As leaders and business owners, many of us think about the importance of building trust with our customers, but is employee trust being overlooked? According to new research brought to us by Forbes, over half of American workers feel they have no one to turn to with a workplace issue. This can be detrimental. So where do you start?
On today’s show, we’re pleased to welcome David Friedman, Founder, and CEO of CultureWise and author of his latest book, Culture by Design: How to Build a High-Performing Culture Even in the New Remote Work Environment. Friedman joins us to discuss critical behaviors that build employee trust in CEOs.
Transcription:
Jim Fitzpatrick:
So thank you so much, David, for joining us on the show.
David Friedman:
Oh, it’s my pleasure to be with you.
Jim Fitzpatrick:
Sure. What’s this whole talk about remote workplace. Let’s get them all back in the office. Isn’t that where-
David Friedman:
That would be nice, but its not going to happen.
Jim Fitzpatrick:
… this is going. I think employees are saying, “Not so fast, wait a minute.”
David Friedman:
It is interesting that so many employers wish they could get people back. But certainly my experience and I think the experience of so many, is that employees actually got used to working from home and a great number of them prefer continuing that. Now of course, there are some with little kids and small workplaces at home, apartments or whatever, that they’re dying to get back to work. But for a whole lot of people, this actually, this experiment, worked out pretty well, they’d like to keep it that way.
Jim Fitzpatrick:
Yes, it’s true. I’ve even spoken to some CEOs that have decided to sublet their office space because it’s been working so well, that now their new normal is a complete remote work environment and it’s working well for the company. Some CEOs have reported back that they’re able to attract more talent outside of their specific market, that their headquarters used to be in, and it’s worked out very well for them.
David Friedman:
It’s an interesting point. And it works in both ways from an employer standpoint, exactly as you just said, Jim, we now as employers, can call upon a workforce that can be almost anywhere literally in the world. But my own company has always been remote, so this is not new for us. But I think about in the last year, I hired somebody in South Carolina, I’m in the Philadelphia area, and it occurred to me as we hired him that I don’t care where he is. It doesn’t matter, he could be in South Carolina, he could be in California, it doesn’t really matter. Now the flip side of that is from a retention standpoint, we’re also competing against employers to hold our team members together. We could be cherry picked by people almost anywhere in the world who say, “Hey, I’d like to hire that person.” So we’re competing against a much broader network of other employers.
Jim Fitzpatrick:
Well, that’s a great point. And I agree with you, it’s even more critical then, that you’re building a culture among this remote workforce, which in and of itself, sounds almost impossible. Because you think of culture, you think of team rallies and meetings and huddles and lunches out or lunches brought in or things that you’re… All of those ping pong tables and bean chairs, I guess we’ll be on eBay now from these companies that go, “Nobody’s sitting in our offices anymore, getting to know one another.” So why is employee trust so important right now?
David Friedman:
Well, I think you raise an interesting point first Jim, about culture. We think of so often, or at least we used to think of culture, as the things you were describing, the bean bag chairs, the bring your dog to work day and have pizza every Friday and all those kinds of things. And yet I would tell you that, that’s actually not what culture is. That may be a symptom of culture, but culture is really about the norms of behavior that become accepted in the group. Now again, pre COVID and I’ll describe this dynamic and it leads to your question about building trust. But pre the COVID dynamic, there was an interesting dynamic that took place as companies grew, and what I’ve observed and experienced in my career, is that when companies are small, so picture a company, they’ve got 5, 10, 15, 20 people, it’s typically an entrepreneurial enterprise.
David Friedman:
The CEO created this business and he or she has grown it. And to a degree, the culture was largely established by the example set by the CEO. He or she was around everybody every day. And just be like me, whether its said that way or not, that was the implication, is I’m going to set a standard for the way we work with people. And that’s just the way it’s going to be. And everybody picks it up. And as companies grew again, forget COVID for just a moment, as companies grew from 10 or 15 or 20, to 40 or 50 or 100 people, or perhaps they opened up other offices or maybe they made an acquisition or two, all of a sudden, not everybody was seeing the CEO anymore.
