Over the last five years, nearly every single Australian workplace has experienced significant change at some level. Whether that’s a merger, new CEO or executive...
Building workplace trust has become more important than ever before.
Today’s ever changing workplace, features increasing speed, complexity and dense interdependencies. Over the last century, work has transitioned from labor intensive, repetitive work to today’s knowledge based economy.
Back in 1975, 83% of a company’s value was through tangible assets such as equipment, buildings and inventory. In 2020, intangible assets such as intellectual property and goodwill now make up 90% of a company’s value.
Twenty-first century work is no longer about how many widgets staff produce, but how well they make them together. Our economies thrive through idea generation, partnering and innovation from teams of highly skilled experts. Generating enormous value through cross-selling to clients, as well as developing algorithms, software, intellectual assets and brand value.
Our digital work tools rely on high-speed internet, digital communication and networked computers. Enabling us to instantly access information and collaborate with others in real time. Paradoxically, our human interactions have not caught up to our technological capabilities. Decision-making and business activity has indeed being slowing down in organisations since 2010.
Technical expertise is no longer enough. The seeds of success revolve around communication, co-operation and teamwork. Our interactions must truly adapt to our digital connectivity capabilities; supporting the seamless exchange of ideas, people, resources and information.
I believe that there are three main factors that are all underpinned by trust which organisations must get right to create a successful company culture today.
1. A New Organisational Structure
The first factor is a new organisational structure. The linear, hierarchical organisational chart of the past made sense when work could be planned and variables were stable. But today, it’s impossible to anticipate what resources are required and how to deploy them when work evolves as you progress. This requires teams that understand all the pieces of the puzzle and who are permitted to figure out how to organise themselves to work efficiently.
As General McChrystal says in the book Team of Teams, organisations must be networked, not siloed. This involves creating an inter-connected lattice of a team of teams to foster cross-silo collaboration, so that the insights of many teams and individuals can be harnessed across the organisation. Functional silos are no longer effective in an interdependent world that requires employees to innovate and solve tricky problems.
Teams that can flex allow organisations to navigate uncertain times making them more sustainable and antifragile. In the parlance of Nassim Taleb, in his ground-breaking book of the same name, Antifragile, fragile systems break down under pressure, but antifragile systems improve. Yet, few organisations, and their people, are designed to get better with increasing stress.
It requires organisations to hack away at old processes, redundant systems and learn continuously; iterating and adapting. Think of it like training a climbing rose to cover an arch. The more regularly you focus on pruning back wayward branches and encourage other branches to climb an archway the more it will reward you with a majestic garden backdrop filled with beautiful roses in spring. Rather than a thorny mess that’s more susceptible to disease and with fewer blooms. Embedding antifragilility into an organisation’s architecture enables it to adapt and grow in the right direction over the long term.
This requires a CEO dedicated to creating strong bonds across the organisation. Ensuring that every employee understands how everything works together through an overarching vision that every department can operationalise. And the only way an enterprise can adapt quickly to changing circumstances is if employees trust their leaders, team members, peers and their employer.
Trust is essential. Without it, social groups can't function properly. Without trust, there is no meaningful connection between people. It’s just meaningless co-ordination.
It’s trust that shifts a group of people into a high performance team. It provides people with the security to explore the world around them. Inspiring people to commit to actions, make decisions fast and confidently buy into a big vision.
Otherwise, it’s like working in sludge. People block one another; require countless meetings to reach consensus and hoard information and resources.
Trust lies at the heart of every business issue. What starts as a people problem, becomes a productivity problem, which becomes a profit problem.
A definition I created to align trust in a workplace is: The ability for everyone in an organisation to confidently rely on (and predict) that others will do the right thing.
After all, in a workplace reliability is key for teams to work seamlessly together when there are different priorities, challenges and goals.
2. New Leadership Style
Trust leads us to the second pillar, which revolves around a new leadership style. Leaders who have the right combination of technical, interpersonal (the ability to develop and maintain relationships and enlist others) and intrapersonal skills (self-management and self-awareness).
Traditional management techniques gum up the works in this new environment doing more harm than good. Today’s leader must empower people to do their best work in service of a shared goal.
To enable real time innovation, leaders must foster the right environment for teams to thrive. Communicating, collaborating, interacting and thinking differently than leaders of the past. It requires a leader who is people focused, rather than process focused. A leader, who learns fast, brings people together through their extensive networks; integrating and aligning the competing priorities and interests of other teams within the overall organisational strategy. A leader who clearly communicates how everything works together.
Central to this concept are leaders who know how to build trust among team members and with different stakeholders in dynamic conditions.
3. How Results are Measured
The third pillar is how results are measured – moving from measuring outputs to a combination of both outputs and outcomes.
In the 20th century, standard management practice was to measure outputs to drive efficiencies in factories. Monolithic teams toiled in a hierarchical structure that was heavily process driven and predictable. Decision-making was centralised. Employees were poorly educated and not expected to think for themselves.
Now, the world of work requires highly educated employees working together to solve complex problems and make decisions. Results take longer to achieve. It requires leaders who can trust employees to do the work based more on achieving outcomes rather than clocking in and out at a certain time each day. Not only that, but with the rise of remote working, leaders have to trust that people are getting work done.
Measuring outputs are a relic of the industrial age that are no longer as relevant. They are also lag indicators, which provide information on how the organisation has performed in the past. While outcomes or inputs are lead indicators that shed light on future performance; providing guidance on what needs to be modified.
Lag indicators hide what is most revealing about the organisation, while lead indicators highlight what activities people are doing the the organisation to support future growth. However, lead indicators take time to solve and rely on two types of trust – faith that the strategy will work and trust that the team are doing the work to get there in the end.
Introducing behavioural metrics supports leaders in understanding their part in building the company culture. Traditional accountability structures can unintentionally block team and collaborative behaviours. It can also increase leadership blind spots and resistance to change that get in the way of progress. Redesigning rewards and incentives that reward collaborative behaviours help circumvent unnecessary friction. After all, numbers don’t run a business – people do.
This requires shifting to behavioural metrics that ensure leaders are undertaking the right interactions with those around them. It’s not longer about “What results am I accomplishing?” but “How are we achieving results?”
Most leaders focus on what, but focusing on how ensures that success isn’t being manipulated through optimising revenue and expenses to match earning expectations. This can result in adversarial win-lose scenarios between team members, pushing them to compete against other lines in the business or take all credit for their performance. It can be a major contributor of distrust in an organisation.
Today, solving complex tasks and working with others remotely requires trust. The result is faster decision making, the sharing of resources, errors and ideas.
The reality is we can no longer operate like how we did in the past. The pandemic has taught us that things can change quickly. We have had to relinquish management practices designed for a different time and place. A time when there was standardised, repetitive work and people were treated as human resources – not human beings. A time when leaders ruled using fear and compliance. A time when companies mattered, not people.
Leaders who can build trust with all of those around them, create a safe environment even during times of uncertainty. And they can't do it alone. It requires the CEO and executives to champion new leadership behaviours, the right incentives and organisational structure that fosters trust. Get it right and it ensures an antifragile firm that can quickly shift and change to meet the demands of today.