Building a System of Trust: Ten Hidden Secrets of Success in Employee-Owned Companies

By Martin Staubus and Robert Porter Lynch

Part 2 of 3

working together

The great potential of employee ownership to improve business performance lies in its capacity to bring people together to work as a team toward shared success. At role-model, employee-owned companies, we see people cooperating and collaborating, contributing their best efforts and ideas toward the goal of organizational success. This highly productive style of operating is actually held together by a hidden key element: trust.

It is trust that is the foundation of all cooperative relationships, whether in business or in our personal lives. And in “creating an ownership culture,” trust is the indispensable element.

4. Build Strong Strategic Partnerships

Companies at loggerheads with their employees are not capitalizing on the value of seeing their employees as partners in their future. High trust organizations see their employees – and their customers and suppliers too – as strategic partners in the business. Here are some of the characteristics of strong partnerships:

Strategic Thinking

While making money is essential in any business, great partnerships are always looking one step ahead to find the new opportunity, to seize the moment when the winds will change, to design the future. Great leaders have a sense for timing their moves when the market is ready, not too early, but certainly not too late. They think of ways that will create a more powerful destiny.

Investment in the Future

“Pay forward” is our motto for making a commitment to our destiny. Companies that put their money where it will be needed in the long run build a foundation for growth and demonstrate to their workforce that success is the result of investing for tomorrow.

Joint Planning

People support what they help create. When people are consulted and their ideas are valued, this builds trust – and a stronger commitment to the future.

Contribute and Build on Ideas

Ideas are the fuel of the innovation engine. When someone offers an idea, reinforce a culture that encourages others to build on the idea. If everyone builds on other people’s ideas, joint-imagination light bulbs are turned on like spontaneous combustion. It’s not nearly as important who originates an idea as how many people contribute to its evolution into action.

No Evaluation or Criticism

Negativity, judgmental critiques and skepticism all contribute to a culture that discourages “creationship.” This does not mean one cannot evaluate, judge or look at something with a critical eye – these are analytic techniques. What we mean is that one must use these analytic techniques in a positive, exploratory, open and constructive manner, not in a way that places the evaluator in the superior position of critic.

No Such Thing as Failure, Only Learning and Results

Be careful not to punish failed attempts at creative solutions. Be sure to encourage learning from failures. Remember, high-performance teams fail more often than low-performance teams; the difference is how they learn then innovate from what they learned.

A Culture of Exploration, Discovery and Invention

Creative inquiry starts with questions. This triggers joint exploration of possibilities, releasing deep creative energies from within, resulting in more and more mutual innovation. According to a Cornell University study, “It starts with a pervasive attitude of constant improvement�.People may be happy, but nobody is satisfied....Nothing is ever truly finished – only in stages, because in the process of building and using what we create, we already see ways to make it better.�The culture, from top down, has to encourage and embrace constant questioning, exploration and experimentation.”

5. Joint Operating Principles

While values are important in the design of a trust system, they tend to be heady and philosophic, lacking a practical perspective. What’s more useful is to have the values brought down to an earthy level by letting work teams develop their own day-to-day operating principles.

“Communities are built around rules [that] may be explicit or implied, but they’re understood by everybody. They provide the glue that holds the community together. You can’t violate them without doing a tremendous amount of damage. We’d built our community around a common understanding that we’d all share whatever wealth we created. That was our bargain, and our people lived up to their end of it.”1

At the level where teams or alliances actually function, it’s essential for those who are interacting to develop a set of operating principles that guide their moment-to-moment interactions. These operating principles need not be long or legalistic; they serve as a social contract that respects and honors what each person brings to the whole. It represents the spirit of their agreement to work together. The operating principles provide direction, maintain a unified focus and help to enable the interactions to be creative.

6. Hiring, Promotion and Rewards

“Hiring and promotion is the most important thing we do to preserve our culture. We hire great people, then teach them the airline business. If you are willing to give 100 percent, the company will give you 100 percent back.” – Colleen Barrett, CEO Emeritus, Southwest Airlines 2

Southwest has a very tight hiring policy that screens out people who do not have a strong desire to co-create, engage in teams and build trust. This prevents many problems from occurring, problems due to a simple mistake the vast majority of companies make every day – hiring on the basis of expertise, neglecting the two dimensions of character and collaboration.

Companies that are not as rigorous as Southwest in making sure new hires have the right character and temperament for their culture eventually find some of the people they hired just don’t fit and must be released from employment, regardless of their competence. They just seem to lack the “collaboration gene.” Most people however, are adaptable, and with training, can learn how to function well in a collaborative and trusting environment. Hiring, promotion and retention must be weighed heavily on character, not just competence.

To be continued�

Note: Robert Porter Lynch, chairman emeritus of the Association of Strategic Professionals is one of the leading experts in the field of strategic alliances and collaborative innovation and author of the seminal books on these topics. He has led workshops for more than 25,000 senior executives and organizational managers.

1 Jack Stack, A Stake in the Outcome, p. 185
2 Colleen Barrett, Speech to NCEO Conference, April 22, 2009

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