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Trust: The Leadership Imperative

“To thine ownself be true; … thou canst not then be false to any man.”

~ POLONIUS ADVISES HIS SON IN HAMLET BY SHAKESPEARE

What makes a great leader? In most cases, people say trustworthiness.

The CPA has long been the United States’s most trusted business adviser, but inside many of the best accounting firms, there is rampant mistrust of each other. We can attribute the mistrust to the backgrounds of the staff members who’ve lived or worked in low-trust environments, the skepticism that we teach and encourage, or the actions of people in leader roles. Trust can be selective. For example, you can trust me to accurately prepare your tax return, but you may not trust me to compensate you fairly. Trust can permeate our relationship. Mutual trust is a shared belief that you can depend on each other to achieve a common purpose. Businesses, teams, and accounting firms operate more effectively when there is a high-level of trust among all the staff members. Yet, we see a severe lack of trust across departments, generations, genders, and various levels of staff. It is the leader’s primary role to model the development of trust.

In this chapter, we will explore the hard economics, as well as the social desirability, of building trust. I’ll cover the elements of being a trustworthy person, such as integrity, intent, competence, and results. We’ll delve into building organizational trust and how to rebuild lost trust.

A culture of trust in your firm can become a major competitive advantage. Trust allows your firm to both function and serve your clients better. Trust is rare; few companies truly have a trusting relationship between leaders and employees. Trust is a capability that is difficult for your competitors to observe and imitate.

In his book, The SPEED of Trust: The One Thing That Changes Everything, Stephen M.R. Covey explains that low-trust companies pay a trust tax, and high-trust organizations reap a trust dividend. Covey explains that trust is not just a socially desirable element to one’s business. Covey says, “Once you understand the hard, measurable economics of trust, it’s like putting on a new pair of glasses. Everywhere you look you can see the impact.”

Neal Spencer, former CEO of the megaregional firm BKD, LLP, in Springfield, MO, says

The first and foremost quality to be a leader in any situation is trust. If people don’t trust you, they will not follow. Second, you’ve got to be there for them. Early in my career, I witnessed what I would call some pathetic leadership where a senior or a supervisor would make his people work on Saturday but he wouldn’t come in! Third is just brutal honesty in all situations. Here at BKD, we call it “putting the moose on the table.”

Stephen Covey’s concept of the emotional bank account draws a word picture of trust. He urges people to make deposits of their own trustworthy actions. This series of deposits typically keeps our accounts in the black, so that if a withdrawal occurs (some breach of trust we commit), an apology and a solution to the problem ensures the continued success of the relationship. But one act of withdrawal may require 100 acts of deposit in order to balance the account.

Terry Harris, managing partner of McKonly & Asbury LLP in Harrisburg, PA, believes

Trust is the core component of a successful organization. With trust comes alignment, and with alignment comes a team that all rows in the same direction, resulting in enthusiasm as the team succeeds. Trust is something that is earned over time, with decisions that are consistently focused on what is best for the organization and not for any one individual. Trust is also built by having a culture of mutual respect for individuals within the organization at all levels. It is aided by transparency of the firm leadership. Open communication and dialogue on issues within the team enhances trust.

If I were to describe a person of integrity, it would be a person that keeps his word. When leaders fail to keep their word, trust is eroded. Trust, much like a good reputation, takes a long time to develop but only a very short time to lose. Honesty over time is the only way to repair trust when it is lost. When mistakes happen or errors in judgment are made that erode trust, an apology from a leader goes a long way toward the reestablishment of trust.

Trust Is a Competitive Advantage Inside and Out

Building relationships requires building trust. Trust is the expectancy of people that they can rely on your word. It is built through intent, integrity, competency, and consistency modeled by the leader. If a leader loves people but has no vision, then everyone will be lost without direction. If a leader is a great systems organizer but isn’t honest, people will be hesitant to support any changes.

Lots of research evidence exists about the value of trust. Tony Simons’s study, “The High Cost of Lost Trust,” published in the September 2002 issue of the Harvard Business Review, focused on pinpointing the real cost associated with low-trust environments. The study surveyed 6,500 Holiday Inn employees in 76 international hotel sites to examine the alignment between managers’ words and actual performance. The responses demonstrated that the hotels where managers followed through on promises and had behavioral integrity were more profitable. In fact, on a 5-point scale, a ⅛-point improvement should result in a 2.5 percent increase in hotel revenues.

