Trust Measurement: How to Measure Smarter

Trust is in the air. It seems that everything you read and every speech you hear refers to trust. We need it, we don't have it and we wonder how to get it back. I've been researching, thinking and writing about trust for a long time, before trust became trendy. Trust is an intangible which we all agree is fundamental to relationships. It is also, however, one of the things with which we struggle. We know it's important but we aren't sure how we can ensure we don't lost it. We are certainly not clear about how to measure trust.

When we look at measuring trust, we enter murky waters. We measure in order to bring certainty to our initiatives. Certainty helps to reduce anxiety about the unknown and and provides us with some degree of control. It provides support (or not) for our decisions.

This is especially important when it comes to with dollars invested in learning and development. Leaders want to know that their investment in L&D is worthwhile; that there is a return.

Trust seems to be amorphous; hard to define, hard to pin down. In discussions with clients who acknowledge the importance of trust and their need to maximize trust in their organization, we invariably come around to discussing trust measurement. When I am discussing an intervention in their organization which will help them improve trust, they want to know how I can reassure them that my program works. How will they know that what I am proposing will result in better outcomes? What type of trust measurement can I offer which can give them the certainty of a return on their investment.

These are tough questions to answer because measuring trust is about measuring changes in attitudes and behaviours. The challenge is how do you measure the effectiveness of a program when you can't control for all factors. For example, the coachability of participants is a critical element in the success of a change program. How open are participants to listening and to making changes? Some of the questions we would ask concern the organizational support systems; Are there organizational supports in place to reinforce the learning? Does the organizational culture and structure support a trust-based culture? If these basic issues have not been addressed, then the program does not have an opportunity to succeed.

My good friend and colleague, Dr. Dean Spitzer, has written what I view as the best book on the subject of Performance Measurement. In his chapter on Transformational Measures, Dr. Dean issues the following cautions.

1. Beware of metricizing. Dr. Dean cautions us not to adopt a pure economic view of whatever it is we are measuring. When we take an economic approach, we are treating measurement as a pure cost analysis when, in fact, these types of measures can be misleading. Trust measures are about behaviour change which, if successful, results in improved individual and organizational improvement. However, if we are looking at a direct and immediate correlation between program cost and economic improvement, we may be disappointed. Behaviour change takes time and isn't always noticeable at first. Trust is based on reciprocity and, as such, depends on the cooperation of the other person. When you change your behaviour, the other person may require time to accept and adjust to your new behaviour. Therefore, trust measurement that doesn't take this into account will be unable to demonstrate positive economic results.

2. Search for new truths. Be cautious that measurement does not represent 'the truth' but is a 'search for truth'. Organizations exist with mental models which sometimes get stuck in a historical reality which is no longer valid. Trust measurement, by its nature, often represents multiple mental models. As my research found, trust is contextually based and means different things to people. Therefore, measurement cannot represent all these meanings. It can, however, bring us closer to an understanding of the different meanings which exist in an organization. Trust measurement helps explain what managers often refer to as 'resistance to change'. I have found that resistance isn't to change itself but to a new context which holds little meaning to an individual or group of individuals in the organization. Measurement can uncover these differences and open the conversation to different ways to view organizational change.

3. Usefulness is key. One of the first things I learned when I was doing my coursework for my doctorate at University of Toronto was the importance that research and measurement to make sense. This is especially true in qualitative research or measurement which is focused on intangibles. Trust measurement falls into that category. There is such an emphasis on reliability and validity (the gold standard of quantitative research) that we have neglected to ask whether the specific measures make sense or offer answers to important questions. As Karl-Erik Sveiby says:" It is not possible to measure social phenomena with anything close to scientific accuracy". In its early stages, it is more important that transformational measurement be relevant and useful. As Dr. Dean says, "it is more important to have the "right" measures in their formative stages than completely accurate measures that are wrong".

4. Overcome skepticism. Many people doubt the value of subjectivity in measurement and I hear this often when I speak about trust measurement. Yes, there are some weaknesses associated with subjective perceptions, but in the hands of a deeply experienced measurement professional, you can find great value in trust measurement. The emergent results can help you to learn, refine and improve your measurement. Innovation takes time and, as Dr. Dean says, requires tolerance; and the ability to live with incomplete certainty.

5. Avoid 'rigor' mortis. Too much rigor kills innovation. I have seen this reaction when clients look at my trust assessments. As a researcher, I make a great effort to ensure validity with my tools. However, I recognize that my tools are not quasi-quantitative assessments and I don't try to make them so.

