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  • mattheelan

What are some of the consequences of not trusting people? Taxes vs. Dividends.

“A nation’s well being, as well as it’s ability to compete, is conditional by a single, pervasive cultural characteristic: the level of trust inherent in the society. - Francis Fukuyama. Well let’s start with some broad data from 2018 when according to this survey of people in the US only 32% tend to trust media, only 18% trust the government and only 21% trust big companies. In terms of people trusting other people, in the US only 31% of Americans believe that other people can be trusted which is down from 48% three decades ago. At the organizational level the news doesn’t get any better. Only 45% of employees have trust and confidence in senior management. Only 18% of people believe business leaders tell them the truth (13% for government leaders.)

At the personal level we still have some challenges. The number one reason people leave their jobs is a bad relationship with their boss and one out every two marriages ends in divorce.

In some of the literature that I have read and based on my experience trust always affects two outcomes - speed and cost. When trust goes down, speed will also go down and costs will go up. And vice versa, when trust goes up, speed will also go up and costs will go down.

A real world example, I worked for this CEO of a medium-sized organziation who firmly believed in this command and control approach to management. The turnover rate had increased over several years to 20-25%. When you dug into those numbers to identify some of the root causes you got comments like, “micromanaging made me leave,” “tell me what you expect of me because it is always a moving target” and “I don’t trust anyone in management.” I proposed an entirely new management approach and style to the organization. There were some broad strategies around this approach that began to create a new dynamic within the organization and over time we began to see the reduction in turnover, more engaged employees, increased productivity and costs were reduced in a whole variety of unexpected ways.

Here are some differences between low trust and high trust organizatons and the "taxes" and "dividends" associated.

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