Mihalicz_What Enron Can TeachIn 2001, more than 19,500 employees were trapped in one of the world’s biggest corporate scandals. Cheated out of their jobs, billions in stocks and retirement savings, victims of Enron say executives betrayed their trust.

Trust is a fundamental component in building a successful business and a low trust environment can destroy a company. When employees lose faith in an organization, there will be low morale, low employee retention and a lack of engagement. 

Enron is an extreme example and while its lessons are invaluable, a recent study reveals that trust is still a major issue in the workplace.

The Chartered Institute of Personnel and Development (CIPD) shows 34% of employees say trust is weak while 40% of senior managers say trust is strong. CIPD writes, “This suggests that senior managers have either a tendency to view things through rose- tinted glasses and/or are out of touch with how other employees are feeling, particularly nearer the coalface.”

Generating Trust

Trust needs to be facilitated, nurtured and engendered so it cascades down the organization, from the CEO to the front lines. This will establish a new level of loyalty and increase the overall level of positivity in the workplace.

According to Psychology Today, leaders who build trust operate with three basic components:

  1. They give trust
  2. They effectively communicate
  3. They authentically show up

Accountability and Authority

Priority Setting and Delegating

To-day’s most effective managers support direct reports by prioritizing work and setting realistic goals.

Effective Managers Research shows that, frequently, a direct report does not get the appropriate direction from his/her managers in terms of priority setting, nor does he/she receive the appropriate resources for the work that needs to be done. As a manager, it is important to set the context and clearly delegate work so direct reports can use their judgment in making appropriate decisions.

Furthermore, ensure your directives are understood and that the necessary resources are provided to effectively complete the work that has been delegated.

An Equal Goal

A manager with the skills and capabilities to perform at a higher level, as outlined in the Five Requirements of Effective Managers, is able to provide guidance and solve problems in a way that is consistent with the work that needs to be done and the overall goals of the organization. A trusting relationship is developed when a direct report feels their manager is providing them with the right level of guidance and support.

In too many situations we find managers don’t have the higher level of capability required for appropriate support. In this situation, they may delegate to direct reports but trust is not established. At the end of day you end up with ineffective managers and workers. When employees lose trust in their organization, workers are less likely to be engaged, less productive, possibly even destructive and almost certainly looking for work elsewhere.