The Trust Ceiling: An Upper Limit on Success

The data confirm that trust is critical to success.[1] No wonder so many firms reach out for help in this area. As a matter of common sense, leaders are getting it: without high levels of trust, we are handicapping ourselves. Indeed, the data support their hunch. Trust puts a ceiling—or upper limit—on how much success a firm will enjoy.

FCG performs Team Scorecards on intact investment teams. These scorecards include 24 well-researched factors that lead to team success. Given the nature of the questions and the quantity of data (i.e. lots), these Scorecards give us useful insights about trust, candor, debate, and many other factors, including success (defined as “achieving results”). In fact, our colleague Bryan Kozlowski and I are hard at work on a white paper digging deep into the data, but for now I want to tease out some headlines. These five factors are highly correlated with trust:

Factor Statement Correlation
I experience a high level of candor and openness on our team. .88
Conflict is addressed and resolved in a constructive way; we know how to “deal with it” and move on. .83
We have common values and norms that promote good teamwork. .83
We have a strong sense of team spirit; we feel a sense of connection. .82
We have open and productive debates. .75

For starters, every team we work with wants more candor. They want frank discussions, lively exchanges, open kimonos. Is there a correlation between trust and candor? The data (from 29 teams that filled out our Scorecard) shout, “Yes!” to the tune of a correlation coefficient of .88. For these same teams, the mean score for trust (on a 1-7 likert scale, with 7 = strongly agree) is 5.40, and the average for candor is 4.80. Here’s the clincher: no team scored candor higher than trust. None. In every case, the teams are saying, “We will NOT achieve high candor without high trust.” Trust puts a ceiling on candor.

How about conflict resolution? Another frequent request of team leaders is, “Help us resolve tension on the team.” Conflict and team spirit are correlated: .80. That makes sense: the more conflict, the lower the team morale. So, does trust correlate with conflict? Indeed: .83. And the clincher again: no team scored “resolve conflict” higher than “high level of trust.” Trust also puts a ceiling on conflict resolution.

If you are thinking, “Well, trust probably correlates with everything on a team!” Not so. There are team factors that are not heavily dependent on high trust. These factors appear largely unrelated:

Factor Statement Correlation
I have clear performance goals that measure my success on the team. .30
My work allows me to use my talents and abilities. .29
I know my role on the team and what is expected of me. .24
I feel that my work is important to reaching our firm’s goals. .09
I have the resources I need to perform my work well. .06

These results make intuitive sense. The first two factors—goals and roles—are more about clarity. Has the leader articulated them clearly? Leaders can achieve these ends without building high trust on the team. The next two factors seem more individually driven. A team member could be in a role that allows them to use their talents and contribute strongly, without experiencing a high level of trust on the team. Finally, budget constraints might limit resources but not damage trust. Or so the data suggest.

Four teams in the data base are what we call “Focus Elite” firms. These firms demonstrate strong leadership and culture and good success.[2] If we ask how do their factors “trust” and “success” compare to the other firms in the database, we can construct this table:

Team Trust Factor (mean) Success Factor (mean)
Focus Elite (4 firms) 6.6 5.9
Other firms (25 firms) 5.2 4.9

This comparison is not quite apples-to-apples. The Focus Elite data are from the leadership teams of these firms, whereas some of the remaining firms (the “25”) are functional teams. Nevertheless, the data are suggestive. (Our white paper will look at these comparisons more critically.)

The headline here is rather obvious: trust matters. A lot. That’s become conventional thinking for most leaders. But the underlying message is: teams need to move beyond acknowledging that trust is important to actually improving it. Perhaps seeing the data will motivate leaders and their teams to act. Trust is only improved through communication. Feedback is crucial. So is an honest self-assessment, a willingness to see that you might be part of the problem. On a positive note, FCG has seen many teams improve their trust scores. So, it is possible. But it takes commitment, courage, and communication.

