Why you Need to Assess Trust Capital Readiness Levels During Strategy Planning

Why you Need to Assess Trust Capital Readiness Levels During Strategy Planning

In last week’s article, I introduced the concept of trust capital, an intangible asset that accumulates goodwill credits just like a bank account.  Without enough trust capital in your organisation, people become unwilling to cooperate resulting in slow decision-making, a lack of accountability, self-interested behaviours and difficulties meeting deadlines.  

After all, it’s trust that enables different people within an organisation to consistently rely on each other.  It’s trust that enables your customers and other stakeholders to believe that you will deliver on your promises and behave responsibly. It’s trust that enables a company or brand to bounce back after a crisis. And it’s trust that enables an organisation to change and grow.

One of the problems is that during strategic development and planning, the focus is on evaluating assets such as human, financial and equipment, to assess strategic readiness.  What’s misunderstood and left out of discussions is that behind each type of capital is another, more powerful form that drives the success of each asset enabling change and growth: Trust Capital.

Trust Capital as an Economic Driver

Economically, high trust increases value.  Imperative Research found that companies that are high in trust have 2.5 times the revenue generation of low trust organisations.  While Great Places to Work Institute together with Fortune magazine discovered that high trust companies beat the average annualised returns of the American S&P 500 by a factor of three.

Trust capital provides a powerful source of sustainable, competitive advantage.  Intangible assets represent more than 80% of corporate value and are hard for competitors to imitate. Once all your competitors are using the same technology and hardware, your trust competitive advantage is really about how fast your people can innovate and deliver.

Intangible assets almost never create value on their own and must be combined with other assets. Trust capital reduces friction and stress within your people capital – so that they take risks, innovate, and collaborate – to make more intellectual property.

It’s the foundational element behind your organisational capital.  It fuels the ability of an organisation to mobilise and sustain change. It’s a precondition before teams and departments will share information, ideas, and work together on projects.  It’s also the precursor of employee engagement.

In terms of both financial and equipment capital, trust underpins that the right decisions are being made based on the collective insights of employees, to create efficient and suitable systems to achieve strategic outcomes.

More importantly, high trust capital provides organisations with a strong foundation for strategic readiness.  Of course, the higher the strategic readiness, the faster they can start generating cash.

Optimising Value Creation Processes

Typically, companies fix trust by treating symptoms, rather than the systemic underlying causes.  Often, when an organisation receives poor employee engagement results, the first action step is to fix engagement. This is approached in lots of different ways – from undertaking focus groups with employees, providing leadership training, supplying free food, undertaking team-building exercises and the list goes on.

The truth is engagement issues are only symptoms.  The real issue is not disengagement or engagement. It’s distrust. Disengagement occurs when employees feel that they are not appreciated or trusted. It’s not safe for them to be themselves. Trust doesn’t cause engagement, it’s a pre-requisite for it.  If you want engagement, you need trust first.

Furthermore, CEOs, executives, and boards believe that trust is all about the transaction process with customers, in order to boost sales.  Care and attention are given to improving how the company delivers on their brand promise and customer experience.

Yet, creating trust with customers is just one part of the equation.  The perception of a high trust organisation or brand also depends upon ethical business practices, how well the organisation plays the good corporate citizen role and most importantly, how it treats employees.  The best way to do this is to ensure all your systems and leadership behaviours are designed to manage and optimise trust.  

Here are six guiding principles to monitor and institutionalise the right trust processes and behaviours in your organisation:

1. Measure your Trust Capital Levels

The truth is you probably already have a good base level of trust with your employees and customers already. The question is: what is needed for you to turn that trust into something beneficial for the company?  It’s great if your executive team trusts each other or your marketing team – but how do you turn that into more accountability and better performance?

Often, leaders fail to connect the benefits of past (and current) trust building efforts in the organisation. They either don’t realise the valuable trust capital they have accrued or how to fully activate it.  It’s important to understand how your organisation builds trust, so you know what you’re excelling at and where there are gaps. The first step is to assess how you are building trust among customers, employees and other stakeholders. 

The good news is that we have created a complementary Unlocking your Trust Capital Potential assessment tool to help your out.

