|B I G P I C T U R E
||ESSAYS AND IDEAS LEADING BUSINESS STRATEGY IN THE
politics as in affairs of the heart, building trust remains that most elusive
ideal. But creating it in your workplace could be your greatest competitive
Ciancutti, M.D. and Thomas L. Steding, Ph.D.
We are a
society in search of trust. The less we find itin government, in
business, in personal interactionsthe more precious it becomes. An
organization in which people earn one another's trust, and which commands trust
from the public, has a powerful competitive advantage. It can retain the best
people, inspire customer loyalty, reach out successfully to new markets, and
provide more innovative products and services.
people don't realize is that you can intentionally create trust in your
organization. You can drive a culture of earned trust that includes everyone in
the company and harvests, at virtually no additional cost, opportunities to
increase growth, profit, productivity, and job satisfaction.
We use the
term Leadership Organization to mean one in which leadership consciously and
intentionally creates a culture of earned trust. The alternative is a Random
Organization, one that relies on arbitrary and accidental habits of interaction
within its work force. Random Organizations are almost always fear-based,
reactive, obstacle-oriented, and influenced by a "Them vs. Us" mind-set with
all its negative financial, personal, and productivity consequences. With
Internet hyperdrive in full gear, today's fast-paced business environment
demands a new approach to leadership that avoids these common pitfalls of
IBM was one
of the first major corporations to learn the value of earned trust. Over the
years of its market dominance, it inadvertently developed a culture that
punished sound risk that failed. People became very carefulmore careful
than they were creative. Some played defense and watched their backs. A
bureaucracy grew up, partly based on a sense of entitlement. Innovation and
mutual trust suffered. By the late 1980s, some people were as concerned with
looking good to top management as they were with market performance. The
result: IBM nearly failed. When it examined its culture, IBM discovered how
much damage risk aversion had caused. Beginning in 1991, IBM developed risk
guidelines that enhanced trust, and executed one of the most dramatic
turnarounds in business history.
The new competitive
markets demand that we keep our competitive edge. But to the business manager
scrambling to keep up, Adam Smith's "invisible hand" often feels more like a
clenched fist jammed into the small of the back. One after another, management
theories emerge and capture the collective imagination of the market, only to
fade from sight, and our business bookcases read like a fashion parade passing
are stuck. We have been preoccupied for almost a century with the notion of
organization as machine. This model deals with what can be observed,
measured, manipulated, structured, and modified. Early fascination with time
studiesorganizations as clocks and people as cogsgave way to
business process re-engineering and time-based competition, both essentially
mechanistic perspectives on competitive advantage. While each new trend
provides some measure of temporary advantage, its incremental return from
additional investment eventually vanishes as it becomes established best
practice. Further, and most important, these methodologies can be copied
easily, and therefore cannot represent a sustaining competitive
language reflects the idea of organization-as-machine. We speak of systems,
hierarchies, structures, processes, interfaces, and cycles. We step on the gas,
take off like a rocket, smash one out of the park, turn up the heat, restart
the program, hit the wall. We seem trapped in a mind-set of externals,
pursuing the management program du jour to try to squeeze a little more blood
out of something that looks increasingly like a turnip.
thinking looks for competitive advantage in the realm of the human
business thinking looks for competitive advantage in the realm of the human
spirit. As we step into this territory, we begin to deal in meaning, trust,
inspiration, depth, paradox, transcendence, and connectionas well as with
their dark-side counterparts: doubt, fear, conflict, isolation, and just plain
feeling stuck. The search for competitive advantage is shifting from the
exterior to the interior, and departing radically from the metaphor of
organization-as-machine. It is looking into the far more spacious realm of the
collective team mind for a new kind of resource.
concept under discussion is social capital, the emotional or
psychological equivalent of financial capital. Social capital can take the form
of trust, acknowledgement, appreciation, or the knowledge that in supporting
you, colleagues are doing something that is consistent with their personal
Fukuyama, in his Trust: The Social Virtues and the Creation of
Prosperity (Free Press), examined the differences in economic prosperity
among different cultures and concluded: "A nation's well-being, as well as its
ability to compete, is conditioned by a single, pervasive cultural
characteristic: the level of trust inherent in the society." In our current
global struggle for economic predominance, he believes that "social capital
represented by trust will be as important as physical capital."
Putnam, author of The Prosperous Community: Social Capital and Public
Life, builds on the notion of social capital as "features of social
organization, such as networks, norms, and trust that facilitate coordination
and cooperation for mutual benefit." He traces success to an abundance or lack
of social capital.
principles apply in individual businesses. Trust represents enormous social
capital with customers. Further, we know that the social capital of trust works
within organizations to create connections and cohesion among team
members, which leads to greater productivity.