Dr. Simons attributes hotel managers’ lack of behavioral integrity to various blind spots, such as their failure to identify integrity problems within themselves. Simons discovered in his research that it takes evidence of only one lie for a manager to be branded a liar. In contrast, a person has to tell a whole lot of truth to qualify as a “straight shooter.”

According to Stephen M.R. Covey in his book The SPEED of Trust: The One Thing That Changes Everything

[i]n a Watson Wyatt 2002 study, high trust organizations outperformed low trust organizations in total return to shareholders (stock price plus dividends) by 286%. Additionally, according to a 2005 study by Russell Investment Group, Fortune magazine’s “100 Best Companies to Work for in America” (in which trust comprises 60 percent of the criteria), earned over four times the returns of the broader market over the prior seven years.

Trust can be an important source of your competitive advantage because trust is valuable and rare. The level of trust that a firm’s leader is able to garner from his or her staff is contingent upon the employees’ perceptions of the leader’s ability, intent, and integrity.

Bob Hottman, CEO of the top-100 firm Ehrhardt Keefe Steiner & Hottman PC (EKS&H) in Denver, CO, believes,

The purpose of business is to build trust and serve others. There’s no question in my mind that if we can build trust within our organization, we can build trust with our clients. If we serve them the way we should serve them, we will continue to grow as an organization. We have a fairly large nonprofit practice. Our people get a lot of pleasure out of serving with those organizations because they can see the tangible results of what they’re doing in the community. At the end of the day, we can sit there and say we helped that company be successful, we helped that business owner, we helped that CEO, and we helped that CFO be successful.

If you think about the four pillars of trust—integrity, intent, capabilities, and results—a lot of people will question the intent of the person who is a great talker: that interesting extrovert. Capabilities and results go hand in hand, and integrity and intent go hand in hand. Integrity and intent are at the core of trust, but in our business, you must also have the capabilities to get results.

You need to sleep at night with a sense of integrity, and you need to look at yourself in the mirror every morning. What you stand for is important, and that’s what people look to you for in the long run. People can make mistakes, and people will make mistakes. We’re human beings. But if you do what you think is right, and you do it for the right reasons, people will always respect you.

Trust is one of the most significant competitive advantages for an accounting firm. You recruit great people. They trust. They retain. They attract clients. You’ll have huge turnover in your team members and clients if you don’t have trust.

As Bob explained, trust is persuasive and inspirational to others. When employees work in a high-trust accounting firm, they bring the trust home to their families and encourage trust building. When an accounting firm team exudes trust, clients and other accounting firms want to emulate the culture. The friction that gets pushed out of the organizational system is palpable.

Trust has an important link with your organizational success. Trust elevates levels of commitment and sustains effort and performance without the need for management controls and close monitoring. Trust between a leader and an employee is based on the trustor’s perception of the trustee’s ability, intent, and integrity.

Dimensions of Trustworthiness

Want to build trust in your organization? I recommend that you begin with yourself by reviewing the ways that you intentionally build trust with others. Do you exhibit integrity—do what you say you’re going to do—all the time or some of the time? If you find yourself always making excuses for why you didn’t follow through with your promises, then trust will elude your mutual relationships. Next, examine your perceived intent. Do your direct reports believe that you are in business for them or only for yourself? If people mistrust your intent, you will have difficulty establishing mutual trust. Lastly, you must exhibit competence and results in what you do in order for people to trust you. I will examine these attributes more in the following paragraphs.

Trusting goes with competence, intent, and integrity. The more we observe these characteristics in another person, the higher our level of trust in that person. Competence is an assessment of the other’s knowledge, skill, or abilities previously demonstrated to us.

Intent is our assessment that an individual we trust is concerned about our welfare. Your perceived intentions or motives are central. Honest and open communication, delegating decisions, and sharing control indicate evidence of one’s intent.

Bob Bunting, former CEO of the megaregional firm Moss Adams LLP in Seattle, WA, says, “Some high-potential people don’t trust some partners when they perceive that the partners’ self-interest trumps everything else. They aren’t going to share credit; they will pass blame and keep praise.”

