Establishing workplace trust is the cheapest way to run a company.
You will spend less on management and get more out of your employees when they buy into a trustworthy enterprise.
This article is about my experience helping build a high-trust organization called Electroimpact. Use these ideas to build trust in your organization—especially in the modern hybrid workplace.
- Make trust a core value
- Hire smart, authentic people
- Empower them with real autonomy
- Enable transparency
- Expect high personal integrity and show it in return.
Why Does Building Trust In The Workplace Matter?
Most traditional organizations are built on the “command-and-control” model. This model is fundamentally structured around setting out explicit instructions and follow-up.
Think military units. Managers don’t intrinsically trust employees. There is a natural tension between management expectations and what the employees think they can get away with doing. The result? Energy spent on friction and noise of verification rather than directed toward productive output.
Even many newer startups are launched from the founder’s vision of how people should work, typically modeled after the founder’s way of working. These organizations sometimes appear to have a high level of trust but, in reality, they often just lack structure and oversight in the gap between the founder and the workers.
Nobody builds a startup so they can have lots of managers but, as companies grow and expand, this layer thickens and the gap can widen. Eventually the company can stray from the mission and then there can be a pretty massive reset driven by strong “leadership” from the founding team.
The founding team realizes they can no longer focus on their work and trust that the rest of the organization knows what to do. Workers realize that, while they thought they had autonomy, really there was just chaos between them and the founding team.
All kinds of unpleasantness ensues, including top talent disengaging, increased turnover, and frustrated communications from an out-of-touch management team.
In contrast, an organization with authentic trust stays in tune from top to bottom. When workers trust that their leadership puts value on their interests, they exhibit high personal integrity in their work and engagement approaches altruism.
When leadership experiences this buy-in from the team they are incentivized to continue and support the model because they can see how it makes their day-job very easy, reduces the costs of oversight, employee turnover stays low, productivity is high and innovation happens.
How To Build Trust In The Workplace
High levels of trust in the workplace seems to be such an unusual experience that many people have a hard time relating to the idea.
At Electroimpact, trust was instilled from the founding principles. The owner founded the company to be “the ultimate engineer’s company” and the mission statement is to “have fun and make money designing, building, installing, and supporting quality automated equipment.”
In this view, great engineers do not like or even need management, bureaucracy, departments, oversight, or really any kind of rules in order to work effectively.
Whereas most engineering or manufacturing companies are founded to make and sell the founder’s widget or idea, this company was built to be a great place for engineers to work, and then focus on “what will we make and sell?”
Essentially the owner believed the people he hired would know to “do the right thing, and do things right.”
Since inception, the company grew faster than the aerospace industry in the boom times. During most of the industry dips, the company shrank back less than peers.
Growth was driven by the ability to rapidly scale when the market demanded it. We grew engineering headcount by as much as 30% in a single year, all through direct hiring—no recruiters! This is a lot of work in a company where engineers make up 75% of the headcount.
So how is building high levels of organizational trust achieved in practice?
Make trust part of your core values
As mentioned above, Electroimpact was founded with autonomy, and therefore trust, as one of the core values. These are enshrined in the employee handbook.
The Handbook itself is only about 20 pages. It does not prescribe all kinds of rules. Instead, it answers common questions and certain guidelines with a strong emphasis on personal integrity:
- The #1 personnel policy statement is “Electroimpact has a nearly flat organizational structure and the company demands and supports individual integrity and effort.”
- New employee orientations review the fact that there is not a cohort of managers looking over employees’ shoulders and people are trusted to work as they see fit.
- On day one, employees are given a key to all the buildings and broad network access
- Unlimited purchasing authority is granted on day one, yet no formal employment contract is signed.
Hire smart, authentic people
Electroimpact’s owner once said, when asked about the secret to success, that he’d “give his competitors the drawings for his products, but not give up how he hires his people.”
Company growth and success is about the quality and integrity of the people.
Trust begins at hiring.
The hiring process must include evaluation of trustworthiness illustrated by robust degree programs, personal integrity, and demonstrated skill.
Often, student engineering team projects are a great way to evaluate how someone performed and related in an environment with limited oversight and guidance.
It can be a challenge for experienced workers to unlearn the habits acquired in previous organizational cultures. Focusing on “feeding the bottom” by hiring recent grads enables people to grow in the trust model and has, of course, the additional advantages of bringing in the latest education and lower salary costs.
For all of these reasons, Electroimpact resisted hiring mid-or later-career individuals.
Trust is the result of shared positive experiences. Negative feelings and distrust can be avoided with high levels of transparency.
So how do you build transparency into your organization? Answer: make everything openly accessible and communicate often.
For example, Electroimpact gives everyone purchasing authority and encourages them to buy what they need to get their job done. This is the first obvious (and shocking to some) side of a “trust triangle”.
