Business Insight: Bottom line for your business is to build trust
David Horsager, author of "The Trust Edge: How Top Leaders Gain Faster Results, Deeper Relationships, and a Stronger Bottom Line," says that even though we collectively no longer trust corporations, banks, government, the media, public schools nor organized religion that can change.
Why has confidence in nearly every major institution declined?
Pull out any newspaper and you'll see countless examples of how trust is violated every day. We continue to be let down, lied to and misled by leaders around us. There is low accountability and more barriers to trust than ever before rising litigation, conflicts of interest, decreasing customer loyalty, media coverage of scandals, fear, negative experiences and a desire for instant gratification. These barriers cause stress and frustration, and they ultimately lead to a lack of trust. Paradoxically, the primary focus of most trust research is about how trust is destroyed, versus how to build it up. If we're going to solve this trust crisis, we need to turn our attention to ways in which well-intentioned people can earn and maintain the trust of the people with which they do business.
How does trust factor into business dealings?
Many think trust is a "soft skill" that does not directly affect the bottom line. This simply isn't true. Consider the impact of Tiger Woods' behavior off the golf course. His breeches of trust lost him millions of dollars in just a matter of weeks. If you have a loan on your home, your mortgage payment is based on your credit score, which is essentially a trust score. The more the bank trusts you, the higher the score, the less you pay over the course of the loan. Because of a lack of trust, the Sarbanes-Oxley Act was put into place, costing companies millions of dollars in compliance costs. Working with a supplier you don't trust costs you time and stress in double-checking, creating paperwork and following-up. In fact, research from a study of 453 buyer-supplier relationships of automakers in Japan, South Korea and the U.S. found that transaction costs were five times higher with the least-trusted supplier than with the most trusted one. Trust impacts the bottom line.
What is to be done?
Trust is both tangible and measurable. Salespeople get caught up in seeking the newest sales tactic or closing technique, but without trust, they won't get in the door. A lack of trust is your biggest expense, and it doesn't matter if it is at home with your family, at work or in your community. Trust is the confident belief in a person product or organization. When a person or organization gains this trust, the time it takes to do anything goes down, along with costs, skepticism and stress. At the same time, morale, output, retention, innovation and revenue all go up. In the course of my research on the impact of trust on organizations and leaders, I not only discovered how trust impacts the bottom line but also found that there are eight key components called pillars that build the most trusted governments, brands, organizations and people of all time. A business can use this framework to solve problems, change its culture and ultimately gain "the trust edge." We have heard people say everything from "it saved our marriage" to "it tripled our sales."
What's the framework?
If you visit the Roman ruins or the synagogue in Capernaum, you will see that many parts of the structures have crumbled, but the pillars still stand. The pillars are the foundation for holding something up they are strong, solid and lasting. The eight key pillars of trust and success that I've identified are clarity, compassion, character, competency, commitment, connection, contribution and consistency. The most successful organizations and leaders have all eight pillars of trust, and they are all interconnected. At first, one might think character is most important. However, if one is not competent, I will not trust him or her. For example, I might trust you to baby-sit my kids because of your character, but I wouldn't trust you to give me a root canal because of your lack of competency. Still, there is one pillar that is the most important of them all consistency. Without it, all the other pillars will fall. Inconsistent compassion does not show that you care. Inconsistent clarity is ambiguous. Inconsistent character is no character at all. Consistency is king of the pillars of trust.
Dawn House David Horsager, author