Prior to my focus over the last decade on leadership and so people, I spent nearly twenty years focussed on numbers and building value in businesses. A key part of that is assessing the hidden assets in a business, the stuff that isn’t always apparent in the financial statements.
Some of these come from assessing shifts a company can make in strategy, though what drew me towards a focus on people was that so many assets are actually around people, behaviour, culture. However, all too often those hidden assets are not valued and so not brought forth, focussed on, invested in to achieve returns.
Today some simple thoughts on one area that is a major hidden asset that can be realised by any business.
Trust
Yes, that key hidden asset is Trust.
As Jack Ma infers in the quote above, realising the potential of and in trust of others is, in so many cases and businesses, the single biggest unrealised asset of a business.
In Economics terms, when we don’t trust people it creates friction, otherwise known as costs, inefficiencies etc.
I’m not suggesting we blindly trust, yet over and over again I find businesses and their leaders who choose not to sufficiently trust their people, their customers, their suppliers.
We seem to live in a world of infinite information, yet instead of that freeing us to trust more, we seem to add more and more regulatory strictures and compliance, as well as the constant drive for transparency.
Transparency, trust and friction
A thought around transparency.
What makes transparency such a good thing?
Sure, some level of transparency is great, but beyond a certain point, it costs a lot to ensure we are always transparent in our dealings. It takes time, energy, resources. If, instead, we chose to trust rather than check, test, verify all this transparent information, surely we would reduce friction in the system?
Let’s take personal relationships for a moment.
All relationships have trust at the heart of them. Without at least some level of deep trust, no relationship can be solid. Apart from that, it takes energy and time when we are untrusting. Taking transparency with that, imagine you go away on a business trip then come home to your partner. Do they ask to see your phone as soon as you get home then check all your messages and emails from while you were away? Of course not (I hope!). Why? Because they trust you! Now consider that in terms of friction. You could be transparent and yes, they could then look at all your messages and emails. A pretty inefficient way of guaranteeing trust though, surely far less friction (in more than one way of meaning friction!) to simply trust each other?
As James Timpson says:
“the easiest way to know if you can trust someone…. is to trust them”