Monday April 21st 2014,
The Company Ethicist

Building Trust At a Startup: Tricky But Critical Challenge

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When building new companies from scratch, startup founders and entrepreneurs tend to obsess more on things like product design, the revenue model and recruiting — and can often overlook issues of trust, ethics, values, or compliance. With the very first group of employees forming the core of a new company, establishing employee trust, experts argue, is a must-have for long-term success.

Recent survey stats reflect the same issue in business at large — only 42 percent of employees trust CEOs, and 50 percent trust their co-workers, according to the 2013 Edelman Trust Barometer. How can executives and managers build up this critical intangible? Here are a handful of practical strategies we’ve culled from a handful of management thinkers.

  1. Create accountability. Each team needs to trust the others that they will complete their tasks, holding each other accountable, says Matt Straz, publisher of business news site The Makegood and CEO of people management platform Namely. “As everyone executes, the level of trust among the group grows to the point where there is true confidence in each person’s abilities and the company,” writes Straz on The Makegood.
  2. Empower employees. Giving employees a sense of ownership by letting them run a project solo develops a sense of employee appreciation. “Micro-managing is a huge trust buster and empowerment is a trust builder,” states Kate Nasser, The People-Skills Coach™ and president of management consulting firm CAS, Inc.
  3. Fulfill promises. Over committing is a sure way to lose respect and fail as a startup, warns Martin Zwilling, founder and CEO of Startup Professionals, Inc., a company that provides advice to entrepreneurs. Yet not making any promises is just as bad. Zwilling writes on the blog Startup Professionals Musings, “People see through this strategy quickly, and will tag you not reliable and indecisive, as well as not trustworthy.”
  4. Communicate openly. While entrepreneurs may want to keep some details private from employees, Nasser recommends, “Let them know that you are assessing and planning and will be forthcoming with information. It doesn’t stop employees from discussing and projecting, yet you keep trust high by not hiding completely from the issue.” Not all risks can be anticipated, but staying transparent allows for fewer surprises company-wide, writes Zwilling.
  5. Give equity with care. When employees are demoted within the company, do they keep stock options? At Zynga, they lost them, but not without some public media coverage and unhappy employees. Providing stock options is a good incentive to get employees on board and invested in the company’s future, but be sure to educate employees about the available packages and about any changes to the rules of the game.

Image via Canstock Photo

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About The Author

Courtney Buchanan is a business writer who frequently contributes to The Company Ethicist.

1 Comment

  1. Karin Hurt August 22, 2013 at 8:45 am

    Really good points to consider. I’ve know several start up leaders who began to think about this stuff too late in the game. Best to get it right from the start.

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