The ability to build and sustain high levels of trust and engagement is a critical competency for today’s leaders. In our technology-fueled, digitally connected world where new products, competitors, and business models seemingly emerge overnight, one of the few competitive advantages organizations possess is their people. The skills, talents, creativity, innovation, and passion of its people can be the difference between organizations achieving exceptional performance or wallowing in mediocrity. In order to come out on the winning side of this challenge, organizations must connect the dots between trust, leadership, and engagement. Trust is the foundation, leadership is the driver, and engagement is the goal.

The Foundation of Trust

Trust is the foundation of any successful, healthy, thriving relationship and it’s essential to your success as a leader. Without trust your leadership is doomed. Creativity is stifled, innovation grinds to a halt, and reasoned risk-taking is abandoned. People check their hearts and minds at the door, leaving you with a staff that has quit mentally and emotionally but stayed on the payroll, sucking precious resources from your organization.

However, with trust, all things are possible. Energy, progress, productivity, and ingenuity flourish. Commitment, engagement, loyalty, and excellence become more than empty words in a company mission statement; they become reality. Trust has been called the “magic” ingredient of organizational life. It simultaneously acts as the bonding agent that holds everything together as well as the lubricant that keeps things moving smoothly.

Trust doesn’t “just happen” through some sort of magical relationship osmosis. It’s built and sustained through the use of very specific behaviors that align with the four core elements of trust: competence, integrity, care, and dependability. Leaders who emphasize the use of “trust boosting” behaviors cultivate an environment where employees feel safe and want to invest their discretionary effort, whereas leaders who engage in “trust busting” behaviors foster an environment of distrust and fear that cause people to withdraw and only give minimal effort.

Leadership as a Driver

Research by Gallup has indicated that a person’s relationship with his or her direct manager is the leading factor influencing employee engagement and that managers account for 70% of the variance in employee engagement scores. The Great Place to Work Institute has documented that committed and engaged employees who trust their management perform 20% better and are 87% less likely to leave the organization. What does that mean for leaders? To a large extent, the way you lead your people has a dramatic impact on their level of engagement on the job.

According to Gallup research, managers account for 70% of the variance in employee engagement scores.

SLII® is a model and methodology that fosters an environment of trust and engagement because it puts people first. SLII is a “people-centered” approach to leadership that looks at the needs of the follower to determine the leadership style used by the leader. The needs of the follower come before the needs of the leader. This altruistic approach by leaders builds trust because his or her followers see the leader has their best interests in mind.

Leaders who effectively use SLII also develop open, honest, and transparent communication with their people. With trust as the foundation in the relationship, employees feel safe enough to ask for the direction and support they need on tasks and goals. A team member who doesn’t trust his or her leader is not going to admit to being a “D2 – Disillusioned Learner.” Admitting you don’t know something is the last thing you’ll do with a leader you don’t trust. Conversely, leaders who foster trust and utilize SLII open up the lines of communication with direct reports and are able to talk objectively about developmental needs.

Engagement is the Goal

It would be overly simplistic to suggest that having a people-centered approach to building trust and employing Situational Leadership® II will produce an engaged workforce. Employee engagement is a broad and complex issue that organizations spend $720 million dollars a year trying to solve, according to a Bersin & Associates report.  Bersin also highlights that when it comes to engagement there isn’t even a commonly accepted definition of the term. Definitions vary widely, with elements including commitment, goal alignment, enjoyment, and performance, just to name a few.

However, it isn’t an oversimplification to state that a people-centered approach fosters an environment that allows trust and engagement to flourish and leads to organizational success. Research by renowned economist Laurie Bassi has proven that firms who put people first, as measured by the highest scores on the Human Capital Management (HCM) scale, have outperformed the S&P 500 over the past 25 years in periods of financial prosperity as well as in more difficult times. Most notably, firms with higher HCM scores are able to endure and recover more quickly from cyclical downturns in the economy than are firms with lower HCM scores.

Simply stated, leaders of the best and most successful firms understand that all they have and all they hope for is due to their people, and as a result, they practice people-centered leadership.