Why trust works
principle behind the Leadership Organization is that people have an innate,
passionate desire to contribute. Opposing this urge to contribute is
fearfear of rejection, failure, loss, retribution, or embarrassment.
Sometimes we hang in the balance, afraid to go this way or that, standing at
the end of a diving board, not wanting to jump and not wanting to climb back
down. While people's passion to contribute may not be obvious at first glance,
below the surface almost everyone wants to be productive, to know that their
organization is a better place because of what they do each day. Fundamentally,
motivation is almost never the problem.
arises when people think that their opportunity to contribute has been
thwarted. What they want most is no longer available to them, or so they think,
and they withdraw, become defensive, gossip, cause trouble, or start just going
through the motions at work.
have a great idea for a product and want to take it to the board, but you are
afraid some board members might object to it. You deliberate about when, where,
or even if you should bring it up. Eventually, you go ahead with the
presentation. They don't seem very interested. They interrupt your
presentation, and you can tell by their questions that they're not really
listening. It's not even that they disagree with you; they just don't seem to
be engaged. How would you react? Or suppose you present your idea to the board,
and they are completely opposed to it. How would you react then? Or suppose
they love the idea! You are now the organization's new genius, the rising star
who can do no wrong.
responses to these different outcomes may range from frustration to elation,
but your reaction will always be emotionaland it will be based on how
well your desire to contribute, and the risk you took to make that
contribution, seemed to be received. Our passion to contribute is always
delicately balanced against our instinct to protect ourselvesand there is
an important emotional consequence, positive or negative, each time we take the
risk to contribute and be productive.
Feeding the passion to
trust tips the balance between the urge to contribute and fear. When we work in
an environment of trust, and one in which leadership models trust, we feel
reinforced, validated, and supported, even when our ideas are not accepted. We
are far more likely to plunge in, to be creative and generous with our talents.
An organizational culture of trust makes us want to support and
contribute to the company.
In a Random
Organization, on the other hand, the ability to contribute is hit-or-miss.
Sometimes people can contribute and feel great. Other times, they wish they'd
never opened their mouths. Nobody really knows how it will turn out, because
nobody is in charge of setting an emotional direction for the organization.
There is no one to tip the balance in favor of contribution by consciously
creating an environment of trust and respect.
recruited from her position as senior vice president of sales for a cable TV
station, where she was a seasoned and celebrated success, to a similar position
in an emerging Internet company. Everyone assumed she knew exactly how to build
a sales force in this new medium, but she did not. In those days, everyone in
Internet sales was a pioneer. This was Carmen's dilemma: Should she admit she
didn't know what to do and ask for brainstorming help from her fellow
executives, or should she continue to bluff and tough it out?
rational answer is obvious, but the emotional environment could make it
difficult for her to execute. If she could ask for help without fear of people
judging or denigrating her, Carmen could access the combined experience and
intelligence of the connected team, use them to network into other sources of
information, and certainly do a better job of building and directing her sales
The connected team
connected team combines not only the intellectual assets of the individual
participants, but also their instincts, hunches, dreams, aspirations, creative
imaginings, gut reactions, musings, and moods. When people feel free to
contribute all their resources, they create a larger network of intelligence.
In a fear-based environment, we only reveal what we feel is safe, which might
be only a small part of us, and the leader ends up trying to conduct a symphony
with one-string instruments.
of the connected team is to create a new form of superordinate intelligence,
where team intelligence grows nearly exponentially with an increasing
population. Now, the strong interplay among team members creates an upward
spiral of creativity as ideas are exchanged readily and improved
connected team is not just another management fad providing a temporary form of
competitive advantage; it is the creation of the underlying capacity of the
organization to create limitless forms of competitive advantage. It is the
generator of technique, not technique itself.
||"In a fear-based
environment, we only reveal what is safe, which is only a small part of
The business case for
Some of the
specific business advantages arising from the connected team are:
Sustainable competitive advantage. An environment rich
in trust creates an engine for innovation. There is no upper limit to the
combined intelligence and creativity of the team - and no team is just like any
other, because each team's true identity emerges in the safe environment of
mutual support. These teams can extend trust authentically to the customer,
resulting in an extraordinary level of loyalty.