Integrity is the degree to which your actions integrate with your words. Integrity leads to trust based on consistency of previous actions, credibility of communication, and commitment to standards of fairness: the congruence of words and deeds.

Dave Sibits, president of the national firm CBIZ Financial Services in Cleveland, OH, believes

The most damaging thing in terms of developing trust is when leadership says one thing and does another. I had a partner who would say, “The fish stinks from the head.” If the people at the top aren’t living what they are asking the others to do, you have a lack of integrity that causes degradation of the success of the whole firm.

To me, integrity is doing the right thing. We had a situation a few years ago where we had to put two of our offices together as one. We believed that all the proper steps had been taken and that proper communication had been completed. But we were surprised because we had a jail break. By jail break, I mean we found out that a major part of one of the offices was leaving with their client records in the middle of the night. It was the result of that group lacking trust in the leadership that we were doing the right thing.

Oftentimes, the top leader lives in a bubble. Many people tell the top leader what they think he or she wants to hear, rather than what he or she should hear. Whether people are intentionally misleading the managing partner, simply being politically correct, or dropping hints, the effect is the same: the leader is not getting factual information on which to make decisions and take actions. When the leader is surprised by the consequences of one of his or her decisions, it is usually an indication that the leader hasn’t been getting truthful information from those around him or her.

Tony Morgan, founder and managing partner of the local firm Gollob Morgan Peddy & Co., P.C., in Tyler, TX, says, “People are going to pay much more attention to what you do than what you say. We can’t espouse a set of core values unless we partners live and model those values.”

John Wright, managing partner of the top-100 firm Padgett Stratemann & Co. of San Antonio, TX, adds, “A leader’s imperative is doing what you say you’re going to do, giving team members the freedom to do what they’re going to do, and let them do that in their own way.”

Ray Strothman, managing partner of the local firm Strothman & Company, PSC, in Louisville, KY, believes, “Integrity is basically doing what you say you are going to do, just basically walking your talk.”

Consulting Experiences

Over the last 20 years in my consulting practice, I have interviewed thousands of employees, team members, managers, and partners around the idea of firmwide trust. Because trust is an intuitive experience, I will provide several representative stories from various interviews to illustrate the fact that trust is a highly personal experience and in no way abstract.

When trust permeates an accounting firm, productivity and creativity will increase, and stress will be lowered. Here are some personal stories from in-depth interviews of employees in accounting firms, from all levels, genders, and generations:

Delegation

“When my managing partner gave me autonomy, he gave me the incentive to succeed, and so I always delivered for him. He is a quiet man, but he went out of his way to tell me he trusted me to handle a significant client situation and that he believed I would do an excellent job.”—Senior manager

A Healthy Meeting Among Toxic Ones

“I attend several meetings every month. All but one has a passive-aggressive political climate, resulting in defensiveness, conflict, and stress. The one meeting that differs, despite its high operational impact, features trust and support among those attending. Everyone brings his or her problems to the table and genuinely asks for help. There are never any undermining remarks. It is all due to the approach of our leader. She never takes us to task publicly, and she guides us in problem solving. She reinforces collegiality. This meeting gets things done inside an otherwise toxic culture.”—Audit partner

Integrity

“The partner that I work for explains things to some of our clients and leaves out many of the facts and skews the situation to make him look really better than he is. Whenever he talks to me, I’m always wondering, ‘What is the real truth in this circumstance?’”—Tax manager

Group Dynamics

“If the partners aren’t interested in what I have to offer, why should I go out of my way to increase the profit of a firm I do not even feel part of? Trust appears to be related to group behavior. In order to build trust or improve it, it is important to listen and consider every employee’s idea, ask questions, and involve everyone in the discussion.”—Consulting partner

Intent

“One partner advises me to build my rainmaking skills, so I will have a strong future in this business. Another partner tells me that I’d better get my billed hours up to 1,800, so I’ll look good. These partners don’t seem to be on the same page, and I don’t know who to trust.”—Senior manager

Invested in Trust

“My managing partner is booked in 40 meetings a month with other partners. I don’t see how he does it. When we meet, he is so focused on me and my success. We discuss the client challenges of the month. Occasionally, other things preempt our time, but he works hard to not let things interfere with our time. I knew it was a high priority for him to invest this time in me, so I trusted him and was more open. I worked extra hard to show my loyalty to him.”—Construction industry leader