Purchasing happens in an ERP where everyone can search and see what everyone else is buying. Everyone can see what you’re spending company money on via quick and easy purchase order search tools.
Project financial reporting, available to everyone, shows the cumulative costs of labor and materials vs what the customer has agreed to pay.
Similarly, open access to design data across and between projects allows people to find, review, and capitalize on others’ work to minimize reinventing the wheel. Successes and failures are visible to all. This is the second side of the triangle.
In cases where customers have data privacy expectations, this is an opportunity for high-integrity individuals to implement the minimum necessary security to avoid inappropriate access and demonstrate that to the customer. Most customers enjoy understanding they are only paying for the overhead they ask for!
Access to company financials and pay and operations transparency are a third side of the trust triangle.
Each month a company management meeting is held. All employees are welcome to attend, but typically it's mostly group leaders and project managers.
Going around the room, those attending in-person and virtually each get a few minutes to talk about what they’re working on, what’s coming up for their team, what needs they have, and what resources and new developments they are making available.
This includes ownership presenting on the state of the business and what technologies and opportunities they’re excited about.
Detailed minutes are taken and then distributed to the entire organization via email and archived on the intranet. Everyone can easily keep up on the big picture.
These minutes have become artifacts of the quality management system as evidence of executive review of the company’s mission.
How transparency prevented pay discrimination
A quick note on this. The owner’s innate desire to keep things simple by posting everyone’s salary on the wall grew into a natural means of preventing pay discrimination by gender, age, and other non-work-related criteria.
A great example of how this is powerful includes when EEO investigators came looking for situations where traditionally-underrepresented workers are paid less for similar work. Any employee can easily show individuals’ contributions via purchasing reports and design data and show how they are compensated.
One case included a husband-and-wife engineer employee pair. Both happened to be mechanical engineers of similar tenure and experience. The EEO investigators found that the wife was paid more than the husband, which was justified by superior work output. Nobody was surprised by this finding.
Empower people with real autonomy
Many organizations create difficult situations by assigning responsibility without providing adequate authority to carry out the work.
This is really frustrating for workers who lack empowerment yet have constant targets to hit. They feel stuck without support from management.
In contrast, leadership that grants real autonomy with local and immediate decision-making by workers empowers them to deliver on their assignments. By proper and effective use of this autonomous power in getting the job done, the workers demonstrate they are trustworthy. This leads to a virtuous cycle with increasing responsibility and performance.
So what does this look like at Electroimpact?
The environment in which people work is an open campus. There are no guards, gates, sign-ins, receptionists, badges, or permissions needed. Customers and suppliers are quickly able to interact with employees as needed.
Vertical responsibility in this model means that engineers are marketing and selling and making contracts with customers.
Upon winning work, the engineers need to perform all the project functions including building a team, doing their own calculations, simulations, and analysis, CAD modeling, presenting to customers, drafting, purchasing, assembly, debug and testing, installation, and support at the customer site.
Typically, each employee is providing a sub-system within the context of a larger overall project deliverable to the customer.
If the project was a custom car, one person would be doing the engine, another the drivetrain, another the body, electrical, etc. Everyone recognizes the car won’t run without all contributions running and on time, and lessons are directly learned so errors are not repeated (by that individual, anyway.)
A very important feature of this model is the real autonomy to choose what you want to work on.
Maybe new hires don’t get to work on what they think is the coolest part of the product when they first join. But, after proving themselves, they’re awarded mobility to continue developing in a particular area, or move on to another area to expand both the product value and their experience.
The project manager’s (themselves an engineer) responsibility is to enable the team to get their work done by removing roadblocks to success, whatever that means in the moment.
Upper management’s job is to curate this environment and make the hard decisions and judgment calls that escalate to them.
Engineers love this model of being able to personally bring their ideas to reality, a rarity in most organizations.
On the flip side, management’s job is made easier—if something goes wrong, they need only look at the individual. Something went awry either at the concept level, the execution, or follow-through. The individual is likely very close to the issues and does not get to point the finger at others!
An aside, perhaps, but something worth mentioning. Peer reviews are a powerful tool to help spot things that could potentially be an issue. Most people look at their own work through the same eyes as during creation—it's just hard to find errors ourselves.
Organizing peer reviews at logical steps in the product development and execution process brings fresh eyes.
A really good peer review includes diverse members of not only the immediate working team but also outsiders willing to give some time.
A really excellent review can be had if one invites “less-friendly” peers. You know what I’m talking about… everyone has some sort of a “nemesis” who is more critical of your work.
As hard as it seems to invite that person to critique your work, it's likely they will find more issues than your friends will. And you want any and all issues to be surfaced and addressed, because otherwise your personal efforts will be increased in the recovery. This requires a certain amount of bravery to be sure!
