Cornell University professor Dr. Tony Simons’ powerfularticle, “The High Cost of
Lost Trust,” appeared in the Harvard Business Review in 2002. In
that piece, he described his team’s efforts to examine a specific hypothesis
(“Employee commitment drives customer service”) in the US operations of a major
hotel chain. They interviewed over 7,000 employees at nearly 80 properties and
found that employee commitment drives customer service, but, most critically, a
leader’s behavioral integrity drives that and more.
Simons’ team defines behavioral integrity as “managers keeping their promises
and demonstrating espoused values.” Their research methods and analysis
discovered:
When employees believe their
bosses have behavioral integrity, their commitment goes up.
As employee commitment goes up,
employees willingly demonstrate discretionary effort.
Employees are more proactive, more
present, and more productive with the application of their discretionary
energy.
Employee discretionary effort is
visible to and highly valued by customers. Customers respond by staying more
frequently, staying longer, eating on the property,
etc
Those customer behaviors generate
higher profits. Significantly higher profits!
measured behavioral integrity on a five-point
scale. Their analysis found that a 1/8 point gain on this scale generated a
profit gain of 2.5% of annual revenues . . . which translated into $250K for
each hotel! This study made an important link – one that had not been
demonstrated before: manager behavior, specifically keeping promises and
demonstrating company values, generates hard dollar profits. (Simons’ work continues at The Integrity
Dividend with a book, programs, blog, and more.)
USA dips, employees consequently plan to look for a new job, citing low trust
of their workplace, senior leaders, direct bosses, or even co-workers as a
primary driver.
Two research studies have noted this “age of mistrust.” According to Deloitte’s
2010 Ethics & Workplace Survey, one-third of employed Americans planned to
look for a new job when the economy stabilized. Of this group, 48 percent say
that a lack of honest communication from company leaders was their primary
reason for that decision. This survey also reports that 65 percent of Fortune
1000 executives who were concerned with the upcoming “talent drain” believed trust
is a factor in this voluntary turnover.
Maritz Research’s workplace study echoes
the Deloitte findings. According to the Maritz poll, only 11 percent of
American employees strongly agree that their managers show consistency between
their words and their actions. Only 7 percent of employees strongly agree that
they trust senior leaders to look out for their best interest (!) and only 7
percent believe their co-workers will do so.
The Maritz poll also found that about 20% of respondents do not believe that
their company’s leader is completely honest and ethical; fully 25% disagree
that they trust management to make the right decisions in times of uncertainty.
Of those employees who do not trust company management, only 3% look forward to
coming to work every day!
board, notes that, by focusing on talent management and retention strategies,
“executives may be able to reduce attrition.” She goes on to state,
“Establishing and enforcing a values-based culture will ultimately help
cultivate employee trust.”
What are you willing to do to measure that level of trust and improve in in the
months to come?
S. Chris Edmonds is a
sought-after speaker, author, and executive consultant. After a 15-year career
leading successful teams, Chris founded his consulting company, The Purposeful Culture Group, in
1990. Chris has also served as a senior consultant with The Ken Blanchard
Companies since 1995. He is the author or co-author of seven books, including
Amazon best sellers The
Culture Engine and Leading at a Higher Level with Ken Blanchard. Learn
from his blog posts, podcasts, assessments, research, and videos at http://drivingresultsthroughculture.com.
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