Stay tuned for our white paper on trust. And in the meantime, you may want to read some of FCG’s prior blogs about building, repairing, and maintaining trust:

Curiously,

Jim

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[1] I am apparently the last of a dying breed that still acknowledges “data” as the plural for datum. Eventually I will give in to popular opinion and write: “the data confirms…”

[2] For more on these firms, read our white paper called, “Linking Culture to Success

 

 

Three Keys to Strong Leadership Teams

It just happens that FCG has been working with several Executive Committees (ECs) recently. The work involves helping them to come together as a highly functioning team that can effectively lead in this new era. They all have newly-added members which means that they must progress through the stages of:

  • Forming (excitement and optimism about the future)
  • Storming (reality of differing expectations, decision rights, Ego contests)
  • Norming (process of agreeing on goals, roles, structure, ground rules)
  • Performing (gelling as a highly functional team)

There is no way to bypass these predictable stages. Naïve leaders (low EQ) try to move from Forming to Performing with the rationale, “Hey, we’re all intelligent professionals, let’s just get to work.” Would an NFL coach say the same thing? “Hey, we’re all great football players, let’s go out on Sunday and win. See you then.” Not by a long shot. Roles are carefully articulated, a game plan is designed, film of the opponent is reviewed, and strong teamwork is supported.

By contrast, savvy leaders acknowledge the developmental process and roll up their sleeves. Specifically, they get three things right. They are:

  • A clear purpose and direction
  • The right team members for the EC
  • A high level of trust

Clear Purpose and Direction

Good leaders get this right on two levels. First, for the firm at large. Increasingly, investment firms are realizing that a purpose beyond “grow and make money” is needed. A recent study by SSgA and the CFA Institute called Discovering Phi (link to paper) shows in detail how purpose contributes to firm success. The paper states that the industry has been characterized by “passion without purpose.” Only 44% of investment professionals believe their leaders articulate a compelling vision of success. We used the Phi paper and many other sources to expand on this topic in our new book, Money, Meaning, and Mindsets. (PDF of book) The big idea is to combine passion and purpose to create a highly motivated work force. And to provide a clear strategy for achieving the vision of success. In this sense, good leaders answer two big questions: Why are we doing this? And How are we doing this?

Second, good leaders define the purpose for the EC. Mostly, members of an EC are the heads of various functions. Eight or fewer members is a good number to shoot for. Surprisingly though, these high-ranking professionals are not clear on the purpose of the EC. What does this committee do exactly? Many times, ECs devolve into MCs (Management Committees) which discuss tactical matters: Is the IT group up and running with the new system? How is the new product launch coming? Have we hired a new lawyer on the legal team? Little wonder that EC members often dread the meetings.

So, what is the proper role of the EC? Most successful teams do the following:

  1. Define and articulate the purpose of the firm
  2. Define and manage the culture of the firm (by example)
  3. Develop and track the strategy for the firm
  4. Communicate the above to all firm members. Provide clarity.

There are other charges as well, like talent acquisition and development, succession planning, compensation philosophy, and the like. But the four big ones listed above are foundational. When the role of the EC is carefully defined, then good leaders can wrestle with the next decision: right team members.

Right Team Members

For all the ECs that FCG works with, this has been a thorny issue. For an EC to function well, it needs both skill and chemistry. Some leaders stack their EC with investment professionals, with the logic being “we are an investment led firm.” Fine. But are the investment members of the EC good at vision, mission and strategy? Do they care about it? Or would they prefer to simply run their strategies? And what message does this send to the critical non-investment staff? Just today we spoke with a CEO who has a five-person EC, consisting of: Head of Sales, Head of Marketing, CFO, and CAO. (Chief Administrative Officer) We were surprised that only the CEO himself represented the investment functions. We asked the obvious question: Why is the CIO not on the EC?(!) The response: “He has no interest in managing people or developing strategy. He just wants to do investing.”

Alternatively, we work with an EC that has ten members and six of them are investment professionals. We know for a fact that several of the investment people are on the EC because they were asked to be by the CEO. Otherwise, they have no strong interest in the role.

So, what is the right way to form an EC? Again, back to the purpose statement for the EC. If you agree that the EC is largely charged with the four functions listed above, then a leader must think carefully about who has the skillsets—vision, strategic thinking, exemplary behavior, and communication skills. The people with these skills may not be the usual suspects, i.e. the C-suite titles. Most likely, it is a sub-set of these individuals who have the skills and, importantly, passion for the work. EC work is different from the daily functional role. FCG breaks leadership into three “hats”: self, team, and firm. Many professionals are well-suited for the first two, but not the third. It requires an ownership mindset that says, “I am now wearing the firm hat which means I am considering the success of all stakeholders. Not just my area.” Finally, a leader must build an EC that has the right chemistry among the individuals. And this brings us to the third factor, trust.

