Trust-Centric Leadership - Insurance Thought Leadership

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March 12, 2012

Trust-Centric Leadership

Summary:

It's hard enough to get a business started on a sound foundation; it's oftentimes much more challenging to continue operating and transitioning into an adult/mature business. The key to success is establishing and maintaining a "trust-centric leadership" model.

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It’s hard enough to get the business started on a sound foundation; it’s oftentimes much more challenging to continue operating and transitioning into an adult/mature business. The key to success is establishing and maintaining a “trust-centric leadership” model.

Notice that I haven’t used the term manager, or management or manage.

Leadership is much different. Leadership helps others advance to a higher level.

Management, in effect, manages the checkers on a checker board. Leadership helps businesses become thriving organizations.

Management stifles creativity, creates meaningless tasks and frustrates employees, while at times satisfying the manager’s selfish desires to be in charge. Leadership doesn’t focus on being in charge; it focuses on effectively getting an organization to an important place.

Micromanagement is leadership gone bad. You never hear the term micro-leadership unless you are talking about a very short leader.

The following diagram presents a model for Trust-Centric Leadership.

Trust-Centric Leadership

This can be described from two different perspectives: that of the leader and that of the subordinate or staff person. Both are critical to high performance.

The Leader’s Perspective (i.e., How They View Staff)
The leader’s responsibility is to develop a trusting relationship with the staff. This is exemplified by developing and maintaining your own trustworthiness as a leader and also demonstrating your trust of the staff.

Without trust the business will eventually fail. Without trust an organization can never thrive and never achieve the adult/ mature stage of its life. Quality recruiting and careful selection of staff improves the likelihood that staff can be trusted. No one is to blame for not achieving this other than the leader. The leader sets the standard and makes the final decisions. Sloppy recruiting can kill an organization. Replacement costs from high turnover rates are wasted dollars. Effective recruiting minimizes turnover rates. Choosing the best available candidate will keep overhead costs down. Choosing candidates who are qualified to replace you will improve performance throughout the entire organization.

After the leader has developed a healthy trusting relationship with the staff, it is the leader’s responsibility to share their vision for the organization with their staff to obtain the staff’s help in achieving the vision (i.e., positive outcome). Without a trusting staff, this effort is futile. The leader cannot do it alone. This is moving from the core of the leadership model to the top where vision is shared.

Once the vision is communicated in an environment of trust, it is important for the staff to be sure they know how to do their job effectively to help accomplish the tasks at hand and achieve success. This is moving clockwise around to Process. If they don’t know how to do their part, they need to be taught. The effective leader helps staff learn what they should do or need to do. Whether the leader directs the training activity personally, or works through professional trainers or other skilled laborers, effective training is required for the staff to do their job right. This must be done in an environment of trust or the training will not be effective.

As the staff begins to understand how to do its job and the trusting relationship continues between the staff and the leader, staff empowerment is a natural next step. This continues to move clockwise around to Empowerment. The leader has to create an environment that welcomes and rewards staff empowerment. The leader needs to be involved in personally encouraging empowerment steps. Some staff will get it but others won’t. The leader demonstrates his trust in the staff by yielding to the staff and delegating key responsibilities to them. Back to trust, the leader has to be confident the staff is ready to be empowered (i.e., trusts their ability to be empowered). When the staff is ready and the leader is confident of it, the leader needs to advance the empowerment process. It is the leader’s responsibility to take the lead in empowerment. This is not something the staff should initiate or in many situations it doesn’t advance. Waiting for the appropriate time demonstrates the staff’s trust of the leader.

As the staff person advances further around the circle, vision is next. An empowered staff person has the right to help craft the future updated vision and perhaps expand the vision beyond that of the original leader. As long as mutual trust exists at the core, the input on vision from staff will be welcomed by the leader as part of the process. Likely this involves expansion with more individuals being part of the trust cycle with much greater scope of activity naturally leading to more, more, more. Since trust is at the core, the effective leader welcomes this input and recognizes the value of the broader participation.

The Staff’s Perspective (i.e., How They View The Leader)
Little progress will ever be made if staff fails to trust their leader. Trusted leadership is a pre-requisite for effective progress. A trusted leader has the potential to effectively lead. A non-trusted leader is impotent. When staff trusts their leader they are willing to listen to the leader’s vision, accept it and adopt it as their own. Without trust, staff will discount the value of the leader’s vision, possibly discredit it and most likely will ignore it and not adopt it. Staff will treat their position as nothing more than a job. Staff will show limited or no commitment to the process and where possible may even undermine the success of the operation. Staff will err on the side of doing as little as possible, just enough to get buy which jeopardizes the company’s success. Most vision requires significant commitment to achieve. To succeed, the business needs everyone doing all they can to achieve the company’s mission. Compliance is a very poor substitute for commitment. Compliance leads to distrust by all which destroys harmony and leads to dysfunction junction.

