Building Team Trust to Manage Change at Work

Change is inevitable. Having a picture of where you've been helps manage change as it occurs.

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Contributor / Grover Wray

Senior Vice President and Chief Human Relations Officer
Digitalglobe / Human Resources

Trust is key to cultivating employees who are engaged, motivated, and able to contribute value back to the organization. When the value they give back equals the value they receive, you build a foundation for trust, and team members have a mental map that provides them with security and a vision for the future. When an organization experiences significant changes, that mental map is destroyed, and leaders need to provide a new one. The most important layer of the map is culture, which expresses the organization’s values. But basic questions about security and predictability must be addressed before organizational values will resonate with team members.

Transcript

As a Chief Human Resource Officer, trust is fundamental to being able to ensure that employees are engaged, they are motivated by what they do and they can contribute a degree of value back to the organization, and in return the organization gives them a degree of value. And when that equation of value that the person gives to the organization is equal to the value that the organization is giving to them, then you have trust. That’s what trust is built on. And so as a Chief Human Resource Officer it’s absolutely critical to ensure that you are effectively building mental maps for all of your team members starting with those who come into the organization on day one.

Essentially a mental map is an ability for somebody to be able to anticipate and to expect what might happen. An example, a simple example would be driving to and from work. If we drive to and from work every day the same way, very soon we have a route. We don’t think about what we’re doing; we just start to drive and the next thing you know you’ve arrived at your destination and you find that you arrived without even giving a thought to how you got there.

BUMPER: Understanding Trust through Mental Maps


When I was first introduced to this idea of mental maps it was through the work that I was doing with Arthur Anderson. I got a phone call one day from a partner who said, “We are thinking about outsourcing this accounting function and I was visiting with the CEO of this company and he said you’ve put a lot of effort and time into making sure that the technical transition of this work goes smoothly. But if you’re going to be in this business full-time you better put as much attention to how you manage the people as you do the technical transition.”

I ended up visiting with the CEO and ended up visiting with all of the team members and that’s when the light bulb went on for me. It was the CEO who understood the dynamic of what was happening to his team members who had an expectation, a trust, and this trust was a very significant trust because it was in a small town. It was a few team members.

And it was at that moment that I realized that these employees could not go through a transition like this without understanding the expectations of what a new company was going to provide to them. And it was then that I realized the power of that mental map and applied that in every situation that we encountered after that, and in every situation almost to a T that process or principle worked very well, because you were addressing exactly what the issues were and the uncertainty that gets created when a mental map gets destroyed.

BUMPER: 5 Steps to Building Trust During Mergers

I realized that principle of a mental map was exactly what was needed inside a merger and acquisition or significant change situation. An employee was in an uncertain moment when all of a sudden the mental map that they had built about themselves and from the company was now gone. The trust that the organization had placed in them and they had placed in the organization was now gone. And without replacing that trust with a new map that would build new trust you would never gain the emotional commitment of the team members.

As a leader, the first thing you have to understand is the very first question that somebody has to have answered for them before you can provide any more information to them is: Do I have a job?

The next layer of that foundation is: What are my salary and benefits?

If that question is answered then the third question in that layer of questions becomes: Who is my manager?

And then the fourth question in that layer is: What is my team or who is my team? Who will I be interacting with?

And then the fifth layer, which is the most important layer, but it’s the last layer – (which is somewhat counterintuitive) is the culture. What is the culture of the organization like? What are the values of the organization? If you start with culture, which sometimes we might tend to do because we want that to be seen as a very positive thing, that’s good but I still don’t know whether I have a job. And so it’s not going to resonate with me until you answer those other foundational questions.

Follow that pattern through, and each of those pieces of the pattern put another piece into the mental map until you have sufficiently formed a mental map for that individual as they move into a new environment.

Keep up with the latest insights on trust

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Trust and leadership are key elements to success.

Trust and Leadership

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Contributor / J. Keith Murnighan
J. Keith Murnighan Management Leadership,Reputation Management,Social Psychology,Swift Trust Every leader wants to come across as competent. And what a lot of research suggests is every leader should also want to come across as warm — as interpersonally warm and caring.

So, this nice combination of competence and warmth is dynamite for leaders. It gets really positive responses from people who not only think you care about them but also understand that you know what’s going on. And that’s a powerful combination.

And if you’re a leader and have been appointed a leadership position for good reasons, people are going to think you’re smart and they’re going to give you some credit.

And think about this — think about leaders who will tell you, “You must earn my trust” versus leaders who say, “We’re starting out with 100 percent trust. You have a good track record. I’ve seen your reports. I have high expectations from you. You’ve been fantastic. Let’s take it from there” — altogether different from starting at ground zero.