When reliability and validity are the only standard by which a measurement tool is judged, then we are locked into a means of measurement which doesn't allow for dynamism in trust measurement. Trust measurement involves measuring both attitudes and behaviours and as such, is not fixed and immutable. As I stated earlier, trust is about context and is multi-dimensional. There is not a universal definition of trust and, as such, we need to carefully interpret the results of trust measurement to ensure that the context and the organizational environment are accounted for.

In summary, measurement is critical to ensure that all programs are aligned to very specific goals and outcomes. The key principle is to ensure that evaluation methods and expectations make sense with the goal of measurement. If the measurement is focused on intangibles, then the requirement is for non-traditional evaluation of reliability and validity. It is more realistic and effective to evaluate or the basis of resonance and change over time.Article Source: http://EzineArticles.com/6718496

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Asian Stocks Retreat on Iodine in Tokyo Tap Water, Reactor Woes

Asian stocks fell, with the regional benchmark index set for its first loss in four days, after levels of iodine unsafe for infants were reported in Tokyo tap water as workers struggled to reconnect power to a damaged nuclear reactor.

Tokyo Electric Power Co. slumped 4.5 percent after rising as much as 7 percent before a Tokyo official warned against giving infants tap water to drink. Toyota Motor Corp., the world’s biggest carmaker, declined 1.2 percent after extending production halts. Virgin Blue Holdings Ltd. plunged 6.1 percent in Sydney after Australia’s second-largest airline forecast an annual loss. China Coal Energy Co. slumped 9.1 percent in Hong Kong after earnings missed estimates.

“Investor focus has moved to the medium-term consequences of the natural disaster to the Japanese and global economies,” said Tim Schroeders, a money manager in Melbourne at Sydney- based Pengana Capital Ltd., which manages about $1 billion.

The MSCI Asia Pacific Index fell 0.2 percent to 132.78 as of 7:32 p.m. in Tokyo. About the same number of stocks advanced as declined on the index. The gauge last week recorded its biggest weekly drop since the height of the European debt crisis in May, as Japan fought to prevent a nuclear disaster after the March 11 earthquake and tsunami, and as tensions escalated in Libya.

“There are still a lot of uncertainties surrounding the nuclear fallout, as well as aftershocks, and we won’t be seeing a stable market for a while,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “No one thinks the nuclear crisis has ended completely.”

Iodine Levels

Japan’s Nikkei 225 Stock Average fell for the first time in three days, losing 1.7 percent, having surged 7.2 percent in the previous two days. Hong Kong’s Hang Seng Index declined 0.1 percent. South Korea’s Kospi Index slipped 0.1 percent, while Australia’s S&P/ASX 200 Index rose 0.2 percent.

People in the Tokyo area should avoid giving tap water to infants, a city official said in a televised conference. The advice came after levels of iodine were found to exceed the limits for infants at a water treatment facility in the Japan capital, the official said. Tokyo-listed drinks makers including Kirin Holdings Co. and Asahi Breweries Ltd. surged on the report.

Engineers at Japan’s stricken nuclear plant are unable to connect power to one of four damaged reactors, marring progress to cool the fuel rods. Restoring power is key to ending the crisis at reactors that have leaked radiation into the ocean and air and forced the government to evacuate thousands of local residents.

Battling Meltdown

Fukushima Dai-Ichi Plant operator Tokyo Electric Power Co. has been battling to prevent a meltdown after losing electricity that helps circulate cooling water to the units following the temblor and tsunami. The company’s shares fell 4.5 percent to 1,049.

A series of earthquakes struck Japan’s Fukushima prefecture today, starting with a magnitude 6.0 temblor at 7:12 a.m. local time, according to Japan’s Meteorological Agency. The Japan Nuclear and Industrial Safety Agency said there has been no impact on the Fukushima plant from the latest temblors.

“Anxieties about the nuclear issues aren’t gone yet, but the situation is improving,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. “Some industries and stocks that declined significantly lately will be bought back.”

Europe, Libya

Futures on the Standard & Poor’s 500 Index climbed 0.3 percent today. The index retreated 0.4 percent yesterday as the price of oil rose amid unrest in Libya and concern grew that Europe won’t find an immediate solution to its debt crisis.

The MSCI Asia Pacific Index lost 3.4 percent this year through yesterday, compared with a gain of 2.9 percent by the S&P 500 and a drop of 1.5 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.3 times estimated earnings on average, compared with 13.4 times for the S&P 500 and 10.9 times for the Stoxx 600.