High Trust

Assuming a leader has defined the role of the EC, and pulled together team members that have the right skillsets and interest level, the question remains: do they work well together? The core of this question is: do they trust each other? Our work with teams involves carefully defining trust (with six factors) and then asking the team members to assess themselves and their team mates (1-10 scale). We then use voting devices to answer the question, “How many team members have at least one low score on the trust factors?”  Results from two ECs are given below:

The number of EC members on each team is the sum of all the votes cast, so the top chart has 9 members, the bottom chart 10. Notice that both teams indicate there are trust issues. And while the top team does have four members who indicate no trust issues, they also have a team member who has trust issues with everyone! Same for the bottom team. ECs will only perform at their best if they minimize trust issues.

So, how does a team do that? Very simply, address and resolve the issues. But here’s the sticking point. Many of us believe that our colleagues really don’t want to know about their trust issues, so we hold back for fear of insulting them. Hence, the trust clearing conversations never happen and trust remains shaky. After watching this phenomenon for several years, we finally developed a voting slide to address this fear. We ask the team members, “Would you rather know about trust issues, or remain in the dark?” In other words: do you want your colleagues to just “sit” on their concerns, or do you want feedback on them? The voting slides for the two teams above are as follows:

Not surprisingly, the team members all agree: I would rather hear about the trust issues than remain in the dark. So, here is the invitation to do the trust work. Your team members have told you, “I want the feedback.” Are you willing to give it to them?

In addition, FCG provides tools to handle these trust clearings in a skillful manner. Two critical factors are: 1) approaching the conversation in a constructive way (you are trying to help), and 2) delivering the feedback respectfully (no blaming or demeaning). Also, separating fact from story is useful. What are the unarguable facts and what is your story about them? Minimizing trust issues and building positive chemistry then is the final piece of the “Big Three.”

Developing a strong EC is no easy task. But there are clear guidelines for doing it. And in these challenging times, the need to get it right has never been greater. Hmmm, maybe that’s why many firms are reaching out for help.

Curiously yours,

JW

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FAQs on Trust

The last few LOL installments on trust have stirred up a number of good questions.[1]  I’ll share them and FCG’s responses below.

  1. Is trust a black and white issue, or are there shades of grey?

Shades of grey. Sure, there are extremes, but mostly people are in the grey area. In our work, we use a 10-point scale on five factors to measure trust.[2]  The factors are:

  • Alignment of interest (i.e. no major conflicts)
  • Benevolent concern (i.e. caring)
  • Capabilities (i.e. job competence)
  • Predictability/Integrity (i.e. consistency and words/actions lining up)
  • Frequency of communication (i.e. open communication of fairly regular basis)

Rarely does anyone get a “50” or a “0”.  In fact, the more relevant measures are the individual scores for the five factors.  Typically, a “7” or above on a given factor represents functional levels of trust.  So, someone’s overall score could be 35 and you could still say, “I trust that person.”  When an individual score is under “7”, then there is usually an issue.  For example, on the factor “capability” a score of “6” usually means, “I don’t fully trust this person’s competence to do a good job.”  FCG worked with an investment advisory firm where a partner was unwilling to turn clients over to a subordinate.  The reason was capability.  The subordinate was excellent on all other measures of trust, but the partner was not convinced that the subordinate had the skill to handle clients on his own.  In the partner’s view, more time was needed to develop the requisite skills.  Alternatively, you may decide that one of the five factors doesn’t really matter in assessing the trust of a colleague.  For example, in some situations the “frequency” of communication may not be that important.  In your mind, you’ve established the other person as very trustworthy on the first four factors, and it doesn’t matter that you rarely communicate with them.  Shades of grey is one of the most important reasons we use the five factors and a 10 point scale.  Determining why you may or may not fully trust someone is a worthwhile pursuit to solving the trust dilemma.

  1. What about when the trust issue is with your boss?

Good question.  Sometimes sticky.  This question highlights the importance of the recent Google study on their best teams.[3]  Google found that the key commonality of great teams was “psychological safety.”  This phrase means that the team members felt safe to be themselves, to show up as real and candid.  Bosses who create this trusting and safe environment have much more engaged and productive team members.  Hence, for years FCG has been working with investment leaders to create trust and safety on teams.  The Google study was a wonderful affirmation of our framework.