BUMPER: Building Trust within Teams

When I work with companies and with leaders, I’m always focusing on the teams that they lead — the immediate groups of people that they lead. And what I want to have happen is for those teams to coordinate themselves well and trust each other.

And if they can coordinate themselves well and trust each other, they’re going to be able to take advantage of whatever abilities they have.

Add on some training programs where their abilities increase — absolutely tremendous bottom-line impact over the long term.

You can’t predict short-term — internal dynamics and their effect on the bottom line, in the short term, is not always obvious.

But in the long term, a really smoothly functioning team that’s well coordinated and trusts each other and has ability — whew! — fantastic.

BUMPER: Exploring Automatic Trust

Automatic trust is where you encounter someone, and for some reason, things click. And you find and believe that they’re trustworthy right away.

Our brains have all of these connections — interwoven connections in our brain — that activate when you say something like a person’s name or when they’re wearing a pair of glasses that you recognize that, for some reason, you have a positive association about.

So, automatic trust is a situation where you get a cue that all of sudden leads you to be more trusting than you would be otherwise. And there are lots of those cues that are possible.

BUMPER: Automatic Trust and Likeability: Creating Schemas

Liking is one thing, but we also have categories where a very likeable person is not particularly trustworthy. And we all know of them. They’re great to have a party with, but you would never loan them your car.

So, we’re pretty good at creating what we call “schemas” for different kinds of people. And we have schemas for professors; we have schemas for nerds; we have schemas for CEOs.

And we have schemas for people who are likeable but not trustworthy and schemas for people who are trustworthy but not so likeable.

Automatic trust can facilitate a better result, when you encounter one of the many, many people who truly are trustworthy, because if I come on as more trusting of you, you’re more likely to reciprocate and be more trusting of me. And we accelerate a trust-development process to both of our mutual benefit.
Employing more trust in leadership led to soaring sales for Oreos in the international market.

Trust in Leadership: 3 Lessons in Empowering Your Team

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Contributor / Sanjay Khosla
Sanjay Khosla Consumer Products Leadership Blank checks is all about trust: trusting leaders to do the right thing, to take ownership, and yet be accountable for results.

How do these blank checks really work? There are three guidelines. The first is, you select the leaders whom you really trust (and the teams) and give them a really big target, let them dream big. And these targets have to be achieved in a very short period of time.

The second is, the leader and the team puts together a short business proposal, asking for the resources that would be needed along with clear deliverables and milestones.

And the third guideline is to nurture these teams, make sure that they have an environment where they can succeed, and then monitor progress against milestones.

BUMPER: Case Study: Oreo

Let’s take an example; let’s take the case of Oreo. Now, Oreo is the number one biscuit in the world by far. Oreo is over 100 years old. But for 95 years, Oreo was spectacularly unsuccessful outside the U.S. — and certainly not for a lack of trying.

So, we called the Oreo team, and we said, “We know currently it’s not doing well in countries like China and Indonesia and various other parts of the world — it’s not doing well. Just figure out what do you want to do, what resources do you want to use, take a blank check, and go.”

And then they realized, why is it that it’s not selling so well in various countries around the world, like China? And they found that, very often, the American Oreo was too sweet, too big, the price points were too different.

And they started experimenting, then, with a number of different products, like Green Tea Oreo, wafers. Half these products failed.

And that was okay. That was really okay because the whole idea here was to give them freedom within the framework of keeping the Oreo essence core around the world but then getting local products, which delight local consumers.

As a result of that blank check, Oreo went from a revenue of about 200 million dollars outside the U.S. to over a billion dollars in revenue in six years. More importantly, gross margins outside the U.S. were very healthy.

BUMPER: Three Lessons from Blank Checks


So, what are the lessons that one can learn from giving blank checks? And again, this is equally applicable to small companies and large companies.

The first is, you get people, you trust people, to do the right thing, and you make them act as owners. The second is that this signal of trust goes all over the organization, of empowerment, but yet they are accountable for results.

And the third is not all blank checks succeed; very often, they fail because if everything is going well, something’s horribly wrong. The important part there is, if a blank check experiment fails, not to penalize the leader or the teams, provided they’ve learned the lessons from the project.

That, again, is a signal of trust — trusting people always to do the right thing and making sure, then, you celebrate not only successes but also celebrate and learning from failures.

Over years of experimenting with blank checks, we found that, in companies, you have a choice: you can either be cozy, or you can trust people and get them to fly.
Understanding trust economics can lead to breakthroughs in the market.

Trust in Transactions: An Economist's Perspective

Foundations
Contributor / Niko Matouschek
Niko Matouschek Economics Economic Exchange,Economics,Legal Guarantees,Long Term Focus,Mergers and Acquisitions,Regulation,Reputation Management,Social Psychology Trust is an issue that most people don’t associate with economics, yet economists actually care a great deal about trust. And they care a great deal about trust because, in the absence of trust, many value-creating transactions simply wouldn’t take place.

