Most leaders are so whipsawed by the hurly-burly of being over worked that they have few resources left to energize their teams. And yet, as my late colleague Peter Drucker noted, the first and foremost job of a leader is to “take charge of your own energy and then help orchestrate the energy of those around you.”

The good news is that recent discoveries in neuroscience — including work from my own lab — show how leaders can energize employees and achieve high performance by orchestrating organizational dynamics. And it all starts with understanding the need to actively design a culture of trust, not to mention actively manage it.

Trust, of course, is seen by many managers as one of those soft issues best discussed in a sensitivity seminar. However, science clearly shows that a culture of trust stimulates productivity and innovation while also improving employee health and happiness. And after a decade of experiments, science also shows us how to build trust.

This article looks inside our heads to explain why trust is an effective means to improve performance. It then shows how it can be measured and provides an action plan to build and increase trust in the workplace.

TRUST AND THE MORAL MOLECULE

My lab set out to measure the brain basis for trust in 2001. I designed a straightforward experiment with a twist by modifying a monetary transfer task known as the “trust game.” In this investment exercise, participants must decide whether or not to trust a total stranger with money given to them, knowing that any amount handed over will be tripled by the experimenter before being deposited with the other party. The receiver of these funds then must decide to share or not to share the return on the investment. My modification involved obtaining blood samples during the game, which is why my academic dean at the time said I was doing “vampire economics.”

I wasn’t playing Dracula. I wanted blood to test if an evolutionarily old mammalian neurochemical called oxytocin would be released when one was shown trust via a monetary transfer. At the time, oxytocin was generally thought of as a “female hormone” released during birth, breastfeeding and sex, all activities too messy to be performed in my lab. But an evolving animal literature was providing snippets of evidence indicating that oxytocin might be released in the brains of social animals under certain conditions when they encountered known others.

My hypothesis was that human beings would have a similar reaction to intentional signals of trust. Blood samples taken during a trust game would allow me to test if trust caused the human brain to synthesize oxytocin. Since money comes in conveniently measurable units, we quantified reciprocity after one was trusted by the amount that participants returned to investors. We were then able to correlate these values with the increase in oxytocin found in blood.

Published in 2004 and 2005, our findings revealed that when participants received an intentional monetary transfer denoting trust, the recipient’s oxytocin increased in proportion to the signal of trust. In other words, more trust resulted in more oxytocin. We also found that the trust-stimulated increase in oxytocin predicted trustworthiness. The more oxytocin one’s brain made during the game, the more money was returned to the person who had initiated trust. This finding challenged standard models in economics because all the interactions were one-shot and conducted anonymously. While it would have been easy for participants to keep all the money entrusted to them, it rarely happened. Both male and female brains were stimulated to make oxytocin when shown trust. And oxytocin did not spike when money was randomly sent to participants via a ping-pong ball draw. During our initial experiment, we tested nine other neurochemicals that interact with oxytocin and they did not change at all. Lo and behold, we found the first non-reproductive stimulus for the so-called love hormone.

Our next set of studies looked to establish the causal relationship between oxytocin and trust by safely infusing synthetic oxytocin into the brains of participants through their noses. This turned on trust like opening the spigot on a garden hose, more than doubling the number of people who showed maximal trust by sending all their money to a stranger. Those who received oxytocin remained cognitively intact and did not show an increase in non-social risk-taking.

Simply put, when oxytocin nudges us toward greater trust, it does not turn us into touchy-feely zombies.  We become a bit more willing to take risks because the path forward looks clear, but we remain quite aware of the decisions and trade-offs being made. And if suspicions arise over a proposed transaction, the trust generated by oxytocin will quickly be inhibited by skepticism-generating stress chemicals such as adrenaline. Your brain is constantly doing an unconscious and delicate balancing act between obtaining the benefits of trusting another and making sure you are not being taken for a ride by a con artist.

My work over the last decade has led me to call oxytocin the “moral molecule,” since it is the biological basis for the Golden Rule: If you are nice to me, my brain is likely to produce oxytocin, motivating me to reciprocate with care and kindness. This has been true for 95 per cent of the thousands of people we have tested, ranging from locals near my laboratory in California to criminals in jail to indigenous peoples in the rainforests of Papua New Guinea (see Zak, 2012, for a full description). And the mathematical models I have built to understand how trust affects economic behaviours reveal that trust accelerates intertemporal transactions such as investments in factories and equipment. It does this by reducing transaction costs associated with distrust. When there is increased trust between trading partners, there are fewer delays, while fewer lawyers and accountants are needed to complete a deal. As a result, more deals can occur, increasing wealth.

BUILDING TRUST

How can trust be created in organizations? This is the question executives started asking me as soon as my findings landed me in the media. After our initial discoveries, I also wondered if what I had learned about oxytocin could be used to actively build high-trust organizations. But my desire to offer practical advice to managers meant more experiments had to be done. And I sensed that most businesses wouldn’t welcome Dr. Dracula wandering their hallways with a handful of syringes to take blood from employees (though some have, permitting an important validity check on what follows).

For these reasons, I created a survey tool called “Ofactor” that allows one to measure organizational trust and its constituent factors as well as assess how trust is created, nurtured and destroyed. The neuroscience conducted by my group has identified eight classes of management policies that create a culture of trust. It has also uncovered the proportion of organizational trust that each factor explains (note that these factors are not statistically independent, so the sum of the explanatory power of each exceeds one).

Conveniently, the eight factors that create a culture of trust — Ovation, eXpectation, Yield, Transfer, Openness, Caring, Invest and Natural — have an easy-to-remember acronym: OXYTOCIN.

OVATION: Ovation, which accounts for 61 per cent of organizational trust, occurs when excellence is recognized, and the science shows that it is most powerful when it is peer-driven, public, unexpected, tangible and close in time to a goal being met. At our weekly all-hands meeting, I invite people to express gratitude to individuals responsible for extraordinary work. I follow the recitation with the presentation of gift cards (my group loves coffee cards). Inevitably, the person being recognized praises others, and a discussion of best practices ensues. By regularly identifying performance exemplars, we create an aspiration among others to be recognized, thus driving higher performance. At the same time, workplace satisfaction is increased by the social benefits of working as a team.

ExPECTATION: Explaining 72 per cent of organizational trust, eXpectations are induced when individuals face challenges, especially with a team. The challenges most engaging neurologically are project-based with clear goals and milestones. Challenges that are open-ended, vague or unachievable induce chronic stress, so these should be avoided as they reduce oxytocin synthesis and, therefore, trust. Keep in mind that the brain largely ignores goals that are more than a week away, so while giving a three-month completion date to Project X is a clear overall goal, using weekly milestones is necessary. This also allows managers to intervene more quickly if the team needs training or resources. Also keep in mind that the brain needs “downtime” to recover from challenges. So when a project is complete, return to Ovation and celebrate the victory. Send the team to an amusement park, skiing, or out for some other adventure for a tangible Ovation before assigning them the next project.

YIELD: Yield, which explains 57 per cent of organizational trust, is fundamentally about managers letting go. It takes place when processes are crowd-sourced and employees are allowed to decide how, where (office, home, cottage) and when (daytime, evenings, weekends) things get done. As long as everyone is meeting deadlines, Yield serves organizations well by increasing employee commitment while focusing team members on eXpectation-driven goals by tangibly demonstrating trust in employee judgment. High-trust organizations stimulate innovation by encouraging non-catastrophic mistakes to be made and rewarding (not punishing) employees who make them. The message here is: Train extensively and then delegate generously.

TRANSFER: Imagine Yield on steroids and you get Transfer, a set of policies that enable self-management. Organizations that practice Transfer are essentially flat. Picture employees competing for leadership roles in a wireless office with desks on wheels. When a project comes up, it isn’t assigned. Instead, a team is formed by the employee with the most interest, time and expertise to complete the task, which, of course, requires clear eXpectations. Transfer, which explains 54 per cent of organizational trust, motivates the ownership of projects by fully investing employees in outcomes. Transfer also requires that financials be opened up, since a project’s budget and expected profit are essential knowledge for a team to be efficient. Indeed, sharing profits facilitates Transfer.

OPENNESS: As mentioned above, neuroscience shows that chronic stress sabotages trust. In fact, the correlation between trust and chronic stress is -.94, a nearly perfect negative correlation. Stress, of course, is created whenever executives have (or appear to have) goals that negatively impact their colleagues. This is especially true when the logic behind setting goals is not explained. Openness, which explains 63 per cent of organizational trust, occurs when decisions are transparent and reasons for decisions are shared. It involves listening to others and communicating clearly with them. This can be as simple as providing quarterly financial updates to all staff, or as radical as sharing all performance and salary data.

