CHAPTER 6

PRACTICE 4: INSPIRE TRUST

“Trust is the highest form of human motivation. It brings out the very best in people.”

—STEPHEN M. R. COVEY

IN HIS CLASSIC BOOK The Speed of Trust, our friend and colleague Stephen M. R. Covey explained that the first imperative of a leader—at work or at home—is to inspire trust. It’s to bring out the best in people by entrusting them with meaningful stewardships, and to create an environment in which high-trust interaction inspires creativity and possibility.

Given this, maybe no other job of a highly effective leader is more pressing than to inspire trust in those he or she is leading.

The opposite can have dire consequences. Loss of trust is arguably the main reason we are stuck in a dreary economy. The repeated financial shocks of the twenty-first century have produced steep declines in public trust in bedrock institutions like big business, banking, and government. Many have lost faith in the foundations of society.

Only 10 percent of workers trust their bosses to do the right thing, and only 14 percent believe their company’s leaders are ethical and honest.1 Less than a fifth of the general public trusts business leaders to be ethical and honest.2 Only 16 percent of Americans trust large corporations.3 And 82 percent of workers believe that their senior leaders help themselves at the organization’s expense.4 They look at their leaders and see too much self-interest, short-term focus, and ego-driven decision-making.

Eighty-two percent of workers believe that their senior leaders help themselves at the organization’s expense.

Oxford University professor Colin Mayer diagnoses the situation this way: “The loss of trust in the corporation reflects a belief that it exists simply to make money for its owners, its shareholders, and it will do whatever it takes to achieve this. From our point of view as customers, employees, and communities, we are therefore pawns in a game in which we are manipulated for the benefit of others. The repeated recurrence of scandals only serves to reinforce the belief that the corporation is inherently untrustworthy.”5

Widespread mistrust acts like a brake on the economy. Everything in the supply chain slows down because transactions have to be regulated, verified, documented, and double-checked. Deals take forever because due diligence is now intense diligence. Costs go up at every point. An example: The Sarbanes-Oxley regulations in response to the scandals at Enron and WorldCom are unbelievably time-consuming and expensive—one study pegged the costs of implementing just one section of the law at $35 billion!

TRUST—A PERFORMANCE MULTIPLIER

For companies known for being trusted, the bad news is good news. People are hungrier than ever to do business with people they can trust. A Watson Wyatt study found that high-trust organizations outperform low-trust organizations in total return to shareholders by threefold.6 What’s behind the “economics of trust” that make such superior returns possible? Consider this: Trust always affects two measurable outcomes—speed and cost. When trust goes down, speed goes down and cost goes up. This creates a trust tax. When trust goes up, speed goes up and cost goes down. This creates a trust dividend. It’s that simple, real, and predictable.

How do you feel about relationships where trust is high? How effective is your communication with a person you trust? In our experience, it’s easy, simple, and fast. Even if we’re dealing with a tough issue, it can be resolved quickly with the person. In hightrust relationships, you can misspeak, but you don’t feel like you’re walking on eggshells, worrying that you’ll offend the other person or make a commitment by accident.

Conversely, when trust is low, it seems that no matter what you say, your words are taken wrong or out of context. Communication is nearly impossible, even about the most trivial things.

Shawn tells this story: “During a casual conversation, a colleague once made an offhand promise to me. Over time, things changed and it looked like it would be impossible for him to keep his promise—it wasn’t his fault, it was just circumstances. So I was surprised one day when he called to tell me he had finished the work he’d promised to do. Now, this effort came at great personal sacrifice for him, but he’d made a commitment and he was determined to follow through. I had always trusted him, but that day I gained an even deeper and more profound appreciation for his integrity and knew that he could be trusted no matter what. Over the years, he and I have had tough talks about important strategic issues, but our communication has always been quick and easy.

“In contrast, I once had another colleague whose relationship with me was dicey, always clouded by ulterior motives and hidden agendas. Even simple conversations with him were difficult, as nearly every word I said aroused suspicion and offense. It was exhausting, like a slow-motion wrestling match.”

Trust is the great accelerator. Where trust is high, everything is faster and less complicated, and where trust is low, everything is slower, costlier, and encumbered with suspicion.

