Do You Know If You Are Trusted?

by Michael Maccoby

Research Technology Management ; Volume 45. No. 4. July-August, 2002. pp 59-60.

Do you know the level of trust in your organization? Do the people who work for you trust what you tell them? Do they trust each other enough to share their ideas and sensitive information? Do they trust you enough to tell you why they disagree with your ideas? Are they able to give you negative news without fear of being punished? Do they trust your company's top management to do what they've promised?

And what about your own trust? How much do you trust your colleagues and superiors? Why do you trust or distrust leaders?

The answers to these questions make a big difference to the effectiveness of any organization. Trust is a soft concept with very hard implications, determining whether we buy a product, follow a leader, share knowledge, tell it like it is, form partnerships and alliances, or invest in an enterprise. When trust breaks down, transaction costs rise, partnerships dissolve and people look out for number one. The rampant distrust in less developed countries, due to corruption and a legal system that does not enforce laws and contracts, results in stagnation and a waste of loans and grants.

A Problem for Management

However, trust has become a management problem even in some of the best companies in the United States. Recently, I met with managers of a well-known international company who confessed that they hid their real views because they did not trust top executives who they believed would punish them for questioning strategy.

Were they right to be so distrustful? I can't be sure, but a basic law of sociology is that what is believed to be true functions as though it were in fact true. In another company, where I know that the top leadership does not punish dissent, a gap survey showed the biggest gap to be "trusting information from management."

Is lack of trust becoming more of a problem in companies? Maybe not in small companies where an owner-CEO is personally trusted. But the surveys I've seen from large companies show that during the last few years, trust has been eroding at all levels of organizations. A debacle like Enron, where top management stands accused of acting dishonestly with the collusion of Andersen, their outside auditor, does not cause distrust of management in other companies, but it does reinforce fears that top managements are bending or breaking rules for their own benefit and that when the blow-up comes, the little people will suffer.

How can you raise the level of trust in your organization? Distrust starts with the executives at the top, their ethics and leadership. Enron leaders espoused values of ethics and integrity, but they did not practice them. Leaders need to lead by example, act consistently and decisively in dealing with violations of company values.

Trust is damaged when top executives get huge salaries that do not track with results. I believe the gaps between the top salaries and those below have become so large that many employees do not believe in a value of fairness and they don’t trust that top management cares about them. A large part of the blame for this belongs to passive boards of directors made up of professional board members and people dependent on the CEO who want to remain in favor with him or her. Companies need strong, knowledgeable and independent board members who have a stake in the company. Warren Buffett is a good model. Too bad he can't be cloned.

The company mentioned above, where surveyed employees didn't trust management information, boasts highly ethical leaders and has a strong board. Then what's wrong? The answer I believe is relevant for all research and technology organizations. Highly educated employees don't trust information unless they know its meaning for them. It is not enough to communicate the information with talks and memos as was done in that company; employees need to be able to question directives, and managers need to be open about their reasoning, why they have made decisions.

Frustrated Employees

A number of years ago, I was invited to visit a factory that made telecommunications equipment. Executives of this company wanted an evaluation of the factory as a potential model for the corporation. The plant manager who was very proud of his clean new plant showed me around and boasted about how he had organized work to make it more challenging. When he started to take me back to his office I asked whether I could interview some of his employees. He said: "Why would you want to do that?" I said I'd be interested in their views about their work and management. "OK," he said, "meet me when you finish." The employees turned out to be frustrated. They told me they had many ideas about improving work, cutting costs, dealing with suppliers, and so forth, but no one listened and they were turned off.

When I got back with the plant manager, he asked what I learned. I said: "I think you have a communications problem" "You got that right," he said. "I communicate all the time and they don't always get it." I said: "I meant two ways." "Of course I use two ways," he said. "I give speeches and I write memos."

Interactive Communication Needed

The plant manager's unintended humor expresses a point of view that is all too common. Managers believe they can improve communication by speaking more, publishing more, putting information on web pages and producing videotapes. However, creating trust requires interactive communication, dialogue based on values of respect and continual learning. Employees also need to trust that management will not punish mistakes or criticism but will use them as a basis for learning.

Building trust is hard, a step-by-step process. At the turn of the century, the German sociologist Max Weber wrote that capitalism prospered in America because this was a religious country. Businessmen who shared religious beliefs trusted each other. Today, it's not a matter so much of ethical individuals making deals sealed with a handshake as it is of developing ethical values practiced by employees throughout an organization, modeled by top leadership. We need both tough laws and leaders who understand the importance of trust and what it takes to nurture it.

Educating Leaders

The education of technology leaders can contribute to this understanding. A good example is a required course for electrical engineering and computer science students taught by C. Dianne Martin at George Washington University. Professor Martin believes that students should understand the basic cultural, social, legal, and ethical issues inherent in the discipline of computing. They need to develop the ability to ask serious questions about the social impact of providing products and services and to evaluate the answers. What is the impact of a product on people? Will it enhance or degrade their quality of life? The students go out into offices and observe how software solutions impact worklife.

The result of these experiences has been to teach students that ethics does not just involve obeying rules; it also has to do with developing the kind of leadership that understands how to create trust by paying attention to the human side. Do you need to do this in your organization?

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