Why Trust Is Crucial For Leadership

Trust is one of the foundational aspects of human collaboration. Here's why it matters for leaders.

Why Trust Is Crucial For Leadership
"People trusting each other" – Midjourney

Trust is a fundamental element of all aspects of life and is especially relevant for leadership. Trusting relationships between leaders and employees foster high-performing teams, while those who lack trust will struggle to collaborate and innovate.

In this post, I will explore why trust is essential for leadership and how it can be built.

Building a Foundation of Trust

Jessy got the assignment from their boss—let's call him Steve—to do market research for a new product. Over the next couple of months, they read reports and analyses, conducted interviews, monitored competitors, and much more to finally synthesise all their findings in a comprehensive study to present.

Steve is satisfied. However, he tasks an external company to verify the results without telling Jessy. But obviously, Jessy eventually hears about Steve's decision.

Try empathising with Jessy. How would you feel in that situation? Are you angry? Or can you understand Steve's decision? Do you feel trusted?

Trust is the foundation of all relationships and is especially important for leaders. It's one of their most crucial tasks to ensure an environment that nurtures the genuine connection between people—and trust is the main component for those connections.

As humans, we are naturally dependent on a trusting environment. We're social animals, relying on a group to protect us from outside threats. Michael Tomasello even argues that Homo sapiens is an "ultra-social animal" in the European Journal of Social Psychology: "Our own view is that humans set off down their ultra-social, cooperative pathway when some changes in ecological conditions forced them to become obligate collaborative foragers."

Tomasello further explains that "interdependence of the human variety led humans to put their heads together in acts of shared intentionality in which they acted on and understood the world together as a kind of plural subject. Individuals came to feel commitments and obligations toward one another as they worked together."

Belonging to a trusting group lies deeply rooted in the human essence. And although we do not depend on the group anymore for our basic survival, this primal instinct still applies to our lives—and especially impacts the way companies and leaders have to create their environment. Building a foundation of trust is the leadership's responsibility who has the means and leverage to achieve meaningful changes in the company's culture.

However, trust doesn't emerge overnight. In fact, the phrase "trust me" uttered by someone you don't know or trust might make you even more suspicious. Building trust takes time, persistence, and intrinsic motivation on the leader's part.

The Components Of Trust

We're inclined to look for easy recipes to build trust, a simple checklist we can work through, and the job's done. But trust and relationships don't work that way. They're constantly changing and need to be worked on because if the work stops, they fall apart and eventually break.

However, a long history of research around trust lets you break it down into three components: competence, honesty, and benevolence.

Let's apply this to the fictional protagonists above. If Steve were a trusting leader, he would show the three components of trust:

  • Competence: trust in someone's abilities
    Steve believes Jessy can do proper market research.
  • Honesty (or integrity): trust that someone keeps their promises
    Steve doesn't blindsight Jessy about the external verification.
  • Benevolence: trust that someone has your best interest at heart
    Steve explains why and how Jessy might benefit from the external verification.

To state the obvious: The feelings of competence, honesty, and benevolence apply to both sides of the relationship.

Leaders Need To Act First

The distinction between personal relationships and professional ones between leaders and employees is the difference in power. As leaders are inherently more powerful in an organisation, it's up to them to take the first step.

Simply said: Check your actions against the three components of trust. As a leader, you may also have to take a leap of faith by blindly trusting at first to gain experience and adjust your actions later accordingly.

Additionally, Paul J. Zak found that the following actions also help stimulate the brain chemical oxytocin, which is relevant for building trust:

  • Recognise excellence
    "Recognition has the largest effect on trust when it occurs immediately after a goal has been met, when it comes from peers, and when it's tangible, unexpected, personal, and public."
  • Induce challenge stress
    "When a manager assigns a team a difficult but achievable job, the moderate stress of the task releases neurochemicals, including oxytocin and adrenocorticotropin, that intensify people's focus and strengthen social connections."
  • Give people discretion in how they work
    "Once employees have been trained, allow them, whenever possible, to manage people and execute projects in their own way."
  • Enable job crafting
    "When companies trust employees to choose which projects they'll work on, people focus their energies on what they care about most."
  • Share information broadly
    "Uncertainty about the company's direction leads to chronic stress, which inhibits the release of oxytocin and undermines teamwork."
  • Intentionally build relationships
    "Help people build social connections by sponsoring lunches, after-work parties, and team-building activities."
  • Facilitate whole-person growth
    "Numerous studies show that acquiring new work skills isn't enough; if you're not growing as a human being, your performance will suffer."
  • Show vulnerability
    "Leaders in high-trust workplaces ask for help from colleagues instead of just telling them to do things."

Trust's Impact On The Bottom Line

Besides its fundamental benefits to the company culture, a high-trusting environment significantly impacts business success. As Zak's research found, people in high-trust companies outperform peers in low-trust settings in any critical metric:

  • 74% less stress
  • 106% more energy at work
  • 50% higher productivity
  • 13% fewer sick days
  • 76% more engagement
  • 29% more satisfaction with their lives
  • 40% less burnout

It's hardly a wild guess that these metrics lower a company's costly turnover rate. Adding in the higher productivity, it's clear that organisations with a trusting environment will outperform those with less trust.

Trust is by no means a vanity metric but a relevant driver of success and, therefore, must be a top priority for any leadership position.

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