From Nothing is as Fast as the Speed of
Speed happens when people . . . truly trust each other.
-- EDWARD MARSHALL
If you're not fast, you're dead.
-- JACK WELCH
I'll never forget an experience I had several years ago when I worked
for a short stint with a major investment banking firm in New York City.
We had just come out of a very exhausting meeting, during which it had
become evident that there were serious internal trust issues. These
issues were slowing things down and negatively affecting execution. The
senior leader said to me privately, "These meetings are dysfunctional
and a waste of time. I just don't trust 'Mike.' I don't trust 'Ellen.'
In fact, I find it hard to trust anyone in this group."
I said, "Well, why don't you work on increasing trust?"
He turned to me and replied seriously, "Look, Stephen, you need to
understand something. Either you have trust or you don't. We don't have
it, and there's nothing we can do about it."
I strongly disagree. In fact, both my personal life and my work as a
business practitioner over the past 20 years have convinced me that
there is a lot we can do about it. We can increase trust
-- much faster than we might think -- and doing so will have a huge
impact, both in the quality of our lives and in the results we're able
TRUST ISSUES AFFECT EVERYONE
As I speak to audiences around the world about the Speed of Trust, I
repeatedly hear expressions of frustration and discouragement such as
I can't stand the politics at work. I feel sabotaged by my peers. It
seems like everyone is out for himself and will do anything to get
I've really been burned in the past. How can I ever trust anyone enough
to have a real relationship?
I work in an organization that's bogged down with bureaucracy. It takes
forever to get anything done. I have to get authorization to buy a
The older my children get, the less they listen to me. What can I do?
I feel like my contributions at work are hardly ever recognized or
I foolishly violated the trust of someone who was supremely important to
me. If I could hit "rewind" and make the decision differently, I would
do it in a heartbeat. But I can't. Will I ever be able to rebuild the
I have to walk on eggshells at work. If I say what I really think, I'll
get fired . . . or at least made irrelevant.
My boss micromanages me and everyone else at work. He treats us all like
we can't be trusted.
With all the scandals, corruption, and ethical violations in our society
today, I feel like someone has pulled the rug out from under me. I don't
know what -- or who -- to trust anymore.
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? Or can you do something to counteract or even reverse it?
I affirm that you can do something about it. In fact, by learning
how to establish, grow, extend, and restore trust, you can positively
and significantly alter the trajectory of this and every future moment
of your life.
GETTING A HANDLE ON TRUST
So what is trust? Rather than giving a complex definition, I prefer to
use the words of Jack Welch, former CEO of General Electric. He said,
"[Y]ou know it when you feel it."
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. When
you distrust people, you are suspicious of them -- of their integrity,
their agenda, their capabilities, or their track record. It's that
simple. We have all had experiences that validate the difference between
relationships that are built on trust and those that are not. These
experiences clearly tell us the difference is not small; it is dramatic.
Take a minute right now and think of a person with whom you have a high
trust relationship -- perhaps a boss, coworker, customer, spouse,
parent, sibling, child, or friend. Describe this relationship. What's it
like? How does it feel? How well do you communicate? How quickly can you
get things done? How much do you enjoy this relationship?
Now think of a person with whom you have a low-trust relationship.
Again, this person could be anyone at work or at home. Describe this
relationship. What's it like? How does it feel? How is the
communication? Does it flow quickly and freely . . . or do you feel like
you're constantly walking on land mines and being misunderstood? Do you
work together to get things done quickly . . . or does it take a
disproportionate amount of time and energy to finally reach agreement
and execution? Do you enjoy this relationship . . . or do you find it
tedious, cumbersome, and draining?
The difference between a high- and low-trust relationship is palpable!
Take communication. In a high-trust relationship, you can say the wrong
thing, and people will still get your meaning. In a low-trust
relationship, you can be very measured, even precise, and they'll still
Can you even begin to imagine the difference it would make if you were
able to increase the amount of trust in the important personal and
professional relationships in your life?
One of the most formative experiences I've had personally in increasing
trust occurred several years ago as a result of the merger between
Franklin Quest and Covey Leadership Center to form FranklinCovey
Company. As anyone who has ever been through a merger or an acquisition
will know, these things are never easy. The merged company had terrific
strengths. We had great people, superb content, loyal clients, and
productive tools. But the blending of the two cultures was proving to be
As president of the Training and Education business unit, I had traveled
to Washington, D.C., to address about a third of our consultants on the
topic of our division's strategy. But a meeting that should have had me
looking forward with anticipation literally had my stomach churning.
