The Trustworthy Leader

Leveraging the Power of Trust to Transform Your Organization

Amy Lyman, Hal Adler

• Publisher: Jossey-Bass
• Year: 2011
• ISBN:
  9781118157671
• Edition: 1
• Topic: Business
• Subtopic: Leadership
• Index: Business

How leaders from the best workplaces build trust in their organizations

The Trustworthy Leader reveals the benefits organizations enjoy when trustworthy behavior is practiced consistently by their leaders. Drawing from examples from the Best Companies to Work For, Lyman, cofounder of Great Place to Work Institute, explains that being trustworthy means that leaders' behaviors are rooted in their commitment to the value of trust and not simply in an imitation of the practices of others. She identifies six elements that reflect a leader's trustworthiness: honor, inclusion, engaging followers, sharing information, developing others, and moving through uncertainty to pursue opportunities.

• Features leaders from great companies such as REI, Wegman's, R.W. Baird, TDIndustries, and more
• Based on more than 20 years of rigorous research into the value of trust in companies large and small and its link to financial and organizational performance
• Published to coincide with the release of the FORTUNE 100 Best Companies to Work For 2012 list

This book offers a key to developing high levels of trust, a critical endeavor in an age when seemingly every day a story of a leader's lapse in ethical behavior makes headlines.

CHAPTER ONE

THE TRUSTWORTHY LEADER

Some of the more poignant moments in my consulting career have come during discussions with leaders and their “people” person (often a representative from Human Resources) as they seek help motivating employees to take on the next challenge. The difficult part of these discussions comes when leaders ask me how to fit time for people issues into their busy schedules. They then await the golden answer they hope I can provide that will help them to convince staff that they care.

One particularly memorable discussion took place after I had surveyed the employees at a large insurance company about their workplace experience. The CEO, vice president of Human Resources, and I were meeting briefly prior to my presentation of the survey results to the entire senior management team. The VP of HR, sitting to my right, leaned into the conversation and asked me what the CEO, on my left—a very busy man—could do if he had only five minutes each day to devote to people issues.

I was a bit stunned by the question. Five minutes is barely enough time to greet a single employee and ask him how he’s doing, let alone show support for people’s growth and development, convey your vision as a leader, and provide people with a sense of direction. And this company had over ten thousand employees!

I turned to the CEO on my left and addressed him directly. “Leading is a full-time job,” I said. “If you want to be successful as a leader, you need to devote all of your time to people issues. Strategy, product development, customer service, innovation—they all depend on people. Five minutes a day—or even five minutes an hour—is the wrong approach.”

Initially taken aback by my directness, the CEO was now paying attention. He also heard in my response the resolution to a dilemma he experienced. He said he was not comfortable switching on his usual care and concern for people at certain times and then switching it off when he considered strategic decisions, business partnerships, financial opportunities, or marketing proposals. Yet all of his management training, and many of his peers, had encouraged him to do just that—respond to people issues when asked, yet focus his intellectual talents on the mechanics of the specific tasks in front of him.

I reminded him that people were integral to his ability to be successful in every single arena within his organization and that if he did not include consideration of people in every aspect of his work, then he was doing himself and the organization a great disservice.

He paused for a moment, mulling this over before responding. What I had said made sense, yet no one had ever said it so directly. He understood himself and his role as a leader well enough to know that clarity and consistency in actions and words is important for successful leadership. He had also previewed the employee survey report and knew that people had raised concerns about actions they felt were inconsistent with his stated goal of creating a great workplace. The question now was what to do about it.

The answer was both simple and complex: this leader needed to focus on being trustworthy.

WHAT IT MEANS TO BE TRUSTWORTHY

For the past twenty years I have listened to people talk about the importance of trust in their workplace relationships and of the devas­tating effects of its absence on productivity, job satisfaction, and commitment.

In 1991, I cofounded the Great Place to Work Institute, best known for its role in researching and selecting the “100 Best Companies to Work For” feature that appears each year in Fortune magazine. Prior to the lists in Fortune, the Institute was known for its work promoting the concept that great workplaces could be created by focusing on the development of trust between leaders/managers and employees. A book about the 100 Best Companies was published in 1984,¹ and initial financial analysis comparing the performance of the Best Companies to their industry peers showed strong evidence that the 100 Best were better financial performers as well as better workplaces. A related book, A Great Place to Work, published in 1988,² laid out the analytical framework for creating great workplaces. It is from this book that the initial ideas for the Institute were developed.

