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Carl Lewis: Welcome to The Connected Enterprise podcast. I’m Carl Lewis, your host from Vision33, and my guest is an old friend, Niels Stenfeldt. We haven't spoken for years, but I liked his recent LinkedIn post so much I said, "This is a great opportunity to reconnect with Niels." Niels, welcome to the podcast. Tell us about yourself, your background, and what you're doing these days.

Niels Stenfeldt: Thank you, Carl. For the listeners, we met in 2007. I was the Global VP of SAP Business One, working in SAP out of Valdov. I left in 2009, but I’ve stayed close to the SAP Business One ecosystem as chairman for MIT that makes the additions to SAP Business One. I've also run various businesses within the software space for small and midsized businesses and large enterprises.

I say this has been my expertise for 15-plus years so I don't appear old! Now, I'm working with some private equity companies while deciding what’s next. My theme in this podcast is trust and how you think, “This isn’t the right place for me.” That’s where I am. It’s one reason for the LinkedIn post.

Carl Lewis: The article was about trust in the business place, tolerance for inappropriate behavior or inappropriate function by employees, and accountability. How do those things play together in employees’ lives?

Niels Stenfeldt: Trust is one of the most critical things a leader needs to create in their organization. Tolerance is also critical. One challenge is that while we want to tolerate as much as possible because we want to accept people’s differences, we should never tolerate poor performance or behavior. Leaders say, "That job will be hard to fill—maybe we should keep Person A a bit longer." But we forget that those with good performance/behavior are wondering why Person A is still here because they’re a nightmare to work with.

Tolerating bad behavior is super negative for the good employees. They’ll look at you as a leader and think, "Why can't you make a decision? Why can’t you do the changes everybody wants?" Your leadership and value as an individual will diminish.

Carl Lewis: I don’t know about Denmark, but that’s happening a lot in the US. Small businesses are having trouble recruiting staff, then having trouble retaining them. Government policies are creating backlash and frustration. Customer service at restaurants isn’t what it used to be because of the quality of the staff, their knowledge, etc. But business owners seem reluctant to trim the herd because they can't find anyone else. From a sociability perspective, what effect do you think that'll have in business if it takes years to recover?

Niels Stenfeldt: Everybody knows there’s a growing challenge, so I go back to my key point: What’s worse? Is it worse to keep a person and watch the good ones edit their CVs and wait for somebody else to call? Or is it worse to be short on employees because you fired the bad ones (but got happiness and energy back to those working hard)? The math is simple: There’s no point keeping dead weight. There’s a bigger negative impact on the good ones when you keep the bad ones, even when it's hard to find somebody else.

Niels Stenfeldt: People will work harder if they see you’re rewarding those who do a good job. Anything else is bad excuses and bad leadership.

Carl Lewis: I prefer a small but excellent team. They support each other. We're all on board together. That'd be a better place to work from my perspective.

Niels Stenfeldt: I agree.

Carl Lewis: How does an employer create this atmosphere of trust? 

Niels Stenfeldt: It's a matter of ‘who’ just as much as ‘how.’ Trust must be delivered by every employee. I can foster trust with my leadership, but if it’s not an organizational mindset, that atmosphere is unattainable.

Start with where you are and where you want to be. When you know that, you can get started. I always consider the ‘low-trust indicators.’ If you have a lot of employee turnover, a hard time recruiting, low energy, and low productivity, it’s because there’s burnout, and people know you aren’t a fun place to work.

That leads to finger-pointing and creating rules defining what you can’t do to compensate for the bad employees. You have bad culture, the innovation sucks, nobody shares information because they don’t trust each other, there’s no respect, and there’s passive-aggressive behavior and cynicism. And then everybody eventually resigns. That’s a low-trust culture. 

It’s also a matter of ‘where.’ To create a high-trust culture, you must start at the top with the president, chairman, CEO, etc. Middle managers can do some, but if it doesn't start at the top, it won’t happen. 

Start the discussion with “These are our low-trust indicators—what do we want to change?” You want fun and laughter because nobody laughs with colleagues they don't trust. You want positive team-building behaviors like gratitude, empathy, and honesty. You want to be open and vulnerable and speak freely and listen to others. That’s high confidence. Comparing what you are with what you want will show you how large your gap is.

And then ask, "Where’s the problem? Accountability? Transparency? A sense of community and shared values?” Those are relatively simple measures. It's about having a vocabulary as a leader and organization about the need to trust. How do we trust each other? Trust is necessary for us to coexist because otherwise, we’re cynical and hateful. And then we’re back in the negativity that comes out of a low-trust culture.

Carl Lewis: Good answer. I'm fortunate to work with a company that includes ‘fun’ in the mission statement. It's been harder recently because we don't see each other often, but it's still there. And always a part of who we are. The challenge is, to accomplish that, you have to spend money. These things require an investment. 