David Friedman:
And if they didn’t find some more programmatic, some more systematic way to build and deepen the culture, they became at risk of losing it when people weren’t seeing that CEO anymore. Well, COVID has created that same dynamic for companies of all sizes. So even if a company is still small, whether they’re small, medium, or large, their people aren’t together anymore. And so if the only way that they were really creating the accepted norms of behavior, which is again what culture is, if the only way they were creating that before was by physical proximity together, people seeing each other and picking up the vibe and the expectation, if that’s the only way it took place, well now with everybody working remote, that doesn’t work anymore. And the bottom line is, that everybody now, not just big companies, but small and medium companies, now have to be a lot more purposeful or intentional or systematic about creating the culture they want.
David Friedman:
And that dynamic has really been forced upon everybody. Now, to your question about trust. Ultimately, there probably is no greater element in the success of any organization, whether we’re talking about internal or external, than creating trust in a workplace. There’s a great book by Stephen M.R. Covey, who was the son of the original Stephen Covey, who of Seven Habits fame. Stephen M.R. Covey is the son, and he wrote a book a number of years ago. It’s one of my favorite books on this topic called, the Speed of Trust. And he talks about how, when trust is present in a relationship, whether it be an employer, employee relationship, or a personal relationship, when trust exists in a relationship, we get this incredible speed because, you say something, I trust you.
David Friedman:
I don’t have to spend a lot of time wasting time or effort. You trust me, I trust you, let’s go, let’s make things happen. And there’s this incredible speed that comes about. And he goes on in that book to look at, “Okay, well, if we understand that,” he calls it a trust dividend, that gets created. He does an analysis of what are some of the behaviors that drive trust? How do you create trust in an environment? And there are key elements of that. Just to give you a few of them, transparency is one of the biggest elements in trust. And again, think of this, not just employer, employee, think of it, company, customer. Think of that personal relationships in a family and a friend group or any other relationship.
David Friedman:
When we are transparent, when I’m honest about what’s happening, it builds trust. When I’m not transparent, again, no matter who it is, it leads people to wonder, “Well, what’s really going on here? What are they really trying to do?” And we start doubting and we don’t trust. I’ll give you a simple example. This weekend, I was trying to buy a car. Talk about an industry that has historically had low levels of trust between vendors and customers.
Jim Fitzpatrick:
You think?
David Friedman:
Yeah, a little bit. And so I was trying to buy a car and you go online and then somebody reaches out to you and says, “Hey, we’ve got your car.” And then after they tell you they have your car, then you go to the dealership and they don’t have any cars, because of all the problems they’re having with supply chains. But starting the relationship by lying about what they have, creates this incredible mistrust that’s unnecessary, destructive and is very difficult to overcome. So transparency, it would be better to say, “I don’t have any cars, but let’s talk about what I can or can’t do for you,” that builds trust.
Jim Fitzpatrick:
And in many cases, what that card dealer may tell you is that the person they don’t trust is actually you the consumer, because if they’re transparent with you and they say to you, “Just want to let you know, we don’t have any cars right now. Yes. That’s the price of it. We don’t have any, we’re not going to have any for a couple of months or what have you. If you’d like to come in and order one, that’s fine. But we don’t have that car,” versus telling you, “Oh sure. Come on in. We have the car,” in hopes to sell you something else, once you get to the dealership, as so many people do. They’ll say, “Well, all right. I wish I knew that, but what do you have?” And then from there, they’ll say, “Okay, well, it’s a good thing we didn’t tell them upfront, because we never would’ve seen Mr. Friedman if in the event that we told him upfront that we don’t have any cars and then he only goes to another dealership.”
