Friday, November 2, 2012

Covey’s Speed of Trust 18: Wave 3—Organizational Trust

Covey waves of trustThis continues our review of Stephen M. R. Covey’s book The Speed of Trust. I seriously urge you to buy it and practice these guidelines for trust.

Covey describes helping companies analyze trust in their organization. He writes “The biggest ‘Aha!’ comes when they realize that it’s happening as a result of violating principles—not only individually, but also organizationally. It’s not just violating the 4 Cores and 13 Behaviors; it’s also violating the principles of organizational design that create alignment with the cores and behaviors.”

The 7 Low-Trust Organizational Taxes

Low organizational trust slows the speed of the organization and increases the cost. Covey calls this a trust tax. He identifies seven taxes generated within low-trust organizations. I have personally witnessed all seven taxes in organizations:

  • “Redundancy tax is paid in excessive organizational hierarchy, layers of management and overlapping structures all designed to ensure control”
  • “Bureaucracy tax is reflected in excessive paper-work, red tape, controls, multiple approval layers, and government regulations. Rather than focusing on continuous improvement and getting better, bureaucracy merely adds complexity and inefficiency—and costs—to the status quo.”
  • “Politics in the office generates behaviors such as withholding information, infighting, trying to ‘read the tea leaves,’ operating with hidden agendas, interdepartmental  rivalries, backbiting, and meetings after meetings.”
  • “Disengagement is what happens when people continue to work at a company, but have effectively quit (commonly referred to as ‘quit and stay’…One of the biggest reasons for this is they don’t feel trusted”
  • “Turnover represents a huge cost for organizations, and in low-trust cultures, turnover is in excess of the industry or market standard.”
  • “Churn is the turnover of stakeholders other than employees. When trust inside an organization is low, it gets perpetuated in interaction in the marketplace, causing greater turnover among customers, suppliers, distributors, and investors.”
  • “Fraud is flat-out dishonesty, sabotage, obstruction, deception, and disruption—and the cost is enormous. In fact, most of the first six organizational taxes are actually a result of management’s response to this ‘fraud tax’—particularly the taxes of redundancy and bureaucracy.”

Monday we review the high-trust organizational dividends of the 3rd Wave of Trust

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