This applies not only to the design engineer and technical work but also to the work of preparing proposals and pricing new products and services. Most people prefer catching things early rather than pitching in to assist in the recovery later.
From an employee discipline perspective, when someone has not performed, most often it's often due to a miscommunication of expectations.
In a high-trust, high-autonomy environment, new hires frequently start work without much instruction (certainly much less than in the academic environment from which they have just arrived).
A two-way conversation between manager and employee can usually clear things up, though sometimes a change in team is needed. In some cases there are actions and decisions which are obvious breaches of trust.
When this is wilful and deliberate it is straightforward for the organization to recognize the individual does not exhibit the level of trustworthiness needed to succeed in this model.
Expect high personal integrity and show it in return
Personal integrity is valuable at all levels, and at work and in our personal lives. Without integrity a person can’t be trustworthy.
Basic integrity means doing what you promised. For the daily engineering work this means following the project requirements, meeting the specifications for performance, and delivering on-time and within the project budget.
Meeting all of these basic requirements is often difficult and displays the character and capabilities of the individual within the project environment.
For obvious reasons, managers tend to prefer team members who make good on their promises, remembering that it’s likely the employee signed up for the particular work.
One barrier some get tripped up on is keeping the best people for your team.
Contrary to common practice, it’s not ideal for a manager to collect all the best people for themselves.
It’s imperative to enable each individual to go as far as they can for the overall best outcome for the organization, and managers should not hold people back. They should encourage and promote when deserved.
This career enablement shows high integrity at the manager level, which should be viewed and rewarded by the next level up. With encouragement from top management, this success ladder goes all the way to the top.
The personal vertical responsibility model shows the ownership each individual has for their own success and collectively the success of the project and the company.
A powerful way senior management can show trustworthiness and advance this model is in how they distribute company profits.
The basic profit equation is the money left over after operations (overhead) and project costs are subtracted from income.
A simple formula retains a portion of the excess profits to grow the business and then distributes the remainder back to employees proportional to tenure and pay as proxies for contributions to company success.
By transparently illustrating how individual labor and purchase decisions create the profit margin, and then sharing excess profits with the employees, the company helps people feel personally responsible for profits.
A common refrain heard in the organization - “hey, knock that off! You’re wasting my profit sharing!”
This is real ownership of the model at all levels in the organization.
A Note On Remote Teams
Remote or hybrid work is easily enabled in a high-trust organization.
Few new tools are needed when the leadership trusts workers and has already empowered them to work with self-direction and spend money and time wisely.
There are great tools like straightforward and reliable network access, slick digital collaboration tools, and PLM and ERP systems in place for visibility around effort and productivity in a trust-but-verify model.
And how are these tools identified and brought into the organization? In the high-trust model, the employees are empowered to select, acquire, and deploy the tools they want to use for the way they work.
When the culture adapted to the sudden remote-work situation with suppliers and customers no longer able to visit the campus, EI responded by quickly running through Slack, Teams, Zoom, Skype, WebEX, and more in just a week or two in late March-early April when the lockdowns began in earnest in the local area.
Most of the organization settled quickly on Teams for internal use, and maintained some capability for all the rest in order to stay connected with customers and suppliers who chose other platforms.
This high level of flexibility, competency, and rapid rollout enabled the organization to lead customers and suppliers through the pandemic’s early months with a reassuring “we got this, we’ll help you out” attitude which mirrored the company’s reputation in the product and service marketplace.
Trust Makes For A More Fun Workplace
Having fun is greatly improved when you trust your fellow team members, leadership, and company ownership.
In an age where “increasing shareholder value” is no longer viewed as the primary mission for companies, and talented employees are in high demand, workplaces must show that they recognize there must be some fun in the workplace to attract and retain talent.
Feeling like you’re valued, and seeing that value reflected in the trust and autonomy in your daily work, is a very powerful retention mechanism. It’s why I stayed in the same company for almost 30 years!
My time at Electroimpact taught me that there is a better way to work than many organizations provide.
I absolutely loved working with and for some of the highest-caliber engineers in the aerospace industry, in an environment where we trusted each other at work and hung out together while our families grew.
We all had a passion for the work as a true team, and, on many projects, the customer was part of the team at the working level.
I received a lot of feedback about how awesome the team was to work with and I think this stems not only from technical competence but also a positive attitude where good intent is assumed.
Especially enjoyable was giving tours of Electroimpact to outsiders ranging from aircraft OEM executives down to schoolchildren.
All came away with a sense of wonderment about the work culture and the capabilities it unlocked. Electroimpact changed the way aircraft are built and I'm very proud to have been a part of it.
Some further reading/watching: