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    February-2013
 
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Building Trust in Business is the Interplay of Trust, Leadership, and Collaboration

There are big warnings in the Interaction Associates’ 2011 Building Trust in Business survey.

It offers both caution signs and strategies for business leaders navigating a still-difficult economy:

Put simply, the trust of employees for management is at risk.

Employee trust in leaders is lagging and has not rebounded in the year since the 2010 survey.

With the current volatility in the economy, everyone is looking for ways to run a more efficient business. 

Yet studies have shown that the average manager lasts less than 11 months, and 70% of executives leave in less than 16 months. 

With that data, organizations can no longer rely on a few top leaders to get things done. 

They must inspire and mobilize their entire team to share in the responsibility to deliver results despite the constant turnover of management all around them.

Building Trust in Business measures key indicators for the interplay among trust, leadership, and collaboration – pointing to how high-performing companies achieve business results by emphasizing all three. With its 2011 survey of more than 150 business leaders Interaction Associates has explored for a third year what has been referred to as “the formula for success” at high-performing companies – even in today’s tough economic context.

“Our Building Trust survey has a key surprise this year around trust,” says Andy Atkins, director of research and development at Interaction Associates. “Even as employees express trust in peers by saying they share and collaborate more easily with colleagues – they remain wary and distrustful of their leaders. Employees want more transparency into decisions and more involvement in the decisions that affect them,” Atkins says.

In the 2011 survey, most respondents view their companies as gaining strength financially and solid for continued survival – with survey results indicating that employees see both leadership and collaboration as strong in their organizations.

But the implications for leaders and the critical need to build greater trust is important, as options for high performers to change jobs in a potentially stronger economy increase.

“Our 2011 Building Trust insights should be an eye-opener for leaders focused on getting stronger results in this tough economy,” said Linda Stewart, CEO of Interaction Associates.

Key Findings of the Survey

  • Leaders are faulted in the 2011 survey for not linking employee goals to overall corporate performance – people are not clear about how their work affects the organization’s success, a key demotivator for top performers.
  • Power-sharing through delegation is weak – leaders are working one or two levels below where they should; employees are not empowered to solve problems independently.
  • Risk-taking generally is not supported – creating environments where innovation can be impeded.
  • Feedback to employees is lacking – for high performers, this has been proven to be an important demotivator.

 In general, leaders are rated positively along several key dimensions in the 2011 survey:

  • Communicating mission, vision and values
  • Modeling organization values
  • Setting and communicating clear goals
  • Promoting cooperation between groups and functions
  • Acknowledging performance
  • Making sound decisions (but not in providing clear context)
  • Reflecting optimism and confidence
  • Supporting employee development

“Employees generally give their leaders low marks for management transparency, managing change, decision-making, listening to employees, and learning from mistakes,” added Stewart.

The Cost of Disengaged Employees

The survey found that 97% of the 150 companies polled were considered to be “top-down” organizations.  These proved to be unsuccessful and demonstrated the lowest levels of trust within the organization.  Disengaged employees are five times as likely to look for new jobs.

Watson Wyatt’s 2009 engagement study showed a 23% drop in engagement among top performers, and most recently, in 2010, Hewitt’s massive annual study reported the largest decline globally in employee engagement in the past 15 years.  Similarly, the Towers Watson 2010 study surveyed more than 7,000 organizations and showed that each disengaged employee costs an organization an average of $10,000 in profit annually.

Organizations with high levels of engagement (65% or greater) continue to outperform the total stock-market index and posted total shareholder returns 22% higher than average in 2010. On the other hand, companies with low engagement (45% or less) had a total shareholder return that was 28% lower than the average.

Interaction Associates defines engaged employees as those who care about their work, as differentiated from involved employees who share responsibility for overall company results.  Says Stewart:
“Low trust clearly impacts performance; going beyond engagement to involvement counters that and delivers strong results at top performing companies.  Not surprisingly, collaborative leadership strategies offer important solutions by equipping leaders with methods to actively and appropriately involve employees in decision-making and in truly collaborative work efforts.”

Successful companies can achieve greater productivity and innovation, customer and employee retention and operational efficiency by focusing on developing their trust, leadership, and collaboration, Stewart says. 

She offers these tips on how to achieve results:

Trust – People within the organization have a sense of shared commitment and responsibility.  People are acknowledged and rewarded for their work.

Leadership – Leaders effectively communicate the mission, vision and strategy of the organization.  They make sound decisions, even when the situation is ambiguous or complex. They provide focused, balanced and timely feedback to individuals and teams.

Collaboration – People are aware of, and appropriately involved in, decisions that affect them. Individuals willingly share information and resources with each other. People generally have the interpersonal and group skills needed to collaborate.

A white paper with additional details on the 2011 survey and previous years’ findings is available at http://www.interactionassociates.com.


© 2017, Information Strategies, Inc.
P.O. Box 315, Ridgefield, NJ 07657
201-242-0600