Management Style of Trust and Retention

Trust plays a powerful role in retention. We’ve talked before about the death of the 19th century style of management: command and control. But what replaces it?

I like the phrase I recently saw of “trust and track.” As explained by an entrepreneur who has achieved great success with this method, trust and track “involves educating employees about what it takes for the company to be successful, then trusting them to act accordingly. … If done right, trust and track can allow a company to be nimble, flexible and productive enough to perform at the highest level through good economies and bad.”

How does this play out in large organizations? This year’s Fortune No. 1 best company to work for: SAS. SAS is the world’s largest privately held software business and has been profitable every year of its existence. In fact, in 2009 SAS grew 2.2%, the second or third most profitable year on record. How’d they do this in the midst of recession? Trust and track.

As the CEO of SAS, Jim Goodnight says in this FT article: “I always say if you treat people like they make a difference, they will make a difference.”

What’s the impact of this approach on loyalty at SAS? This CNNMoney article tells us: “The average tenure at SAS is 10 years; 300 employees have worked 25 or more. Annual turnover was 2% in 2009, compared with the average in the software industry of about 22%.”

Are you trusting your employees to make a difference? Trust is itself a powerful form of recognition as well as motivator. Tell me your stories of the power of trust.