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Trust: The Missing Metric

When Peter Drucker said, “If you can’t measure it, you can’t improve it.” he was, in essence, advocating a cure for mediocrity through better metrics. Unfortunately, he didn’t specify what should be measured.

While performance and productivity measures are essential for every organization, they aren’t enough to ensure success in a team-based, often virtual, multi-generational, and cross-cultural business world.

Devan was excited about her promotion from leading a single team in the CS organization to Head of Customer Success at a remote-first enterprise software company. Her former CS team consistently outperformed the other teams in the group across customer satisfaction, revenue expansion, and other metrics. More than once, Devan’s manager recognized that her people’s performance enabled the group to “make their numbers for the quarter.” What Devan didn’t fully appreciate until she stepped into her new role was that her former teams’ success covered up chronic mediocrity on other teams in the group.

As Devan dug into the reasons for the differences in results, it quickly became apparent that some serious people issues affected other teams. Ironically, due to her team’s performance, the overall results were good enough for her ex-manager, and he never dealt with the problems. With a new VP raising the bar for the CS group’s performance, Devan knew she didn’t have the luxury of covering mediocrity among the many with overachievement from the few. She also knew that she didn’t have a cure for the growing stress and anxiety she felt while reviewing this coming year’s goals. Devan’s instincts told her the answer was in the difference between team behavior and that there must be a missing metric.

The cost of mediocre team leadership and performance is staggering – billions of dollars a year in higher absenteeism, turnover, lost productivity, and underperformance. In response, most companies measure a myriad of performance factors with great precision. Yet, most fail to measure the most critical predictor of their teams’ success: trust. Unlike performance metrics like unit sales, revenue, or sprints, measuring trust and relationship strength predicts team effectiveness just as your level of fitness predicts your longevity.

The ROI of Trust

Trust has been a topic of leadership and team research for over 60 years. During those decades, academics piled up study after study showing the benefits of trust in leaders. Over the past 30 years, business books and articles have touted the power and virtue of trust. From researchers, organizational psychologists, and business gurus there’s a consistent message that trust is the single most essential element determining an organization’s ability to consistently deliver exceptional results. Trust leads to high-performance because it enables people to work safely, authentically, and be fully engaged. And, it’s the antidote to toxic people and cultures.

In his book Trust Factor: The Science of Creating High-Performance Companies, Professor Paul Zak talks about his research linking neuroscience, trust, and organizations’ performance. Zak provides overwhelming evidence, from both his neuroscience research and dozens of companies with whom he’s worked, of the powerful connection between trust and performance. His research uncovered that people working in high-trust environments were:

  • 76% more engaged at work and 50% more productive.
  • Enjoyed their jobs 60% more and were 70% more aligned with their companies’ purpose.
  • And felt 66% closer to their colleagues, with people showing greater empathy towards their peers and depersonalizing them less often.

When leaders value trust and invest in helping their people create and sustain it, they’re making a small investment that delivers significant returns. Helping people lead with trust across an organization starts with adding a metric demonstrating how effectively each leader builds and sustains trust in their teams.

The Missing Metric

The nature of teamwork has evolved rapidly over the last 25 years. The decline of organizational hierarchy, and the rise of remote, cross-cultural work, has multiplied the challenges of building and leading teams. In the 21st century, exceptional team leaders must be effective in flat, cross-cultural, virtual organizations, requiring a focus on team relationship health and fitness as much as traditional performance and productivity measures.

Networks of teams like Devan’s group are the building blocks of today’s organizations. Developing strong, trusting relationships on and across teams is perhaps the single most significant leverage point for leaders. High-trust teams communicate, collaborate, and innovate better. Trust is an essential element that enables people to take full advantage of diversity, tapping into people’s full potential as they strive together to achieve a goal.

While performance and productivity measures are essential for every organization, they aren’t enough to ensure success in a team-based, often virtual, multi-generational, and cross-cultural business world. Adding a trust metric to scorecards balances the traditional focus on performance management with a measure of leadership quality.  For a group like Devan’s, a trust metric will help her develop the actions and nudge behaviors to deliver peak performance. For other organizations, adding the missing metric is an opportunity to save millions of dollars a year in absenteeism, turnover, lost productivity, and under-performance. That’s not a bad return on investment.

