In advising leaders of companies, a big part of my work has been making the business case for trust. Most people think that trust is “nice to have” in business – that it’s a soft, social virtue. Everyone is in favor of trust, but they don’t see it as a factor that truly affects business results. The reality is that trust is a hard-edged economic driver because it always affects speed and cost, and you can measure it in terms of trust levels, trust components, and trust effects.
There are proven ways of measuring trust levels in companies. Trust indexes and surveys can rate trust on a scale of 1 to 100 or in terms of “mistrust taxes” and “trust dividends.” People are asked anonymously, “Do you trust your supervisors?” and survey results are expressed in terms of hard data. Many people see trust as a perception, but it can be shown in terms of numbers over time.
We can also measure trust in terms of its components – credibility and behavior. Credibility encompasses four dimensions – integrity, intention, capability, and results – that can all be measured. If employees don’t trust management, it could be an issue of integrity. Do they perceive a “spin” on information they’re given? Or it could be an issue of intent, where employees don’t feel that leadership cares about them as people. It could be a capability issue; leaders may not be current with what’s really happening, or they may not be growing in their competence. It might be a behavior issue, where results just don’t mesh with what people are told. The effect is the same; employees become skeptical and therefore don’t trust.
Behavior is the second component of trust. We have found 13 behaviors that build trust. These include talking straight, creating transparency, and keeping commitments. Because we can see these things happening, we can measure them. By observing behaviors, we learn about leaders, managers, and employees – the total company. Then, we can work to move the needle in the areas that these components indicate.
Another way to measure trust is by its effects. In every case, trust influences speed and cost. In any business relationship, when trust is diminished, speed goes down and cost goes up. And again, the opposite is true. High trust equals a rise in speed and a decline in cost. This concept is simple, real, and predictable – and highly measurable.
So when someone tells you that trust is “soft,” you can show them how to measure it in terms of levels, components, and effects. It’s quantifiable, and from an economic framework, you can see its expense and its dividends. Trust is always worth the investment.