Rebuilding Trust Takes Time

“My senior tax partner broke her promise to me. I have tried hard to understand trustworthiness, so I planned to reach out and rebuild my trust in her. I am not going to give it back right away, as I needed time to set new boundaries. It is still not where it was, but I have started.”—Tax senior manager

Lessons From Consulting Experiences

These interviews reveal that trust is a vital concept that is both highly appreciated and evokes strong feelings. Trust takes time and patience to establish. It must be done with repetition, interactions, and degrees of openness or delegation. Spending non-work time with coworkers nurtures trust and speeds up its effects.

The need for trust arises from our interdependence with others. We often depend on other people (and they on us) to help us obtain, or at least not to block, the outcomes that we value. Because our interests with others are intertwined, there is also an element of risk because we cannot compel the cooperation we seek. Therefore, establishing trust can be very valuable in all business interactions.

Dave Deeter, founder of the top-100 firm Frazier & Deeter, LLC, in Atlanta, GA, believes that integrity is simple, “It’s doing what you say you’re going to do.”

Scott Dietzen, managing partner, Northwest Region, of the national firm CliftonLarsonAllen LLP, in Spokane, WA, clarifies, “Actions are always louder than words, to use the cliché; does our living match what we say we are doing?”

Gordon Krater, managing partner of the megaregional firm Plante & Moran, PLLC, in Southfield, MI, believes in the inner voice, “I think integrity is trying to do the right thing always, not if it’s convenient, not if it’s easy, but always. I say try because we are human. I think where people get in trouble is they hear that inner alarm going off, and they do something anyway.”

In the accounting profession, integrity is a foundation stone. Integrity is one of those words that is easy to say but difficult to achieve. Although leaders agree that integrity means that your actions integrate with your words, what happens when you are prevented from fulfilling your promises? The key here is to communicate, communicate, and communicate. Align your actions with your words, so that they integrate in ways that clients and team members can clearly witness. If you simply don’t perform according to your words without explanation, trust will be lost.

Ken Baggett, co-managing partner of the national firm CohnReznick LLP, says that one only has to follow two rules in order to achieve success.

Recently, one of my partners repeated what I had told him years ago, “All I had to do is follow two rules. You always told me to tell you the truth and to never let you get blindsided.” Anything else we could deal with, as long as our client isn’t the first one to call me to tell me that there is a problem. Absent those two things, you can pretty much deal with anything else. You don’t lie to me, and don’t let me get blindsided.

Ken believes that in order to convince potential clients to utilize your business’s services and to convince your employees to trust you, you have to follow through with what you say. “At the end of the day, I think there is a correlation between being able to convince someone that you can do what you say you’re going to do,” he says. “If you cannot convince others (i.e., potential clients to utilize your services), I don’t believe you can convince others to follow you as employees.”

Levels of Trust Development

Personality theorists suggest that some people are more likely to trust than others. Viewed as a fairly stable trait over time, trust is regarded as a generalized expectancy that other people can be relied upon. This expectancy rises or falls to the degree that trust has been experienced in that person’s history. Our perceptions of others’ trustworthiness are shaped by first impressions, but we can continue to build trusting relationships, even with those who do not trust easily.

Leaders are responsible to different groups, such as clients of the firm, other partners, and all staff members. Because each of these groups have different expectations and different ways of communicating, it is often easy to send mixed messages. For example, sometimes, partners want more billable hours from the staff, but leaders want to keep staff members from cracking under the pressure of work.

I believe that trust builds along a continuum, such that as trust grows to higher levels, it becomes stronger, more resilient, and changes in character. At early stages of a relationship, an individual will carefully calculate how the other party is likely to behave in a given situation, depending on the rewards for being trustworthy and the deterrents against untrustworthy behavior. In this manner, rewards and punishments form the basis of control that a trustor has in ensuring the trustee’s behavioral consistency.

Individuals mentally calculate the benefits of staying in the relationship with the trustee versus the benefits of “cheating” on the relationship and the costs of staying in the relationship versus the costs of breaking the relationship. Trust will only be extended to the extent that this cost-benefit calculation indicates that continued trust will yield a net positive benefit. Over time, trust can be built as individuals manage their reputations and behave consistently, meeting agreed-to deadlines and fulfilling promises.

