The Keys to Building Trust
By Stever Robbins
Harvard Business School Working Knowledge

Q. Which comes first: truth or transparency?

A. Uh, oh. Is that politics in the air? I'm guessing you either want to trust someone else or you want them to trust you. Either way, transparency plays a powerful role. It's just part of the Trust Equation, though. So let's really dig into the nature of trust.

At its heart, being trustworthy means being consistent in motives and accountable for actions. If you trust me to listen attentively and hear your side of an issue, it means you'll expect me to value your opinion when I act.

How is trust lost?
Losing trust is outrageously easy. Just let someone down once and kaboom, years of trust go down the drain. The CEO of a newly public company asked employees not to sell stock to keep the price stable. Then he turned around and sold more stock than all his employees owned put together. He lost trust, lost it big, and lost it permanently. He tried to recover, claiming (truthfully) he'd only sold a small fraction of his shares. But percentage ownership wasn't the issue; he'd set up the expectation "we'll all act together to keep the price strong" and then shattered that promise.

How is trust gained?
Trust isn't subject to the whims of logic. Many people trust others from day one, with no real basis for that trust. (This is a good thing, by the way. It's the basis of community!) We trust a new project manager to know how to balance resources, map out a plan, and monitor execution. When an employer hires us, we trust they'll provide the salary, benefits, and job opportunity they offered. Trust starts out free.

Others need to see behavior before starting to form trust. Norton is JoAnne's new boss. JoAnne has been the victim of management incompetence too many times. She has to see Norton champion his team's ideas two or three times before trusting that he cares as much about his team's success as his own. Some people need consistent proof for weeks, months, or years, and still others are never convinced—they demand proof every time they work with someone.

Businesses lose trust left and right
Remember, we build trust when behavior matches expectations. As humans, we might expect our organizations to take care of us. We might expect managers to be stewards of companies, and companies to be stewards of employees, customers, and communities. In reality, most companies and managers don't behave that way. What do most businesses do consistently? Act for the shareholders. It's the law. Sometimes they act for "productivity," "growth," "profit," "the bottom line," "share price," "efficiency," and lots of other measures that might not directly promote the well-being of employees, customers, communities, and suppliers. Then when paychecks are cut to bolster the quarterly financials, a move that helps the financial interests of shareholders, employees might be excused for losing a little trust in their employer’s stated position that “Our employees are our greatest assets!”

Trust can also take a hit when the CEO pulls into the corporate parking lot driving a car that costs more than most employees make in a decade, even as the company calls for cost controls and outsources jobs. Other trust-destroying business tactics:

• Layoffs, especially when preceded by promises that "we'll never have layoffs." The nail in the coffin is when the executives receive bonuses that year.
  
• Ignoring problems. When things are going wrong, it's tempting not to tell people. After all, managers are supposed to support morale. It's true, to some extent. But when everyone knows things are troubled, saying otherwise makes management seem either clueless or false. Both break trust.
  
• Keeping people in the dark during uncertainty. "We'll tell people when we know what's happening" is the usual excuse. That's nice. And while waiting for certainty, everyone around us is losing faith. The trustworthy approach is to admit and discuss the uncertainty. At least the words will match the actions.

Winning trust with honesty
Fortunately, you can win trust. And you put your finger on the best way: transparency. Transparency just means you tell the truth in a way that people can verify. Say what's true and honest, then let people check it out for themselves. Did you make a mistake? Admit it and people will still trust you. Cover it up, especially when everyone knows you did it, and you'll destroy any chance that people will believe your word is good.

Losing trust is outrageously easy.
A multimillion-dollar acquisition was minutes from closing when the lead negotiator upped his asking price by $10,000—a pittance—because he thought he had the other party over a barrel and wanted to prove his power. Surprise! The other side had an alternative offer he hadn't known about, and the deal fell through. The negotiator steadfastly insisted it wasn't his fault. He didn't just destroy the deal; he destroyed his internal credibility by denying his part.

This works in the other direction, as well. Starbucks is pricey, and they claim the money filters all the way back to supporting the farmers who grow their coffee. By hiring independent auditors to follow the money through the supply chain, they open up to great scandal if their claims aren't true. But if the money is going where they claim, the transparency builds that much more confidence.

So which comes first, trust or transparency? Even though some people trust by default, ultimately, transparency is needed for trust to endure. So why not start now? By telling the truth and giving people the means to know for themselves, you can build the foundation for a strong relationship when times get stormy. If you wait to be transparent until the trust is in place, you may wait a very long time.

Additional Information:
2004 by Stever Robbins. All rights reserved in all media.

Stever Robbins is founder and president of LeadershipDecisionworks, a consulting firm that helps companies develop leadership and organizational strategies to sustain growth and productivity over time. You can find more of his articles at http://LeadershipDecisionworks.com. He is the author of It Takes a Lot More than Attitude to Lead a Stellar Organization.