In their book "The Leadership Challenge" Kouzes and Posner express the importance of trust this way:
Trust is at the heart of fostering collaboration. It's the central issue in human relationships within and outside organizations... Individuals who are unable to trust other people fail to become leaders. (The Leadership Challenge - P. 163)
In "The Speed of Trust", Stephen M. R. Covey notes that in high trust organizations the speed of every aspect of the business goes up and costs go down, whereas in low trust organizations speed suffers while costs can rocket upward. (The Speed of Trust - P. 13)
Trust is the lubricant that lets an organization work smoothly and quickly. In high trust situations ideas are communicated with a minimum of effort, tasks are completed without excessive oversight, processes flow without excessive rules, and people feel valued and empowered. In a low trust environment, a cultural friction develops that causes the slowing of systems, growth of management structures to oversee and monitor work, establishment of new bureaucracies, and creation of rules. In these environments true leadership becomes almost impossible.
Because they can't bear to be dependent on the words and work of others they [leaders] either end up doing all the work themselves or supervise work so closely that they become overcontrolling. Their demonstration of lack of trust in others results in others' lack of trust in them. (The Leadership Challenge - P. 163)
The leader's own assumptions about the organization play an important role in creating a high trust environment. Edgar Schein says that "... a fully connected [communication and information] network can only work if high trust exists among all the participants and that high trust is partly a function of leader assumptions that people can be trusted and have constructive intent." (Organizational Culture and Leadership, p. 370)
If a leader starts from the position that people cannot be trusted, communication and information networks cannot function quickly. The cultural friction slows every aspect of the organization.
A lack of trust is often translated into a feeling of suspicion. A leader working in a suspicious system feels that everything that is done should be questioned. Employees feel that they have to cover their backside with extra work, and that everything will be checked, and double-checked. Within all of this effort, the lack of trust (suspicion) robs the leader and the organization of time and money.
Mahatma Gandhi believed that "When there is suspicion about a person's motives, everything he does becomes tainted." (The Speed of Trust, p. 8) Therefore, in organizations where there is low trust, no matter how much additional work is done, it is the underlying motives of the leader or workers that will be questioned. There will always be the search for the hidden agenda or conspiracy.
In his Leadership Diamond Model, Dr. Peter Koestenbaum expresses the belief that trust is an essential part of the ethics of the leader. (The Philosophic Consultant, P. 46) Koestenbaum would agree with Schein that a leader's assumptions about the organization, and the leader's ability to behave in an ethical manner toward the organization (an attitude of care and empathy for humanity, and how our actions affect others), contributes to the environment of trust within an organization.
But, if the experts agree that trust is so important to a leader's success, 1) why do so many leaders fail to understand that their inability to succeed is tied to their own inability to establish trust within their organizations? And, 2) what can a leader do to create trust when it does not naturally exist?
Before a leader can start to build (or rebuild) trust, a leader must understand that a trust gap exists. This is a bit like starting any 12 step program - the first step is recognizing that you have a problem, and need help. Without recognition, you can never cross the gap because you are unaware that it exists.
As to why so many leaders fail to see the trust gap, it is hard to say. But it is likely that the answer lies within the leader. Kouzes and Posner show that managers and leaders "... with the highest control scores have the lowest personal credibility." (The Leadership Challenge - P. 166) Credibility is an essential element in trust; we tend to trust people we see as credible. Highly controlling behavior on the part of the leader sends a signal that is received as "You don't trust me." When I see myself as trustworthy, and receive the signal that says I am not trusted by the leader, I respond in kind; I will not trust the leader.
Let's say you are the leader in question. Breaking this cycle starts with you. Before you can ask others to trust you, you must first demonstrate your trust in others. This means going first, being willing to risk, and communicating.
Communications - letting people know what you are thinking, when you are thinking it, and why you are thinking it - is the starting point. Constant, person to person, open, and honest communications is a step in recreating a trusting relationship. Self-disclosure, and a willingness to be vulnerable to others whose behavior you cannot control is all part of this process. (The Leadership Challenge - P166-170)
There is more to the process. And, if you are interested in taking the journey required to rebuild trust, I recommend both The Leadership Challenge, and The Speed of Trust. In addition, a good coach could be worth their weight in gold (literally speaking). Creating trust within your organization could make the difference between success and failure, for both you and the organization.