People began paying attention to the possibility of creating great workplaces, and the Institute’s work had a ready audience. I spent much of my time developing the consulting and advising services that helped leaders understand why trust is so important to organization success, and also how they themselves could become more trustworthy. Leaders saw that they could become stronger leaders by being trustworthy and could also increase the likelihood of success for their organizations.

During the early years at the Institute, my colleagues and I developed and used an employee survey as our primary data source—a tool designed to ascertain the quality of relationships between employees and their leaders and managers. That survey, now called the Trust Index, is used around the world by the Great Place to Work Institute and international affiliates that produce Best Company lists for their markets. To develop and refine the survey, we used the first-person employee interviews conducted for the original 100 Best Companies to Work For book and the research for A Great Place to Work.

We had the luxury of time to develop the Trust Index, so we were able to study the interview transcripts in great detail. We noted that three elements came up again and again in the words of employees when they described why they trusted their managers and leaders: credibility, respect, and fairness. Therefore, our first goal in developing the survey tool was to accurately capture employees’ perceptions of the credibility of their leaders, the respect with which they felt treated, and their experience of the fairness of workplace policies and practices. To this day, when asked why their workplace is great, employees who have never seen a description of the Great Place to Work model or heard the Institute’s definition of a great workplace—one where “you trust the people you work for, have pride in what you do, and enjoy the people you work with”—speak of the power of trust. And when employees are asked to tell stories about how they experience trust, as they reflect on the behavior of their leaders, the words credible, respectful, and fair come up all the time.

WHAT IS TRUST?

We use the word trust to explain a bond that is created between and among people. Trust is an emotional and a cerebral connection, characterized by an ability to rely on someone to act in ways that will be of benefit to one’s own health and well-being. Trust often comes into play during challenging times, when stress, miscommunication, or poorly conceived actions place a strain on people’s bonds. Trust is what helps people to have faith that they can work through the challenges and arrive at a positive outcome. Trust-based relationships are also deeply enjoyable, as they bring comfort and stability, with the experience of trust providing support to the relationship and contributing to an individual’s sense of security and belonging.

Trust develops through interaction. An interaction can be a conversation between two people, a look that passes between a father and child, or collective hard work among a group of people rebuilding a home. These actions convey a willingness on the part of one person to do something that is of benefit to another’s health and well-being. The more the actions are repeated, the deeper the connection developed, and the greater the likelihood of a long-term trust relationship.

In the workplace, trust can infuse every element of a leader’s actions. Even if a leader isn’t obviously engaging in a trust-building action—if, say, she’s just going down the hallway to refill her coffee cup—her interactions with those she passes en route reflect on her trustworthiness. Does she make eye contact? Say anything? How do the people she acknowledges respond? With a sharp focus on the details, even a minor coffee break can be seen as fertile ground for trust-building.

And a sharp focus is exactly what has been used at the Great Place to Work Institute to study people’s experience of trust in the workplace. Actions that build trust affirm a person’s credibility, convey respect to others, and embody a spirit of fairness in their implementation. Everyone is capable of acting in ways that will lead to the creation of trust. Everyone. When we act in ways that convey our credibility, show respect to others, and affirm a commitment to fairness, we are showing others that we are trustworthy.

As commonsensical as all of this seems, there are still many leaders who struggle to develop trust-based relationships with their employees. Why?

THE MYTH OF THE SUCCESSFUL LEADER

For many years a stereotyped notion has reigned of the successful leader. This leader is portrayed as all-knowing, a bit greedy, a tough decision maker, and consumed with work. These are not generally the characteristics you’d want in a friend, yet these qualities have often been cited—and exaggerated—as prerequisites for business success. In this definition of the successful leader, “success” is equated with making considerable sums of money—for oneself and, ideally, for the company—and often living with the trappings of conspicuous consumption and excessive display. People who follow this leadership model are actually less successful in the eyes of their employees, who see the great distance between themselves and the person leading the enterprise and often feel that the leader’s excesses come at their expense. This mythical leader is also less likely to create an organization that will be successful in the marketplace.

