The importance of trust in business

published by the Nashville Business Journal

Instinctively we all know that building a high level of trust is the right thing to do. However, can you really measure the impact of trust on business? Yes. I found this out after researching study after study that overwhelmingly validated the economic benefits of operating in a high-trust environment. The returns to shareholders have been measured at double, triple and even quadruple those of lower-trust organizations. Wherever you are on the organizational chart, there’s ROI tied to trust. 

Let’s look at some of the key components of high-trust organizations:

Set focused direction – Take measures to ensure everyone knows as clearly and completely as possible where the business is headed. Then consistently share goals and performance measures. For example, daily sales compared to plan is the most important measure for Tractor Supply Company stores.  Every morning in every store the sales results are shared with the team.

Success is possible only when the entire team can see the future and measure the past. 

Function as a team – Collaboration helps achieve goals more efficiently. Knocking down the silos or even preventing them from being erected in the first place nurtures the right environment for teamwork to thrive. Leaders who empower team members see much greater levels of cooperation and transparency than those who hold back and micromanage. 

Coach for success – The difference between success and “wild success” is often the amount of time and effort leaders devote to the coaching process. In my retail world I spent inordinate time in stores with a wide variety of staff studying business operations from every angle. Big portions of those trips were spent coaching and teaching leaders at every level. 

Make team decisions – Ultimately leaders are accountable for big decisions, but they should be made with integral team consultation. Push decision-making down the ladder whenever possible. When team members are engaged in the process the likelihood of making a good decision is increased, as is the strength of support and execution. 

Support the team – Teams function best when they have all the tools needed to get the job done. Providing those tools is a leadership responsibility. Your team needs to know you are available for support and consultation. You are a key reference and resource, not a dictator. Engage, listen and empower your people for maximum results. 

Celebrate success – There is nothing that generates more confidence and team trust than achieving success and celebrating those special milestones in an appropriately motivating way. 

The research is clear: Strong levels of trust yield strong results. Still doubting the importance of running a high-trust business? Just Google “organizational trust.” 

Joe Scarlett is the retired CEO of Tractor Supply Company and
Founder of the Scarlett Leadership Institute

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