Several weeks before, the company's new CEO -- frustrated (as we all
were) with the enormous problems and friction that had beset what had
seemed to be a promising merger -- had scheduled a meeting of all the
consultants in the company. In an effort to "get out" everyone's
concerns, he had created a format in which we, as leaders, were to
listen, but could not respond, to anything anyone wanted to say. The
meeting, scheduled to last four hours, turned into a 10-hour "dump"
session. With no one allowed to amend, correct, give context, supply
missing information, discuss the other side of the issues, or even show
the dilemmas involved, only a small percentage of what was said had real
contextual accuracy. Most was misinterpreted, manipulated, or twisted,
and some of it was flat-out wrong. There were assumptions, suspicions,
accusations, frustrations. And, as leaders, we had reluctantly agreed to
a format in which we weren't permitted to say a word.
In the end, we'd had over a dozen such meetings. The whole experience
had been brutal, and, with my position of leadership, I had taken it all
personally. Having had some experience on Wall Street, I knew mergers
were usually hard, but I had thought we could do what needed to be done
to make this one work.
The problem was that I had assumed far too much. Mistakenly, I had
failed to focus on establishing trust with the newly merged company,
believing that my reputation and credibility would already be known. But
they weren't, and, as a result, half the people trusted me and the other
half didn't. And it was pretty much divided right down Covey or Franklin
"party" lines. Those from the Covey side who knew me and had worked with
me basically saw my decisions as a sincere effort to use objective,
external criteria in every decision and to do what was best for the
business -- not to try to push a "Covey" agenda . . . in fact, sometimes
even bending over backward to avoid it. Those who didn't know me, hadn't
worked with me, and didn't trust me interpreted every decision in the
exact opposite manner.
In one case, for example, a question had come up concerning the use of
the Sundance Resort for one of our leadership development programs.
Sundance had been somewhat hard to work with, and some felt we should
move the program to another venue. The program director strongly wanted
to keep it at Sundance because clients loved the location, and the
financial data showed that we were averaging nearly 40 percent more
revenue per program held there compared to other venues. I said,
"Because the economics are better and the program director strongly
recommends that we keep it there, we'll find better ways to work with
Sundance." That was an example of a solid business decision I assumed
people would understand.
But those who didn't trust me didn't understand. They thought I was
trying to push a "Covey" approach. Some even wondered if I was getting
some kind of kickback because, as a community leader, I had been asked
to serve in an unpaid role on the advisory board for the Sundance
Children's Theater. Many suspected my motive. Because there was such low
trust, the feeling was, "There's got to be some kind of hidden agenda
going on here."
In another situation, I had made the decision to move "Ron," an
extremely talented leader who had come from the Covey side into a
different position because, like many of us, he had gotten caught in
merger politics and had polarized the two camps. I had decided to go
outside the organization for Ron's replacement so that there would be no
perception that the new manager was a "Covey" person or a "Franklin"
When I made this announcement, I thought people would be excited by my
attempt to bring in new talent. But among those who didn't trust me, no
one even heard the part about bringing in someone from the outside to
replace Ron as manager; all they heard was that he was still in the
company, and they wanted him gone.
Time after time, my actions had been misinterpreted and my motives
questioned, even though I had involved both Covey and Franklin camps in
making decisions. As you might imagine, some who had no idea of my track
record and results had assumed that the only reason I was in my position
of leadership was simply that I was Stephen R. Covey's son and that I
had no credibility on my own.
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.
As I thought about everything that had transpired, I came to the
realization that if I didn't take the tough issues head-on, the current
situation would simply perpetuate itself -- probably even get worse. My
every decision would be second-guessed and politicized. Getting anything
done would be like trying to move through molasses. We were facing
increasing bureaucracy, politics, and disengagement. This was wasting
enormous amounts of time, energy, and money. The cost was significant.
Besides, I thought, given how badly things were going, what did I have
So when I walked into the consultant meeting that day in Washington,
D.C., I basically said, "Look, we're at this meeting to talk about
strategy. And if that's what you want to talk about, that's what we'll
talk about. But if you would rather talk about the merger issues that
are really on your minds, we'll talk about those. We'll talk about any
of the tough questions you have: Who's staying and who's going? Who's
making what decisions? What criteria are being used? Why aren't we more
informed? What if we don't trust those making the decisions? What if we
don't trust you, Stephen, to make some of these decisions?"
