At Entrepreneur, leadership consultant Matthew Wride examines trust in the workplace through the lens of a Nobel Prize-winning economics theory “on how markets operate when transactions involve asymmetrical information“:
Asymmetrical information is the enemy of trust. Unsurprisingly, trust is eroded when we believe others are withholding information or where we do not have enough information on our end to move forward with conviction. We hesitate, just like the used-car buyer who frets over whether he is getting the deal of a lifetime or a bucket of bolts and a set of blown valves, worn rings and a barely-working water pump. …
In our view, trust is best fortified and grown through expectation alignment. …
Interestingly, my firm has found that the nature of a person’s expectations is less important than whether there is alignment between the parties. Again, the used car market illustrates this point all too well. If we buy a low-priced car and it breaks down, we become less upset because “we got what we paid for.” On the other side, nothing is more frustrating that than paying top price for a late model Honda Accord, only to find yourself stuck with a costly repair bill. Just like we don’t relish surprises with our used cars, employees do not thrive when there are too many surprises at work. They prefer consistency and predictability.
This is one of several articles and studies our team has come across reinforcing the value of trust for organizational performance and highlighting the challenges of nurturing trust in today’s environment. Trust has also been a key theme in several of the best practices we’ve published in our recent research on enterprise contribution and enterprise leadership.
(CEB Corporate Leadership Council members can explore that research here and here, and in case you missed it, check out the replay of our October webinar with Stephen J. Scott, founder and CEO of Starling Trust Sciences, on how to identify and leverage trust networks in the workplace).
In our new research in 2017, we hope to explore the role of trust in creating and sustaining organizational culture. Is trust a prerequisite for culture change or the outcome of a high-performing culture? Is trust one type of culture an organization might pursue or the foundation of any successful culture? Organizations tend to rely on senior leaders to drive their culture, but could trust barriers (for instance, due to asymmetrical information, as this article describes) be hindering their efficacy as agents of change? Stay tuned!