Explore the people-based elements of trust and learn how building a culture of trust can give you a competitive advantage.

In the previous post, we talked about the process-based elements of trust.  In this post, we’ll talk about the people-based elements of trust and discuss the competitive advantage that comes from institutional-based trust.

Why does institutional trust create a competitive advantage?

As we’ve stated, institutional trust exists when individuals trust the people and the processes of an institution.  When institutional trust exists, people are perceived to have the best interest of others in mind and count on one another to be fair and to perform.  This results in open communication, sharing of information and other resources, support, cooperation, coordination, efficiency, innovation, and effectiveness.  These practices become the norm—the way people work together.

And when these become the norm because there’s a culture of trust, people are more accepting of others and are more open to being influenced.  As a result, they manage differences well.  Social interactions and problem solving are more effective.  Time and energy are directed toward team and organizational goals.  People are engaged and committed.  Morale is good.  Execution is easier.  Ideas flourish.  New approaches are tried.  The organization stays on the cutting edge, forging new paths and creating a competitive advantage that sets it apart—all because of trust.

Now let’s turn our attention to people-based trust and explore it in more detail.  As we’ve mentioned, three elements lead individuals to perceive people as trustworthy: (1) intention, (2) competence, and (3) reliability.

When we trust someone’s intentions, we believe that he or she has our best interests in mind.  When we believe that someone is competent and reliable, we trust that person to perform.

A culture of trust based on good intentions can be created by infusing fundamental principles about how to be and how to treat others.  Regarding competence, individuals should be placed in roles that utilize their knowledge, skills and abilities or be given the resources and support to develop those required of their position.  Regarding reliability, leaders should ensure that workloads are realistic, organizational processes are lean and effective, and a culture of responsiveness exists.  This is where Six Sigma/Lean Processes and Kaizen events can add so much value and why infusing fundamental principles that lead to cooperation is critical.

Now that we’ve explored trust in people, trust in processes, and trust in institutions, let’s discuss how they relate to the precursors to trust.

Building integrity increases people-based trust because it leads to the perception that an individual has others’ best interests in mind.

Strengthening emotional intelligence also increases people-based trust because it leads individuals to view situations more clearly and therefore more objectively (i.e., based on facts).  In addition, emotional intelligence increases an individual’s ability to see situations from other perspectives, which increases the likelihood that he/she will engage in effective communication processes.  Doing so not only increases process-based trust because the individual is more likely to engage in procedures that are perceived as fair, it increases people-based trust because the individual is more likely to be perceived as having others’ best interests in mind.

When organizations create inclusive networks where social ties can be formed and strengthened and people can freely exchange information and resources, institutional-based trust is strengthened because it increases the perception that the organization has people’s best interests in mind.  The same is true when organizations provide the information and resources needed for people and teams to perform well.

When effective communication becomes the norm and people genuinely strive to see situations clearly, understand one another and generate inclusive solutions, both people- and process-based trust increase.

How does all of this pertain to COOs, CMOs, CHROs and CVOs?

Leaders can strive to ensure that their decision-making processes are fair (i.e., based on facts and seeking input from all involved), and therefore trusted.  Leaders can also strive to be personally trustworthy by keeping others’ best interests in mind and being competent and reliable.  Last, leaders can build institutional trust (i.e., trust in the institution’s policies and procedures to be fair and trust in the institution’s leaders to be competent and reliable and to have others’ best interests in mind).

In the next post, we’ll look at how trust gets built, why it might get weakened or broken, and how to repair and even strengthen it when it does.

Action Item:

  • Think about the times when you were certain that you could trust your leaders.
  • Did they have others’ best interests at heart?
  • Did they promote fair procedures?
  • Were they competent?
  • Were they reliable?
  • Did people feel free to share ideas and information openly?



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