Peter Drucker got it right, “If you can’t measure it, you can’t improve it,” and I would add, “it’s what you measure that matters most.”

Dr. Jeb S. Hurley
Dr. Jeb S. Hurleyhttps://www.xmetryx.com/
Dr. Hurley, the co-founder of Xmetryx, has deep expertise in team science and team leader development, and his passion is inspiring leaders to craft extraordinary teams. Jeb’s career journey began on new product innovation teams in Europe and Asia. This led to GM / VP and CEO roles at companies ranging from Fortune 500 to VC backed startups, as well as co-founding 3 software companies. After nearly 30 years in VP, GM, and CEO roles, Dr. Hurley spent five years walking in the shoes of today's team leaders while earning his doctorate in leadership. He experienced what was and wasn't working on the front lines and combined his research with insights from the best minds in the field of team science. His TRM workshop is based upon his groundbreaking research into human motivation, employee engagement, and team performance. Jeb regularly speaks and writes about team leadership and improving employee wellbeing and is the author of Team Relationship Management: The Art of Crafting Extraordinary Teams, as well as The ONE Habit: The Ultimate Guide to Increasing Engagement & Building Highly-Effective Teams. Jeb has published over 50 articles on team leadership and is a Columnist and Featured Contributor for BIZCATALYST 360°. See Jeb's full bio, and connect with him, on LinkedIn.

3 COMMENTS

  1. Trust is among the core phenomena of humans side-by-side with others like love, one might characterise them as siblings. Their realm is beyond and above many other phenomena like respect, dignity, decency etc. as such Trust is the parent or meta phenomenon. The recurring metric challenge is, that Trust (and related) are largely a) intangible (not directly measurable and only partly causal) and b) the results like any other result are only reactively (regressively) available. Trust is essentially not a data driven strictly causal phenomenon – it is a sensation and feeling. To be absolutely true to itself as a phenomenon it can only be A-strategical in its most prototypical form. It is astounding in spite of the abundant evidence available we still see so little tangible effort – it continues to be mainly talks and hollow statements in corporate value statements. “Developing strong, trusting relationships on and across teams is perhaps the single most significant leverage point for leaders” and trust is contagious (its emotional side) – trust breed trust. Still it is matter of faith (there’s no ONE formula) and we all know it works – because trust is what creates fruitful relationships. It is easy to believe but hard to execute trust building when your metrics largely disregard human behaviour (knowing-doing gap).

    • Hi Per, thank you for the comment. Trust is indeed a core human phenomena. I would however slightly disagree with your statements that trust isn’t tangible or directly measurable, and that there isn’t a formula for trust (at least in the context of the work environment). My work and research’s central premise is that there is a formula for building exceptional teams. That formula is made up of two key parts – behavior and brain chemistry – and revolves around the concept of Trust-Centered Leadership. If we start with the neurobiology of trust, brain science has come a long way in the last 20 years. The work of people like Dr. Paul Zak have shown the measurable relationship between oxytocin and trust/trustworthines. At a behavioral level, trust isn’t only a trait it also acts as a catalyst. Measuring the gap between expectations and experience provides a quantifiable (though self-reported) means of visualizing trust. The behaviors that make up the formula for building exceptional teams (living values, inspiring motivation, coaching relationships) are potent because together they produce a neurochemical cocktail made up of norepinephrine, endorphins, dopamine, and as trust grows, oxytocin. By aligning those leader behaviors, and then using software to turn them into a habit, we can create the ultimate leadership hack for a new generation of leaders.

      Thanks for the opportunity to reply. I’d love to hear your thoughts.
      Best,
      Jeb

  2. Trust is not an issue to be underestimated. It is part of the overall strategy of the company, and significantly affects its financial results and competitiveness.
    Despite efforts, it is impossible to completely prevent the risks of losing trust. However, companies can prepare themselves with a strategy that balances growth, profitability, sustainability and trust. This approach can help reduce the number of episodes of loss of confidence or, if they still occur, limit the damage.

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