At first, people were stunned that I would bring up these difficult
issues, including their perception of me. Many were also wondering what
my real agenda was. But they soon realized that I wasn't hiding
anything. I was being transparent and candid. They could tell I
genuinely wanted to open things up. As the meeting progressed, they
could see that I wasn't operating from any hidden agenda; I was
sincerely trying to do what was right for the business.
As it turned out, the scheduled one-hour strategy meeting turned into a
full day's discussion of their concerns: Whose buildings were we going
to use? Which compensation plan would we adapt? Whose sales model would
we use? Are you, Stephen, really competent to make these decisions? What
is your track record? What are your criteria?
I openly acknowledged that these were challenging issues. I candidly
shared the thinking and rationale behind the decisions and the process
by which they were made, or were being made. I shared all the data I
could share, and if I couldn't share it, I explained why. I listened and
sought to understand their concerns. Based on their recommendations, I
made several commitments around improvements.
At the end of the day, there was a renewed feeling of hope and
excitement. One participant told me that I had established more trust in
one day than I had in the prior several months. More than anything else,
I realized, it was a starting place, an acknowledgment of the value of
our transparent communication. I also realized that the real test,
however, would be on how I followed through. At least now, people could
see my behavior through new eyes, not tainted by the lens of low trust.
Word from this meeting spread, and within the next few months, I was
able to meet with the other consultants and go through the same process
with the same results. I followed a similar course with other groups and
divisions. In a very short period of time, we were able to establish
trust with our entire business unit. As far as my unit was concerned,
this increased trust dramatically changed everything. We were able to
increase speed, lower cost, and improve results in all areas.
Though I eventually left FranklinCovey to start my own company and write
this book, I am happy to report that they have weathered the storms
created by the merger and are now doing very well. On a personal basis,
the whole experience helped me to understand trust far more clearly than
in premerger times when trust was high and things were good.
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 track record, which they
were not. I assumed that because I was teeing up the tough issues in my
private meetings and making decisions based on objective business
criteria, this was being reported down line, but it was not.
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
In addition, I learned that trust truly does change everything. Once you
create trust -- genuine character- and competence-based trust -- almost
everything else falls into place.
A CRISIS OF TRUST
You don't need to look far to realize that, as a global society, we have
a crisis of trust on our hands. Consider recent newspaper headlines:
"Employees' New Motto: Trust No One"
"Companies Urged to Rebuild Trust"
"Both Sides Betray the Other's Trust"
"20 NYSE Traders Indicted"
"Ethics Must Be Strengthened to Rebuild People's Trust"
"Relationships Fall Apart as Trust Dwindles"
"Now Who Do You Trust?"
News headlines reveal the symptoms of the compelling truth: Low trust is
everywhere. It permeates our global society, our marketplace, our
organizations, our relationships, our personal lives. It breeds
suspicion and cynicism, which become self-perpetuating, resulting in a
costly, downward cycle.
Consider our society at large. Trust in almost every societal
institution (government, media, business, health care, churches,
political parties, etc.) is significantly lower than a generation ago,
and in many cases, sits at historic lows. In the United States, for
example, a 2005 Harris poll revealed that only 22% of those surveyed
tend to trust the media, only 8% trust political parties, only 27% trust
the government, and only 12% trust big companies.
Perhaps even more telling is the loss of trust with regard to people
trusting other people. A recent survey conducted by British sociologist
David Halpern reveals that only 34% of Americans believe that other
people can be trusted. In Latin America, the number is only 23%, and in
Africa, the figure is 18%. Halpern's research also shows that four
decades ago in Great Britain, 60% of the population believed other
people could be trusted; today, it's down to 29%.
The "good" news of this study -- relatively speaking -- is that 68% of
Scandinavians (Denmark, Sweden, and Norway) and 60% of the people in the
Netherlands believe others can be trusted, indicating that there are
some higher-trust societies. And Mexico's figure -- though a low 31% --
is up from 1983's 19%, which indicates that it is possible to increase
On the organizational level, trust within companies has also sharply
declined. Just look at what the research shows:
Only 51% of employees have trust and confidence in senior
Only 36% of employees believe their leaders act with honesty and
Over the past 12 months, 76% of employees have observed illegal
or unethical conduct on the job -- conduct which, if exposed, would
seriously violate the public trust.
