Jeff Rosenthal is Co-CEO of ProjectNext Leadership, a consulting firm focused on developing leaders and successors for high impact roles.
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It’s no secret that trust is a key ingredient for many aspects of business success, from external connections with customers to healthy internal relationships that create a culture of innovation. We know that consumer/customer trust in companies has a huge bearing on financial performance. In 2022, PwC research showed that organizations with strong consumer trust have 31% higher average profits and a 21% higher level of return on assets.
Employee trust in leadership is a similarly dramatic force. Harvard Business Review research from 2019 showed organizations where employees possess high trust have 50% higher productivity levels and 76% higher engagement levels. These are not small differences.
Trust consistently emerges as a critical component for getting things done successfully, and now we're seeing an increasing focus on another kind of trust: how leaders work together within organizations. This is lateral trust, and its development is becoming integral for business success.
Three Key Questions For Lateral Trust
At ProjectNext Leadership, our own research confirms that senior leaders are now spending as much time leading laterally as they do vertically. Lateral agility—what we also call “leading across"—is a leader's ability to collaborate effectively with other departments or teams when no direct-report relationships exist. It requires adapting to an enterprise-first mindset, which requires humility, greater emotional intelligence and appreciation of everyone's expertise. We hear many clients talking about trust being at the core of how leaders operate effectively to solve problems, make decisions and spur innovation cross-functionally.
When clients are establishing lateral working relationships, we often see three questions drive this process:
1. "Do I trust your motivation?" When building lateral trust, are leaders coming into it thinking about their own success, or are they truly looking to create a win for all parties involved? If leaders are able to establish a sense of accountability for the collective "we,” rather than the “I” or “my team,” colleagues feel motivated to find the right ways to work together effectively.
2. "Do I trust your understanding?" Do your leaders take the time to understand the objectives and constraints of their peers, or do they focus only on their own goals? At the core of lateral trust are curiosity and empathy; leaders should be able to put themselves in the shoes of their colleagues. After all, if they don't understand what success looks like for everyone, how can they build the confidence to work toward solutions that are mutually beneficial?
3. "Do I trust your openness?" Our research indicates that the word “influence” feels outdated or, at least, needs to be redefined. Why? Because it implies “I’m going to convince you that my way is right” rather than creating a solution together. Leaders who exhibit flexibility, show a willingness to change and actively seek out new perspectives or ideas are those who engage in true co-creation. From our research, the most effective lateral problem-solving approach involves participants bringing initial ideas, then having the willingness to be open-minded, compromise and build a solution together.
In the past, we’ve often thought of trust in the context of a leader’s direct team, but it's taking on a wider scope these days. The more senior a leader becomes, the greater number of interactions they must manage for their own success. As responsibilities increase, leaders need to develop lateral agility to connect with all colleagues whose interdependency impacts organizational success. Knowing this, it’s time we put a bigger focus on the skills that lead to lateral trust. Companies that possess generous levels of this trust can set themselves to execute, innovate and grow faster than their competitors.
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