When people come to a deeper understanding of each other through repeated interactions, they may become aware of shared values and goals. This allows trust to grow to a deeper level. Both parties understand what the other party cares about. Trust at this advanced stage is also enhanced by a strong emotional bond between the parties, based on a sense of shared goals and values. So, in contrast to calculated trust, deep trust is more emotionally driven and is grounded in care, concern, and mutual satisfaction.

Building Trust

Trust building requires mutual commitment and effort, especially when attempting to deescalate conflict. Nonetheless, there are several ways individuals can act on their own to initiate or encourage the trust-building process. This is accomplished by either taking steps to minimize the risk that the other party will act in untrustworthy ways or by policing one’s own actions to ensure they are perceived as evidence of trustworthiness.

At the calculated trust level, individuals can take several steps to strengthen another’s trust in them, particularly when these steps are performed repeatedly and within several different contexts of the relationship:

▴ Establish consistency and predictability. We can enhance the degree to which others will regard us as trustworthy when we behave in consistent and predictable ways. Every effort should be made to ensure that our words are congruent with our subsequent actions and that we honor pledged commitments. Our integrity is reinforced to the extent that we do what we say we will do.

▴ Communicate accurately, openly, and transparently. In addition, one should act openly (that is, be clear about the intentions and motives for one’s actions). This helps the other party accurately calculate our trustworthiness because we are willing to act transparently and be monitored for compliance.

▴ Perform competently. One should perform one’s duties and obligations competently. Individuals should continuously strive to demonstrate proficiency in carrying out their obligations. In some cases, this may entail updating skills and abilities as technology advances. As others contemplate how much to trust you, they will assess your qualifications and ability to perform.

▴ Share and delegate control. Trust often needs to be given before it will be returned. There is symbolic value in soliciting input and sharing decision control with others. To the contrary, when such control is hoarded, and others feel that they are not trusted, they may be more likely to act out against this with behaviors that reinforce a distrusted image.

Building Organizational Trust

Trust can be a touchy subject in an accounting firm. Many partners bristle at the suggestion of building trust. They say, “Why do we need to do that? Don’t you trust me?” Consequently, rather than addressing trust alone, it is often better to incorporate measures of trust into already existing practices. Based on years of experience in the field of building trust and teamwork in an organization, the following ways to weave trust into an organization may be helpful:

▴ Prepare a definition of trust for the firm. The Oxford dictionary defines trust as confidence (an emotional word); reliance (another emotional word); or “a resting of the mind on the integrity, veracity, justice, friendship or other sound principle of another person or thing.”

Neal Spencer says

Whenever we make a mistake, I like to use an autopsy without blame. When we screw things up, let the dust settle, autopsy the sucker, and see what we did wrong so we can learn and not repeat the mistake. Not to blame somebody because I think that’s a low-level way of looking at mistakes. We encourage people to put the moose on the table, meaning that if they make a mistake, don’t fall on your sword; put the problem on the table. We’re all on the same team.

▴ Include trust and ethical behavior items in surveys and focus groups. Review surveys and other data collection tools, whether internal or external, for items that address trust. The challenge of involving senior partners on these sensitive topics is best accomplished using solid data for problem solving and action planning. It’s one thing for you to say we need to focus on trust, but when peoples’ clients or subordinates say it, they really listen!

▴ Evaluate the organization’s change management practices. Nothing depletes trust more quickly, and sometimes irrevocably, than poorly implemented organizational changes. Knowing this, a leader will find ways to improve communications before, during, and after a change of any kind.

▴ Conduct training for partners, management, and staff on improving trust. Use your focus group or survey data to raise the issues. This means setting new expectations for a high level of trust for all supervisors, managers, and executives. No matter how talented the executive or manager, he or she must vigilantly and consciously guard trust quotients and frequently add to the “trust account.” In order to build a successful firm, you have to start by building trust, says Mike Cain, founder and comanaging partner of the top-50 firm Lattimore Black Morgan & Cain, PC (LBMC), in Nashville, TN.

I think you have to build trust by consistently doing the right thing in terms of looking at the firm first as opposed to yourself. You have to be able to put the firm first again and again. When you do, then people begin to trust you. They believe that you are going to think about things, you are going to listen to them, and then do the right thing for the firm. We have had partners from time to time in the past who didn’t treat the staff with respect or who were indifferent to their clients. In those situations, we literally had to part ways with those individuals.”

