daily dispatches from the management vanguard
Creating the High-Trust Organization
American society appears to be undergoing a crisis in trust. Most of the major organizations that we depend upon, including governments of all types, corporations, our health care system, our financial institutions, and our schools all seem to be failing us. Indeed, I do not believe it is an exaggeration to claim that our society is actually undergoing a disintegration process whereby the fundamental premises and values supporting our institutions are all being called into question. While such disintegration is of course very painful to experience, it is also a tremendous opportunity for genuine transformation. My essay will attempt to outline some of the most important values and strategies necessary for the creation of, and the transformation to, high trust organizations.
Virtually all of our societal organizations seem to have either forgotten or have never really known why they exist and what their higher purposes are. Instead, they have often elevated narrow individual and institutional self-interest into the only purposes that they recognize as valid. Our governments all too frequently serve the politicians and the public service unions rather than their citizens. Our schools too often serve their educational bureaucracy and teachers’ unions instead of their students and their parents. Our health care system too often seeks to maximize the profits of pharmaceutical companies, hospitals, doctors, and insurance companies rather than the health and wellness of patients. Many of our corporations primarily exist to maximize the compensation of their executives, and secondarily shareholder value, rather than value creation for customers, employees, and other major stakeholders.
The single most important requirement for the creation of higher levels of trust for any organization is to discover or rediscover the higher purpose of the organization. Why does the organization exist? What is it trying to accomplish? What core values will inspire the organization and create greater trust from all of its stakeholders?
While there are potentially as many different purposes as there are organizations, I believe that great organizations have great purposes. The highest ideals that humans aspire to should be the same ideals that our organizations also have as their highest purposes. These include such timeless ideals as:
The Good: Service to others—improving health, education, communication, and the quality of life. Southwest Airlines, Nordstroms, The Container Store, Amazon.com, and Joie de Vivre Hospitality are examples of this great purpose.
The True: Discovery & furthering human knowledge. Google, Intel, Genentech, and Wikipedia all express this higher aspiration.
The Beautiful: Excellence & the creation of beauty. Apple and Berkshire Hathaway share this ideal in their own unique ways.
The Heroic: Courage to do what is right to change & improve the world. Grameen Bank and the Gates Foundation express this higher purpose in their actions.
Organizations that place these higher purposes at the very core of their business model tend to inspire trust from all of their major stakeholders: customers, employees, investors, suppliers, and the larger communities that they exist in. Higher purpose and shared core values tend to unify the organization behind their fulfillment and usually act to pull the overall organization upwards to a higher degree ethical commitment. Higher levels of trust are a natural result of this unity of purpose, shared core values, and greater ethical commitment.
CONSCIOUS LEADERSHIP—WALKING THE TALK
Next to the power of higher purpose, nothing is more important for creating high levels of organizational trust than the quality and commitment of the leadership at all levels of the organization. It doesn’t matter if an organization has a higher purpose if the leadership doesn’t understand it and seek to serve it. The various stakeholders of an organization, especially employees and customers, look to the leadership to “walk-the-talk”—to serve the purpose and mission of the organization and to lead by example. It is especially important that the CEO and other senior leadership embody the higher purpose of the organization.
As the co-founder and CEO of Whole Foods Market, I’m the most visible person in the company. One of the most important parts of my job is touring our stores and talking to our team members, customers, and suppliers. I know that in virtually everything that I say and do, our team members are always studying me, trying to determine whether they can trust me and the mission of the company. I’m always on stage. So walking the talk is very important. I try to communicate the mission and values of Whole Foods at every opportunity and I try to live those core values myself with complete fidelity. Fidelity to the mission and values builds trust, while any deviance undermines it. High trust organizations and hypocritical leadership are mutually exclusive.
Human beings evolved in relatively small tribal bands. Many scientific studies have indicated that our ability to maintain close trusting relationships with family, friends, and co-workers is constrained to probably not more than about 150 people. We can, of course, know many more people than this, but it is hard to know them well enough to develop close bonds of trust based on actual experiences. At Whole Foods we recognize the importance of smaller tribal groupings to maximize familiarity and trust. We organize our stores and company into a variety of interlocking teams. Most teams have between 6 and 100 team members and the larger teams are subdivided further into a variety of sub-teams. The leaders of each team are also members of the Store Leadership Team and the Store Team Leaders are members of the Regional Leadership Team. This interlocking team structure continues all the way upwards to the Executive Team at the highest level of the company.
It has been our experience at Whole Foods that trust is optimized in this type of smaller team organizational structure. This is because each person is a vital and important member of their teams. The success of the team is dependent upon the invaluable contributions of everyone on the team. Trust is optimized when it flows between all levels within the organization. Many leaders make the mistake of believing that the key to increasing organizational trust is to somehow get the work force to trust the leadership more. While this is obviously very important, it is equally important that the leadership trust the workforce. To receive trust, it is usually necessary that we give trust. Organizing into small interlocking teams helps ensure that trust will flow in all directions within the organization—upwards, downwards, within the team, and across teams.
EMPOWERMENT = TRUST
While small teams are essential to optimizing the flow of organizational trust, equally important is the philosophy of empowerment. The effectiveness of teams is tremendously enhanced when they are fully empowered to do their work and to fulfill the organization’s mission and values. Empowerment must be much, much more than a mere slogan, however. It should be within the very DNA of the organization. Empowerment unleashes creativity and innovation and rapidly accelerates the evolution of the organization. Empowered organizations have tremendous competitive advantage because they have tapped into levels of energy and commitment which their competitors usually have difficulty matching.
