quality and effectiveness goes down—which ultimately impacts the customer. As

Columbia Business School Professor John Whitney says, “Mistrust doubles the cost of

doing business.” Because trust is the one thing that affects everything, it is, without

question, the most important strategic lever we can focus on. Since this is the case, it is

critical to understand the impact that trust is having on our organizations so that we can

do something about it.

 

We can measure organizational trust in 3 specific domains or categories:

 

  1. The trust level inside the organization (trust levels)

  2. The observable behaviors that create or destroy trust (trust components)

  3. The economic impact of the trust level inside the organization (trust effects)

 

1- The trust level inside the organization (trust levels): Most organizations don’t

formally measure trust. Those that do, tend to measure it in this first category but then

stop there. Nonetheless, measurement in this category can be helpful in that it creates

awareness and a starting place. While some organizations ask general ‘trust’ questions

using various methods, our analysis is that a very effective question is to ask this question to

employees at all levels of an organization: “Do you trust your boss?”

 

But to only measure trust levels and not to measure the trust components or effects is to limit

our ability to solve the problem or run with the opportunity. Usually, most people already know

when the trust is low and we don’t need an employee survey to tell us that. What’s valuable is for 

us to know why so that we can begin to behave ourselves out of a problem we may have behaved ourselves into.

 

2- The observable behaviors that create or destroy trust (trust components): When

individuals, teams and organizations live the 13 Behaviors of High Trust Leaders, trust is

created. The 4 Cores of Credibility—Integrity, Intent, Capabilities and Results—will

correspondingly increase. When the opposite of these behaviors, or the more common

‘counterfeit’ behaviors are displayed, trust erodes and the 4 Cores will decrease. Going

beyond the general and focusing on which specific ‘trust’ behaviors are strengths and

which are deficiencies is very valuable. We can then focus our training, communication,

processes, systems, etc, to strengthen the behaviors, and ultimately the Cores, that

create trust.

 

As an example of measuring observable behaviors, consider a large health care

organization: As we began to work through our Speed of Trust process, it was evident

from the data that the behaviors Practice Accountability and Create Transparency were

significantly lacking. Before going through our training process, the respondents

indicated that 26% ‘usually’ or ‘always’ Practiced Accountability. After the process, that

number went to 54%. Relative to Create Transparency, before the process this behavior

showed up 32% of the time; after the training process, 67%.

 

The process resulted in the culture seeing “Trust as a visible asset” going from 6% to

20.5% in 3 months time.

 

3- The economic impact of the trust level inside the organization (trust effects):

Wouldn’t it be great if “trust” showed up on the financial statements as either a ‘tax’ or a

‘dividend’? Organizations would then use resources to eliminate the tax or create a

larger dividend! Although a high trust or low trust culture doesn’t literally show up on

financial statements, it does show up in the following ways, which are measurable,

observable and economically relevant (all of which make a strong “business case for

trust”):

 

Tax                                                                      Dividend

Redundancy                                                        Increased Value

Bureaucracy                                                        Accelerated Growth

Politics                                                                Enhanced Innovation

Disengagement                                                   Improved Collaboration

Turnover                                                             Stronger Partnering

Churn                                                                  Better Execution

Fraud                                                                   Heightened Loyalty

 

As we become better at measuring trust, we also become better at increasing trust. As

we do this, we turn this so-called intangible into a hard-edged, economic driver, enabling

us to increase the dividends in our companies while decreasing the taxes, validating the

twin phrases, “Nothing is as fast as the speed of trust.” And, “Nothing is as profitable as

the economics of trust.”

 

Tammy Holyfield is the founder of Holyfield International, a business and personal development company.  Holyfield International works with business professionals, entrepreneurs, CEO’s, managers, leaders and individuals from all walks of life, teaching skills that are proven, practical and get results.  She is also a business and personal coach, professional speaker, author and consultant.  For information on organizational solutions or to reach her visit www.holyfieldinternational.com or call 619-431-1345. Follow Tammy on Twitter and Facebook for more insights on business and leadership. 

 

Have questions?  We would love to hear from you! Email your questions to tamholy@gmail.com

 

                   © 2000-2017 Holyfield International   P.O. Box 535   Jamestown, NC  27282

                                              619.431.1345   holyfieldinternational.com

 

 

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