The High Cost of Low Trust Cultures

by Employers Council HR

Featured,  Hot Topics,  Organizational Development

“Trust is like the air we breathe. When it’s present, nobody really notices. But when it’s absent, everybody notices.” – Warren Buffett

Many consider trust to be an intangible asset, but research suggests it directly correlates to your bottom line, your long term competitive advantage and sustainability, and your capacity for organizational execution. While difficult to measure, it is worthy of consideration, particularly when you contemplate the following hard costs of low trust in the workplace:

  • Emotional detachment, leading to lower engagement or disengagement;
  • Tardiness and absenteeism;
  • Higher employee turnover in excess of industry standards;
  • Re-work or duplicate work;
  • Lost sales, clients, and customers;
  • Excessive communication justifying errors or mistakes;
  • Disinterest in the success of the organization;
  • A merely transactional relationship with the employer;
  • Minimal motion needed to stay employed; and
  • Annoyance that can become anger, increasing the potential for destructive or sabotaging behavior to equipment or products; destructive rumors; theft; and fraud or unethical activities.

Early warning signs of a low trust culture are easy to spot and tend to show up in three ways:

  • Redundancy: Duplicative layers of management, overlapping control measures, low span of control, excessive organizational hierarchy, and “control and monitor” behaviors;
  • Compliance: Cumbersome and restrictive rules, regulations, bureaucracy, policies, procedures, and processes; and
  • Politics: Divisive splintering of relationships, creating factions that result in wasted time, energy, talent and money.

By contrast, high trust cultures are characterized by people who supervise themselves according to an agreement around what is expected. There is a broad span of control, people are energized, empowered, committed, motivated, innovative, and collaborative. What best characterizes your organization?

Establishing, cultivating, building, and restoring trust is a learnable skill and the desire to have a high trust culture is a deliberate choice. Here are some questions to be asking:

  • In what ways does your organization extend trust to its employees?
  • In what ways does your organization convey distrust (both intentionally or unintentionally) of its employees? In answering this question, look to structure, policies, processes, procedures, systems, strategy, and culture.
  • What in your systems and structure might be rewarding low trust behaviors, both formally and informally?
  • If your company could do only one thing to build or rebuild a culture of trust, what would it be?

Holding on to the belief that employees cannot be trusted has an exceptionally high cost to your company’s profitability and productivity. One example of a low trust culture is where tools are locked up because employees might steal them, but now you have people who can’t efficiently and effectively perform their work duties because they cannot access the necessary tools. The underlying driver is fear, which in turn drives mistrust. A climate of mistrust creates and encourages untrustworthy employees. If you want a culture of high trust and trustworthy employees, unlock the cabinets! Taking the risk to trust can transform culture, and just as mistrust is contagious, so is trust!

For hard data on the cost of low trust cultures, check out this article by Stephen Covey and this article by Brianna Bigelow East. Also, consider taking this interesting quiz regarding “The Hard Costs of Low Trust.”

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Employers Council HR