Once we understand the hard-edged, measurable economics of trust, it’s like putting on a new pair of glasses. Everywhere we look, we can see quantifiable impact. If we have a low-trust organization, we’re paying a tax. While these taxes may not conveniently show up on the income statement as “trust taxes,” they’re still there, disguised as other problems. Once we know where and what to look for, we see low-trust organizational taxes everywhere, including the following: redundancy, bureaucracy, politics, disengagement, turnover, churn, and fraud. Just as the taxes created by low trust are significant, so the dividends of high trust are also incredibly high.

When trust is high, the dividend we receive is a performance multiplier, elevating and improving every dimension of the organization. Specific dividends include the following: increased value, accelerated growth, enhanced innovation, improved collaboration, stronger partnering, higher engagement, better execution, and heightened loyalty. When you add up all the dividends of high trust—and you put those on top of the fact that high trust decreases or eliminates all the taxes as well—is there any doubt that there is a significant, direct, measurable, and indisputable connection among high trust, high speed, low cost, and increased value? Indeed, trust is the one thing that changes everything!

Trust is the great accelerator. Where trust is high, everything is faster and less complicated, and where trust is low, everything is slower, costlier, and encumbered with suspicion.

In an organization, trust is critical both internally and externally. In fact, given the performance- multiplier effect of high trust, leaders who used to campaign to be the “provider of choice” in their markets should now campaign to become the most trusted provider; those who make building trust a priority are obviously going to have a strategic advantage.

At one time, Sue was a key executive in the McDonald’s Corporation and met often with Ray Kroc, its founder. She reports, “There were times when Ray could not pay his suppliers within the usual thirty-day window. Cash flow was always an issue in the early years of building the Golden Arches into a global brand. So Ray sat down with his key suppliers, like Coca-Cola, and explained that he may sometimes be late with a payment. However, he promised he would always pay—and he did.

“The abundant response from Coca-Cola deepened his loyalty to the extent that he promised them he would never change soft drink providers. They shook hands on it and to this date, McDonald’s remains a Coca-Cola company. I learned about this personally when I was driving with Ray and he found a competing soft drink in my car. He explained his handshake deal with Coke and how amazingly helpful they had been when he was struggling to keep the McDonald’s mission and vision alive.

“He then asked why I could buy something other than Coke. When I explained that I enjoyed a sweeter taste, he smiled and said I must have screwed-up taste buds. He was loyal to a fault. Not long after, a Coca-Cola truck pulled up in front of my walkup Chicago apartment to deliver a year’s supply of European Coke with multiple bows and a big card from Ray that read, ‘No excuses, Sue—ask for more when you need it. The European formula is sweeter than the US formula. We are loyal to our partners and I am loyal to you. Ray.’

“I learned so much from Ray and all of my great teachers, leaders, and colleagues at McDonald’s—more than anything, the power of extending trust. By trusting Ray Kroc, Coca-Cola gained its largest and most profitable customer forever.”

Inspiring trust and extending trust—these are often the keys to gaining an unbeatable competitive advantage. And creating such trust is a skill—a performance multiplier—and arguably the key leadership competency needed in today’s low-trust economic environment.

HOW TO BUILD IT: THE FIVE WAVES OF TRUST

But how do you do it? What is the methodology for building trust?

In The Speed of Trust, Stephen M. R. Covey presents a “framework, language, and process” that enables us to establish and grow trust at five levels, or contexts, what he calls “The Five Waves of Trust.” This model derives from the “ripple effect” metaphor that graphically illustrates the interdependent nature of trust and how it flows from the inside out, starting with each of us. It also gives us a framework so we can think about trust, a language so we can talk about trust, and a process so we can do something about actually creating trust. The underlying principle behind the first wave, Self Trust, is credibility. The key principle behind the second wave, Relationship Trust, is behavior. The key principle behind the third wave, Organizational Trust, is alignment. The underlying principle of the fourth wave, Market Trust, is reputation. And the principle underlying the fifth wave, Societal Trust, is contribution. While the principles are cumulative as we move from the inside out, creating an exponential effect in growing trust, the first two principles—credibility and behavior—represent the twin building blocks for how trust is built.

