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Video: Without Trust, There Is No Innovation
Robert Porter Lynch’s clients include Procter & Gamble, Bell Canada, IBM, Exxon Mobil and Cisco. The man knows what he’s talking about and that’s why Productivity Alberta brought him to Alberta to to speak and engage with members of the business community. Below is a video excerpt from a conversation with Robert Porter Lynch on on the importance of trust in the innovation process.
It might sound a bit touchy-feely but if you are serious about innovation you should take Lynch’s insights to heart.
** Transcript**PA: What is trust worth? RPL: Let me try to give some examples to you of just what trust is worth. Let’s look at the headlines in today’s Globe and Mail which talks about Air Canada going the same route as American Airlines and going into bankruptcy. Trust in the airline industry makes a very big difference. Look at WestJet, a high trust organization. They hire their people based on the idea of trust and they’ve been consistently profitable. Whereas Air Canada loses money, month after month, year after year.
John Helliwell is an economist at the University of British Columbia. His data on trust shows that people who trust stay in their jobs. Retention is going to be very important when it comes to the next boom. His research also shows that if you raise trust just 10 per cent in an organization it’s equivalent to a $40,000 raise. That’s big, if I can make you feel like you just got a $40,000 raise from increasing trust not only have I improved the productivity and innovation within my own organization but the company will become better at retaining its staff.
If you want a counter-example look to the boom of 2005 to 2007. WestJet had virtually no turnover while people working in other industries were crossing the street for an extra $1000 a year. The economics of trust are very powerful.
PA: Business leaders like to measure and analyze. How do you measure and reward trust? RPL: The issue of how to measure trust is very, very important. Ask your employees simple questions year after year. Do you trust your co-workers, do you trust your leaders? Companies that aren’t asking that question on an annual survey are really missing the boat.
There are more detailed questions you can ask as well. Do you feel you’re getting your fair share? Do your co-workers do what they say they’re going to do? Do you respect your leaders? Do you respect your team? Do your co-workers tell the truth? Are people honest and fair in their dealings? So there are specific questions you can ask and once you know how your workforce feels you can address their concerns. But if you don’t reward and measure trust you can’t give people promotions on it, you can’t retain people because of it.
How do you manage your supply chain? Do you use suppliers that are honorable and trustworthy in their dealings with you? Or do you measure the value of your supply chain by who gives you the lowest price? Is it a cutthroat game you play with your suppliers? The issue of trust is not just an internal issue. How do you deal with your customers? Does trust flow outward to them? It has to do with the entire culture of a business and it’s something that should be considered very carefully.
Trustworthy companies are able to form alliances, not just with their customers and suppliers but even with their competitors in order to serve a mutual customer base. Untrustworthy companies don’t form these alliances and don’t benefit from the synergies from the other players in their value chain.
