Building a System of Trust: Ten Hidden Secrets of Success in Employee-Owned Companies
By Martin Staubus and Robert Porter Lynch
Part 3 of 3
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.
7: The Power of Metrics
You get what you measure.
Set up the metrics to reinforce your architecture of trust. In other words, what is measured should reflect the key elements of the system of trust such as achievement of goals toward the strategic vision or behaviors that reinforce honorable purpose or key decisions to choose the greater good over self-interest.
“Records are important. Every record represents an opportunity for management to compliment people, to make them feel good, to build confidence and self-esteem. Celebrate every win, even small onesï¿½ people will follow it up with another one, and another, and another. They’re solving their own problems ï¿½ [not] delegating problems up to their managers. What's important is to make sure to ï¿½.choose a goal that people can meet if they do things right.”6
8: Standards of Excellence
Performance standards are also essential to building trust. When standards fall to anything less than “high” and the lapse goes unchallenged, members of the team realize it’s okay for someone to give substantially less than 100 percent of their best effort. As soon as we believe that someone else is slacking off we either do the same or become resentful and therefore distrusting. This is the “force of gravity” that pulls things down to the level of mediocrity. It triggers two simultaneous downward spirals — first, an avalanche of distrust and disrespect and second diminished business performance, each feeding on the other.
9: Open Book Management
Open book management is a process of delivering ongoing business performance data to employees so that they can better respond and deliver what the organization needs. After all, people can’t fix problems that they are unaware of or take advantage of opportunities they aren’t privy to. But there is more to it. If management isn’t willing to share the performance data with the employees, what does that say about the level of trust in the organization? Jack Stack sums it up well: “Just by implementing a well-designed, open-book management system, companies demonstrate trust and respect, and then the educational process kicks in, transforming both the culture and the behavior of employees — not all of them, but a certain critical mass. Along the way they become extremely possessive of and deeply loyal to the company and its culture ï¿½ The numbers ï¿½ serve as the bond, the basis of trust.”7
How important is trust? Simply put: without trust, the performance potential of an employee-owned company is severely diminished because the capacity to create competitive advantage through collaborative innovation is never realized.
Shared aspirations to build and operate a great company founded on a culture of trust as we have described is the key to unlocking creative genius and synergistic teamwork among people. Southwest Airlines founder Herb Kelleher said it this way: “The intangibles are more important than the tangiblesï¿½. Someone can go out and buy airplanes from Boeing, but they can’t buy our culture, our esprit de corpsï¿½. There's no magic formula. It’s like building a giant mosaic — it takes a thousand little piecesï¿½. You have to recognize that people are still most important. How you treat them determines how they treat [customers].”
Building trust then should not be something that “just happens.” Trust manifests in its greatest glory by design not by accident. If we don't consciously build a trust-based system of operating, we spin erratically and unpredictably, handicapped in a world of distrust. Conversely, a high-trust environment spawns a massive competitive advantage, enabling teams to make rapid decisions without the need for a legal contract every time someone tries to make a decision.
The old-style command and control approach to management — issuing orders and edicts from the top and demanding rigid compliance — can’t keep up.
“When you intimidate, when you treat people badly, you lose powerï¿½ Loudmouths talk about winning through intimidation. Not only are they dead wrong, but they are promoting one of the most destructive myths in American business. The big lie is the notion that you can manage effectively by forcing people to do things they really don’t want to do.”8
We need not take the emotions out of business to create trust because trust is an emotion, as is fear. While fear causes people to withdraw, withhold, undermine and generate suspicion, trust does just the opposite. It is both the grease that makes things work smoothly and the glue that binds.
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.
6 Jack Stack, The Great Game of Business, p 47-50, A Stake in the Outcome, p 199
7 Jack Stack, A Stake in the Outcome, p 13
8 Jack Stack, The Great Game of Business, p 25, 27, 36