So, back to the question. What kind of environment has your boss created?  There are three basic levels:

  • Functional trust. If the trust level is functional, that means you score your boss pretty highly on the trust scorecard mentioned above.  There is enough safety to raise the trust issue directly.  Use the tools provided in the earlier article on repairing trust.

 

  • Dysfunctional trust. In this scenario, which is common, the boss would have one or more scores of “6” or below on the trust indicator.  For example, the boss may be very competent and genuinely caring but s/he may have a blindspot around agreements.  Perhaps they over-promise and under-deliver (an example of a lack of predictability/integrity).  And they do this on a regular basis.  It’s a pattern.  Hence, the dysfunction.  So, again, you could use the tools from the LOL on repairing trust and work through the issue with them.  Have your facts well documented and approach the conversation in a constructive way.
    Alternatively, you may assess the situation as a bit more entrenched.  The boss is basically a decent person but they have strong defenses against acknowledging any weaknesses.  They are really good at denial!  “I can understand why the behavior you describe would be troublesome, but I don’t do it!”  In this case, you might want to get a skillful third party involved.  (Lessen the career risk for you!)  Many firms have resources, like HR, that have the ability and the authority to step in and help.  You can brainstorm your situation with the third party and see if they have a suggestion for how to raise the trust issue effectively.  Often times they know the boss and his/her personality and can approach the person in a non-threatening way.  One technique that we’ve seen work is to generalize the trust issue to the team level, and then tackle it as a team.  Once the dialogue is started with the team, it may be easier for each person to take responsibility for their contribution to building/eroding trust.  If several team members also express the same issue—over-promising and under-delivering—then possibly you will break through the defenses and get the boss to see the problem.  A key to success in bringing up the issue will be using the cube methodology[4] we presented in the trust tool kit.  Leading the discussion facts will begin to remove the emotion from the discussion and give you the opportunity to present factual situations which may be blindspots for your boss.

 

  • No safety/No trust. Unfortunately, this situation exists all too frequently.  Bosses who are very insecure are prone to retaliation.  Instead of listening to the employee’s concern and then rationally dealing with it, they lash out in retaliation.  Usually, a well-intentioned effort by the employee to address trust issues turns out badly.  Unless there is strong support—say from senior management—we don’t advocate a heroic approach to “fixing” the boss.  If this is the case, you may be facing a career decision.  Ultimately, people join organizations and leave bosses.  If it becomes clear that your boss does not want to build a trusting relationship, then you may decide that you need to work for someone else in the same firm, or if that is not possible, leave the firm.  If you stay, you are consciously deciding to take part in a “villain/victim” drama.  The boss plays the school yard bully, and you play the hapless victim.  Sometimes life circumstances call for you to do this—“I need this job right now”–but commit to finding some better arrangement as soon as you can.  Or, acknowledge the nature of the boss—villain personality—and resolve to NOT sink into drama. In other words, don’t play victim. Some people’s personality type allows them to do this without taking on too much stress.  (Buddha, Dalai Lama, Mother Theresa to name a few…J)

For the bosses reading this piece, remember that psychological safety is a key characteristic of top teams. You want to create a team environment where team members feel safe raising issues and providing feedback.  If you don’t create this environment, you’ll have lower engagement, reduced productivity, and flight risk. In order to create safety, you as the boss must have sufficient confidence and security to hear feedback without getting defensive. Remember, the three big reasons we get defensive are because one of the following is threatened:  1) Security, 2) Approval, 3) Control.  Learn to moderate these needs, so you can hear feedback.  (Employees: you may want to copy this article and leave it on the boss’s desk…anonymously!)

  1. Do I have to respect someone to trust them?

Interesting.  Webster defines respect as “a feeling of deep admiration for someone or something elicited by their abilities, qualities, or achievements.”  Using this definition, no.  You don’t need to deeply admire someone to trust them.  As long as they pass the five factors, then you probably will trust them.  There is a slight nuance to this one. FCG believes that strong cultures are often built on the value of respect.  But this does not mean a deep admiration; instead it means that you will treat all people with dignity and respect, regardless of your judgments about them.  In this definition of respect, you might treat them with respect but NOT trust them.

