Two companies with similar activities and the same assets and resources will not show the same performance, degree of innovation or competitive advantages.
How can we explain this? The company has abstract resources, namely human resources and skills. Let’s compare them to an iceberg. On the balance sheet, they are represented by personnel expenses that are quantifiable. However, know-how, interpersonal skills and competencies are difficult to evaluate. This is the submerged part of the iceberg.
But let’s go further in the comparison. Let’s imagine that these two companies are endowed with the same assets and resources, including skills. Will they obtain the same result? Probably not, because an essential factor is missing, which is also an invisible resource that is much more important than we imagine. This is the trust asset
The trust asset
Trust is an essential mechanism without which we could not act or interact. Without trust, the world is unlivable. There can be no more exchange and cooperation. Money, which is the basis of our economy, cannot exist without trust. Economic or social crises are often due to crises of trust. Remember the crisis of 1929, which struck people’s minds. When shareholders no longer have confidence, the markets collapse. When a people no longer have confidence in their institutions, the country enters turbulent zones.
In economics, the first definition of trust was given by Kenneth Joseph Arrow (1972, 1974): trust is an “invisible institution” that facilitates exchanges, in other words, it is elusive, we do not know what it comes from, but the economy needs it.
Distrust isolates, separates, cuts, while trust binds, connects, assembles. Trust is the cement for exchanging and living together.
Trust in the company
#Employees- hierarchy and human resources
Trust is found in all the relationships that a company develops with third parties. It allows the company to build customer loyalty, secure supplies from suppliers, obtain funding from banks or shareholders….
But what about the company’s employees, especially since it has been proven that the level of trust a customer has for his supplier depends directly on the level of trust the supplier’s employee receives?
From the first step in the company, invisible links are created between the employee and the company. Apart from the legal contract, there is a subjective contract that will strongly impact the relationship. This link is called the psychological contract. Denise Rousseau’s article1 has published a reference regarding the definition of the psychological contract. This contract binds each employee to the company through implicit mutual beliefs, tacit or explicit promises, and exchanges of tangible or intangible resources. It conditions the employee’s contributions.
We need to understand is that this contract is changeable, as are the expectations of employees throughout their professional lives. The adaptation of the contract is permanent and follows the organization’s messages (e.g.: you are working well, we’ll soon offer you a position with more responsibility) or is based on an individual construction or belief (e.g.: my manager owes me respect). The employee constructs his or her patterns by identifying promises and/or expectations, translating them into reciprocal obligations.
The rupture of this invisible and deep link can lead to intense emotional relationships and a loss of trust that will inevitably have repercussions on the company. This results in significant costs for organizations, including loss of productivity, mobilization and even resignation.
#Employees- producer of values and innovations
The employee’s trust within the company goes beyond the relationship with the hierarchy or human resources. It changes the way they work, cooperate and exchange.
Trust is a major asset for the company because it produces value. Sociological and economic approaches agree that the relationship of trust allows the coherence between individual and collective interests. As each individual actor gains from the collective organization, general well-being increases. No cooperation is possible without this trust in the collective. Several conclusions can be drawn from this:
- Through trust, mutual commitments facilitate cooperation
- Trust has a pacifying effect on the social climate. For Kenneth Joseph Arrow, trust is the “lubricant” that underlies the functioning of the social system and its efficiency. Without it, friction would be too great. Distrust and mistrust cause the machine to break down and the first signs of this will appear within the company through disengagement, resignations and social conflicts….
He also points out that generating trust has a positive impact on investment in human capital. This relationship is important because while the relationship between social capital and growth is sometimes uncertain, the one between human capital and growth is much less so. Trust is an essential determinant of growth and therefore of performance.
Finally, in a complex and uncertain world with rapidly evolving digital technology, innovation has become the lifeblood of the economy. The rise of intra-organizational cooperation mechanisms, on a laboratory scale such as hackathons, or on a team or project scale, calls for collective intelligence to innovate. Here again, trust plays a fundamental role, as it is the keystone of innovation. Indeed, as it changes the way of working by generating collaboration, it allows the activation of collective intelligence.
#Employees- CSR, PSR
After having seen what trust can bring to the company in terms of value production via performance, innovation capacity, social stability, let’s take a closer look at its main contributions for the employees and, by ricochet, for the company?
Working in a climate of trust improves relations with one’s hierarchy and colleagues. Let’s remember that relations and working conditions are an item in the Corporate Social Responsibility guideline.
Trust based relationships also reduce psychosocial risks (PSR) such as stress and burnout that affect the mental and physical health of employees in their work environment. These risks have serious consequences for individuals: illnesses, depression, psychosomatic diseases, and for the company: absence, resignation, turnover, work accidents.
Trust is a real issue for the company. How can it deal with an invisible issue?
For the company, a real problem arises because trust is impalpable and is only noted when it is found to be missing.
Is there a discrepancy between the trust perceived by the employer and the trust shown by the employees?
Should we wait for the first signs of a lack of trust within the company before taking action?
What are the warning signs of a loss of trust among its employees?
How to act? What is this loss based on, what can cause it among employees?
Which preventive measures can be taken to avoid the risk of a trust crisis?
How can it be included in the risk map so that questions can be asked at the right time?
A solution: measuring trust
By measuring trust, precautionary measures can be taken. How can objective and subjective data be made available? What tool should be used to measure trust? How often should it be monitored?
Startrust has been working for 8 years on the measurement of trust. The result is the creation of an algorithm to evaluate it. The Startrust logo is a sextant, because measuring trust among employees can help guide companies towards better management of their human resources.
How does Startrust do it?
Startrust will measure the climate of trust from the answers to a questionnaire given to all employees or some of them (governance, n+1 or representative sample) according to the company’s choice. The results are presented by a trained and certified Startrust advisor, who is a coach by profession. At the same time, the company receives a global report of the results.
The work on trust is therefore carried out on two levels:
- At the individual level with an action plan established during the feedback to improve confidence;
- At the company level with regard to the global report which will allow the company to determine the need or not to work on trust relationships by using the different levers mentioned in the report.
This solution provides the company with a real opportunity to create, preserve and reinforce trust.
Identifying the risks of deterioration in the climate of trust and activating the levers to remedy it means acting before it is too late.
Startrust is the key to accessing this invisible and invaluable capital, as it accurately identifies the levels of trust. Risks are then determined, which finally allows the integration of trust (major risk) in the company’s risk map in order to treat them and follow their evolution.
1 “Psychological and Implied Contracts in Organizations”, 1989