TRUST ME, I’M THE BOSS

A version of this article was originally published by IESE Insight(http://insight.iese.edu)

Transformations and adaptations cannot take place within an organization unless the employees trust their leader. Studies have shown that transformational and charismatic leaders are able to build this trust in their followers, and that there is a correlation between leadership and effectiveness.

Conversely, if there is a lack of trust within an organization, employees are more likely to take a defensive stance, which can be detrimental to the organization and its performance. Given the current economic climate and prevalence of downsizing, creating trust is a challenge like never before.

Recognizing the seriousness of this issue, IESE Professor Pablo Cardona and Wei He look at how trust is initiated, developed and maintained in organizations. Their paper examines the factors that influence trust levels in boss-subordinate relationships, and they suggest some ways of restoring the trust that is so essential for the successful running of any organization.

WHAT IS TRUST?

Though trust has been studied across a variety of fields, from history to psychology, the concept remains difficult to pin down in one universal definition. Generally speaking, however, trust can be understood as a relationship that involves a "willingness to be vulnerable to the action of another person, based on positive expectations about the other person's intentions and behavior," according to Cardona and He.

Based on this definition, trust becomes not necessarily a choice, nor a specific behavior, but more an attitude toward a particular person who can be the cause of another's choices. Trust, therefore, is the attitude someone takes based on direct or indirect experience with another person, past interactions or personal observations of how that person behaves toward others.

THE TRUST FACTOR(S)

By definition, the boss wields power over the subordinate. However, this does not mean that the worker is a passive receiver of trust. Rather, the worker's perception of the boss will determine his or her participation in "an interaction of trust."

What factors encourage trust or distrust between workers and their supervisors?

First, there are the personal factors -- characteristics of the boss and the subordinate -- that affect the extent of the subordinate's trust in the boss. These factors include demographic characteristics, personality traits and the professional competence of each.

Second, the boss's behavior during interactions with subordinates will also determine the boss's trustworthiness. The five key types of behavior are consistency, integrity, communication, delegation and consideration.

THE MATRIX APPLIED TO CHINA

Trust is a dynamic relationship, and the interaction process involves both the boss's personal factors and his or her behavior. Obviously, the personal factors are concerned with the characteristics of both parties involved in the interaction, while the boss's behavior is concerned with the relationship between boss and subordinate.

Cardona and He provide an illustrated matrix of this dynamic relationship. This matrix reveals a variety of dimensions, including the idea that, at the start of a relationship, favorable personal factors are necessary for trust. However, those factors may become less important as time goes by, because they could be compensated by accumulated past experience.

While their trust matrix is based on Western-based cultural studies, it can just as easily be applied to China. The authors take the four categories of the matrix and match them with four Chinese counterparts: the fast-dying paratroopers, the slow-dying old fellow, expatriates and successful entrepreneurs. Combinations of personal factors and the boss's behaviors will lead to different perceptions from subordinates: respect only, trust or distrust.

DEVELOPING TRUST OVER TIME

The length of a relationship can often indicate the degree of trust between parties, with the number of years between a boss and subordinate thought to have a positive correlation in terms of the level of trust. However, trust does not automatically come with time, but rather with the quality of the interactions between the boss and subordinate.

In general, the subordinate will develop an initial trust or distrust of the boss based on personal factors. Competence and trustworthiness are often based on information received via third parties or on direct observation of how the boss behaves toward others.

When boss and subordinate begin to interact, trust will develop based on the quality of their interactions. The boss's behavior and subordinate's response provide a dynamic relationship of mutual influence. Obviously, as the boss is in a position of greater influence, his or her behavior is critical as to how it affects the subordinate's motivation.

The interaction will continue with the boss's initial judgment of the subordinate's capabilities. From that initial interaction, the relationship develops. While a boss might trust a subordinate, it does not mean the subordinate trusts him or her back, though it is essential to have some degree of reciprocity.

POTENTIAL RISKS

While many bosses express a strong desire to build and maintain trust, not everyone is able to achieve it. This is due to four issues in the boss-subordinate relationship: the nature of the relationship, unclear principles and values, incongruence between words and behavior, and misuse of power and authority.

But if bosses and subordinates are able to interact effectively and achieve the desired trust, the results will be positive all around. Indeed, the level of trust can eventually be such that, according to one American survey, the majority of workers polled said they would trust their boss with baby-sitting their own children, and 77 percent said they would actually hire their own boss. Now that's trust!