2. Getting Alignment with Trust

Once you have the preliminary trust capital results, it’s critical that the executive team all agree with the need to improve trust throughout the organisation.  Any difficulties or strengths within your company can be traced right back to the amount of trust and cohesion with the executive team.  Executives must start building trust with each other and modelling the right trust behaviours to employees. 

Good questions to consider with your management team in a structured strategy day include:

  • Where is trust a competitive advantage that we can turn into something even more effective?
  • How much trust is needed for the company to succeed?
  • How can we improve trust with each other?

Honestly, not all executives want to build trust or see the need.  This tends to be the case for those who can’t be trusted.  Undertaking a review of your trust capital levels helps executives who are on the fence on trust, to understand where trust would benefit the organisation (and helps the CEO see who might not be suited to the team).  This is an important step that cannot be missed.  Leaders drive trust and without their full endorsement, any future trust efforts will be sabotaged.

3. Develop Trust Leadership capabilities

Leaders need to learn about the elements of organisational trustworthiness to better understand how to embed elements of trustworthiness and change behaviours. Learning and developing a company trust framework helps individuals and teams understand, discuss and practise trust with each other.

Most leaders have never learnt how to build, judge and rely on trust with others.  Instead, they tend to go with past experience and intuition which can be flawed due to biases and filters.  Providing trust leadership training that helps them more easily make the right trust judgements is crucial to improving trust levels.

4. Trust Capital Readiness Conversation

Once management is in agreement that improving trust is important to the organisation and understands how it works at a comprehensive level, it is time to measure trust capital levels amongst other types of capital and how aligned it is to strategy.  This involves measuring the gap between your current trust competencies and what’s needed in the future.  When trust issues are hidden or ignored from the strategic discussion, it enables obstacles to negatively impact delivering on the customer’s value proposition.

For example, consider the realisation that organisational capital is suboptimal. During strategy discussions, it is evident that for your organisation to compete effectively the product development needs to speed up. A hidden sticking point is that you uncover key divisions to drive strategy is working in silos. Further work and planning need to be undertaken to increase trust between manufacturing, product development, marketing and sales.

Questions to discuss:

  • Do we have the right behaviours that match our new strategic needs that build trust?  
  • How can we create a reliable product development process for all stakeholders?
  • Do we have the right leaders to embed trust throughout the organisation?

5. Embedding Trust into Strategic Planning

During strategic planning,  it is important to translate the strategy into the right behaviours throughout the organisation.  This means systems and leadership behaviours are designed to manage and optimise trust. 

Choosing 2-4 trust building priorities are more than enough for companies to work on in one year.  Examples can include providing leaders with tools on how to more strategically trust their colleagues, improving trust in internal communication or between specific departments.

6. Monitor and Adjust

To truly embed trust and systemise it throughout your organisation, improve accountability by making trust a corporate governance issue.  One important role for the board is to oversee and contribute to updating the strategic value proposition and the organisation’s capacity to execute.

This involves setting performance metrics that include improving trust according to the behaviours required by the strategy.  Such metrics are ideal lead indicators that help the board determine how management is performing.  This can also include employee engagement results, specific trust assessment tools, customer satisfaction results and exit surveys all seen through a deeper lens of trust.

For too long, organisations have seen trust as an “airy-fairy” concept that cannot be properly measured and provide a serious return on investment.  The real issue is that most leaders don’t understand trust at a deep level or overlook its importance in strategic planning and thinking.  It all starts with an “inside-out” approach to trust where trustworthiness is institutionalised into the very fabric of an organisation’s architecture and behaviours.


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Marie-Claire Ross is the Founder and Chief Corporate Catalyst at Trustologie. She is a workplace sociologist, author, speaker and consultant focused on helping leaders put the right processes in place to accelerate trust during change and growth. She does this through strategic diagnostics, roundtables, workshops, coaching and consulting. Marie-Claire is also the author of the number three ranked book on Amazon, Transform your Safety Communication. She has been interviewed on “Technology Behind Business” for Sky Business News and regularly contributes articles to FM Magazine and LogiSYM on company culture. She is also a Graduate of the Company Director’s Course and is on the SME Committee for the Australian Institute of Company Directors.


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