Jim Fitzpatrick:
So I think the trust is one of those things that also conjures up anxiety and fear on both parts, right? It’s like, “Wow, I’ve got the fear I’m going to lose you, if I’m completely transparent with you and tell you, ‘Hey, here’s the deal?'” Okay, well the person may say, “Well, sorry, you’re not the dealership for me. I’m going to another one.” Only to find out that when you get to that other dealership, you end up saying, “Okay, you two don’t have it. Well sell me your used car. What do you have in that area?” And the person that says, “Well, I was up front with them and showed the transparency early in the deal or early in the transaction,” I should say, in the relationship, I’m the odd man out now. And I think companies have a problem with that, don’t they?
David Friedman:
Yes. You’re saying something really interesting thing, Jim and that is that people fear that, and yet, the reality is the opposite, that when you’re transparent and it requires a certain degree of courage to be transparent, to your point, because we fear we may lose the business if they find out the real truth. And yet, that transparency actually builds trust. There’s another great book on this topic. Patrick Lencioni who many people may have read his books, he’s a great author. He wrote a book probably five years ago, maybe a little longer, almost all of his books are written in a fable format, like the one in that manager series. And he wrote a book called, Getting Naked. I don’t know if you’ve ever seen that book. And it’s not about being naked, it’s about consulting relationships. And his metaphor for this idea of getting naked is that he tells a story of a particular consultant and how he learns about a consulting firm that’s really successful.
David Friedman:
And what he discovers is that the really successful consulting firm is incredibly honest, particularly in times where we fear we may lose the business. So for example, his metaphor for getting naked is this ability to be vulnerable, the ability to say, “I don’t know the answer,” or, “I don’t have your car,” or, “I can’t help you, but let me hook you up with somebody who can.” Your willingness to lose the business, to be so vulnerable, that you might lose the business, actually has the opposite impact.
Jim Fitzpatrick:
That’s right. It becomes-
David Friedman:
It builds trust.
Jim Fitzpatrick:
… endearing and attractive to that consumer that goes, “Finally, I found somebody that’s going to be upfront with me.”
David Friedman:
Exactly. And so it’s this weird contradiction in that we fear that vulnerability will cause loss, but vulnerability actually makes a stickier relationship.
Jim Fitzpatrick:
That’s right.
David Friedman:
It’s fascinating.
Jim Fitzpatrick:
That’s right. It’s kind of like back in the Watergate days, it wasn’t the crime that got them in trouble, it was the coverup. And through every lie that’s told on either a showroom floor or in a company that says, “Yes, we can do that,” in a reality, they can’t do that. It’s always the coverup that gets them in trouble because those companies try to hurry up and serve that customer. When in reality, they just should have said to them, “Hey, we can’t do that for X, Y, and Z. This is why.” So glad you told me that rather than us going down that road, and then you’re trying to keep up.
David Friedman:
Yes, people appreciate that. One of the things you talk about creating trust in a employer, employee relationship. One of the things I’ve discovered in my career is that when there is bad news, let’s say the company’s struggling. Times are going to be different. Maybe we even have to lay people off, whatever it is. What employees want more than anything is two things. One is they want to be told the truth, don’t sugar coat it, don’t pretend, don’t make it sound like it’s really not that bad. Tell them the truth. I can handle it. I’m an employee. I can handle it. I’m an adult.
Jim Fitzpatrick:
And often, they know anyway, right?
David Friedman:
They do.
Jim Fitzpatrick:
So it is kind of one of those things, if you lied to them or you sugarcoat it, now you’re even lower in their opinion, because they’re like, “You should’ve just told us we’re in trouble, and we got to work our way out of this.”
David Friedman:
Yep. And they appreciate the honesty. When you tell them, you’re treating them like an adult. The second thing they care about is they want to be treated fairly. Now, granted we all may have different perception of fairness, true. But still, if there’s a general sense of shared pain… I give you a really simple example. Many years ago in the first company I had run, there was a particular time in which it was actually 2008, when the recession of 2008 hit, and it was the first time my company had ever had a year where we were struggling. Every year, other than that, we were doing great. And we needed to cut expenses and nearly all of our expenses were people expenses, and so that’s the only place to get it.