  1. If someone violates trust can it really be reestablished?

Yes.  That’s the whole point of our previous LOL on building and maintaining trust.  If you catch trust issues early, then you can address them before they become irreversible.  FCG has found that early diagnosis and treatment works.  Unfortunately, too many people let the trust issues compound and then revel in the judgment that “I was right.  He IS untrustworthy!”  (Don’t we love to be right?)  Of course, the problem with this approach is confirmation bias.  Once we have a hypothesis that someone is untrustworthy, we look for evidence to make our case.  And we talk to people who will support it.  Trust repair goes the other direction:  confront the person directly, using the “cube”, and clean up the misunderstanding.  In FCG’s experience, only a handful of people are pathologically untrustworthy.  The rest of us are simply human and make mistakes.  So, reestablishing trust should be the norm not the exception.

 

  1. Do I have to trust someone to work with them?

I believe the intent of the question is:  Do I have to trust someone to work effectively with them?  FCG’s experience indicates yes.  A lot of mental energy is wasted when you work with untrustworthy people.  You worry about deadlines, work product, backstabbing, gossip, and a host of other petty concerns.  I can say I am blessed to work with my team members at FCG because I waste virtually NO time with these concerns.  Warren Buffett has made similar statements.  He simply won’t work with people he does not trust.  His deals are done on a handshake.

Here is the summary of key ideas concerning trust:

  1. Understand that trust is crucial to strong and sustainable performance.
  2. Monitor trust with co-workers.  (Use the scoresheet provided in the previous LOL)
  3. There is a predictable decline that occurs if trust issues are left un-treated.
  4. Deal with trust issues when they are small and “easy.”  Don’t wait until they are serious.  (Like medicine: early diagnosis and treatment)
  5. Use the cube to describe prior issues in a “clean” (i.e. non-blaming) way.
  6. Get current: let go of past issues and make agreements about future behavior.
  7. Monitor new agreements and build “new” trust over time.

Trust is core to the investment industry and to healthy functioning of teams.  Treat trust issues like kitchen fires: jump on them and fix them immediately.  Work to build a safe and trusting environment.  And keep the questions coming; we’re happy to share our experience and help where we can.

Curiously,

JW

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[1] I will restate some of the earlier blogs, but to fully understand the discussion, we recommend reading the prior two short pieces on trust: Treat Trust Issues like Kitchen Fires and Trust Repair Kit

[2] For the full version, see the Trust Scorecard in the “Trust Repair Kit” LOL. Pg. 2

[3] Click here for study link

[4] Again, for a full description see the prior blogs, but briefly “cubing” means that your statement follows this pattern: facts, story (i.e. interpretation of facts), reaction (i.e. worried, irritated, etc.), request (i.e. what do you want?)

Treat Trust Issues like Kitchen Fires

You’re in the kitchen, dinner is being prepared, and a grease fire erupts on the stove.  What do you do?

  1. Look disgusted, point a finger at the nearest person, saying, “It’s their fault.”
  2. Remain calm, find a note pad, write down, “To Do’s: put out kitchen fire.”
  3. Ignore it and continue chopping onions.
  4. Jump into action, alert everyone, put out the fire! (Note: NOT with water.)

Too many teams treat trust issues like A, B, or C above. Big mistake.  Trust is core to team effectiveness. For sure, if trust is damaged, team performance will decline.  For this reason, we suggest that you treat trust issues as you would a kitchen fire.  In other words, answer D above.  Jump into action and put it out immediately.  You know that any delay could mean a larger fire and possibly injury and severe damage to your home.

Unfortunately, too many teams ignore trust fires.  They rationalize that things will get better over time.  Time heals all wounds, right?  Wrong.  FCG has seen this mistake time and again.  Recently we worked with a senior team that wanted us to deliver a training seminar on trust with their managing directors. In the course of planning this work, we asked, “How is trust at the senior level?  That is, with YOU guys.” The response was an embarrassed silence and awkward glances.  FCG suggested that any serious training in trust has to start at the top.  The response was, “We tried that but it didn’t go so well.”  No action was taken.

Within a month of that discussion, the CEO had jumped to another firm.  Chalk up another point for “lousy succession.”  In the weeks that followed several talented professionals left the firm, and the exodus continues.  Morale is sinking.  We have countless stories like this.  And they all hinge on broken trust at the senior level.

The antidote is immediate corrective action when trust is damaged.  Again, put the fire out as soon as you spot it.  Trust Issues = Kitchen Fires.  Burn that one into your memory bank.  Same way that kids learn, Stop, Drop and Roll.