Moving around the circle, staff will take the time to learn what they need to be doing only when they sincerely trust the leadership and the direction the company is going. Unless staff feels valued by the leadership, they will assume empowerment is not an option or even a possibility. They at best propagate compliance and no commitment. It becomes a self-fulfilling prophecy. They will not do what it takes to be empowered, therefore they never become empowered. They most often complain about the leadership further proving to the leadership that staff can’t be trusted. They lack the desire to take the next step since they don’t trust the leadership or believe there is much chance of empowerment ever happening. Never being empowered, they fail to advance, keeping them in a position of distrust since leadership doesn’t recognize their capabilities or potential. The business doesn’t advance and often leads to a decline or even failure.

Diagnosing a Trust Problem
Many dysfunctional organizations simply suffer from a trust problem (i.e., lack of trust). Example after example shows a breakdown in trust. Business failures go back to a core trust problem. Some real life examples of this are:

  • Non-performing sales operation: This mid-sized company was not achieving its sales goals. Discussions with sales leadership showed significant frustration that sales had no seat at the table. The company’s leadership team had representatives from each of the key areas of the company except for sales. They saw no need to include them since they were just sales personnel. Sales felt they deserved more respect and a seat at the table.

    We recommended that this be changed to include someone on the leadership team, someone new with strong sales skills. Within a few weeks of restructure, sales performance improved and the business started to thrive. Today several years later the company has almost doubled in size and trust has been built around the leadership table. No more criticism with leadership, they are all in it together.

  • Non-performing nurse care managers: This health plan employed physician medical directors and nurse care managers in their care management operations. In addition to being trained in care management, nurses were often utilized as cost effective substitute experts for physicians, essentially physician extenders, especially on simple and more straightforward items. During an operational audit, we observed overly cautious nurses that were not appropriately providing care management. It seemed as though they were afraid to make simple judgements. They weren’t making decisions as expected and seemed to be overly timid in their process. By definition, the job description required more aggressive behavior.

    Further investigation showed that performance stopped shortly after an incident where the medical director didn’t stick up for the appropriate decision of a care management nurse in a controversial situation. The nurse felt abandoned and betrayed by the medical director even though they had made the correct decision. This nurse and others who became aware of the situation no longer performed their task effectively since they could no longer trust their leader, the medical director. Once the leader let the staff down, they could not and would not perform. This trust failure led to significant financial losses as health costs skyrocketed.

    This particular situation could not be fixed with the current medical director. Once the medical director was replaced, with clarification of how the process was to work, this led once again to a trusting fully functioning operation. Trust could not be rebuilt with the prior leader.

  • Higher than average turnover rates: An organization was experiencing very high employee turnover rates in a particular department that was critical to the company’s success. Initially the concern was focused on finding problems with recruiting since the company had lost four different key staff members in this single position over the past three years. Leadership was very concerned about impact of losing so many people from a single position.

    Investigations showed that the problem was not recruiting but rather an unwillingness of the department leader to empower the position to do what it should be doing. The leader wanted to maintain the spotlight on themself and keep staff away from more senior leadership. This executive was threatened and frankly was operating at a much higher level than their own level of competence. They weren’t able to do their job effectively and relied upon staff to make them look good. They were not trustworthy themselves and clearly were not willing to give staff the attention and credit they were entitled to.

    Once discovered this leader was removed with one of the recent staff people rehired to take this position. Trust was rebuilt and now the company thrives. The leader’s willingness to delegate, give credit as it is due, show higher leadership the value of their staff, and share the credit helps to quickly build leadership.

Preserving Trust
It is critical that trust be preserved at all cost. This requires direct accountability and open and transparent two-way communication. Without clear communication, trust will erode eventually hurting the business. Trust assures success and accountability, and communication assures trust.

Conclusion
Take a close look at your organization’s TQ (i.e., its Trust Quotient). If high, strive to raise it even higher. If low, take prompt action while there is time.

If you are the leader and have a hard time really trusting your staff, go back, look in the mirror and be sure you are a trustworthy leader. Go out of the way to demonstrate your trustworthiness, be true to your word, show that you really care, and your staff will respond. First one at a time, then in larger groups, then everyone. Trust is catchy and very obvious. Mistrust spreads faster and is more obvious.

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