Consider conducting interviews to learn more about trust in your firm. Please see exhibit 3-1 for sample interview questions.

Exhibit 3-1: Sample Interview Questions for Gauging Level of Trust in a Firm

Sample questions could include the following:

1. Do you trust your supervisor?
____________________________________________________________________
____________________________________________________________________

2. Do you trust our CEO?
____________________________________________________________________
____________________________________________________________________

3. Give an example of high trust in our firm.
____________________________________________________________________
____________________________________________________________________

4. What does trust mean?
____________________________________________________________________
____________________________________________________________________

5. Give an example of low trust in our firm.
____________________________________________________________________
____________________________________________________________________

6. How do you know if you are being trusted?
____________________________________________________________________
____________________________________________________________________

7. What do you believe helps build trust in our firm?
____________________________________________________________________
____________________________________________________________________

8. Have you ever tried to rebuild trust with someone at the firm?
____________________________________________________________________
____________________________________________________________________

9. How did you go about that, and was it successful?
____________________________________________________________________
____________________________________________________________________

In his book Wooden on Leadership, Coach John Wooden said, “It’s like character and reputation. Reputation is what others perceive you as being, and their opinion may be right or wrong. Character, however, is what you really are, and nobody truly knows that but you. But you are what matters most.”

When Trust Is Broken

When trust is broken, I think the first thing you have to do is identify where it happened. Then, I believe it’s critical that you apologize. If I don’t apologize, that sends what message? The message of an apology is that you’ve recognized where the trust was lost, and you take ownership of it. The next thing you need to do is go about giving trust back the other way because people aren’t going to give you trust unless you give it to them first.

Jim DeMartini, managing partner of the top-100 firm Seiler LLP in Redwood City, CA, says

Trustworthiness and integrity are particularly crucial when you’re managing a knowledge transfer business. And it goes to how you handle errors or oversights with clients. We demand that our people immediately take responsibility and cure the error; you don’t want people hiding errors or problems because that can really do damage to the organization.

The bottom line is when trust is broken, it can never be regained. But there’s never, never a reason why trust should be broken. Maintaining trust has to do with having an unwavering commitment to integrity. Where an error has been made, we immediately go to the client, we tell them it’s been made, and we make it right.

Carl George, former managing partner of the national firm Clifton Gunderson LLP in Peoria, IL, believes

Whenever I’ve not done something I promised, the first thing I do is apologize. I go to him and I say, “I screwed up; I told you I’d do this and I didn’t.” I think that’s key. I’m just a human being, so I’m going to make a lot of mistakes, and you go to the person you’ve harmed. I’ve done it with the board; I’ve done my management team this way, I’ve gone to staff. If I screw up I, I admit it, and I apologize. I don’t try to bury it!

As the severity of the trust issue increases, the victim is more likely to experience stronger negative reactions, including a sense of moral outrage. Serious offenses harm trust severely, often to the point of complete destruction. These serious offenses may also stimulate the rapid growth of distrust. Accordingly, the victim is more likely to engage in more severe reactions to the trust violation, including exacting retribution, escalating the conflict, or terminating the relationship.

Rebuilding Trust

In Tony Simons’s article “The High Cost of Lost Trust,” we learn that rebuilding trust is not as easy as building trust in the first place. After trust has been damaged, there are two key considerations for the victim: (1) dealing with the stress that the violation imposed on the relationship and (2) determining if future violations will occur. After a trust violation and the fallout that ensues, the first critical question is, Is the victim is willing to reconcile? If the victim believes that the violator will not make efforts at righting the wrongs and minimizing future violations, the victim has no incentive to attempt reconciliation and restore trust.

There is a clear distinction between reconciliation and forgiveness. Reconciliation occurs when both parties exert efforts to rebuild a damaged relationship and strive to settle the issues that led to the disruption. Reconciliation is a kind of forgiveness when feelings of resentment are appeased, and amnesty is granted to the offender. However, it is possible to forgive someone without the willingness to reconcile and vice versa.

