Forget talent, skills and new processes: Trust is the new competitive advantage

Several years ago, Peter Bregman wrote an article for the Harvard Business Review about a small company called Passlogix, whose clients knew they could pick up the phone and call the CEO if ever the work wasn’t done to their expectations.

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The CEO spoke eloquently about his commitment to the company and to them, creating a personal relationship — a trust — that was echoed in conversations those clients had with each Passlogix employee. That trust was so powerful that clients were willing to invest millions in Passlogix despite its small size at the time (it has since been acquired by Oracle). “We simply don’t trust companies anymore,” Bregman concluded. “We trust people. … Trust is the new competitive advantage.”

People don’t do business with companies; they do business with people, and they are looking for that personal connection more than they ever have in the past. These relationships are built on trust and, as a leader, trust is two-fold. You need to be able to inspire it but you also need to cede it, giving your employees and colleagues the freedom to do good work, unencumbered by overly restrictive approval processes.

Trust is often assumed, or taken for granted, but it affects the quality of each interaction we have nonetheless. Warren Buffett put it like this: “Trust is like the air we breathe. When it’s present, nobody really notices. But when it’s absent, everybody notices.”

There are three key tenets to building trust in any organization, and they begin with the basics.

Be vulnerable

We often think of great leaders as strong, confident and driven by results. But those who are most capable of inspiring trust are not afraid of showing emotion – they are comfortable being vulnerable.

“There is no better way to earn a person’s trust than by putting ourselves in a position of unprotected weakness,” Patrick Lencioni wrote in “Getting Naked.” People suffer from three fears, he says: fear of losing the business, fear of being embarrassed and fear of feeling inferior. Overcoming these fears, admitting your limitations and allowing yourself to be completely vulnerable, or “naked,” is a surefire way to build everlasting, trusting relationships with clients, Lencioni believes, and the same holds true for winning the trust and respect of colleagues and subordinates. Showing vulnerability or asking for input and help gives others the freedom to do the same, which creates a culture of exploration and collaboration, and one in which employees are able to react quickly to change.

Trust is arguably the most powerful currency in today’s business; it has enabled small companies to overtake larger ones. With trust, autonomy and collaboration flourish, even in the face of incomplete data. Trust helps you work more nimbly and adapt at a moment’s notice, which can help even the largest of organizations act smaller. This is evidenced at Facebook, where everyone within the organization is entrusted with the authority to make decisions. Because CEO Mark Zuckerberg trusts his employees enough to empower them to act autonomously, Facebook is able to respond more rapidly to change than traditional large companies.

Don’t be afraid to trust in others

You also need to trust that those around you can get the job done. Giving your teams the freedom to make decisions and move forward without spending lots of time seeking approval allows your organization to solve problems more quickly. Higher levels of performance emerge. Teamwork is more prevalent, and employees are more likely to be committed to their output and the organization’s vision.

That commitment shines through to customers, who in turn are more confident putting their trust in the company. A study by Interaction Associates, a workplace performance improvement company, found that organizations that have a high level of trust among their employees are more than twice as likely to be leaders in revenue growth. With just 40 percent of employees reporting confidence in their boss or organization, investing in the creation of a high-trust workplace can set your business apart.

Surround yourself with people who inspire trust

Aside from leadership, hiring and HR practices are key components in building a strong culture of trust. To hire great people, spend less time looking for candidates with skills and experience — the ability to inspire trust is far more important than the length of their resume. Look for smarts, tenacity and a little bit of grit. If they are innately hard-working and have a long-demonstrated curiosity, you will find that you can trust them to figure out how to do the job, even if it’s in a new industry or focus area.

Once you have great people, you need to keep them, and building a culture of mutual respect and trust goes a long way toward keeping employees happy. Google, 3M and Southwest Airlines are among the companies known for doing this well. Laszlo Bock, Google’s SVP of People of Operations, wrote in “Work Rules!” that Google operates on the belief that people are fundamentally good, with leadership trusting and empowering employees to do the right thing. 3M is known for encouraging employees to spend 15 percent of their working time on their own projects, giving talented people the opportunity and resources to prove the worth of their ideas. In the airline industry, Southwest is famed for giving each employee the authority to make decisions about how to best serve the customer.

Companies that win are vulnerable, and they build high-functioning teams who not only believe in their members but also gain the trust of their clients. In short, they support their workers and get out of their way. In a time when large companies marginalize the individual in favor of multi-layered bureaucracy and value process over speed, building a strong foundation of trust will set your organization – big or small – up for success. After all, it’s not the number of employees on your payroll or the zeros at the bottom of your P&L that determine your size. It’s about how you act, and trust is the new competitive advantage.

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