So, what are the signs that a Trust Fire has started?  John Gottman is a world renowned expert on trust and relationships.  He has studied them extensively and come up with what he calls the Four Horsemen of the Apocalypse.[1]  Here are the signs of a Trust Fire and the remedies for each:

Apocalypse Level Symptoms Remedies
1)      Criticism Attacking a colleague’s personality or character, with the intent of making them wrong.  Generalizations like: “You always” and “You never” Learn to state specific concerns and requests with “I” statements:  “When X happens, I react with Y and I want you to Z.” In other words don’t make it about them, with “You” statements.
2)      Contempt Attacking a colleague’s sense of self with the intention to insult or abuse.  Name calling, hostile humor, eye-rolling. Treat all team members with respect and appreciation.  Listen deeply and show you understand their position.  Assume good intent on their part.
3)      Defensiveness Seeing yourself as a victim, warding off a perceived attack.  Making excuses, attacking back, yes-butting, whining. Take responsibility. Get curious. What can I learn from this? Notice the stories you make up and practice letting them go.  Or testing them out.  (Are they accurate?)
4)      Stonewalling Withdrawing from the relationship as a way to avoid conflict.  Appearing neutral but actually disapproving and showing contempt.  Stony silence, avoiding the other person. Break away and take a 20 minute time-out.  Then when you are calm, return to the conversation and practice listening, respect, and appreciation.

 

Gottman has shown that the 4 levels of distrust are predictable in relationships that are heading “South.”  So, just as the kitchen fire will predictably spread and cause great damage, so will the trust fire.  Don’t make the mistake of assuming that things will “just get better.”  Unfortunately, it almost surely goes the other way.  The two parties begin to amplify their stories, showing that they are right and the other party is wrong.  They lose sight of the bigger victory—team trust—and go for the petty battle:  I’m right and you are wrong.  (Sometimes followed by, “Nah, Nah, Nah, Nah, Nah”)

The phrase “an ounce of prevention is worth a pound of intervention” is wise counsel.  When you feel the slightest trust issue emerge, jump on it immediately.  See the kitchen fire in your mind’s eye and act. It helps if the whole senior team is familiar with this language and imagery, so that any person can invoke the “kitchen fire” rule.  For example, during a routine staff meeting, one of your colleagues seems to take credit for work that you and he did together.  You feel a little irritation and have the story, “He’s trying to take all the credit for our project.”  That is a trust fire. Jump on it.  How?  Either during the meeting, or afterwards (certainly within 24 hours), respectfully bring up the incident using FCG’s cube it model:

  • Set-up – “I want to put out a possible trust fire, because I believe we are both good team members and want to succeed as a team.”
  • Facts – “In the meeting, you mentioned the work that you had done on project X. You didn’t mention that we worked on that together.”
  • Story – “My story is that our CEO now thinks you did that work on your own.”
  • Reaction –“I was a little irritated and felt like that created a small trust fire. Specifically, that I will not get credit for my contributions when we work together.”
  • Request – “My request is that we share credit fairly for work we’ve collaborated on. And that you would mention to the CEO that you forgot to state that you and I worked on it together.”

Can you see how easily it would be to let this trust fire grow?  I mean, it’s not a huge deal.  Right?  But that is the problem.  These little deals gather and fester and pretty soon it’s a big deal and you are marching South on Gottman’s scale.  Eventually, you are criticizing or blaming or stonewalling.  And then these trust issues become MUCH harder to solve.  The house is ablaze.  Often, FCG gets called in to put out these fires and despite our best efforts and tools, many are beyond repair.

So, if you are currently a member of a high performing team with high trust, then GREAT.  Use that leverage—money in the trust bank, so to speak—to maintain the high levels of trust.  Pass this note around to your team and discuss the concept and language with them, so that it becomes common practice to put out trust fires before they cause any damage.

Maintaining high trust requires courage and skill.  But nothing valuable comes easily.  Given the importance of trust, agree as a team that you will work to maintain it.  Repeat after me, “Trust Issues = Kitchen Fires.”

Curiously yours,

JW

[1] For a short, excellent video from Gottman on trust, watch this: https://www.youtube.com/watch?v=rgWnadSi91s

 

Trust: The Performance Platform

Trust is core to high performing teams. We all know this. As one wag put it: “Trust is not important to team performance, unless you want to win.” Indeed, some teams manage to perform even with low trust levels, but that’s a bit like a car traveling on four flat tires. Yes, it gets from point A to point B, but it’s a rough ride.