If reconciliation is the goal, then it must be initiated by the offender. It may be that there were unclear expectations that can be quickly clarified. Or there may be some explanation that places the unexpected behavior in context, so that the event is no longer perceived by the victim as a violation. Finally, apologies indicate remorse. These are important forms of communication that help restore balance in the relationship and convince the victim that it will be safe to trust again in the future.

Such a repair may involve acts of restitution that compensate the victim for the specific consequences of a violation. Restitution also carries important symbolism in that the offender is actually trying to redeem his or her trustworthiness with concrete actions. In calculated relationships, actions may speak louder than words, so it is imperative for the offender to honor trust in subsequent interactions with tangible offerings designed to restore “fairness” in the relationship.

Take immediate action after any violation. Offenders should act quickly to engage in restorative efforts. This communicates sensitivity to the victim and relationship and avoids the double burden that the victim has to incur by both suffering the consequences of the violation and having to confront the offender with the consequences of his or her behavior.

Apologize and take responsibility for your actions if you are culpable, and express remorse for the harm that the victim endured because of the violation. Your remorse indicates to the victim that you have also suffered as a result of your actions, and the victim may be less likely to pursue vengeance and escalate the conflict. Terry Snyder, president of the accounting firm alliance PKF North America in Lawrence, GA, says

When trust or loyalty is damaged, it’s hard to repair. But what really is the quickest way to repair it is for somebody to walk in and say, “You know what, Terry, I didn’t handle this very well. I’m not happy with the way I handled it, but you know, it was my best shot at the time, and I hope I can get your confidence back. I would understand if you’ve lost trust in me. It was a misstep on my part, and if we can work this out, good. If not, I understand completely, but I’m going to give it my best shot.” A humble apology like this will get you miles down the road to repairing lost trust.

Tony Argiz, founder, CEO, and managing partner of the megaregional firm Morrison, Brown, Argiz & Farra, LLP, in Miami, FL, says

I was born with a little bit of street smarts. Maybe I’m wrong the first time around that I evaluate people, but it’s usually a pretty good batting average. First time around, I try to trust everybody.

Integrity is really what we sell. One thing that I learned early in my career, the Reverend Tim Dolan, who ran Georgetown University, would always say, “Think for yourself what’s right and what’s wrong. It’s not what the law is, it’s what’s right and what’s wrong.” Each human being should have the conscious to really determine, based on their life experiences, if something is right or it doesn’t look right or it’s wrong. That’s always the best pulse out there for you to follow in life.

A client of mine, Orlando Gomez, would always tell me in his business, “You know, if you take that business over there, the owners have a car leased under their business or bought under their business, they’re running the gasoline through there, they’re running this expense and that expense through the business. That’s not having integrity or leadership. If you do that, every one of your employees is going to do it. So, you try to lead with your actions.” And if people want to work late, hey, where is the managing partner?

When someone breaks your trust, it is very difficult to repair. I always like to give people second and third chances, so it would have to be pretty sad for someone to do something that would really break that trust because people can make honest mistakes; people can make wrong decisions. The key is to continue to mentor that individual and see if you can turn them around because, in most cases, if you give it the amount of time it requires, you’ll be able to succeed. But you think to yourself, “Hey, in the next battle that I have, can I really depend on this individual?”

Hugh Parker, executive partner of the regional firm Horne LLP in Jackson, MS, says

I define trust as confidence that the person I’m dealing with has my best interests at heart, will do what he says he is going to do, and get the results that we both have in our minds.

A partner put a hidden camera in one of our offices to watch the people. One of the employees picked it up and brought it to the attention of the responsible parties. There was a direct Internet hook up, so this guy could monitor people from his office in another location. That is not who we are. He is a command and control person and he couldn’t move forward. Although he was financially a very contributing partner he would not live our values.

Notice that although communication and action are both central elements of reconciliation and trust recovery, the repair process for calculated trust is predominantly a material, transactional effort. To simply give someone a handshake after this type of violation is not likely to help and could, in fact, make things worse. Something substantive, more than a cursory apology, must happen to repair lost trust.

