Building Trust to Drive Business Results: New Research Defines What Leaders Need to Do Now – And What Happens When They Don’t

Annual Survey from Interaction Associates Details the Formula for Success At High Performing Companies — And Cautions Organizations to Heed Trust Indicators
Trust Still At Rock Bottom — But Business Leaders Get Strong Results When They Are More Transparent and Involve Employees in Decisions

(BOSTON, MA – June 13, 2012) — Interaction Associates has released Building Trust in Business 2012, its annual research on trust and leadership that details the critical do’s and don’ts for driving strong business results by building trust in leaders at all levels.

The findings in Building Trust in Business 2012 offer both a cautionary tale for companies that do not specifically focus on building trust — as well as rare good news in a still-sputtering economy for companies that do. Building Trust in Business 2012 surveyed 440 leaders at more than 300 companies globally – polling them on specific issues at the intersection of trust, leadership, and collaboration. For the 2012 research, Interaction Associates partnered with the Human Capital Institute, the global clearinghouse for best practices and new thinking around leadership and talent management. The full report – Building Trust in Business 2012 – is available here.

Huge Decline in Trust
For the fourth straight year, the Building Trust 2012 survey points to big declines in leadership and trust across the business spectrum – with trust at its lowest level since Interaction Associates began surveying the issue in 2009. For 2012, trust takes the biggest hit on the question of whether leaders are consistent, predictable, and transparent in decisions and actions. In 2012, only 23% of respondents said that their companies' leadership is consistent, predictable and transparent, compared with nearly 40% in 2009.

Trust Impacts Results
Despite the dramatic decline in trust, there is good news in Building Trust 2012 – with important data tracking to an economy struggling to grow stronger. The 2012 results show a clear, explicit connection between companies that achieve strong business results and high ratings in trust, leadership, and collaboration. Additionally, leaders of high performing companies are more focused on employee involvement – including the notion of shared responsibility for success as a key driver of business results.

In companies that are performing well in the areas of revenue and growth, employees are 12% more likely to recognize how their tasks are linked to the organization’s overall objectives than are employees in less successful companies. And these higher-performing companies are 13% more likely to provide a collaborative environment founded on shared responsibility for success. “Trust is at rock bottom, but if leaders want to drive trust levels higher, we say: focus on openness, transparency, and involving employees,” said Linda Stewart, CEO of Interaction Associates. “Shared responsibility for success is a key characteristic of high trust organizations – meaning employees are committed to a common goal and are eager to collaborate to make it happen,” added Stewart.

Comparing High Performing & Low Performing Companies
Building Trust in Business 2012 distinguishes between high performing and low performing companies. Survey respondents who stated their company’s net profit grew more than 5% over
the previous year were classified as working for High Performing Organizations (HPO’s). Companies with profit growth below 5% were classified as Low Performing Organizations
(LPO’s). Respondents’ self-reporting along those definitions were verified independently by analyzing public information on each company.

Leaders Build More Trust at High Performing Companies
High Performing Organizations are more successful at building trust, their leaders are seen as more collaborative, and they’re much better at retaining key employees. Compared with LPO’s, 14% more survey respondents from HPO’s agreed that employees have high trust in management and 15% more see their leaders as effective. “In other words, at high performing companies, leaders are trusted, they’re known for leadership transparency — and they involve their people in decision-making,” said Linda Stewart. “That’s really good news for any company looking to know what helps drive substantial results today,” added Stewart.

Additional Insights Linked to Financial Success
Building Trust 2012 details other patterns around trust, leadership, and collaboration --- characteristics that are strongly correlated with financial success. Examples include:

• High performing organizations have shifted to a focus on building and managing relationships as a key priority, which differentiates them from the rest of the pack.
• HPO employees are 14% more likely to say they have the interpersonal and group skills needed to collaborate, and are open and receptive to the suggestions and opinions of others.
• Employees at HPO’s are 19% more likely than employees of low-performing companies to say their leaders reflect realistic optimism and confidence in the future, and that they have specific and measurable goals that are clearly linked to the organization’s strategy.
• Employee engagement and involvement levels are down at HPO’s and LPO’s, but employee involvement levels are stronger at HPO’s. In fact, HPO’s have more than double the percentage of involved employees than do LPO’s – and HPO’s are more effective at retaining key employees.