What about trust at the personal relationship level? While this
naturally varies with regard to particular relationships, trust is a
major issue for most people in at least some relationships (and too
often with their most significant relationships, such as with a boss or
coworker or a spouse or child at home).
Consider the following:
The number one reason people leave their jobs is a bad
relationship with their boss.
One out of every two marriages ends in divorce.
Relationships of all kinds are built on and sustained by trust. They can
also be broken and destroyed by lack of trust. Try to imagine any
meaningful relationship without trust. In fact, low trust is the very
definition of a bad relationship.
What about trust at the individual level? Consider the percentage of
students who acknowledged that they cheated in order to improve their
odds of getting into graduate school.
Liberal arts students -- 43%
Education students -- 52%
Medical students -- 63%
Law students -- 63%
Business students -- 75%
How does it make you feel to know that there's more than a 50% chance
that the doctor who's going to perform surgery on you cheated in school?
Or a 75% chance that the company you're going to work for is being led
by someone who didn't consider honesty important?
Recently, when I presented this data to a group of attorneys, they were
thrilled to find out that they were not in last place! And they chided
me because -- with my MBA -- I was! (It didn't help when I further
pointed out that 76% of MBAs were willing to understate expenses that
cut into their profits, and that convicts in minimum-security prisons
scored as high as MBA students on their ethical dilemma exams.)
Talk about a crisis of trust!
Society, organizations, and relationships aside, there's an even more
fundamental and powerful dimension to self trust. Often, we make
commitments to ourselves -- such as setting goals or making New Year's
resolutions -- that we fail to fulfill. As a result, we come to feel
that we can't even fully trust ourselves. If we can't trust ourselves,
we'll have a hard time trusting others. This personal incongruence is
often the source of our suspicions of others. As my father has often
said, we judge ourselves by our intentions and others by their behavior.
This is why, as we'll discuss later, one of the fastest ways to restore
trust is to make and keep commitments -- even very small commitments --
to ourselves and to others.
Truly, we are in a crisis of trust. It affects us on all levels --
societal, institutional, organizational, relational, and personal -- and
it has a perpetuating effect. While many of us may be fairly resilient,
with each new violation of trust or corporate scandal, we tend to
recover a little more slowly. We wonder what else is out there. We
become increasingly suspicious of other people. We begin to project the
behavior of the few upon the many, and we are paying for it dearly.
THE ECONOMICS OF TRUST
A cynic might ask, "So what? Is trust really more than a nice-to-have
social virtue, a so-called hygiene factor? Can you measurably illustrate
that trust is a hard-edged economic driver?" I intend to answer these
questions emphatically in this book by clearly demonstrating the strong
business case for trust.
Here's a simple formula that will enable you to take trust from an
intangible and unquantifiable variable to an indispensable factor that
is both tangible and quantifiable. The formula is based on this critical
insight: Trust always affects two outcomes -- speed and cost. When trust
goes down, speed will also go down and costs will go up. When trust goes
up, speed will also go up and costs will go down. It's that simple, that
real, that predictable. Let me share a couple of examples.
Immediately following the 9/11 terrorist attacks, our trust in flying in
the U.S. went down dramatically. We recognized that there were
terrorists bent on harming us, and that our system of ensuring passenger
safety was not as strong as it needed to be.
Prior to 9/11, I used to arrive at my home airport approximately half an
hour before takeoff, and I was quickly able to go through security. But
after 9/11, more robust procedures and systems were put in place to
increase safety and trust in flying. While these procedures have had
their desired effect, now it takes me longer and costs me more to
travel. I generally arrive an hour and a half before a domestic flight
and two to three hours before an international flight to make sure I
have enough time to clear security. I also pay a new 9/11 security tax
with every ticket I buy. So, as trust went down, speed also went down
and cost went up.
Recently, I flew out of a major city in a high-risk area in the Middle
East. For geopolitical reasons, the trust in that region was extremely
low. I had to arrive at the airport four hours before my flight. I went
through several screenings, and my bag was unpacked and searched
multiple times by multiple people. And every other passenger was treated
Clearly, extra security measures were necessary, and in this instance I
was grateful for them, but the point remains the same: Because trust was
low, speed went down and cost went up.