CARING: Caring, which explains 45 per cent of organizational trust, can be increased via the implementation of simple relationship-building policies at work, ranging from offering communal employee snacks to hosting after-work gatherings. Our studies have demonstrated that when our brains synthesize oxytocin, we become more empathic. This allows us to better understand those around us and produce more effective collaboration and greater innovation. As a result, leaders can be more effective coaches by simply noticing the emotions of others. It only takes a minute for a manager to state something like, “Beth, you seem tired/sad/happy/delighted today. What’s going on?” Our studies show that the payoff to Caring is significant because it nourishes loyalty to the organization in addition to building trust.

INVEST: Organizations can increase trust by looking beyond professional development and investing in whole person growth. Supporting professional, personal and spiritual development (anything one deeply cares about outside work and family) sustains long-term organizational performance by allowing employees to grow as human beings. After all, work–life integration requires an organization to Invest in a human being, not just a human resource. If you follow the eXpectation and Ovation modules, you can transform the dreaded and backward-looking annual review into a forward-looking Whole Person Review (WPR). A WPR focuses on growth and personal happiness in addition to professional development and lets leaders get ahead of looming home-front problems that can disrupt work. Invest explains 49 per cent of organizational trust.

NATURAL: The final Ofactor component is Natural, which explains 46 per cent of organizational trust. A leader stimulates trust and caring in others when his or her vulnerabilities are evident (providing one is also viewed as competent and sincere). So, try to live inside your organization rather than hover above it. Getting an annual 360 review is fine, but asking for feedback on a daily or weekly basis is better. And don’t be afraid to loosen up. Colour your hair pink when the big project is completed or work the tradeshow floor wearing a plastic nametag like everyone else. These things can be very endearing to others and you’ll get to see what is happening on the frontlines.

You can actively create a culture of trust by implementing policies that raise the OXYTOCIN components and then measuring the impact on trust and productivity. And you can reverse-engineer this process by looking at the downstream effect of trust when it is combined with your organization’s transcendent purpose — how the organization improves the world. As social creatures, employees are highly motivated by work that has a positive impact on society.

When purpose is clearly and consistently communicated, internally and externally, engagement increases. Our studies show that the combination of trust and transcendent purpose synergistically produces joy at work.

Joy can be considered a “sufficient statistic” or summary measure of the overall impact of culture on an organization’s performance. So if you cannot measure trust and the OXYTOCIN components in your organization, then assess joy as an indicator of how well your culture nurtures and engages colleagues. Figure 1 illustrates the feedback loop between Trust, Purpose and Joy.

FIGURE 1 Trust × Purpose = Joy

After giving more than 5,000 employees the Ofactor survey, and comparing those in the highest quartile of organizational trust to those in the lowest quartile, we find that high-trust organizations have the following performance advantages:

• 70 per cent less stress
• 28 per cent more energy
• 26 per cent more joy
• 69 per cent higher job retention
• 70 per cent greater job satisfaction

My group has also done experiments with employees in their workplaces and we have discovered that those in the top quartile of trust are:

• 19 per cent more productive
• 22 per cent more innovative at problem solving
• Homesick for 33 per cent fewer days

Working in a high-trust organization also confers benefits beyond the office. Those in high-trust organizations, for example, are 17 per cent more satisfied with their lives.

THE TRUST ACTION PLAN

Managers in high-trust organizations function as coaches, enabling the success of those around them while foregoing micromanagement. While letting go can be difficult, the payoff is powerful when supported by trust. Trust also frees up time for long-term strategic planning, the most important function of senior management. If that’s not enough, then keep in mind that decades of research have shown that money is a very weak employee motivator. Trust, on the other hand, works wonders when it comes to preventing knowledge workers from seeking to take their human capital elsewhere.

Here’s what you can do to increase trust in your organization:

1. View employees as volunteers, who continue to show up only if they are engaged by the organization’s purpose.
2. Use joy at work as a measure of an effective culture. Identify divisions that are joyful and copy how they operate elsewhere.
3. Experiment by changing OXYTOCIN factors one at a time and measuring the effect on joy and productivity.
4. Invite co-workers to tangibly recognize each other weekly (see Ovation).
5. Communicate your organization’s transcendent purpose internally and externally via an engaging story that goes well beyond increasing shareholder value.

Follow just some of the above lessons offered by neuroscience and you should see performance accelerate. As in most things management, Peter Drucker said it best when he pointed out that effective leaders never say “I,” but not because they have had the “I” trained out of them. They think “we” while understanding that it is their job to make the team function. But while they accept this responsibility, they make sure that credit goes to “we,” which is “what creates trust, what enables you to get the task done.”