customer loyalty. “Confidence is the beginning of everything,” as a bank advertise-
ment claims, and customer loyalty is invaluable. Customer satisfaction increases
when a company responds quickly to its customers’ demands. This is only possible
if there is a relationship of trust within the company itself and employees can decide
spontaneously and independently without having to consult with three managers on
whether the customer gets a discount. The costumer might already have turned to the
competition before the manager has ever taken the time to read the request of the
employee responsible for customer service. So trust can also give us a decisive lead.
Only in an environment of trust can information and knowledge flow freely.
People who distrust their colleagues, superiors or subordinates, hide know-how in
their desk drawer or in their own minds and do not share it with the organization.
But innovation requires an unobstructed horizontal and vertical knowledge transfer,
as well as taking risks and being able to accept mistakes. Ideas have to be openly
expressed, have to be tried, to be accepted or rejected in an atmosphere of trust.
“If you want creativity, you have to reduce the pressure of justification. Uncer-
tainties must be accepted. Let go. Give up control” (Sprenger 2002b, p. 42). There-
fore, in Sprenger’s view there is no entrepreneurship without trust.
Distrust increases costs immensely and destroys values. The costs arising due to
distrust are immeasurable in the truest sense of the word, such as the loss of missed
opportunities, unmotivated staff, etc. Half of the total costs of most companies is
caused by distrust, estimates Sprenger. An infallible indicator of this unfortunate
development is if administrative costs increase faster than revenues.
Many of these expenses never arise if organizations do without all of those
resources that they invest only as a safeguard against the dreaded “worst-case
scenario”:
The cost of the losses due to constant arrangements, negotiations and new
agreements.
The cost of explicit contractual safeguards and monitoring activities.
The cost of the development, implementation and monitoring of monetary incentive
strategies, with all of their disastrous side-effects.
2.3.3.3 Trust Motivates
Psychological and sociological studies show that human beings flourish under
conditions of trust. One of these conditions is that the people – i.e., the employees –
have degrees of latitude without supervision. These spaces generate interest and
responsibility to support the commitment to the cause and to the company as well as
the so-called “intrinsic motivation.” And these spaces create individuality and
originality. Without trust, Sprenger feels, there is no durable and resilient motiva-
tion. A business climate that is characterized by trust is a real competitive advantage
in times of difficult employment situations for high-potential staff. Incidentally, I can
confirm that from my own experiences.
There is no other choice for the executives than to trust these highly skilled and
specialized knowledge workers, because they can no longer monitor them.
2.3 The Relationship Between Leader and Led 93