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February 23, 2020
On the other hand, if developed and leveraged, that one thing has the potential to create unparalleled success and prosperity in every dimension of life. Yet, it is the least understood, most neglected, and most underestimated possibility of our time. That one thing is trust.
rather, trust is a pragmatic, tangible, actionable asset that
you can create—much faster than you probably think possible.
it is the key leadership competency of the new global economy.
So what do you do if you’re in a situation like one of these—or in any situation where a lack of trust creates politics and bureaucracy, or simply slows things down? Do you merely accept this as the cost of doing business?
Simply put, trust means confidence. The opposite of trust—distrust—is suspicion.
When you trust people, you have confidence in them—in their integrity and in their abilities.
The moment there is suspicion about a person’s motives, everything he does becomes tainted.
As a result of all this, I’d had to make decisions much more slowly. I tried to project how every decision would be interpreted by each of the cultures. I began to worry about baggage and risk. I started playing a political game that I’d never played before—one that I never had to play before, because it had never been part of who I was.
We were facing increasing bureaucracy, politics, and disengagement. This was wasting enormous amounts of time, energy, and money. The cost was significant.
First, I learned that I had assumed way
too much. I assumed I had trust with people, when in fact I didn’t. I assumed that people were aware of my track record and Covey Leadership Center’s
I also learned that I had been politically naïve. Yes, I made mistakes. But I didn’t make the mistakes I was being accused of making. The most significant mistake I made was in not being more proactive in establishing and increasing trust. As a result, I experienced firsthand both the social and the hard, bottom-line economic consequences of low trust.
Whether you’re on a sports team, in an office or a member of a family, if you can’t trust one another there’s going to be trouble.
Relationships of all kinds are built on and sustained by trust. They can also be broken and destroyed by lack of trust.
As my father has often said, we judge ourselves by our intentions
and others by their behavior.
one of the fastest ways to restore trust is to make and keep commitments—even very small commitment...
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When trust goes down, speed will also go down and costs will go up. ↓ Trust = ↓ Speed ↑ Cost When trust goes up, speed will also go up and costs will go down. ↑ Trust = ↑ Speed ↓ Cost It’s that simple, that real, that predictable.
“We did no ‘due diligence.’ We knew everything would be exactly as Wal-Mart said it would be—and it was.”
Imagine—less than one month (instead of six months or longer), and no “due diligence” costs (instead of the millions typically spent)!
Not only was Kelleher a trusted leader, he also extended trust to others. He trusted Barron’s character and his competence. And because he trusted that Barron knew what he was doing, the company could move with incredible speed.
Finally, Jim simply put a small basket on the side of his stand filled with dollar bills and coins, trusting his customers to make their own change. Now you might think that customers would accidentally count wrong or intentionally take extra quarters from the basket, but what Jim found was the opposite:
In addition, he found that his customers liked being trusted and kept coming back. By extending trust in this way, Jim was able to double his revenues without adding any new cost.
I know of leading organizations who ask their employees directly the following simple question in formal, 360-degree feedback processes: “Do you trust your boss?” These companies have learned that the answer to this one question is more predictive of team and organizational performance than any other question they might ask.
Mistrust doubles the cost of doing business.
“Widespread distrust in a society . . . imposes a kind of tax on all forms of economic activity, a tax that high-trust societies do not have to pay.”
When trust is high, the dividend you
receive is like a performance multiplier, elevating and improving every dimension of your organization and your life.
But once they put on “trust glasses” and see what’s going on under the surface, it immediately impacts their ability to increase their effectiveness in every dimension of life.
Whether it’s high or low, trust is the “hidden variable” in the formula for organizational success. The traditional business formula says that strategy times execution equals results: S × E = R
But there is a hidden variable to this formula: trust—either the low-trust tax, which discounts the output, or the high-trust dividend which multiplies it: (S × E)T = R ([Strategy times Execution] multiplied by Trust equals Results)
Or high trust could serve as a performance multiplier, creating synergy where the whole is more than the sum of its parts.
“Above all, success in business requires two things: a winning competitive strategy, and superb organizational execution. Distrust is the enemy of both.”
The ability to establish, grow, extend, and restore trust with all stakeholders—customers, business partners, investors, and coworkers—is the key leadership competency of the new global economy.