So, today’s LOL journal entry is a review of trust:

  1. Why is trust important to successful teamwork?
  2. What are the steps in building trust?
  3. How do you repair it? Can you?

Webster’s defines trust as: firm belief in the reliability, truth, ability, or strength of someone. The factors that lead to trusting someone have been well researched, and we’ll discuss them further below.

Trust: why it matters?

So, why do we care about trust? A fair question. In FCG’s experience, trust contributes hugely to the “workability” of a team. In short, the ability of a team to work well together. Trust enhances a team’s candor, which in turn helps to address and resolve conflicts. Candor also improves decision making, as more relevant information gets brought to the discussion. Trust improves not only the quality but the speed of decision making. Trust helps team members to stay curious and open in the face of challenges, rather than getting defensive and creating corporate “drama:” blaming, finger pointing, gossiping, and manipulating. Trust allows teams to survive the tough times. And, importantly, trust allows for continuous improvement. If I trust my co-workers, I am much more likely to give and receive useful feedback because I know their intention is good. They want to help.

Interestingly, even on teams which have low levels of trust—measured by surveys—the individual team members tell us that they want to be trustworthy. So, the paradox is: all the team members want to be trustworthy, but the team has low trust! So, how do you close that gap? What are the steps to building or re-building trust on a team?

Steps to building trust: it’s a skill

In an article called “The Decision to Trust,” author Robert Hurley shares his research into the elements that contribute—or detract—from trust. FCG uses these elements in a scorecard that measures the level of trust between two team members. The elements are as follows:

  1. Frequency of communication, or simply familiarity. Opportunities to meet with team members face-to-face on a regular basis builds familiarity and leads to greater likelihood of trust. As a first step to trust building, leaders should promote opportunities for their team members to meet and chat with each other.
  2. People tend to trust those who are similar. Similarities may include common values, membership in a defined group, and shared personality traits. In deciding how much to trust someone, people often begin by tallying up their similarities and differences. For this reason, FCG encourages firms to define their core values, so that staff members KNOW the common values and, therefore, can feel more trusting of their colleagues. In the modern workforce, where diversity is common, the core values may be the most important glue that binds team members together.
  3. Alignment of interests. This one is really important. If I feel that my team mates and I are well aligned around common purpose, values, and incentives, I am much more likely to trust them. After all, we are all trying to achieve the same thing so why wouldn’t I trust them! But leaders can create trust problems when their incentive systems pit team members against one another. Trust is much harder to establish when there is internal competition.
  4. Benevolent concern. Trust is often an issue between two people when one or both is viewed as self-centered. It is easier to trust people who care about us and look for win/win outcomes. It is harder to trust people who have win/lose frameworks and are “out for themselves.”
  5. Capability. All of the above factors mean very little if a co-worker is incompetent. I won’t feel comfortable turning a client over to a colleague who repeatedly drops the ball. In a professional sense, I will only trust colleagues who are good at their jobs.
  6. Predictable and Consistent. Team mates who are reliable are more trustworthy. Erratic behavior contributes to distrust. One of the marks of integrity is making and keeping clear agreements, that is words and actions aligning. Colleagues who say one thing and do another lack integrity. The result is distrust.

People who practice these six behaviors build strong bonds of trust with their team mates. In a perfect world, we would all busily work towards a steady increase in trust levels, until trust was absolutely flawless. But in the real world, all kinds of events and challenges arise which damage trust. Therefore, good teams are ever-vigilant around watching for trust ruptures, so they can address them quickly. FCG has worked with countless pairs of investment professionals who once had “perfect trust” for each other, but now are suspicious of the other party. John Gottman (discussed in Gladwell’s book, Blink) is an expert on human relations and has studied carefully the erosion of trust. It follows a fairly well-defined path:

  1. Defensiveness. Events occur in which I start to feel defensive around the other person. I feel my guard go up around the other person. I notice that I don’t feel comfortable being completely open and candid with this other person.
  2. Critical. At this second level I move beyond just feeling awkward or guarded to being critical of them. I find myself gossiping about them to third parties, often trying to confirm my suspicion that the person is, in fact, untrustworthy.
  3. Stonewalling. This third phase involves avoiding the person. I consciously leave them out of meetings and do not copy them on emails. I write them off.
  4. Fundamental ill-will. At this bottom level, I have determined that the person is bad and that no one should trust them. They are fundamentally flawed such that they are untrustworthy.