The Five Waves of Trust

Trust Starts with Who You Are

Where does it start? Ultimately, trust starts with you—with your personal credibility. In The Speed of Trust, Stephen M. R. Covey explains how credibility is the foundation on which all trust is built, and how, in the long run, you’ll never have more trust than you have credibility. Credibility is a function of two things: your character (who you are—your integrity and intent) and your competence (what you can do—your capabilities and results). Competence is visible above the surface, while your character, like the roots of a tree, lies beneath the surface and feeds your success—or your lack of it.

If we were doing business with you, and you knew that we had all the right professional qualifications and skills but didn’t keep our word, you wouldn’t trust us and everything would stop. Our lack of character would prevent you from doing business with us, even though we might be the best at what we do. Think of the many highprofile athletes and executives with world-class competence whom the public no longer trusts because of some very steep lapses in character.

Conversely, if we were doing business with you, and you knew that we were honest and cared about you, but that we didn’t have the right capabilities, were no longer relevant, and didn’t have a track record of results, you also wouldn’t trust us and everything would stop. Our lack of competence would undermine the trust, even though we might be extremely honest and caring. You might trust us to watch your home if you went on vacation, but you wouldn’t trust us on a key project or deliverable if we didn’t have a track record of results.

Both character and competence are vital to building trust, with character being the deeper root, the first among equals. Drilling a level down on the character and competence dimensions enables you to assess yourself against what Stephen M.R. Covey calls “The 4 Cores of Credibility”—the first two cores belonging to character, and the second two belonging to competence.

The first core of credibility is integrity. To use the metaphor of the tree, integrity is the root. It means honesty, truthfulness, and congruence. It means doing the right thing and sticking to your word. A great educator, Dr. Karl G. Maeser, described in a penetrating way what it means to have integrity: “Place me behind prison walls—walls of stone ever so high, ever so thick, reaching ever so far into the ground—there is a possibility that in some way or another I may escape. But stand me on the floor and draw a chalk line around me and have me give my word of honor never to cross it. Can I get out of the circle? No. Never! I’d die first.”7

The second core of credibility is intent. In our tree metaphor, it’s the trunk—part of it is beneath the surface, part of it is above. Intent refers to our motive and agenda. The motive that best builds credibility and trust is when you care about the people that you’re leading—and they know you care about them. The agenda that best builds credibility and trust is when you are open and seek mutual benefit—that’s called win-win. Think about it: When you suspect someone has a hidden agenda, you question everything they say and do. Gandhi put it this way: “The moment there is suspicion about a person’s motives, everything he does becomes tainted.”

The motive that best builds credibility and trust is when you care about the people that you’re leading—and they know you care about them.

The 4 Cores of Credibility

The third core of credibility is capabilities. On our tree, capabilities are the branches that produce the fruits. Capabilities refer to your ability to inspire confidence, the means you use to produce results. Capabilities comprise your talents, skills, expertise, and knowledge. The key question here is this: Are you relevant? A family doctor might have integrity, his motives might be good, and his track record might be strong, but unless he’s trained and skilled to perform a particular task at hand—brain surgery, for example—he’ll be lacking in credibility.

The fourth core of credibility is results. Results refer to your track record, your performance, your getting the right things done. Results matter enormously to your credibility. As Jack Welch said, having results is like having “performance chits” on the table. They give you clout. They classify you as a producer, a performer. Results are what convert the cynics. Returning again to the metaphor of the tree, results are the fruits—the tangible, measurable, end purpose and product of the roots, trunk, and branches.

Results are what convert the cynics.

Each of these four cores—integrity, intent, capabilities, and results—is vital to personal and organizational credibility, and credibility is the foundation on which all trust is built.

