Build Trust in Family Business

3 Ps of building trust in your family business

We have a tradition here at the Alliance.

Every week during our regular team meeting, we each (including myself) share our biggest “blunder of the week” – then we vote to see who made the biggest blunder and that person is celebrated as the winner.

This tradition is not about assigning blame. It’s an exercise in building trust, taking accountability, and living one of our guiding principles of “reserving the right to get smarter every day.”

We have redefined FAIL as a First Attempt In Learning.

Although awkward at first, this weekly exercise in vulnerability has built team cohesion and trust.

Trust is the bedrock of a prosperous family business. It’s the foundation of good teamwork.

Every year, 20,000 Navy recruits try out to become a Navy SEAL.

Only 250 of them will make it.

While the SEALs are known for their high performance, because they must trust each other with their lives, they actually value TRUST above skill.

The stakes aren’t as high in business, but the idea holds.

Here’s a simple test of this factor in your own organization: think of the most highly skilled but least trusted member of your team. What do you call them?

When I ask this question, the most frequent response I get is “a jerk.”

They may have skills, but no one wants to work with them.

This kind of low trust situation will erode your team.

So how do you build trust?

Through the 3 Ps: People, Process, Purpose

People: be open and vulnerable.

This is one of the earliest learnings I had as a leader: vulnerability builds trust.

I can guarantee you that 30 years ago, I would not have been sitting at a table with my team disclosing my biggest blunder. More likely, I’d have been talking about my biggest win.

While it’s important to share wins and accomplishments, these don’t build trust in the same way that sharing mistakes and failures do.

When people are comfortable sharing their failings, they are also more open to contributing their thoughts and their ideas. Especially if you, as a leader, invest time in listening to them and encouraging them to ideate with you.

If you’re lacking innovation in your company, you probably have a trust problem.

Processes: enable 2-way communication

Strong processes build trust.

When your processes are clearly documented, you understand who’s in charge, and you have good variance controls in place, it’s easy to trust the process.

Nowhere is this more important than in your communication processes.

You need to have a process for cascading information up and down in your organization.

If you want to have a healthy company, you need to be transparent about your goals and strategic intents.

You don’t have to give out your trade secrets or break confidentiality, but you will build more trust if you share the answers to these questions:

  • Where are we going as a company?
  • What are the strategic intents?
  • What is my role and expectations for me?
  • How are we going to measure progress along the way?

In a healthy environment, these are cascaded downward.

Equally important is to have a process where issues are escalated upward.

At the Alliance, we call this our System for Management and it is one of the key areas where we help our clients.

Purpose: an exercise in developing trust and attaining alignment

When we work with companies to develop their purpose statement, it’s an iterative process that can take a significant amount of time.

We involve the key leaders, the family board members, the managers, and all the employees.

Sometimes business leaders or owners get frustrated with the process.

But the process is the point.

The magical thing about developing a purpose statement isn’t the statement itself. It’s not an exercise in wordsmithing.

It’s an exercise in building trust and attaining alignment.

The fact that the process takes time and can be frustrating is what makes it work. It gets people involved and committed. They take ownership. They develop trust.

Developing a culture of trust can take time, but it’s worth it!

There are many benefits, including:

  • Increased speed and productivity
  • Happier, more engaged employees
  • Better customer service, increased sales, more innovation
  • Faster problem-solving
  • A more enjoyable workplace for everyone

If you’d like some assistance installing a culture of trust and accountability in your business, book a call with one of our advisors, we’d be happy to help!

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