Consider another example. The Sarbanes-Oxley Act was passed in the U.S.
in response to the Enron, WorldCom, and other corporate scandals. While
it appears that Sarbanes-Oxley may be having a positive effect in
improving or at least sustaining trust in the public markets, it is also
clear that this has come at a substantial price. Ask any CEO, CFO, or
financial person in a company subject to Sarbanes-Oxley rules about the
amount of time it takes to follow its regulations, as well as the added
cost of doing so. It's enormous on both fronts. In fact, a recent study
pegged the costs of implementing one section alone at $35 billion --
exceeding the original SEC estimate by 28 times! Compliance regulations
have become a prosthesis for the lack of trust -- and a slow-moving and
costly prosthesis at that. Again, we come back to the key learning: When
trust is low, speed goes down and cost goes up.
On the other hand, when trust is high, speed goes up and cost goes down.
Consider the example of Warren Buffett -- CEO of Berkshire Hathaway (and
generally considered one of the most trusted leaders in the world) --
who recently completed a major acquisition of McLane Distribution (a $23
billion company) from Wal-Mart. As public companies, both Berkshire
Hathaway and Wal-Mart are subject to all kinds of market and regulatory
scrutiny. Typically, a merger of this size would take several months to
complete and cost several million dollars to pay for accountants,
auditors, and attorneys to verify and validate all kinds of information.
But in this instance, because both parties operated with high trust, the
deal was made with one two-hour meeting and a handshake. In less than a
month, it was completed.
In a management letter that accompanied his 2004 annual report, Warren
Buffett wrote: "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)! High trust, high speed,
Consider the example of another legendary leader, Herb Kelleher,
chairman and former CEO of Southwest Airlines. In Robert K. Cooper and
Ayman Sawaf's book, Executive EQ, the authors share a remarkable
story. Walking down the hall one day, Gary Barron -- then executive vice
president of the $700 million maintenance organization for all Southwest
-- presented a three-page summary memo to Kelleher outlining a proposal
for a massive reorganization. On the spot, Kelleher read the memo. He
asked one question, to which Baron responded that he shared the concern
and was dealing with it. Kelleher then replied, "Then it's fine by me.
Go ahead." The whole interaction took about four minutes.
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
Here's another example on a much smaller scale. "Jim," a vendor in New
York City, set up shop and sold donuts and coffee to passersby as they
went in and out of their office buildings. During the breakfast and
lunch hours, Jim always had long lines of customers waiting. He noticed
that the wait time discouraged many customers who left and went
elsewhere. He also noticed that, as he was a one-man show, the biggest
bottleneck preventing him from selling more donuts and coffee was the
disproportionate amount of time it took to make change for his
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: Most customers responded by being completely
honest, often leaving him larger-than-normal tips. Also, he was able to
move customers through at twice the pace because he didn't have to make
change. 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.
Again, when trust is low, speed goes down and cost goes up. When trust
is high, speed goes up and cost goes down.
Recently, as I was teaching this concept, a CFO -- who deals with
numbers all the time -- came up to me and said, "This is fascinating!
I've always seen trust as a nice thing to have, but I never, ever,
thought of it in terms of its impact on economics and speed. Now that
you've pointed it out, I can see it everywhere I turn.
"For example, we have one supplier in whom we have complete trust.
Everything happens fast with this group, and the relationship hardly
costs us anything to maintain. But with another supplier, we have very
little trust. It takes forever to get anything done, and it costs us a
lot of time and effort to support the relationship. And that's costing
us money -- too much money!"
This CFO was amazed when everything suddenly fell into place in his
mind. Even though he was a "numbers" guy, he had not connected the dots
with regard to trust. Once he saw it, everything suddenly made sense. He
could immediately see how trust was affecting everything in the
organization, and how robust and powerful the idea of the relationship
between trust, speed, and cost was for analyzing what was happening in
his business and for taking steps to significantly increase profitable
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.
Once you really understand the hard, measurable economics of trust, it's
like putting on a new pair of glasses. Everywhere you look, you can see
the impact -- at work, at home, in every relationship, in every effort.
You can begin to see the incredible difference high-trust relationships
can make in every dimension of life.
THE TRUST TAX
The serious practical impact of the economics of trust is that in many
relationships, in many interactions, we are paying a hidden low-trust
tax right off the top -- and we don't even know it!
Three summers ago, when my son Stephen turned 16, he got his first job.
He was very excited. He was going to be a manager of a shop that sold
His first couple of weeks went really well, and he was thrilled when he
received his first paycheck. He tore open the envelope and looked
expectantly at the check. Suddenly, a frown covered his face. "Dad," he
exclaimed, "this is not right!" He thrust the paper at me. "Look," he
said. "They've done the math all wrong."