Honda Motor Co. dropped 1.8 percent to 3,090 yen in Tokyo today. Japan’s second-largest carmaker by market value will suspend production at three plants in Saitama, Mie and Kumamoto prefectures until at least March 27. Daihatsu Motor Co. Japan’s biggest minicar maker, lost 1.5 percent to 1,214 yen after extending a production halt until March 24. Toyota slipped 1.2 percent to 3,305 yen.

The Nikkei 225 plunged 10 percent last week on concern the effects of the earthquake and damaged reactors will hurt a recovery in the world’s third-largest economy.

Virgin, China Coal

In Sydney, Virgin Blue plunged 6.1 percent to 31 Australian cents after the airline forecast an annual loss on higher fuel prices and the effects on tourism of from last month’s Cyclone Yasi, which devastated parts of Queensland state, and the New Zealand earthquake, which destroyed much of Christchurch.

China Coal, the nation’s second-largest producer of the fuel, dropped 9.1 percent to HK$10.74 in Hong Kong. Net income increased 1 percent to 7.47 billion yuan ($1.1 billion), China Coal said yesterday, missing a mean estimate of 10.03 billion yuan in a Bloomberg survey of 17 analysts.

Maanshan Iron & Steel Co., China’s second-biggest Hong Kong-traded steelmaker, slipped 2.4 percent to HK$4.15 after reporting that second-half earnings slumped 95 percent.

Among stocks that rose today, Taiheiyo Cement Corp., Japan’s biggest cement maker, surged 3.4 percent to 153 yen in Tokyo and Sumitomo Osaka Cement Co. gained 0.8 percent to 252 yen, as building-materials suppliers rose on speculation they’ll benefit from post-earthquake reconstruction.

Reconstruction Agency

Japan said it may set up a reconstruction agency to oversee earthquake repairs, while data showed the central bank pumped record liquidity into lenders as the nation grappled with its worst disaster since World War II.

Chief Cabinet Secretary Yukio Edano told reporters in Tokyo the government will weigh “some sort of system or organization” to oversee spending following the earthquake, adding that it’s too early to say when a spending bill will be compiled. The Bank of Japan said yesterday lenders’ deposits with the central bank more than doubled since March 11 to 41.62 trillion yen ($513 billion).

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Brazil Mid-Month Inflation Index Slowed Less Than Expected

Brazil’s mid-month inflation slowed less than economists expected, as the cost of transportation and housing accelerated.

Consumer prices as measured by the IPCA-15 index rose 0.6 percent in the month through March 15, their lowest mid-month reading since September, the national statistics agency said in Rio de Janeiro. Economists expected the index to rise 0.53 percent, according to the median of 32 estimates in a Bloomberg survey. The annual inflation rate accelerated to 6.13 percent from 6.08 percent in mid-February.

Brazilian central bank President Alexandre Tombini said in Senate testimony yesterday that policy makers may adopt new measures to curb the consumer credit growth in a bid to cool heated domestic demand and slow inflation. Tombini said he has “confidence” that interest rate increases, fiscal cuts and curbs on credit will slow inflation to 4.5 percent -- the midpoint of the government’s target range -- next year.

The yield on most interest-rate futures contracts due January 2013, the most traded today in Sao Paulo, fell one basis points, or 0.01 percentage point, to 12.84 percent at 8:09 a.m. New York time. The real fell 0.1 percent to 1.6609 per U.S. dollar.

Housing costs jumped 0.39 percent in the month, compared with 0.28 percent in mid-February. Transportation rose 1.11 percent versus 1.04 percent in the previous mid-month reading. Clothing prices fell 0.37 percent.

Rate Increases

Traders are wagering that the central bank will raise borrowing costs by 0.5 percentage point for a third straight meeting April 20 to cool inflation that is close to the top of the central bank’s target range, according to Bloomberg estimates based on interest rate futures.

Economists raised their 2011 inflation forecast to 5.88 percent, from 5.82 percent a week earlier, according to a March 18 central bank survey of about 100 economists. Economists expect inflation to slow to 4.8 percent in 2012, the survey found.

Brazilian economists estimate that the credit curbs have the same impact on inflation as a 0.75 percentage-point interest rate increase.

Data published last week show Brazil’s economy may be cooling more slowly than analysts had expected. Brazil’s economic activity index rose at its fastest pace in nine months in January.

January retail sales, which Tombini yesterday said are the best reflection of the current state of the economy, beat estimates and rose at their fastest pace in five months. Sales rose 1.2 percent in January from December, up from a revised 0.2 percent the previous month.

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