To take the quintessential economic transaction as an example — if you (the buyer) don’t trust me (the seller) not to sell you a lemon, then you won’t buy from me in the first place. And you won’t buy from me even if, in principle, I could make a product that you value more than it costs me.

And so, trust matters to economists because it enables and facilitates transactions that create value and therefore are good for all of us.

Or the other way around — trust matters because the absence of trust is an impediment to growth. It’s an impediment to growth in employment, wages and profits, and therefore makes us all worse off.

To be sure, not all transactions require trust. If, for instance, you can verify on the spot whether I’m selling you a lemon or not, then our transaction doesn’t require any trust. Or, alternatively, if we can write a contract that ensures I’m not selling you a lemon, then, again, we don’t need any trust between us to transact.

The problem is that in many situations, that’s not the case. In many situations, you can’t verify on the spot whether I’m selling you a lemon or not, and writing a contract is either costly or even impossible.

And in such situations, transactions do require trust. What the economic literature on trust tries to understand is how markets function when transactions do indeed require trust.

BUMPER: Rationality and Trust: "Good Types"

To explore how markets function when transactions require trust, it’s useful to start by asking yourself when and why it’s rational for market participants to trust each other — that is, to believe that the other side is going to follow through with their promise, even if it’s not in their immediate economic interest to do so.

There are really two reasons for why it may be rational for you (the buyer) to trust me (a seller). One is that you may think that I’m what’s called a “good-type” or a “virtuous-type seller” — that is, I’m not really a coldhearted homo economicus who, at any moment in time, tries to maximize his profits.

Instead, I’m somebody who incurs, essentially, a psychic cost from not doing what I’ve said I was going to do. Even if there’s just a small number of these virtuous sellers — these virtuous sellers are in short supply, as you might think they are — they can still have significant impacts on how markets work.

One implication comes from the fact that if you’re a virtuous seller, you have a competitive advantage over regular rational ones.

If you’re known to be a virtuous seller, buyers want to transact with you. And to compete, the regular rational sellers have to create essentially contractual alternatives for trust that are both costly and typically imperfect substitutes for trust.

And so, somewhat paradoxically to being committed not to maximize your profits at any moment in time actually increases your profits. And so, being virtuous is not just good for your soul, if you want, it’s also good for your bottom line.

And that’s why virtuous sellers, or so-called virtuous sellers, can play an important role in a market, even if there’s just a small number of them.

Economic historians, for instance, sometimes argue that one of the reasons for why the Quakers played such an important role in the British economy in the 18th century is because they were known to be trustworthy.

And so, people knew that they would keep their promises, even if it were not in their immediate economic interests to do so. That put them into a competitive advantage vis-à-vis other business people and led to them playing a disproportionately important role in the economy.

BUMPER: Rationality and Trust: Good Incentives

A second implication of having virtuous sellers in the market is that if there’s uncertainty about who is who — who is virtuous and who is rational — then the rational sellers have an incentive to try to mimic the virtuous ones.

That’s going to be costly for them today because they have to forego some profit opportunities today, but then they reap the benefit of being perceived as virtuous tomorrow.

There’s a large literature on reputation games in economics, as it tries to understand the incentives, how they play out, what extent there is scope for this mimicking behavior, and how the mimicking behavior affects the functioning of markets — whether it’s overall good for the market or whether it’s bad for the market.

Now, suppose that you know that I am a coldhearted homo economicus; can it still be rational for you to trust me? And the answer is yes, provided that I care not only about today’s transaction with you but also about future transactions, either with you or with others.

In deciding whether to honor my promise to you, then, I face a trade-off. By breaking that promise today, I can make more money today, but now it comes at a cost of less future business, essentially.

As long as I care enough about the future, it is then rational for me to keep my promise to you. And since it’s rational for me to keep my promise to you, it’s rational for you to trust me in the first place.

Repeated interactions, then, can allow a coldhearted homo economicus — somebody who’s known to be a rational agent — to commit to behave as if he were a virtuous one and to do so without having to rely on any formal contracts.

Now, for that to work, two things have to be true, generally speaking: One is I, that seller — that coldhearted seller — have to care enough about the future. And two, there has to be enough transparency, in the sense that current consumers can observe enough about how I’ve treated past consumers.

And there’s a large literature on repeated games in economics that tries to understand exactly when and how these reputation mechanisms that work through repeated interaction operate.

In summary, then, there are two strands in the literature: one focuses on good types, and one focuses on good incentives. And together, they have a number of implications and shed light on a number of economic issues and phenomena.

Other pages in Videos:

Pages in The Trust Project at Northwestern University