"What do you mean?" I asked as my eyes went over the paper.
"Look right here," he said, pointing. "I'm supposed to be making eight
dollars an hour. I worked for 40 hours. That should come to $320.
I looked at the paper, and, sure enough, he'd worked for 40 hours and
the check was only for about $260.
I said, "That's right, Stephen. But look a little higher -- there on the
paycheck stub. See these words -- 'federal income tax'?"
"What?" he responded incredulously. "You mean I'm paying taxes?"
"Yes, you are," I replied. "And there's more. See, here's 'state income
tax,' 'Social Security tax,' 'Medicare tax' . . ."
"But, Dad," he practically wailed, "I don't even need Medicare!"
"No, son, you don't," I replied, "but your grandfather does! Welcome to
the real world."
Probably no one really likes to pay taxes. But we do so because they
serve a greater societal cause (and also because it's the law). But what
if you didn't even know you were paying taxes? What if they were hidden
-- being taken right off the top without your even being aware? And what
if they were completely wasted taxes -- if they were going right down
the drain and doing absolutely no good to anyone anywhere?
Unfortunately, low-trust taxes don't conveniently show up on your income
statement as a "cost of low trust." But just because they're hidden
doesn't mean they're not there. Once you know where and what to look
for, you can see these taxes show up everywhere -- in organizations and
in relationships. They're quantifiable. And they're often extremely
You've undoubtedly seen this tax in action many times -- perhaps in a
conversation where you can tell that your boss, your teenager, or
someone else is automatically discounting everything you say by 20
percent, 30 percent, or even more. This is what I was experiencing
firsthand in the difficult days of the FranklinCovey merger. If you
think about it, you've probably been the one taxing some of those
interactions yourself, discounting what you're hearing from others
because you don't trust them.
In some situations, you may even have had to pay an "inheritance tax"
when you've stepped into a role that was occupied by someone who created
distrust before you. When you move into a new personal or work
relationship, or if you step in as the new leader in a low-trust
culture, it's possible that you're being taxed 30, 40, 50 percent, or
more for something you didn't even do! I recently consulted with one
executive who lamented that the manager she replaced had destroyed trust
with the organization so dramatically that the culture was taxing her
for all of his behavior, even though she was new to the organization.
As bestselling author Francis Fukuyama has said: "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." I contend that this
low-trust tax is not only on economic activity, but on all activity --
in every relationship, in every interaction, in every communication, in
every decision, in every dimension of life.
THE TRUST DIVIDEND
I also suggest that, just as the tax created by low trust is real,
measurable, and extremely high, so the dividends of high trust
are also real, quantifiable, and incredibly high. Consider the speed
with which Warren Buffett completed the McLane acquisition and how
quickly Gary Barron's massive reorganization proposal was approved.
Consider the doubling of revenues for Jim the donut and coffee vendor.
Consider the speed with which you can communicate in your own
relationships of high trust -- both personal and professional.
When trust is high, the dividend you receive is like a performance
multiplier, elevating and improving every dimension of your organization
and your life. High trust is like the leaven in bread, which lifts
everything around it. In a company, high trust materially improves
communication, collaboration, execution, innovation, strategy,
engagement, partnering, and relationships with all stakeholders. In your
personal life, high trust significantly improves your excitement,
energy, passion, creativity, and joy in your relationships with family,
friends, and community. Obviously, the dividends are not just in
increased speed and improved economics; they are also in greater
enjoyment and better quality of life.
THE HIDDEN VARIABLE
One time I hired a guide to take me fly fishing in Montana. As I looked
out over the river, he said, "Tell me what you see." Basically I told
him I saw a beautiful river with the sun reflecting off the surface of
the water. He asked, "Do you see any fish?" I replied that I did not.
Then my guide handed me a pair of polarized sunglasses. "Put these on,"
he said. Suddenly everything looked dramatically different. As I looked
at the river, I discovered I could see through the water. And I
could see fish -- a lot of fish! My excitement shot up. Suddenly I could
sense enormous possibility that I hadn't seen before. In reality, those
fish were there all along, but until I put on the glasses, they were
hidden from my view.
