TRUST. A little word, only five letters, but bearing the weighty burden of a significant meaning and an even larger implication if betrayed.
It should nestle comfortably at the heart of every relationship. Business relationships – and personal ones – can't survive without absolute trust. And if those relationships can't survive, then how can businesses?
Sadly, it appears that one third of UK employees don't trust their boss. According to a Institute of Leadership and Management (ILM) study, which examined the six factors that are fundamental to trust – ability, understanding, fairness, openness, integrity and consistency – the recession is amplifying employees' concerns and eroding trust in leaders and senior managers.
Penny De Valk, ILM's chief executive, has warned leaders that being good at their job is no longer enough. The more senior you are, the more the gap between what you say and what you do – or what you don't say or do – is amplified, she said. In recession, employees are anxious and this spotlight will be yet further intensified.
Clearly trust has to be earned and maintained. That's easier said than done but experts suggest vision and communication are key to both.
It's often assumed that in smaller businesses it is easier for employees to understand what is going on. In truth that is a fallacy. Often the entrepreneur is too busy – or think they are – to share key information with staff and trust is lost through the inability to communicate.
Lecturer Frank Martin explains that entrepreneurs always talk about the vision they have and often complain when they feel staff do not share that . But trust should be about saying it is "our" business rather than "my" business and too many entrepreneurs do not know how to achieve this.
Entrepreneurs and business owners may have selling or product development skills or may be good at communicating with customers, but not so good at internal communications, says Martin, from Stirling University. "To put it simply; no sharing of information, no collective vision, no trust."
Scott Allison, of Abica Business Telecoms, is on the board of the Entrepreneurial Exchange. For him, openness and honest communications are fundamental to earning trust. At a recent Exchange dinner focusing on the recession, everyone agreed now is the time to communicate more rather than less. "We all know that the less information employees have the more they fear, and that damages trust," said Allison
Peter Vardy learned the importance of sharing and communicating your business vision and values from watching his dad, Sir Peter Vardy, at work. He believes it's essential to do that from the moment you offer someone a job. In a recent survey of the best UK companies to work for, Peter Vardy's car dealerships – founded just three years ago – ranked right up beside Unicef and PWC.
Vardy's 250 employees felt they could make a difference, their votes on this alone earning the company the third highest rank of all 100 companies surveyed. Staff said they have faith in Vardy and confidence in the leadership skills of the senior management team, and that managers talk openly and honestly about the business.
Recruitment and induction are key, says Vardy. When you are employing someone you must explain your values and only recruit those who share them, then communicate regularly and reward people fairly.
Vardy e-mails his staff every Sunday evening, writes again at the beginning of each quarter and at the end of the year. He shares what he has been doing, how well the business is performing, singles employees out for praise and talks openly about plans for the future.
"Stick to your guns, and then people will trust you and your judgment and what you stand for," he advises.
Borders-based recruitment expert Eileen Pheasant agrees that it's important to earn trust at the outset. She highlights to both potential employers and employees that trust and understanding, expectations and agreements must be in place from the outset and that prospective employees shouldn't necessarily take the employer at face value after an interview. Researching the company and speaking to staff will reveal the truth about the business and its leader before it's too late.
Mistrust in business can be expensive, and destructive. The costs are often unseen, but lack of trust can lead to a loss of company loyalty, decreased commitment and higher employee turnover.
Distrustful employees are less productive, and mistrustful managers waste time checking on employees. It is best to reward behaviour that reflects company values and get rid of those who don't share them.
Companies should communicate often and clearly, honestly and transparently. They should have integrity in all their dealings and lead by example.
It sounds simple. Indeed, it is. When you consider the most significant relationship entrepreneurs have is with their business, it is easy to understand the importance of trust. It's the difference between business success and failure.
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