Rick Anderson, CEO of the megaregional firm Moss Adams LLP in Seattle, WA, says

One crucial step in beginning to repair broken trust from a mistake or otherwise is to simply acknowledge that mistake. If you don’t, it becomes even harder, if not impossible, to repair. I think the repair process first of all it requires effort on the part of both people to seek out opportunities to once again be where they want do business together. You’ve got to make it a priority to find a way to rebuild the trust. If you are going to just let it happen, I am not sure it will happen at that time because you have to replace the bad experience with some new good experiences. And that’s most likely to occur if both parties make it a priority to do so.

In deep trusting relationships, trust of the other party is based on the shared values of the parties and their emotional investments. Thus, violations may lead the victim to conclude that the parties are not as “together” as they once may have appeared. Deep trust relationships are more heavily grounded in intangible resources, such as perceptions of mutual attraction, support, and caring for each other.

For the offender to reestablish intent, he or she should quickly and voluntarily offer a thorough and sincere apology, which conveys remorse for harm inflicted, an explanation of the details surrounding the betrayal, and a promise of future cooperation. The offender should explicitly recommit to the relationship and discuss strategies to avoid similar problems in the future.

As before, both communication and action are essential to the trust-rebuilding process, but deep trust repair involves an emotional and a relational focus. For example, simply paying some form of material compensation may not be sufficient to reassert shared values and rebuild the common sense of identity that was the foundation of the trust.

When deep trust has been broken, prescriptions for trust building entail a number of additional steps, such as the following:

▴ Promote shared values and emotional attraction. Individuals should model a concern for other people by getting to know them, engaging in active listening, showing a focus on their interests, recognizing the contributions of others, and demonstrating confidence in abilities of others.

Jim Metzler, vice president of the AICPA, says, “My experience has been that when trust is broken, few people can really repair it. There are some difficult steps necessary to rebuilding trust. One step is coming forth with an attitude of humility. It’s a long and difficult road but not impossible.”

▴ Create mutual goals. Working toward the collective achievement of common goals fosters a feeling of togetherness. Parties create activities that define their commonality and uniqueness.

▴ Establish a common identity. Nurturing a common identity creates a sense of unity that can further strengthen trust. Engage in talk and actions that build a sense of “we” rather than “me.” A common shared identity reduces divisiveness and encourages individuals to work together.

▴ Reaffirm commitment. Reassert shared values. Reestablish the effective connection in the relationship by expressing your emotional attachment to the other party, and strive to demonstrate that the relationship is a top priority.

Steve Mayer, founder, chairman, and CEO of the regional firm Burr, Pilger & Mayer LLP in San Francisco, CA, believes

It’s extremely difficult to repair broken trust because you always wonder if you can ever trust the person again. I’m a forgiving guy, and I want to give people the benefit of the doubt. I always believed that everybody deserves a second chance and that everybody screws up from time to time. I’ve had people lie to me, and it takes a while before I can believe them again.

The first thing you must do is to admit that you’re wrong. You have to talk it through, so everyone understands the extent of the collateral damage. It’s going to take me a while to completely trust you again, but as far as I’m concerned, we have a clean sheet of paper. So, I may think about things a little bit, but as far as I’m concerned, you’re good to go. I got to be a little bit careful, but I’m not going to hold this against you the rest of your life.

There is also an important psychological role for taking responsibility for one’s actions, communicating remorse, and going to special lengths to compensate victims for harm inflicted. These types of restorative actions may threaten one’s ego or self-esteem, and the expected benefits derived from such actions may not be deemed to be worth the expected costs.

Another aspect to consider is the legal implications of our guidance. Although apologies convey remorse and responsibility that aids in the trust-rebuilding process, they also admit potential liability. If trust rebuilding is the priority, the offender will have critical decisions to make regarding whether and how to apologize. Once again, there may be instances when the costs associated with trust rebuilding are unfortunately outweighed by other considerations, such as minimizing legal liability.

Trust exists both in one-on-one relationships and in the firm at large. The confidence it provides permeates an organization through its people, departments, policies, products, and future outlook. Unfortunately, it often does not receive the overt focus and attention that it deserves, considering the vast impact that it has on an organization’s performance.

Conclusion

In this chapter, you’ve learned how trust can be a competitive advantage for a team or firm. We’ve discussed trust as not only a socially acceptable characteristic but one that has a profit motive attached to it. I’ve challenged you to build trust on your team and in your firm, given you methods to repair trust when it is broken, and demonstrated that the leader must be trustworthy in order to build an effective, growing team.