Some years ago, a former executive of a Fortune 500 firm told me I was wrong. Very wrong.

I had just noted his old employer's lofty ranking in a high-profile list of "Most Admired" companies. The reality, he said, was quite different. He went on to describe a toxic work culture that started at the top and infected the whole organization.

His observation highlights how these "Best Company" or "Most Admired" rankings--which increasingly proliferate online and vary widely in quality--can sometimes be a superficial gauge of a company's real strengths.

As I explained to him, a "Most Admired" list is by definition a measure of external perceptions, and companies, at least in the short term, are often able to create a perception that may or may not match the reality.

It's the difference between reputation and character. Ideally, the two are aligned, but any attempt to build a positive corporate reputation while lacking the character to back it up won't be sustainable. Sure enough, the company's ranking on the list dropped precipitously in the years that followed.

These days, every leader wants their organization to be recognized on a "Best Workplaces" list. Some companies devote months and significant resources to meeting the criteria, accurately seeing the exposure as a way to boost their reputation, brand, and attractiveness to top talent in a tight labor market. There's nothing wrong with that. But imagine if that much energy was devoted to actually improving the company, rather than just its image.

A good ranking should be viewed as the result of a company's efforts to build its identity and culture, rather than an end in itself. That's hard to say when a competitor keeps rising up the list and your position remains unchanged, or even unacknowledged. But as great as it feels to be recognized, the real reward lies in creating something that can't help but be noticed. And the number one way a company can achieve this is by building a high-trust culture.

Trust between management and employees, and among team members, is the defining characteristic of what makes an organization a great place to work. Having presented on this topic in more than 50 countries over the past few years, I can also tell you that the relevance and impact of a high-trust culture is a principle that crosses all borders.

Ideally, a deliberate focus on building and leveraging trust starts at the top of an organization and cascades down. But a high-trust culture can just as easily originate with one person, in one team, or one department and ripple out from there.

Here are three key steps that anyone can take to begin creating a stronger culture of trust in their organization:

1. Look in the mirror.

High-trust cultures are built from the inside out. Start with yourself first. You need to have self-trust and credibility before expanding it to relationships, teams and the whole organization. Core behaviors include talking straight, listening first, clarifying expectations, and practicing accountability.

2. Declare intent.

Be explicit and open about the culture you intend to build. When you don't declare your intent, people tend to ascribe it to you anyway--and often get it wrong. The best leaders are able to build trust fast by being completely transparent, describing the "why" behind the "what." When you declare your intent well, it changes people's subsequent interpretation of your behavior. Declaring intent is a powerful, practical lever that leaders can deploy to influence how they are perceived and to start spreading a culture of openness and intentionality throughout the organization.

3. Extend trust to others.

A cardinal rule of trust is that you have to give it to get it. It's possible for two trustworthy people working together to nonetheless have no trust between them if neither is willing to extend it to the other. This doesn't mean that trust should be completely blind. Rather it should be what I call "smart trust," based on an assessment of the particular situation, the level of risk involved and the credibility of those being entrusted. A good guide to extending trust is to start with your heart and then balance it with your head, rather than the other way around.

Creating a high-trust culture is not wasting time on a "soft skill." It's a hard necessity, an economic driver. Its power is in its potential to change everything within an organization. Trust becomes the rising tide that lifts all boats. It can help companies attract, retain, and inspire people to build their teams, to collaborate and partner, to be agile and to lead change. It's the foundation for innovation. What's more, it can create incredible energy and joy in the workplace.

I was invited to speak recently to Wegmans Food Market, a regional grocery chain. It has been on Fortune's "100 Best Companies To Work For" list--which heavily weights for trust--for 20 years and ranked second last year. Wegmans' famously high-trust culture makes it a hugely desirable place to work, resulting in a staff turnover rate of around three percent, far below the industry average of 48, leading to a savings of some untold millions in costs wasted at other companies.

People who are trusted rise to the occasion and perform better, then turn around and give trust to others, creating a virtuous upward spiral of trust and confidence. More than ever, employees want to be inspired and led, not managed. And being trusted is the most compelling and inspiring form of human motivation.

Lists have their uses and recognition is always welcome. But if a company can successfully achieve a high-trust culture first, it will climb in every measure, and eventually--and legitimately--the rankings will follow.

Published on: Feb 8, 2019