Organisations have become the means of absorbing the overheads individuals might face if they worked independently. All organisations, being humanly constructed and maintained, are normative communities defined by inter-personal behaviour. Trust is the ingredient that makes these social interactions possible, the social 'glue' that binds an organisation together. High trust generates what has been called 'the loyalty effect'. Recent research calculates that 'the loyalty effect' can add 40 per cent to a company's productivity.
Employees simply give more, act more creatively and require less supervision where they are trusted.
Much of this is commonsense, but it has proved remarkably elusive in many organisations. The majority of research into trust in organisations confirms the importance of leadership. How leaders behave personally, what they value and how they reward behaviour in others have huge consequences for the evolution of community norms and the creation of high trust organisations. Success or misjudgements in these matters can determine whether an organisation is trusted or not, at least by its members. Leadership behaviour is therefore crucial in establishing trust, in business as in politics, in both public and private sectors.