David Friedman:
And when I thought about what to do and how to communicate it, we ended up having people take a small pay cut. But there were two things that we did that were really important. One is we were incredibly honest about what the numbers were, what it meant, why we were doing what we were doing, so there was no pretending it was anything good. There was no sugar coating, nothing, very honest. But the second thing is, I had everybody take a small, it was a 2% pay cut, which wasn’t massive but hey, nobody wants to take a pay cut.
David Friedman:
But we had managers take a 5% pay cut. And so to be able to communicate the message that we’re all in this together, you’re not being singled out, everybody’s faced with this. So we’re not taking some departments and they’re struggling more than others and your manager’s taking a bigger pay cut than you are. It’s pretty hard for somebody to feel like, “That’s not fair. Why are they doing that to me?” Well, I understand what the facts are. I understand the decision. I know where we are and we’re all sharing in this fairly. I’m okay with that. And so, that’s all they want, is just treat me fairly and be honest with me.
Jim Fitzpatrick:
That’s right. And it makes perfect sense. But again, that fear creeps in, on behalf of these companies and these employers that go, “Uh oh, if I tell them this, I run the risk of losing some really good people that I don’t want to lose. And I don’t want to come out in the conference room and say, ‘Well, you four would be on the first train out of here. Well, I don’t want to lose you guys,'” so that’s real transparent, right” But to your point, let them know where you stand as a company, what you can do and what you can’t do. And also what the concerns are that you’ve got moving forward and let them share in that, right.?
David Friedman:
Absolutely.
Jim Fitzpatrick:
It’s a great idea. Otherwise, anything else is somewhat of a fraud and they’re going to pick that out pretty quickly, right?
David Friedman:
Yes. I’ll just give one other real quick behavior that is tremendously impactful as it relates to the building trust in any relationship. And that is, I call it honoring commitments. Do what you say you’re going to do, when you say you’re going to do it and I trust you. Don’t do what you say you’re going to do when you say you’re going to do it and I lose trust. And it sounds so simple, and yet, so many people and companies, it’s both, the companies are made of people, of course, struggle with honoring commitments. Sometimes not because they purposely are lying or don’t care, or don’t want to, it’s that we’re sloppy about it. We say yes to things, with good intention that can’t be done.
David Friedman:
It goes back to the vulnerability we were talking about a moment ago. In the moment, you asked me for something, and I said, “Jim, sure, I can do that,” because I want to please, I want to satisfy you. I want you to feel good about it. If its a customer, I’m sure going to say yes. And then I’ve said yes to too many different things, some of which are unrealistic to do, and then I fall short and then I end up damaging the trust in the relationship. We both would’ve been better off once again, go back to transparency. If you ask me for something that I can’t do. You ask me, “Can you get this to me by Friday?” It would really be better for me to say, “No, Jim, I’m sorry. I’d love to be able to do that. But given the other commitments I have, it’s not going to be possible. Could I get part of it to you Friday? Or could I get it to you by Monday? Will that work for you?” That would be way better than to say yes and not deliver it on Friday.
Jim Fitzpatrick:
100%-
David Friedman:
And we do it all the time.
Jim Fitzpatrick:
Couldn’t agree more. I do fall into that situation all the time, because I do over promise and under deliver in so many cases as an entrepreneur and a business owner, and I’m pulled in so many different directions and I don’t want to let one of my employees down, or sometimes one of my customers or one of our clients and it is troubling. And then of course that adds to more anxiety on me, which then renders its own issues and problems in trying to just think straight, because you’re like, “Wow, I’ve got all these promises that I just committed to. And I know in my heart of hearts, I can’t commit to half of them, but I didn’t want to let the customer down or the employee.” And I think it’s something so many people run into, its great advice.
