VANISHING LEVELS OF TRUST Trust In Times Of Distress Prof. Gyanendra Kumar Kashyap (Member of Faculty, IIPM-New Delhi) reiterates the benefits that a one-point increase on the trust scale can bring to organisations |
 The chief economic advisor to the PM did not mince his words as he forthrightly put forward his view, “Much more than anything else it is a crisis of confidence…” One can only wish the corporate houses were more than forthright in accepting the truth behind the “crisis of confidence”. Be it crisis, the upsurge in Lalgarh or the subsequent failure of the “introspection meet” on the part of India’s leading opposition party, BJP; a common entity which holds the key in all these cases and a number of other similar cases is the utter absence (or lack) of ‘trust’. A recent World Economic Forum study categorically concludes that global and large domestic companies are equally distrusted to operate in the best interest of society. Thanks to the short-term greed and selfishness of leaders from all walks of life (who have failed to understand the basic fact that leadership without mutual trust is a contradiction in terms), apparently all trust is vanishing. The aftershocks of mistrust are common these days – insidious office politics which have sabotaged companies’ efficiency, national politics rife with cynicism – the reasons are galore. Be it in business, or for that matter in personal relationships; trust has often been assumed to be static, more like some semi-mystical atmosphere or social glue, while the fact remains that trust is dynamic, sophisticated and reflective. Nothing can undermine a relationship more completely than lack of trust. But what has trust got to do with the corporate world? Indeed, trust is the pivotal precondition on which real success depends and, as a matter of fact, moments of distress truly test the trust between employees and the employer. Leaders can make the maximum of the prevailing adverse conditions and involve people, thereby increasing the level of trust. The last utterance of Julius Caesar, “Et tu, Brute?” which put to rest the complex multi-dimensional dynamic feature of trust in his era has unique connotations in the present scenario. Today, there happens to be no dearth as far as the number of Bruti is concerned. The corporate misdeeds of behemoths like Enron, AIG, Satyam, etc. are suggestive of the basic problem besetting the corporate world. In all probability, the problem is simply the absence or the lack of trust. As corporate debacles unfold, one is left wondering if there is any trust between employees and management (Brutus and Julius Caesar for that matter). It is in times of such distress (when the absence of trust or even distrust makes coordination and controls all the more problematic) that corporations must sow the seeds of trust. It is commonly observed that businesses strive aggressively to establish trust with customers and quite often neglect the need to do so in their own workplaces. |
Organisations which treat employees (the internal stakeholders) as second-class citizens fail to realise the basic premise of business – employees are the ones who make business what it is. Blame it on their myopic outlook; they build an antagonistic work environment wherein loyalty, creativity and innovation are put to the altar of death. It is high time that businesses realise that trust is more than a social virtue and it serves as an economic imperative for business resilience in the global marketplace. For that matter, inter-organisational trust enhances business performance in a number of ways, viz. reducing transaction costs, investment with future returns, and continuous improvement and learning. In trying times as these, when layoffs have become the rule rather than exception (leaving behind a pool of dissatisfied employees), which organisation on earth would not like to reduce costs and maximise returns (operational efficacy as you like to term it as)? Any sane corporation would favour business resilience in times of downturn, is it not? The pertinent question then is, how does one go about it? The answer is readily available (yet lost in the bewilderment of profitability versus the absurd idea of business ethics) - restore trust; trust the abilities of the employees and, in turn, be trusted. Move away from Douglas McGregor’s Theory X to Theory Y. One needs to go beyond the traditional trust equation, which defines trust as a complex function of credibility, reliability, intimacy and self-orientation, and focus more on the ways to achieve it. It is an established fact that when employees are trusted by their managers, they are less likely to consider quitting, and they tend to be more productive than employees whose bosses find them untrustworthy. Economists such as John Helliwell have empirically proven that the greatest contributor to workplace happiness is trust. A one-point increase on the trust scale can mean the equivalent of the psychological benefits associated with a 40 per cent wage increase. In an industry notorious for low morale, Southwest Airlines presents a classic case of bestowing trust and reaping greater benefits. Herb Kelleher, the founder of Southwest has professed, “The only way that you ever get people to respond with trust and fidelity is to treat them as if you trust them. You have to give everyone the opportunity to show their best qualities.” Southwest has been successful primarily because it followed a simple principle – engage, listen, frame, envision and commit. It is a psychological chain reaction of its own kind; it obviates the use of constraints and gives that something extra, a positive motivational force which enhances X-efficiency and dynamic efficiency. On a more quantifiable parameter, when employees trust their managers, and feelings of trust are extended to co-workers, they tend to be happier, which leads to increased productivity, less absenteeism et al. Harvard Business Review (HBR) puts it as “the key to keeping your best and brightest? Make sure they trust you.” |