Trust Is Strengthened by How You Act

After credibility, the other key building block to trust is behavior. Behavior means what you do—and how you do it. People not only judge your results, they also judge how you achieved them—and how you behave in the marketplace. The astonishing spectacle of high-level business and government leaders pointing fingers and fighting each other during the Great Recession probably destroyed trust as much as anything. “In the midst of the worst economic crisis in decades, people saw their leaders not leading but squabbling and name-calling,” complains former San Francisco mayor Gavin Newsom.8

It’s not enough just to talk about a behavior—you have to put it into action, into practice. Think about trust and your relationships in terms of a bank account—making deposits and withdrawals. Deposits and withdrawals ultimately manifest themselves as behaviors. The Speed of Trust specifically identifies thirteen high-leveraged, trustcreating behaviors. These include keeping commitments, righting wrongs, practicing accountability, demonstrating respect, listening first, and talking straight. The opposites of these thirteen behaviors diminish or even destroy trust: these include breaking commitments, denying wrongs, shirking responsibility, showing disrespect, failing to listen, and lying.

While the behaviors and their opposites are straightforward and common sense, all too often they are not common practice. The common practice for far too many people and organizations tends to be what are called counterfeit behaviors, like “spinning” a story instead of telling it straight, so it is technically true but leaves a false impression. Other common counterfeit behaviors include covering up a mistake instead of righting the wrong, having hidden agendas instead of creating transparency, blaming others instead of practicing accountability, and overpromising and underdelivering instead of keeping commitments. More often than not, it’s the thirteen counterfeit behaviors, perhaps more than the thirteen opposite behaviors, that trip up people and organizations, causing them to lose trust. This is because it’s fairly obvious the opposite behavior will destroy trust (e.g., lying), while the counterfeit behavior, like counterfeit money, is deceptive—it appears to work but ultimately diminishes the trust (e.g., spinning).

BUILDING TRUST AT FRITO-LAY

While studying and applying Stephen M. R. Covey’s work on the speed of trust, the executives of Frito-Lay became fascinated with the idea that building trust could speed things up and lower costs. “Frito-Lay was never a low-trust company,” Covey says, but CEO Al Carey wanted to reignite the corporate culture. Like all good leaders, he wanted things to be cheaper, faster, and better, but he also wanted to energize people, to help them “lean into” their work—in short, to reengage them.

Hundreds of bureaucratic rules and procedures were swept away. Layers of decision making were removed. The administrative changes were fueled by the introspective work people did on themselves as they learned a methodology for building trust.

“We didn’t just teach skills—we changed the culture,” says Cheryl Cerminara, a vice president at Frito-Lay. “Pick two people. One you trust in both competency and character. The other you expect to flub up and/or stab you in the back. Then think about the extra work, energy, and frustration the untrustworthy person causes. Low trust is exhausting and stressful. You hear people say, ‘I have to send a million follow-up emails.’ ‘I worry about it all the way home.’ ‘It upsets my work/life balance.’ Everybody has been in a situation like this. It becomes much harder not to act with integrity when everyone around you is.”9

The methodology cascaded through the organization and transformed Frito-Lay. For the first time they critiqued their untrustworthy behaviors. They held regular “Trust Talks” at every level, identifying and winnowing out problems. They held checkpoint meetings quarterly to evaluate their progress in becoming a more trusted company. “We learned to trust each other,” says Al Carey. “So there was no need for the extra bureaucracy.”

In 2008, the company faced gigantic challenges—a sudden spike in fuel prices and the worst economic collapse in seventy years. Then the cost of their raw material—potatoes—went up tenfold because heavy rains spoiled the crops. Financial disaster threatened. But Frito-Lay was ready with a new perspective and a new skillset. With their highly accelerated decision-making processes, they navigated through the threat. The entire pricing system was reengineered in five weeks instead of the sixteen weeks it normally took. “What would normally take us two months of wrangling, we did in ten days,” says Carey.

Instead of suffering financial disaster, Frito-Lay shot past expectations and produced one of its best years ever. “It was the best profit growth we’d had in ten years,” Al Carey says. “I credit the Speed of Trust process. We moved through decisions that are enormously complex at breakneck speed. We made five sets of tough decisions throughout the whole year, and we never before would have been able to make those decisions as quickly as we did … It’s the most exciting culture change I’ve seen in my twenty-eight years with the company.”10

As a leader, your influence counts. By building up your own credibility and then behaving in ways that establish trust, you’ll go a long way toward inspiring high-trust behavior transformations in others.

BUILDING TRUST:
INSTRUCTIONS FOR DOWNLOADING

Here’s how to build trust with others11: