Trust, the high-performance fuel for success

Many of us have been in that situation when, driving to an appointment or important meeting, we suddenly notice the low fuel indicator on. A flurry of thoughts spring to mind; “Did it just come on?” “Shall I risk the drive?” That’s the last time I lend my daughter the car!”

We generally find that our levels of anxiety and distraction increase proportionally to the importance of the event. We worry about getting to the destination safely and not being stranded on the freeway. We consider taking short cuts or alternate routes, while we pray to the traffic gods to look after us.

So how can we get to our destination safely and on time while dealing with these additional distractions? Do we choose to believe that the people we loan our car to will return it refuelled?  Do we choose to believe that the fuel gauge alert really only just came on . . .  while simultaneously vowing to always, always check the fuel-gauge ourselves, in plenty of time, before starting that time-critical journey?

Trust is like that tank of fuel. The more you have, the further you can comfortably travel through life’s journey. A full tank of quality trust helps you effectively achieve your goals by improving the quality of support from the relationships around you.  Life is navigated more effectively, efficiently, and happily.

There are many definitions of the word “trust”, however, one from Miriam-Webster seems to capture its essence perfectly:

Assured reliance on the character, ability, strength, or truth of someone or something. One in which confidence is placed.

Trust in business

Trust in commercial relationships is much the same, where higher levels of trust help businesses successfully reach their goals.  Unfortunately, commercial relationships do not come with trust gauges, but even if they did, how would we refill the tank, and what do we fill it with?

In business, relationships and trust go hand in hand, and are often known as ‘soft concepts’.  However, there is nothing soft about them, as they are hard to measure, build and maintain. The only way we can effectively work with trust in business is to understand it. So what are constituent qualities of these ‘soft concepts’ and how do we measure them?

So why is trust so important?

Research has found that compared with people working at low-trust companies, people at high-trust companies report: 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, and 40% less burnout.

As trust improves, so does the performance of the personnel and the organisation. Trust is also an essential part of a successful commercial agreement. It reduces friction in the contract and allows for more efficient management with better results.

Side note: What is Friction?

Friction compromises the efficiency and performance of machines, whether it be caused by the quality of their components, their assembly, maintenance, or the resources used.

Similarly, commercial agreements have friction that affects their efficiency and profitability. The higher the friction levels, the more resources are consumed to manage the contract.

What does trust in a commercial relationship look like?

Trust is something that builds over time. It can be built upon mutual respect, but it’s also about knowing your counterparty in the deal has your organisation’s best interests at heart, just as much as his own. And it’s not just about knowing someone well enough to have confidence in their judgement; it’s about having a good sense of your own character and ability to make the right decisions under pressure.

The Circle of Trust

A great way to visualise and understand trust is with the Circle of Trust. This model is comprised of two concentric bands, where the inner band represents core trust: the outer band, dynamic trust. Measuring and combining these two values gauges the overall trust within a commercial relationship.

Core trust

Core trust is at the heart of the model and is comprised of three powerful relational qualities:

• Integrity (truth, honesty, principled),
• Solidarity (mutuality, reciprocity) and
• Equality (parties seen as equals, fairness of dealings)

We find that core trust is difficult to build and maintain. It organically develops over time and generally doesn’t change with significant magnitude. It also has a correlation with the deep-seated values of the personnel assigned to manage the contract. To influence and improve core values, it must be done with purpose and effort.

Dynamic trust

Dynamic trust forms the outer circle of trust and as its name implies, it is more flexible than the core, its nature and intensity varying throughout the life of the contract. Moreover, it is quite reactive to internal and external influences, such as market forces, changes in strategic directions and even team personalities.  Its three relational qualities are:

• Commitment (right amount of effort and resources for success),
• Agility (flexibility, goal alignment, continuous improvement) and
• Harmony (values aligned, team chemistry, culture)

Measuring trust

Relationships and trust are difficult to measure in commercial environments, but a tool like Contract Harmonics™ can help effectively measure both their levels and their quality. This tool allows parties to a contract to measure the core and dynamic trust components as well as gauging the underlying relational contract norms.

Each relational norm is measured on a scale of 0-100, with thresholds as follows:

Low (0- 50%) Relationship distrust is endemic. Likely to be toxic. Requires major surgery.

Moderate (51-75%) Some trust but could deteriorate.  Invest in relationship before it becomes toxic.

Average (76-89%) Most relationships sit within this range.  Look for opportunities for improvement.

High (90-%) Environment is right for maximum performance. Monitor and maintain.

Understanding the factors that affect trust can help organisations identify strengths and weaknesses in commercial relationships, as well the areas they should be working on.

When to assess a relationship?

Commercial relationships can be assessed when needed. Organisations should generally wait for stabilisation after a deal has been transitioned into business operations. However, if there are any transition teething problems, it may be prudent to assess the relationship then.

Situationally, assessments are recommended when commercial relationships are identified as problematic, inefficient, inconsistent, or underperforming.

Summary

Individuals generally have an intuitive sense of their company’s relationship with its commercial partners. However, having the ability to measure and understand trust significantly helps you determine not only how trustworthy the parties perceive each other, but also provides ways to develop and improve the relationship.

In the second part of this article, we will further develop our understanding of trust, and explore ways to apply our knowledge in commercial environments to foster high quality trusted relationships.