You said this trust component needs to start at the top and become part of the culture everyone buys into. It's curious, though—if you've tolerated a poor employee who’s become a little bitter, that one bad apple creates a lot of bad apples. And once that negativity is there, it’s much harder to overcome with trust.

It seems like if leadership isn’t aware of it, it grows too fast. It can hurt the company.

Niels Stenfeldt: Absolutely. A rotten apple will quickly spread itself; it's the same with trust. Trust is contagious. I’ve turned down jobs because I didn’t feel trust. I knew if I couldn't trust the interviewer, how would I ever get the entire organization to trust? If an organization has lost confidence or trust in the journey, your battle as a leader will be uphill.

Carl Lewis: We’ve both worked for large and small companies.

Niels Stenfeldt: Yes.

Carl Lewis: Do you think it’s easier for smaller or larger companies to build this trust?

Niels Stenfeldt: As a small business, you can be more agile. The distance from the top down is shorter, which gives you a faster response time and makes it easier to spot low-trust indicators. But big organizations can have a high-trust culture. It's all about the people. If the leadership understands the importance of trust, big organizations can be as good as small ones. But it may be easier in small organizations.

Carl Lewis: I think there's truth to that. I've worked for sole proprietors before, and I wasn't as smart as you in judging if I could trust them. So, the relationship didn't last long because they weren’t trustworthy, and their motives weren’t completely honorable.

Niels Stenfeldt: You have a point—it’s probably easier to be a politician hiding in a large organization. They’d be called out faster in the small one.

Carl Lewis: Maybe what I'm thinking about is executive accountability. When you're the owner, sole proprietor, president, and CEO, you don't answer to anyone—except maybe a higher power or your spouse.

Niels Stenfeldt: For sure.

Carl Lewis: So, what you are is what the business becomes. CEOs of larger corporations report to a board of directors, so there’s accountability. Of course, if the board is sour, everything else is sour, but each has strengths and capabilities to build a trust culture.

Niels Stenfeldt: A good CEO can communicate truthfully and with authenticity about changes, so everyone understands. Whatever my job is, if the logic doesn’t make sense, it's because it's being communicated poorly—or it’s a bad decision. 

And going back to the low-trust indicators: if the logic is missing, engagement will drop. Engagement drops, cynicism and water cooler complaining starts, and there’s low trust. Maybe it was just bad communication, but a good leader can communicate even hard decisions.

Carl Lewis: Absolutely. One thing I've noticed is technology. So much of our daily business—like every meeting with my coworkers—is via Zoom or other technologies. It's great. We would’ve been lost without it the last few years, and we should be grateful we live in this age. But it’s taken away some transparency into what we're doing during our workday. I have no data about whether virtual work creates less accountability and visibility into one another's work, but I wonder if it will create more distrust within organizations.

Niels Stenfeldt: There’s no doubt working from home has offered opportunities to appear two-dimensional. You sit behind the screen and see maybe someone’s whole head. Virtual work is great, but you’ll never get the full engagement in a conversation when you're just virtual. Eventually, offices will be more like clubhouses because there are strengths in working from home. You can go into the details, concentrate, and be focused. You can have meetings and be very productive. 

But for some groups of people, it doesn't work. If you're single, it’s no fun because you sit alone all day looking at your screen. If you have a sick relative or spouse, you need positive stimulation. And we must consider mental health. People are social by nature; we need clubhouses. But we need meeting rooms and working rooms—and some working rooms can be at home—so when we have projects, we can use a meeting room with the other project members.

We’ll be more social when we’re together in the clubhouses as opposed to cubicles. I doubt cubicles will continue to be the preferred way to organize offices. But we need to compensate for the lack of social togetherness as corporate individuals. We’re not machines sitting behind the screens.

Carl Lewis: You’re right. I've been talking with businesses about how they see the future. Many are restructuring their campuses and office buildings, eliminating offices, and bringing things together in one redesigned space. They’re trying to build a better situation for their employees and a better culture for the future. And at the core are these concepts of trust, accountability, and transparency.

Niels Stenfeldt: Absolutely. And hopefully, your listeners will ask, “What are we doing in our organization?” And “Am I trustful enough? Do I trust my boss? If not, what am I going to do about it?” Because if there’s no trust, it won’t be fun. And we work too many hours to have no fun.

Carl Lewis: Exactly. One of my greatest skills is being an open book, and it’s served me well. People feel like they know me. I don't know how I do it, but I do, and it works.

Niels Stenfeldt: It's all about being yourself, Carl. Because a) it's much easier, and b) you're not playing a part. You say what you do and do what you say. People can relate to that. As I wrote in another post, we know if we trust someone within two to three seconds of meeting them. It’s a sense. 

You must feel that intuition. It comes with meeting someone who is who they are. They have vulnerability and authenticity, and they’re themselves. We all have a role to play, and we should play it and not pretend we're something we're not.

Carl Lewis: Those are good words to end with. Niels, I appreciated the article and using it as an excuse to reconnect. Thank you for joining me. And everyone else out there, we’ll see you next time—until then, stay connected.