Is my organization paying taxes or receiving dividends? And what about me—am I a walking tax or a walking dividend?
The 80% Tax (Nonexistent Trust) In the organization . . . In personal relationships . . . • Dysfunctional environment and toxic culture (open warfare, sabotage, grievances, lawsuits, criminal behavior) • Militant stakeholders • Intense micromanagement • Redundant hierarchy • Punishing systems and structures • Dysfunctional relationships • Hot, angry confrontations or cold, bitter withdrawal • Defensive posturing and legal positioning (“I’ll see you in court!”) • Labeling of others as enemies or allies • Verbal, emotional, and/or physical abuse
The 60% Tax (Very Low Trust) In the organization . . . In personal relationships . . . • Unhealthy working environment • Unhappy employees and stakeholders • Intense political atmosphere with clear camps and parties • Excessive time wasted defending positions and decisions • Painful micromanagement and bureaucracy • Hostile behaviors (yelling, blaming, accusing, name-calling) followed by periods of brief contrition • Guarded communication • Constant worrying and suspicion • Mistakes remembered and used as weapons • Real issues not surfaced or dealt with effectively
The 40% Tax (Low Trust) In the organization . . . In personal relationships . . . • Common "CYA" behavior • Hidden agendas • Militant stakeholders • Political camps with allies and enemies • Many dissatisfied employees and stakeholders • Bureaucracy and redundancy in systems and structures • Energy draining and joyless interactions • Evidence gathering of
other party’s weaknesses and mistakes • Doubt about others’ reliability or commitment • Hidden agendas • Guarded (often grudging) dispersing of information The 20% Tax (Trust Issues) In the organization . . . In personal relationships . . . • Some bureaucratic rules and procedures • Unnecessary hierarchy • Slow approvals • Misaligned systems and structures • Some dissatisfied employees and stakeholders • Regular misunderstandings • Concerns about intent and motive • Interactions characterized by tension • Communications colored by fear, uncertainty, doubt, and worry • Energy spent in
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No Tax/No Dividend (Trust Is Not an Issue) In the organization . . . In personal relationships . . . • Healthy workplace • Good communication • Aligned systems and structures • Few office politics • Polite, cordial, healthy communications • A focus on working together smoothly and efficiently • Mutual tolerance and acceptance • No worries The 20% Dividend (Trust Is a Visible Asset) In the organization . . . In personal relationships . . . • The focus is on work • Effective collaboration and execution • Positive partnering relationships with employees and stakeholders • Helpful systems and
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Now consider what would happen if you were able to change that percentage. What if you were able to move from a 20 percent tax to a 20 percent dividend?
Trust is hard. It’s real. It’s quantifiable. It’s measurable. In every instance, it affects both speed and cost, and speed and cost can be measured and quantified. To change the level of trust in a relationship, on a team, or in an organization is to dramatically impact both time and money—and quality and value, as well.
MYTH REALITY Trust is soft. Trust is hard, real, and quantifiable. It measurably affects both speed and cost. Trust is slow. Nothing is as fast as the speed of trust. Trust is built solely on integrity. Trust is a function of both character (which includes integrity) and competence.
You either have trust or you don’t. Trust can be both created and destroyed. Once lost, trust cannot be restored. Though difficult, in most cases lost trust can be restored. You can’t teach trust. Trust can be effectively taught and learned, and it can become a leverageable, strategic advantage. Trusting people is too risky. Not trusting people is a greater risk. Trust is established one person at a time. Establishing trust with the one establishes trust with the many.
As you go to work, your top responsibility should be to build trust.
“Now you need to know that when you take this job, I don’t do it anymore. It’s your job. It’s called a stewardship. Stewardship means ‘a job with a trust.’ I trust you to do the job, to get it done.”
He said we would walk around the yard twice a week so that I could tell him how things were going.
He assured me that he would be around to help me when I asked, but he made it clear to me that the job was truly mine—that I would be my own boss and that I alon...
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He said, “What’s so hard? You haven’t done one thing.” After a moment of silence, he asked, “Would you like me to give you some help?” Remembering that his offer of help had been part of our agreement and sensing a glimmer of hope, I quickly replied, “I would.” He said, ‘What would you like me to do?” I looked around. “Could you help me pick up that garbage over there?” He said he would. So I went inside and got two sacks, and he helped me pick up the garbage just as I had asked him to do.