Self-regulation. People at all levels of the
organization are inspired to identify and resolve open issues without
unnecessary or intrusive supervision by leadership, and to relate with one
another in a framework of trust guidelines. People become committed to
developing habits of reliability, follow-through, and clear
Efficiency. In a passionate organization that does not
consciously build on trust, everyday frustrations result in "Them vs. Us"
interactions. The business built on trust principles eliminates this energy
lost to suspicion, unresolved issues, forgotten commitments, unclear
agreements, missed deadlines, and the associated propensity toward blame,
gossip, resentment, and frustration. All of this energy then becomes available
for productive use. On the connected team, somebody always knows when a
particular issue has not been resolved, so you do not have to wait for the
customer or the marketplace to show you that you are off-track.
performance. The connected team discusses and processes ideas at every
stage, so incremental "fixes" and improvements can be made as needed. Ideas
pass through many hands and are improved at each turn, so these teams have an
unusual ability to create superior products and services.
for change. Trust-based organizations have a knack for holding opposite
conditions and points of view simultaneously. They may, for example, have
tightly structured, disciplined development processes, and yet still be able to
react quickly to changing market needs or internal situations such as mergers.
The connected team is a crucible that can stand the heat and contain its
reactions until a new synthesis is reached.
Meaning. Making trust a central principle anchors the
organization in a set of values that everyone agrees is attractive and
meaningful. People become part of something bigger than themselvesand
that results in attracting the best people, and keeping them happy and
Creating trust quickly
Trust is a
dual concept. It has both a feeling or emotional component, what
Webster's calls "assured anticipation; confident hope," and an
intellectual component. This intellectual component is based on a track
record of performance that confirms trust, or "assured reliance on another's
integrity, veracity, and justice." The active result of trust is
confidence in the honesty and reliability of the company's leadership. The
passive result is the absence of worry or suspicion.
Trust, then, is confidence, the absence of suspicion, confirmed
by track record and our ability to self-correct. Building the culture on trust
not only covers all these basesemotional and intellectual, active and
passivebut it also works quickly, which is essential for success
in the marketplace.
know that it can take up to two years to establish trust between individuals.
This is why we reserve our greatest trust for our most established
relationshipsour family, long-term friends, and social circles. But in
business, we are in a hurry. Time is of the essence. Two years includes eight
financial quarters, more than enough time to perish in the current economic
climate. We need something faster and more efficient.
Theorem I: People are more willing to trust...when principles that promote
MOST EMPLOYEES HAVE AN INNATE DESIRE TO CONTRIBUTE AND WORK
We begin to
address the issue of speed by observing a general principle.
Theorem I: People are more willing to trust, more quickly, when principles that
promote trust have been explicitly and universally adopted.
willing to continue that trust for as long as people's behavior, particularly
the behavior of key leaders, is consistent with those principles. Provisional
trust, confirmed by experience, then deepens into institutional
than waiting two years to establish trust, building earned trust through
guidelines and principles facilitates a substantial level of trust in only a
few weeks, the time it takes to develop your particular trust principles, and a
short period in which people watch others (especially the leaders) demonstrate
their adherence to it.
team is a crucible that can stand the heat and contain its reactions until a
new synthesis is reached."
Built on trust
The tool we
offer for creating a culture of earned trust is the Trust Model. The Trust
Model is an ongoing process of examining the specific areas in your
organization that must be addressed in order to build a culture of
trustthese might include growth, profitability, closure, commitment,
communication, speedy resolution, respect, and accountabilityand within
that process, creating and continuously updating your own customized set of
Trust Model guidelines.
Model guidelines are framed and modeled by leadership as unilateral promises,
and then offered to the entire organization in a systematic way for everyone's
input and buy-in. People at all levels of the organization participate in
developing and shaping them. Building your guidelines requires everybody's
involvement, contribution, and creativityand the process of drafting your
guidelines, communicating to the organization about them, earning acceptance
for them, and maintaining and evaluating your Trust Model are all part of that
trust-building. The Trust Model is truly a continuous process, not a set of
rules. The leadership and organization may wish to consider certain principles
for inclusion in its own Trust Model. What follows are two key
Is your firm built on
means coming to a specific agreement about what will be done, by whom, with a
specific date for completion. You don't leave anything dangling. "I'll get you
the report" isn't closure because there is no time by which it will arrive.
"I'll do what I can" isn't closure because there is no specific agreement for
what will be done. It's easy to see how lack of closure breeds uncertainty,
hesitation, doubt, wasted time and energy, resentment, and lack of
it works. You are sitting in your office and Henry sticks his head in the door.