In the same way, for most people, trust is hidden from view. They have
no idea how present and pervasive the impact of trust is in every
relationship, in every organization, in every interaction, in every
moment of 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 X E = R
(Strategy times Execution equals Results)
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 X E)T = R
([Strategy times Execution] multiplied by Trust equals Results)
You could have good strategy and good execution (10 on a 1 to 10 scale),
but still get derailed by low trust. Or high trust could serve as a
performance multiplier, creating synergy where the whole is more than
the sum of its parts.
A company can have an excellent strategy and a strong ability to
execute, but the net result can be either torpedoed by a low-trust tax
or multiplied by a high-trust dividend. As one eminent consultant on
this topic, Robert Shaw, has said, "Above all, success in business
requires two things: a winning competitive strategy, and superb
organizational execution. Distrust is the enemy of both." I submit that
while high trust won't necessarily rescue a poor strategy, low trust
will almost always derail a good one.
Perhaps more than anything else, the impact of this "hidden variable"
makes a powerful business case for trust. According to a study by
Warwick Business School in the UK, outsourcing contracts that are
managed based on trust rather than on stringent agreements and penalties
are more likely to lead to trust dividends for both parties -- as much
as 40 percent of the total value of a contract. A 2002 study by Watson
Wyatt shows that total return to shareholders in high-trust
organizations is almost three times higher than the return in low-trust
organizations. That's a difference of nearly 300 percent! An education
study by Stanford professor Tony Bryk shows that schools with high trust
had more than a three times higher chance of improving test scores than
schools with low trust. On a personal level, high-trust individuals are
more likely to be promoted, make more money, receive the best
opportunities, and have more fulfilling and joyful relationships.
One of the reasons why the hidden variable of trust is so significant
and compelling in today's world is that we have entered into a global,
knowledge worker economy. As New York Times columnist Thomas
Friedman observes in The World Is Flat, this new "flat" economy
revolves around partnering and relationships. And partnering and
relationships thrive or die based on trust. As Friedman says:
Without trust, there is no open society, because there are not enough
police to patrol every opening in an open society. Without trust, there
can also be no flat world, because it is trust that allows us to take
down walls, remove barriers, and eliminate friction at borders. Trust is
essential for a flat world. . . .
This is why I again affirm: 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.
Examples such as the McLane acquisition, the Kelleher reorganization
approval, and others I've shared in this chapter go a long way toward
dispelling some of the debilitating myths that keep us from enjoying the
dividends of high trust.
One myth, for example, is that trust is "soft" -- it's something that's
nice to have, but you really can't define it, quantify it, measure it.
As I hope you can tell by now, the exact opposite is true. 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. Another myth is that trust is slow.
While restoring trust may take time, both establishing and extending
trust can be done quite fast, and, once established, trust makes the
playing field exceptionally quick. You don't have to look far beyond
these examples I've given or even the speed with which you communicate
and get things done in your own relationships to see the reality that
truly, nothing is as fast as the speed of trust.
Probably the most insidious myth of all is the one expressed by the
senior leader of that investment bank I worked for briefly in New York
City: "You either have trust or you don't, and there's nothing you can
do about it."
You can do something about trust! For 20 years, I've been a
business practitioner. I've been responsible for building and running
organizations, for developing teams, for reporting to boards, getting
results, and having to "hit the numbers." During many of those years,
I've also done consulting work with dozens of well-known companies --
many of which had good strategies and good execution abilities, but fell
short of being able to accomplish what they wanted to without being able
to explain why. I have been a husband, a father, a member of a large
extended family with many multifaceted relationships. I have served in
community situations in which I have counseled individuals and families
dealing with complex trust issues. And in all of my experience, I have
never seen an exception to the basic premise of this book: Trust is
something you can do something about -- and probably much
faster than you think!
Once again, I affirm that nothing is as fast as the speed of trust.
Nothing is as fulfilling as a relationship of trust. Nothing is as
inspiring as an offering of trust. Nothing is as profitable as the
economics of trust. Nothing has more influence than a reputation of
Trust truly is the one thing that changes everything. And there has
never been a more vital time for people to establish, restore, and
extend trust at all levels than in today's new global society.
Whether you approach the opportunity and challenge of increasing trust
in relation to your personal life, your professional life, or both, I
can promise you, it will make an enormous difference in every
dimension of your life.
Copyright © 2006 CoveyLink, LLC
Excerpted from "The SPEED of Trust: The One Thing That Changes Everything" by Stephen M.R. Covey. Copyright © 2008 by Stephen M.R. Covey. Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher. Excerpts are provided solely for the personal use of visitors to this web site.