If the only goal of a business leader is to create a financially successful company, then he or she will want to be a Trustworthy Leader. Although Trustworthy Leaders do not choose to be trustworthy for the sole purpose of making more money, it is one of the notable benefits of building trust. My research and that of others confirms this. From 1998 through 2011, the publicly traded 100 Best Companies, as a group and over time, have outperformed the Russell 3000 and S&P 500, posting annualized returns of 11.06 percent versus 4.26 percent and 3.83 percent, respectively.³ The primary factor that gets a company to be selected for the 100 Best Companies list is the level of trust between employees and management. As you’ll see again and again throughout this book, Trustworthy Leaders lead fiscally sound companies, weather economic storms while their contemporaries struggle, attract and keep the best talent, and encourage high levels of innovation and problem solving.

Trustworthy Leaders are so successful because they do see beyond the goal of dollar signs. They understand the complexity of bringing together a group of human beings to pursue extraordinary accom­plishments. They are masters at guiding, directing, encouraging, and challenging people to contribute their best, in part because they ask the same of themselves. Trustworthy Leaders know that their relationships with others throughout the organization are key to their success—however success is measured.

Trustworthy Leaders are also independent-minded enough to think for themselves and not just follow the pack. They choose to create their own leadership style and approach—one that is inclusive and respectful rather than one that is selfish and mercenary. At their core, Trustworthy Leaders believe in the inherent value and dignity of people—all people—a belief that influences their choices and guides their actions. Most importantly, they understand that great leadership is a way of being, not something that can be switched on and off.

This new model that I was developing of the Trustworthy Leader—from the five-minute people person, through my deep understanding of the power of trust, to a challenge to the popular myth of leadership success—called for a compelling framework. As I considered what I was learning, I kept going back to the transcripts of my conversations with Trustworthy Leaders. I looked for the pattern in their experiences, the key moments when they understood the power of trust. I pushed myself to understand what had happened to them that set them on the path to being trustworthy. The pattern that emerged, illustrating the shared path of leaders who are widely considered trustworthy, is one in which aspirations are high, consequences are acknowledged, responsibility is accepted, and leaders move forward. I call this path the Virtuous Circle of Trustworthy Leadership.

THE VIRTUOUS CIRCLE

Usually we think of a path as a straight line from one point to another. Yet for most of us, our growth and development never moves forward in a straight line. There are always shifts and changes, times when things seem to speed up and other times when we feel stuck. There are lessons we circle back to even as we move forward. The Trustworthy Leader’s path is similar, always moving forward, yet—as in our own lives—each step that leads to the next is connected to the previous one as well, creating a circular path of growth and learning. And as we complete one circle with some new experience, something to put into practice, we begin again, only stronger. The next round through the Virtuous Circle both reinforces and strengthens the lessons learned from the previous round.

There are six distinct elements in a Trustworthy Leader’s Virtuous Circle that combine to both create and reflect his or her trustworthiness:

• Honor
• Inclusion
• Value and engage followers
• Sharing information
• Developing others
• Movement through uncertainty to pursue opportunities

Each of these elements both influences how a leader acts and reflects how that person thinks about being a leader. Thinking about what you are doing and the impacts that your actions have on others is a singular requirement of effective, Trustworthy Leadership.

The honor felt by Trustworthy Leaders is continuous and greatly influences their actions. Many of us feel honored when we receive an award or recognition for a special accomplishment or a contribution we’ve made to the good of others. Trustworthy Leaders extend this sense of being honored to their roles as leaders, expressing gratitude for being asked to lead and acknowledging the responsibility that comes with it.

The inclusion of all people in an organization’s community is a hallmark of Trustworthy Leadership. A leader’s active involvement in promoting the inclusion of every person into the larger community of the organization is critical. One of the most important ways that leaders accomplish this is by building bridges of trust that extend beyond the boundaries of individual departments or divisions. This is of great benefit to the enterprise that wants people across the entire organization to work well together.

The ability to value and actively engage followers is a further sign of leadership excellence. Great, Trustworthy Leaders engage those who are following them by paying attention to them and learning from them. They acknowledge people’s choice to follow, seek to support their contributions, and connect wit...