Nothing holds back empowerment more than the leadership philosophy of command and control. Command and control (C&C) is actually the opposite of empowerment and it greatly lessens trust. C&C usually involves detailed rules and bureaucratic structures to enforce the rules. Such detailed rules almost always inhibit innovation and creativity. People get ahead in the organization not through being innovative, but by following the rules and playing it safe. C&C may produce compliance from the workforce, but it seldom unleashes much energy or passion for the purpose of the organization. Empowerment = Trust. C&C = Lack of Trust.
THE IMPORTANCE OF TRANSPARENCY & AUTHENTIC COMMUNICATION
A very important measurement and condition of trust is transparency. If we want to optimize trust then we must seek to optimize transparency. When we decide to keep something hidden the motivation is almost always a lack of trust. We are afraid that the information that we wish to hide would cause more harm than good if it were widely known. While of course, some discretion is usually necessary to protect important organizational information from migrating to one’s competitors or to outsiders who wish to harm the organization, such discretion can easily be overdone. Transparency is a very important supporting value for empowerment. Indeed, it is difficult for an organization to be empowered if it lacks transparency.
Whole Foods Market strives to optimize transparency to all of our stakeholders. Authentic communication with honesty and integrity are essential attributes of both transparency and trust. This is the exact opposite of what many organizations do, which is to try to “spin” their messaging to tell people what they believe people want to hear so that people will think well of them. This lack of honest, authentic communication and transparency usually boomerangs, however, and undermines trust and creates cynicism. One of the main reasons why Americans don’t trust many political leaders, including the various Presidents that have led us, is that we discover that they routinely lie to us. They don’t tell us the truth and we come to understand that they don’t trust us and feel that they need to manipulate us. We tell the truth to people that we trust.
The high-trust organization takes the risk of revealing too much information. We must be willing to take the risk that some valuable information may fall into the wrong hands because our commitment to empowerment and trust necessitates taking that risk. Creating transparency and authentic communication is an ongoing challenge that every organization faces. We must continually strive to remove the barriers that prevent it, knowing that we can’t maintain high levels of organizational trust without it.
FAIRNESS IN ALL THINGS
Nothing unravels trust more quickly in an organization than either the reality or the perception of unfairness. Another important virtue of creating a culture of transparency is that it helps ensure that unfairness is clearly seen and can therefore be corrected quickly. It is essential that the ethic of fairness apply to all key organizational processes such as hiring, promotion, compensation, discipline, and termination. Favoritism and nepotism undermine organizational trust. They cannot be tolerated. People are often prone to envy and any perceived unfairness exacerbates this tendency greatly, giving it the energy of justification.
CREATING A CULTURE OF LOVE AND CARE
Ultimately we cannot create high trust organizations without creating cultures based on love and care. The people we usually trust the most are the people that we also believe genuinely love and care for us. All too often, love and care are not qualities that we associate with organizations. We tend to look for love and friendship with our families and friends, but not from our work. Why is this? Many people believe that love and care in the organizational setting interfere with efficiency and get in the way of making the “tough but necessary” decisions that the organization requires for success. This type of thinking reflects our own lack of integration of love and care in our own lives. We have created an artificial barrier that is holding back our own personal growth and the full potential of our organizations.
Fear is the opposite of love. When fear predominates in the organization, love and care cannot flourish. The opposite is also true—love and care banish fear. How can we create more love and care in our organizations? To answer this would require another essay and perhaps even an entire book. After discovering the higher organizational purpose, nothing is more important than encouraging and nurturing love and care. Here are a few suggestions that will hopefully stimulate further thinking on this incredibly important goal of creating more love and care in our organizations:
- The leadership must embody genuine love and care. This cannot be faked. If the leadership doesn’t express love and care in their actions then love and care will not flourish in the organization. As Gandhi said: “We must be the change that we wish to see in the world.”
- We must “give permission” for love and care to be expressed in the organization. Many organizations are afraid of love and care and force them to remain hidden. Love and care will flow naturally when we give them permission and encourage them.
- We should consider the virtues of love and care in all of our leadership promotion decisions. We shouldn’t just promote the most competent, but also the most loving and caring. Our organizations need both and we should promote leaders who embody both.
- Cultivate forgiveness rather than judgment and condemnation. Too many organizations believe that judgment of others and criticizing failures are essential for creating excellence. While striving for excellence is important for all organizations, this can be done at a higher level of consciousness without condemnation. Forgiveness doesn’t mean condoning mistakes and failures. It simply means that we help the other person to learn from their mistakes through non-judgmental feedback and encouragement.
- End all your organizational meetings with “appreciations”. This is something that Whole Foods Market has been doing for about 25 years now with wonderful results for spreading love and care. Give everyone participating in the meeting the opportunity to voluntarily appreciate and thank other members in the group for services they have contributed or qualities that are admired. This one simple cultural practice of appreciating our fellow team members moves us out of judgment and fear into the consciousness of love.
We have the opportunity to create more conscious and higher trust organizations in the 21st century. To do so will require three major changes. First the organization must become conscious of what its higher purposes are.
Without consciousness of higher purposes organizations will not reach their fullest potential because the creative energy within the organization will not be fully expressed.
Secondly, we’ll need our leaders to evolve to higher levels of consciousness and trust themselves. We will not be able to create high trust organizations without more conscious and high trust leaders. Less conscious leaders will tend to hold their organizations back.
Thirdly, we will need to evolve the cultures of our organization in ways that create processes, strategies, and structures that encourage higher levels of trust. These will necessarily include the important ideals of teams, empowerment, transparency, authentic communication, fairness, love and care.