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The Exchange Rate Of Trust: How Leaders Can Improve Their Trust IQ

Forbes Human Resources Council

Ed Manfre is a partner in Heidrick & Struggles’ Los Angeles office and a member of Heidrick Consulting.

In this era, it’s hard to scan a news article or pick up a magazine without reading about the importance of trust. But in my experience with senior executives around the world, the definition and conditions of trust can vary based on context and personal preferences.

In a sense, the definition of trust "floats" like a currency, and the job of a leader in today’s climate is to understand what it means to the people they lead in order to meet their expectations. But as critical as that conversation is, it's not enough. Ultimately, leaders must build on that understanding to shape a shared definition that informs their communications, interactions and organizational cultures.

As I speak to leaders on this topic, it's like watching someone search for their keys in a dark room—confident in eventually finding them, but not totally clear where to start. Let's dial up the dimmer switch for a moment and take a look around.

What informs the exchange rate of trust?

Broadly speaking, we can break down the two large marketplaces for trust: One is interpersonal and the other is systemic (or institutional).

Interpersonal trust is exactly as it sounds: Something like "confidence in another person and a willingness to be vulnerable with them." Systemic trust also deals with a confidence level but is targeted at a particular system's ability to deliver on expectations.

The shorthand way to think about it: Interpersonal trust is person to person and systemic trust is person (or people) to organization. It's the difference between trusting your direct supervisor with personal information versus trusting your organization's systems and processes to keep that information safe—two separate but not unrelated transactions.

This matters because I have found business leaders often conflate the two and in many cases emphasize systemic trust when it is just as important to be aware of people's experiences with individuals they work alongside. Indeed, PwC's recent global survey on trust revealed that "business leaders tend to take a broader view of trust," which creates "disconnects" between their thinking and their employees'.

Armed with that information, here are three immediate actions leaders can take to improve their trust IQ.

Lead With Your Own Awareness

First, hone your awareness of how you think and talk about trust. Are you paying attention to both dimensions? Do you emphasize one or the other? Inquire with your colleagues, employees and customers. Use this frame of reference as a platform for dialog. In these times, trust is a terrific conversation starter. It’s so personal, everyone can provide an opinion.

Assess Yourself Candidly

Second, recognizing that both dimensions matter, take stock honestly. How effective are you at developing trust with others on an interpersonal basis? Systemically, how aligned are your organizational systems with desired outcomes that customers and employees must rely on every day? Where are the gaps?

Develop Trust From The Inside Out—Starting With You

Third, strategically plan to develop both along parallel, yet interconnected paths.

On one hand, leaders should consider what kind of awareness-building and practical training their organizations can provide to help all employees—especially people supervisors—develop interpersonal trust with each other.

On the other, they can take a hard look at their business strategies and explore improvements in how systems and processes ensure the trust of employees and customers in organizational outcomes. Research by my firm, Heidrick & Struggles, found that systemic alignment is a critical success path for shaping healthy and high-performing work cultures.

Systemic Trust In Action

Let's explore an example to illustrate the point. A common desire of leaders today is to improve how sales teams collaborate to address their customers' challenges. Yet in working with leaders, I often hear that inspiring collaboration among sales employees remains a significant challenge. In these situations, it’s important to check if your incentive and reward systems are helping—or hindering—what you want to see more of.

In one case, a client leader spoke openly to employees about the need to collaborate in every communication and even sent their sales force through a day-long training on—you guessed it—collaboration. But the leader discovered that sales representatives had grown resentful because the new sales system didn’t allow them to log more than one individual as the “originator.” The originator was eligible for a larger portion of the commission. This point had been raised in meetings early on but was ignored by sales leaders, so the teams opted to forgo collaboration rather than create conflict in their paychecks. The sales teams had grown distrusting of what leaders were saying and of a sales system that wasn’t aligned with expectations. Eliminating this loophole was one small step toward restoring trust between expectations and outcomes.

As you can imagine, there are often many more similar examples where that came from. Discrepancies in trust exist in organizations today, and leaders need to be aware of that.

Jump-start your path toward an improved trust IQ by taking stock today. Remember, both the interpersonal and systemic dimensions are critical to ensure a sturdy foundation for company health and high performance.


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