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Leading Digital Transformation: How Cultivating Trust Enables Success

Infinitive, Insights
Published March 13, 2017
I recently came across some interesting survey results, which caused me to think about trust in the context of today’s digital transformation and change initiatives. The following data from author Stephen Covey’s The Business Case for Trust is particularly enlightening:
In a 2002 Watson Wyatt study, high-trust organizations outperformed low-trust organizations in total return to shareholders by 286 percent. High-trust organizations also consistently create and deliver more value to their customers through accelerated growth, enhanced innovation, improved collaboration, stronger partnering, better execution and heightened loyalty.
Though the survey is several years old, I believe trust is even more important and valuable now, given the increasing scope, velocity and necessity of change. Such a data point by itself represents a strong value proposition for building trust in any type of organization, though there are other compelling reasons why company leaders should emphasize trust. Covey has outlined his own business case for trust, which involves the ability to move more quickly and reduce hidden costs that often take the form of “low-trust organizational taxes,” a concept he has trademarked. Harvard Business Review has also examined the impact of trust on employee engagement and found that it’s a real difference maker. At high trust companies, people 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” compared to their counterparts at low trust organizations. If you believe that worker or team engagement is helpful to project success, then trust should be part of your leadership toolkit.

A Lack of Trust Hurts Your Business on Two Fronts

I’ve outlined some specific ways in which building trust builds business value. Likewise, a lack of trust undermines your organization. In my experience, lack of trust in organizations and teams threatens success in two major ways.

Without trust, your organization wastes time and money

Without trust, progress will be an uphill climb of negotiations, meetings and reluctance to take chances. Second-guessing people’s motives creates an environment in which safety and self-preservation take precedent over charging ahead or embracing necessary change. Such skepticism and resistance slows progress and stalls momentum. When there is no culture of trust, teams and organizations require the constant involvement of executive leadership as mediators or arbitrators, rather than efficiently leveraging them for vision-setting, decision-making and supportive communications, which are their natural roles. Additionally, within a transformation journey, failures and setbacks are difficult to overcome without trust. Blame-gaming may replace collective responsibility and the commitment to fix problems, learn from mistakes and move forward toward project goals. In my experience, trust helps projects move forward more quickly and purposefully and gets them back on track sooner when issues arise, as they inevitably do.

A trust deficit establishes a success ceiling

As noted above, trust breeds collaboration and innovation. Without trust, the safe and risk-averse options will always win out. Teams without trust may unknowingly block paths and options that would provide higher ROI or greater customer experience. Who wants to put forward an unconventional, potentially controversial or “out of the box” idea if they don’t trust that their peers will receive that idea with open minds?

Through hard work and grit, you might be able to get a project to the finish line without trust. But the process will likely be more difficult than it needs to be. And the outcomes or finished product may not deliver the hoped-for benefits or value.

Lack of trust can raise costs during a project and depress the end value of deliverables –  a big squeeze on both sides of the transformation equation. So now the big question: what can you do to build and nurture a culture of trust?

Three Ways to Cultivate Trust: Building, Knowing, Growing

Company leaders can cultivate trust within their organizations to support digital transformation efforts in three key ways.

1. Building Trust

Be pragmatic and strategic when building your team, whether it be a leadership team or a project team. You won’t know with certainty that a person will embody trust. You can, however, glean insights into their trustworthiness by how they engage in discussions (both work-related and not) with peers and direct reports. Just as important, embed trust in your initial team ground rules and connect the team through a singular and common mission/goal.

2. Knowing Trust

Get to know your colleagues. I’m not talking about knowing their favorite pizza toppings, but rather their working style and preferences. Mistrust can many times grow from lack of understanding. A colleague asking questions can come across as disagreement or skepticism, rather than as curiosity or lack of comprehension.  Developing a deeper understanding among and between company leaders and employees prevents such misunderstandings, allowing trust to grow.

3. Growing Trust

Trust can be grown by continual action instead of irregular talk. The best way to grow trust is to be a living, breathing example of what is expected. That is how leaders can promote a trust-based culture where mistrust is the outlier. Conversely, incidents or conversations that reveal a lack of trust should be handled immediately and discreetly by getting to the root cause of the mistrust and building a path forward in partnership with the individual.

Trust, Emotional Intelligence and Wide-Ranging Change Management

It may be useful to see trust as both a function of and result of emotionally intelligent leadership, which is essential to driving transformation success. Leaders can and should use their emotional intelligence skills to foster trust. Specifically, emotionally intelligent, trust-building leadership in today’s digital world is largely a matter of effective communication. Today’s myriad communication options – both digital and traditional – can actually make it more difficult to gauge emotions. Without trust, team communication may not be open enough for raising questions or concerns. A 2015 Gallup study found that employees whose managers regularly meet with them are much more likely to be engaged. More, the study noted that a combination of communication methods (phone, face-to-face and electronic) was most successful for engaging employees. The bottom line: DON’T rely on any one form of communication for open, honest conversations. DO prioritize regular touchpoints to prevent trust deficits and ensure communication is effective and your employees stay engaged. Transparent communication is also crucial to building trust more broadly across the organization, including among critical stakeholders who are not part of the everyday transformation team. This is especially true for large-scale digital transformation projects, which may include multiple levels or dimensions of simultaneous change.

Such multi-faceted change initiatives require transparent communication across the entire ecosystem. That ensures that any and all stakeholders impacted or involved know what is going on.

With something as difficult as digital transformation, organizations and leaders must take advantage of all available tools and resources and do everything they can to succeed. That’s why building trust should be at the top of the list, given its proven ability to drive success and lower costs along the way.

About the Author:

Wayne Campagna is a principal with Infinitive, specializing in business transformation initiatives. He has more than 15 years of management consulting experience in Telecommunications and Education industries focused in portfolio, program, and project management.