Trust and the High Performance Organization
In the EBBF publication “High Performance Organizations”, cited in this blog last week, Lawrence Miller looked at the evolution of such organizations and weighed in their traits in the balance provided by the Bahai teachings. One of the most positive and significant changes the author noted that is taking place in the high performance organization, is the shift from a control-based to a trust-based management. Here is his analysis:A recent and popular book by Francis Fukuyama presents a well thought out argument that “one of the most important lessons we can learn from an examination of economic life is that a nation’s well-being, as well as its ability to compete, is conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society.” Fukuyama presents a detailed argument for individual virtues which are the bedrock of social relationships, or the tendency toward fluent association, what he calls spontaneous sociability. “Spontaneous sociability is critical to economic life because virtually all economic activity is carried out by groups rather than individuals. Before wealth can be created, human beings have to learn to work together, and if there is to be subsequent progress, new forms of organization have to be developed.” The idea of human capital as a measure of wealth, the intellectual competencies and abilities of the members of society, has been presented before. However, Fukuyama distinguishes between human capital and social capital. Human capital being the knowledge and skills, social capital the culture of trust or values that permit association. High trust societies are more successful at wealth creation, those which are low trust societies demonstrate less ability to generate both social and material wealth. Low trust societies, such as in the Middle East and southern Italy, extend trust within, but little beyond the family association. Economic relationships are often within the family and those relationships beyond are treated with distrust. This is a brake on economic activity. High trust societies such as the U.S., Japan and Great Britain develop multiple forms of association and ease of relationships beyond the family. These associations include the civic clubs, fraternities, political parties, trade and profess ional associations, as well as religious and other community organizations. This ability to “spontaneous sociability” is the foundation of economic activity.This analysis of high trust society as a foundation of wealth presents a clear warning to cultures such as the United States in which the decline of sociability, the loss of trust, is rapid and visible. It also represents a keen insight into the dynamics within the enterprise. The level of trust within the corporation, among its associates, as well as between the organization and its suppliers and customers is an essential form of capital required to succeed in today’s economy.What Fukayama’s analysis lacks is the mechanism, the force, to create or recreate trust. There are two components that drive the creation of trust in the enterprise. The first is the personal behavior, the character, of leaders. The second, is the nature of the systems and structure.To create high trust organizations we must rely the creation of character – the personal ability to control one’s own behavior to a set of standards. This is the essential function of religion – to establish a community of individuals who behave in ways that are trustworthy and guided by the common, rather than the selfish, good.The other requirement to the creation of trust is the establishment of systems and practices that call on the exercise of trustworthy behavior, that reinforce this behavior, and cause it to become habitual.The high-performance organization is organized into teams in which individuals work toward the common good of their customer, their team and their organization. It is a huge leap forward from workers who focused on their assigned tasks. It is an organization in which information is shared in a trusting manner. It is an organization in which the manager’s job is defined as “helping” the teams to do the best possible job, rather than controlling and “catching” mistakes. These changes are simple to state, but profoundly difficult to establish. Each of the following paradigm shifts contribute to this first and most essential characteristic of the high performing organization.For access to the complete article, full of insights, click here.
December 3rd, 2007 at 09:41
Congratulations on getting this post included in the Carnival of Trust. I enjoyed the post.
As someone who writes on trust, I am very familiar with Fukuyama, and think you are quite right in citing him as you do.
And while I also agree with you about the importance of leaders in creating a high performance, trusting organization, I would not have picked “systems and practices” as falling into the same category. Frequently I find systems and practices are the enemy of trust; rarely the friend.
In addition to leaders setting good examples, I’d suggest other characteristics like a culture of empathy combined with constructive confrontation; values systems that support things like transparency and openness; and a medium-to-long term perspective in all things. More values-oriented sorts of issues, in other words.
In some ways, these values manifest in behaviors, or if you will, “practices.” But the practices are quite a ways downstream from the motivating forces, it seems to me.
Anyway, I’m glad to see such a high level of discussion about what I consider to b e an important topic. Thanks, and congratulations again.