As I stated earlier in this piece, FCG has yet to meet a person who says, “I am pretty untrustworthy and I don’t care!” And yet, we OFTEN hear from clients that so-and-so is fundamentally untrustworthy! So, there is the “trust gap.” Everyone wants to be trustworthy, but many are viewed as completely untrustworthy by team mates. (Note: FCG’s view is that there are sociopaths who are fundamentally untrustworthy, but we’ve met very few in our client work. Nearly everyone can become trustworthy if they care to.)

Repairing and rebuilding trust: ever vigilant

Obviously, if you and your team mates enjoy high levels of trust—based on the factors listed above—then that’s wonderful. You just need to maintain it by continually addressing and resolving small issues so that they don’t fester and become big ones. Ray Dalio at Bridgewater calls this “staying in sync.” FCG calls it “cleaning up” trust issues.

But what about trust issues that have festered and grown into Gottman’s third or fourth level? (FCG calls them G3 or G4 levels.) Is there any way to fix them? The answer is yes, if the parties are willing to. Of course, the problem at G4 level is that you may really believe that the other person is fundamentally untrustworthy. They are one of those sociopaths that just can NOT be trusted. My only response to this stance is what I said earlier: FCG meets very few people who fit this description. We do meet people who are very sloppy around trust and deserve the “bad reputation” they have built. But these people are not fundamentally “evil” and are not unconcerned about being trustworthy. They’re just careless and un-conscious about their behavior. They can do better.

So, if both parties are willing to fix the trust issues, here is a reliable process for doing it. Start with this framework:

The steps are as follows:

  1. The past. Open up the door to the past. Allow each party to go back and discuss actions and attitudes that caused the trust issues. Use the Trust Scorecard described above to score the other person on a scale from 1-10. For example, “On the capability factor, I would give you a 9. You are very good at your job. However, on the benevolent concern factor, I would give you a 3. You seem to be only interested in yourself and willing to throw people under the bus.” Obviously, it helps to have a neutral third party facilitate these sessions because they can get heated. In the case I just cited, the facilitator might ask for examples: what actions constitute “throwing someone under the bus? When did that happen?” Often in these sessions, there are some significant “ah-has” and valuable insights. Remember: all people have significant blindspots. The person hurling team members under the bus may not realize that he is doing it! Or may have rationalized it—we’re all good at this skillset!—so that it didn’t seem like a big deal to him. A skillful facilitator will help the person take responsibility for his actions without embarrassing him. Also, the facilitator should remind the participants that “holding on to grudges” doesn’t serve any purpose. In these discussions, the goal is to clear out the past. Each person will surface the infractions, clear up any misunderstandings, apologize where appropriate, and then let them go. Keep exploring the past—using the scorecard–until both participants can honestly say, “ok, I better understand the past, can let it go, and start fresh.”
  2. The present. If the facilitator can get the two people to let go of the past and get “present” in the here-and-now, then there is every chance for reconciliation. The work at this stage is to discuss and make clear agreements going forward such that the old problems don’t crop up. In the case we’ve been using as an example, the facilitator could help them create a “no bus throwing” agreement, in which each party clearly understands what happened in the past and what will NOT happen in the future. All of the agreements should be written out clearly, and the facilitator should test with participants that it actionable and that they do agree to it.
  3. The future. Once the “rules of engagement” are crafted, the work then becomes monitoring each other’s behavior. The 12-step concept of “one day at a time” is very useful here. Obviously, the parties won’t trust each other just because they’ve cleared the air and made some agreements. They will have to monitor the behaviors and follow the “trust but verify” concept. FCG has used this process successfully many times. It works if the people are truly committed to being trustworthy. Fortunately, most of us are.

Oh yes, and one more thing. This process requires a lot of courage. I always appreciate each person who is willing to do this work. It’s not for sissies. You may have to look at your own behaviors that are less than pretty. But there are huge payoffs. So, don’t labor under the delusion that “what we don’t know won’t hurt us.” Yes, it will. If there are trust issues on your team, sooner or later they will bite you. So, have the courage to surface them and resolve them. It will pay big dividends.

Curiously yours,

JW

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