“Trust is an economic driver, not merely a social virtue,” said Covey, the former CEO of Covey Leadership Center. “There is a business case for trust, and you can put a value on it.”
Covey said numerous studies have calculated reduced market values and revenue trends for companies with poor scores for trust, which he said also correlate with low employee engagement and customer satisfaction.
He also cited the capital markets as an example of the importance of trust.
“Markets are based on capital, liquidity and trust,” Covey said. “If there is a shortage of either, governments can put more capital into the market to increase liquidity, but if participants don’t trust the market, money doesn’t flow.”
On a more personal scale, Covey said, a lack of trust can have profound effects on workplace relationships and productivity. He asked audience members to compare their feelings about colleagues or staff members whom they trust, and those they don’t.
A lack of trust leads directly to less effective communications, the pace of project execution, and the kinds of results a team is able to achieve.
“The difference between relationships in which there is trust and those where there isn’t are not just a difference in degree – it’s a difference in kind,” Covey said. “We know the difference because we’ve all been there, and the difference between the two is palpable.”
A Learnable Skill
For financial leaders, Covey said it’s important to foster trust within a team by following through on your stated intentions and actions, and by assuming workers are worthy of trust unless they demonstrate otherwise. A leader has to clarify expectations for the team, and give members room to work toward meeting those expectations.
“You don’t want to be Pollyannaish, but if you want to be trusted as a leader, you have to give trust,” he said. “There’s a reciprocity of trust. The primary reason employees don’t trust their managers is when managers don’t trust their employees.”
In contrast, he said, a lack of trust acts like a form of corporate tax by causing managers to waste time and effort double-checking on workers and implementing ever-stricter controls to guard against waste or fraud.
“You get more control and more accomplished in a trust-based culture than a rules-based culture,” Covey said. “You can’t come up with enough rules for people you don’t trust.”
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