David Friedman:
And what’s fascinating about that is yet think from the other person’s perspective, if somebody were making a commitment to you, wouldn’t you rather than say no, and tell you when they can do it. But if they say they can do it on a different day, if I asked you, “Can you do this by Friday?” I would much rather have you say, “No, I can do it by Monday,” and know with absolute certainty that it’ll be done Monday. I would much rather that.
Jim Fitzpatrick:
That’s right. I agree.
David Friedman:
Except in the moment we keep saying yes.
Jim Fitzpatrick:
I agree. There’s no question about it. So real quick, if you can, give us some of the other items on the list. What are some of the things that can build trust with CEOs?
David Friedman:
So here are some other behaviors that really have significant impact on trust. One of my favorites, I call it, practice blameless problem solving. When there are organizations in which blame is prevalent, when a problem happens, I want to, “Well whose fault was it? Was it your fault? Was it his fault? Who did this?” It creates so much defensiveness and lack of trust and destruction. It stifles innovation because people don’t want to try anything. It teaches people to cover things up, because if I discover a mistake and I raise it, they might blame me, and so I’ll just cover it up and hope nobody finds out about it. It’s so dysfunctional. And so one of the behaviors that we teach in all of our clients in my own company, I call it, practice blameless problem solving.
David Friedman:
And when I teach about that, I always say, there are three elements to this behavior. The first is, a problem’s going to happen, we know that. Fix it. Who cares whose fault it was, it doesn’t matter, just fix it. The second element though is after we fix it, well, let’s go back afterwards and do a little bit of diagnosis. Well, autopsy to see if we can discover, well, what did we learn there? How did this happen? Not to blame somebody, but just so we can learn.
David Friedman:
And then the third element of this behavior that is often missed by people is after we fix it and learn from it, how do we incorporate what we just learned, into some kind of a process improvement, that the new improved process reduces the chance of making that same mistake again? There are many times I hear people say, “We don’t do the blame thing. We just fix it and move on.” No, I don’t want to just move on. I want to make sure we got smarter. And we improved our processes in our business,, as a result of what we learned so that each of those mistakes leads to greater learning.
Jim Fitzpatrick:
That’s right. The mistake actually has a huge value in it, a huge opportunity that if we just move on and say, “Okay, we’re not going to talk about it. Let’s just pick up where we left off.” And to your point, I think so many companies and businesses do make that mistake, that they don’t spend enough time on the, what you would call an autopsy. But to just kind of pull it apart and say, “Where did the communication fail or the mistake happen?” And to your point, not to place blame, but to fix that and then move on, right?
David Friedman:
Exactly. And by the way, one of the elements of doing that diagnosis, that autopsy, as I called it, well, is, this is a subtle but important thing, if the question we ask when a problem happens is, who messed this up? That’s a blame question. It was Jeremy, he messed that thing up again. If the question we ask instead is a how question, where did our process break down? Where did our process break down that enabled this error to occur? That’s a process question, and now we’re really learning about what took place versus the blame question, which is a who question.
Jim Fitzpatrick:
Boy, there’s no question about it, and it’s so easy to fall into that trap of wanting to point the finger and who did this and you’re right, nothing gets accomplished. You only build a culture of fear with questions like that, right? It’s a mistake, I think so many make. Well, David Friedman, this is a topic I can talk to you all day about, and hopefully we can have you back on the show to do just that. For people that are watching, this is the kind of content that we want to bring to small business owners, large business owners as well, because this is a new normal that we’re in.
Jim Fitzpatrick:
We are working with people that are working remotely. And again, we’ve got to brush off our management skills and step up to this occasion because there’s huge opportunity in it, if you know how to do it right. And it’s so important to get it right, first time in. So David Friedman, founder and CEO of CultureWise, also a best selling author. So again, thank you so much. I really appreciate you spending all the time and giving us all the time here at the show. We can’t tell you how much our viewers and subscribers get out of content, just like this. So love to have you back again, to pick up where we left off.
David Friedman:
My pleasure, Jim. Great to be with you.
Jim Fitzpatrick:
Thank you.
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