Seizing the moment, you ask, "Henry, would you get me a ham sandwich?" Henry
disappears without comment. Now it begins. You start wondering: Did Henry hear
me? Is he going to get me the sandwich? When? Who will pay for it? Does he have
the money? Or is he upset that I asked him in the first place? Does he remember
that I got him a sandwich last week, or did he forget (which would be just like
him)? Did Henry's mother teach him any manners? And what about the
closure always leads to wondering, which takes time and energy away from other
tasks. Wondering is gyroscopic; we sit and spin in place, consuming momentum,
going nowhere. Even if we try to shove the concern from our minds, it simply
resurfaces later, perhaps in the middle of the night. ("What did happen with
that sandwich?") And the greater our passion for success, contribution, and
satisfying the customer, the more consuming the worry.
culture of closure, you can simply ask for a date for an action. Then you can
spend the time between now and that time doing other thingsnot wondering
and worrying about whether or not you should call, whether or not anything is
being done, or when it might get done if it hasn't been important enough to do
up to now.
breeds suspicion, and suspicion is antithetical to trust. Therefore, closure
is critical to trust. The goal of a Leadership Organization is to have 100
percent closure on all communications, big and small.
||"Lack of closure
always leads to wondering, which takes time and energy away from other
is an "intention of no conditions." This means that there are no hidden "ifs,"
"ands," or "buts." It doesn't mean that you absolutely guarantee the result
that you promise, but it does mean that you enter into the commitment with
every intention of fulfilling it. And if you discover that you can't keep the
commitment for any reason, you speak up immediately.
half-hearted, or pretended commitment is saying "yes" without the pure
intention to produce the final outcome on time. When we go into an
organization, one of the first questions we ask is, "How much of the time do
you think people really mean what they say?" The answer is usually 20 to 60
commitments can be made consciously or unconsciously, with or without malice
aforethought. In most cases, nobody means to make false commitments; they are
just one of our workplace habits. They are sometimes called "nodding
commitments" or "hallway salutes." In the mind of the person making the
commitment and not following through, the false commitment may seem like no big
deal. It was a lapse in memory, an excusable detour, an avoidance of the
inconvenience of following through, or a change of heartthings everybody
does, for heaven's sake! The person to whom the false commitment was made, and
who is still relying on it, is still heading for a destination that will not be
there when he arrives. His reaction may range from irritation at the minor
inconvenience of having to revisit the issue and establish a new commitment, to
there being absolute hell to pay.
have experienced pretended or false commitments when people have said to you,
"I'll get you the report," "I'll make it up to you later," "The check is in the
mail," or "I'll get right back to you on that." If you didn't get the desired
result, you were probably disappointed, angry, hurt, or simply less likely to
trust that person the next time he or she promised something.
organization that winks at or even encourages pretended commitments, people
stop believing what others tell them. When they can't count on what others tell
them, they try to stop caring. The trouble is, they can't stop caring. The
passion to be productive and helpful still lives, even if it's below the
surface. When we can't contribute, we hurt. We may disguise our hurt in ways
that look cavalier, defensive, or even aggressive, but the pain of not
contributing eats away at us and saps our energy.
We may even
start making promises that we have no intention of keeping. We then start
believing that we can't have integrity at work, because we have to say we'll do
things we either can't do or aren't willing to do. We begin a cycle of not
doing what we said we would do, then finding excuses.
||"When we can't
contribute, we hurt. The pain of not contributing eats away at us and saps our
Theorem II: False commitments lead to dramatization in the
commitments bleed the team of energy in many ways. People first have to stop
and figure out how to get the work done that was promised but not delivered.
Then they have to fix the mess that they are probably in because the work
didn't get done with the original commitment. They also have to deal with
knowing there is someone in their midst who says one thing and does
of making pretended commitments creates a downward spiral in organizations.
People trust less, and fear more. False commitments may begin with the lead
team, but they eventually work their way down through the organization to the
customer. A customer who knows you make false commitments isn't likely to be a
customer for long. The habit passes as a business practice only because our
competition is probably doing it, too!
Folk Theorem III: If you are learning about problems from
your customers or the marketplace, it is already too late.
worst-case scenario with false commitments is that they go undiscovered for a
long period of time, say, until the first external measure of progress arrives.
That could mean the first quarter sales figures, or the testing of the new
software program, or a customer complaint. At this point, the false commitment
is much more costly and time-consuming to correct. Not only have time and
energy been lost, but it may be difficult to locate the original false
Folk Theorem IV: At least one person on the team always
knows about a problem well in advance of it being revealed by customer
Theorem III: If you're learning about problems from your customers...it is
already too late.
