Entrepreneurial businesses do not trust their bank. True? Threat or Opportunity?

It is said that most business owners don’t believe that their bank understands their business or, worse, even cares about them. Is this even true? And if it is, is this a crisis – or an opportunity for the banks that get this right?

We brought together top entrepreneurs, leaders from the main lending banks as well as from insurgent ‘challenger banks’, academics, journalists and thinkers in a no-holds-barred debate to get to the truth, find out what entrepreneurs really want and what the smartest banks are already doing to deliver it. You can read here the startling revelations and brilliant ideas that emerged from this lively and searingly honest debate.

 


The entrepreneurial idea that management theory and practice has just spent a generation trying to suppress

Entrepreneurially-minded organisations achieve agility not by having a purpose but what they do with it. These agile and entrepreneurially-minded businesses display a clearly defined set of drivers within their cultures that are the secret to bridging the Purpose Gap and making purpose work in an organisation.

“trust equals consistency over time. There’s no shortcut for either”.  Jeff Weiner

Contexis Purpose Gap_v3_4The first major difference in these organisations is a strong cultural assumption of TRUST. These cultures tend to be open, compassionate and creative rather than inward looking, fearful and controlling.  Purpose is able to live in the organisation and create value and impact because people implicitly trust in its authenticity.

In more traditional cultures based on control, people are instinctively distrustful of the purpose and hence it has no power to change things for the better. We once interviewed, across global markets, 600 middle Managers of a global Bank whose CEO had created and communicated a compelling and authentic purpose, strongly supported by the Board. Yet, the percentage of Managers who identified with or even believed the purpose was in low single digits.

What drives trust, allows purpose to thrive and transforms cultures is a marked difference in the organisation’s approach to people. Whilst it’s not always perfect, people tend to feel valued and trusted because management from the top to bottom is encouraged and supported to consistently act and behave differently. This is about managing compassionately, using a specific skillset that gives managers the knowledge and confidence to understand another’s point of view and take more time to listen and understand.

Trust allows people absolute confidence in their expectations of how they will be treated which means everyone’s energy is focused on making good things happen in the company rather than on protecting their own positions. People feel confident to try new things and go the extra mile which makes these cultures open and creative outwardly-facing. People strive for self improvement and mastery because the default setting tends towards learning before blame.

Compassion isn’t simple empathy; it requires action and gets results.

There is nothing soft or altruistic about this. Compassionate management isn’t simple empathy; it requires action and gets results. It is about creating exceptional productivity and efficiency. It is about building agile, responsive and highly effective cultures.

These cultures do not happen by accident but as the result of a conscious choice to manage people differently. It is also not an instant fix. As Jeff Weiner, CEO of LinkedIn, who has consistently built a culture based on compassionate management, says  “trust equals consistency over time. There’s no shortcut for either”.

To create a culture built on trust requires a conscious and courageous choice for senior management, backed up by consistent and sustained focus. In our experience, an entire culture can be transformed only when enough people are working, thinking and feeling differently to reach a tipping point. As a rule of thumb, 15% of the organisation’s management at every level must develop a fundamentally new way of thinking for change to become permanent and self-sustaining.

As Jeff Weiner says “compassion can be taught” by which I think he means the techniques and methodologies can be taught. Compassion is a core part of the human condition. Management theory and practice has just spent a generation trying to suppress it.

Perhaps it’s time to release people’s natural compassion in the workplace. As Linkedin has discovered, the rewards of creating Cultural Agility in terms of building cultures that are innovative, open and always learning can be extraordinary.

To find out about the other key drivers of entrepreneurial agility in large organisations, read here and here.

You may also enjoy these articles:

‘Most big companies won’t have the velocity to see out the decade’. Survival tips from the ones wearing the running shoes.

How thinking like an entrepreneur could make corporate organisations 26% more productive

Purpose transforms performance.  But if you can’t measure it how can you implement it?

Photo by Jon Tyson on Unsplash


The Neuroscience of Trust

We’re big on trust here.  We believe it is one of the fundamental ways for an organisation to bridge the gap between its Purpose, as articulated by the board, and everyday reality for its people.  You can read more about our experience of how fast growth businesses use trust to help bridge that gap , about how entrepreneurial organisations harness trust and about the crisis of trust between big and small businesses.

[pullquote]55% of CEOs think that a lack of trust is a threat to their organisation’s growth[/pullquote]There is a lot of data that validates the importance of trust in an organisation. Employees in high-trust organisations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working at low-trust companies. They also suffer less chronic stress and are happier with their lives, and these factors fuel stronger performance.

Yet organisations frequently approach the development of their culture in an ad hoc way, and do not focus on the behaviours that help to build a high trust culture.

[pullquote]Ultimately, you cultivate trust by setting a clear direction, giving people what they need to see it through, and getting out of their way.[/pullquote]Paul J Zak has been researching the relationship between trust and economic performance since 2001, both mathematically and behaviourally, and his latest article for HBR summarises the last ten years of neurological research as well as identifying eight management behaviours that build trust.  The full article is well worth a read and there is a summary of the behaviours below.

Recognise excellence.

The neuroscience shows that recognition has the largest effect on trust when it occurs immediately after a goal has been met, when it comes from peers, and when it’s tangible, unexpected, personal, and public. Public recognition not only uses the power of the crowd to celebrate successes, but also inspires others to aim for excellence. And it gives top performers a forum for sharing best practices, so others can learn from them.

Induce “challenge stress.”

When a manager assigns a team a difficult but achievable job, the moderate stress of the task releases neurochemicals that intensify people’s focus and strengthen social connections. When team members need to work together to reach a goal, brain activity coordinates their behaviors efficiently. Conversely, vague or impossible goals cause people to give up before they even start.

Give people discretion in how they do their work.

Once employees have been trained, allow them, whenever possible, to manage people and execute projects in their own way. Being trusted to figure things out is a big motivator. Autonomy also promotes innovation, because different people try different approaches.  (Read our article on how a sense of ownership, which has nothing to do with stocks and shares, drives performance)

Enable job crafting.

When companies trust employees to choose which projects they’ll work on, people focus their energies on what they care about most and take accountability for the outcomes.

Share information broadly.

Uncertainty about the company’s direction leads to chronic stress, which inhibits the release of oxytocin and undermines teamwork. Openness is the antidote. Organisations that share their “flight plans” with employees reduce uncertainty about where they are headed and why.

Intentionally build relationships.

The brain network that oxytocin activates is evolutionarily old and when people intentionally build social ties at work, their performance improves , not least because they don’t want to let people down.

Facilitate whole-person growth.

High-trust workplaces help people develop personally as well as professionally. Numerous studies show that acquiring new work skills isn’t enough; if you’re not growing as a human being, your performance will suffer.  Assessing personal growth includes discussions about work-life integration, family, and time for recreation and reflection. Investing in the whole person has a powerful effect on engagement and retention.

Show vulnerability.

Leaders in high-trust workplaces ask for help from colleagues instead of just telling them to do things. Asking for help is a sign of a secure leader—one who engages everyone to reach goals.  Asking for help is effective because it taps into the natural human impulse to cooperate with others.