EMPLOYEES MUST LOOK OUT
FOR EACH OTHER TO CREATE A
networking startup company experienced a predicament that illustrated Folk
Theorems II-IV. On August 19, this company shipped a "beta card" to a reselling
partner, who happened to be a very large networking company. The "beta card"
was a very complicated product, and the customer had an internal delay of at
least two months before it could start testing it. When they finally did the
tests, the card crashed repeatedly. The customer was upset because the project
was already behind schedule, and threatened to cancel the order if the software
company didn't make the "beta card" work within 10 days.
took them seriously and had engineers working around the clock to make the
deadlinewhich they ultimately missed. But during the final press to
finish, one of the engineers said, "They should be mad at us. That card was a
piece of junk."
revealed that as early as August, when the beta card was first shipped (and
possibly long before that), somebody on the team already knew that it wasn't
going to work, but hadn't told anybody. Somebody always knows, and it's
inevitable that the problem will radiate out to the customer. At that point,
it's often too late to fix the product, and the result is lost energy, time,
reputation, and business. If our startup had been aware that the card was "a
piece of junk" back in August, we could have gotten to work fixing it during
the two months that it was sitting over at the customer's office, not being
tested. The result would have been a good product, less stress and overtime,
and far less "Them vs. Us" among individuals and the two companies.
Theorem V: You can only honor commitments to customers to the extent that you
honor commitments internally.
Much of the
frustration of everyday life can be traced to false commitments. Bounced
checks, late deliveries, shoddy work, unreturned emails, laundered shirts with
missing buttons, poor work performance, broken partnerships, and so
onunder close examination, all of these involve issues with "commitments"
that were made but not kept.
organizational culture in which people consider their commitments carefully,
and in which they absolutely intend to do what they say they will do, generates
trust. People can relax into their natural enthusiasm, without fear that
they'll be let down, and feel part of something bigger. When we encourage
people to earn trust, and show them how, everybody's goal becomes the same.
That translates into greater commitment, greater creativity, greater
satisfaction with work, and better performance.
problems with commitment come in the making and not the executing. An effective
environment must make adequate accommodation for the serious nature of
commitments. We can begin by providing adequate opportunity to weigh
commitments in the making, which means honoring doubt in a new way. Doubt is an
invitation to examine the proposed commitment. Doubt needs to come out of the
closet and into the conference room where it can be visibly present without
prejudice. Doubt denied or discouraged will take its revenge later when time,
productivity, and trust are lost.
||"Doubt denied or
discouraged will take its revenge later when time, productivity, and trust are
Theorem VI: Genuine doubt virtually always precedes real
addition to examining closure and commitments for improvements, there are other
areas that can yield substantial performance improvements. One of them is "Them
Harvesting "Them vs.
vs. Us" is the frequent appearance of two or more adversarial elements in the
organization. Them vs. Us is so automatic, so fateful, so commonplace,
that we are tempted to conclude that it is an inevitable destiny of teams, and
we enjoy endless jokes about engineering versus marketing, marketing versus
sales, and HR versus just about everybody. We don't think this outcome is
inevitable. We think Them vs. Us arises because people care about the outcome
of their work, and the outcome is thwarted due to lack of closure
Theorem VI: Genuine doubt virtually always precedes real
FALSE COMMITMENTS CAN BE DEADLY.
forms of closure, and collaboration, between heretofore warring elements leads
to innovation. When engineering and manufacturing collaborate on designing
manufacturable products, we get concurrent engineering. When
manufacturing and distribution collaborate on reduced delivery cycles, we have
just-in-time manufacturing. When everybody collaborates, we have
strong-form cross-functional teams, considered essential for cycle time
reduction. These are all specific examples of:
Fundamental Folk Theorem of Competitive Advantage. The greatest
prospective opportunities for competitive advantage arise from the most
virulent current instances of Them vs. Us in the organization.
in fact an infinite number of ways to gain competitive advantage by harvesting
the tension in Them vs. Us. Your next great advantage is lying there in the
white spaces in your organization chart, awaiting discovery.
important clue to locating the areas for highest payoff in your organization
can be found in your discomfort. We invite you to try the following. In the
next 24 hours, think about where you sense lack of resolution or conflict in
your team. Then get your leadership team, or your immediate team, together and
communicate your discomfort and ask for their input. Don't be surprised if they
have been sensing the same issue(s). Ask for their help in identifying
precisely the nature of the conflict, and for ideas for win-win closure. Listen
carefully. Ask for true commitments, with realistic timelines, and enjoy the
process of following progress together with your reconnected team.
CIANCUTTI HAS TAUGHT TEAMWORK AND CHANGE AT STANFORD UNIVERSITY'S GRADUATE
SCHOOL OF BUSINESS. HE IS FOUNDER OF THE LEARNING CENTER. CIANCUTTI IS AUTHOR OF
BUILT ON TRUST: GAINING
COMPETITIVE ADVANTAGE IN ANY ORGANIZATION.
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