I contend that the impact is devastating! It literally kills the potential enthusiasm, engagement, collaboration, and the reciprocal trust that could catapult the organization miles ahead.
Consider again the example of Warren Buffett and think about the impact of the way he extends trust—not only by making handshake deals based on trust, but also by extending trust abundantly in the way he runs his business. Buffett’s holding company, Berkshire Hathaway, is one of the largest public companies in the world, with some 77 acquired operating companies and more than 377,000 employees. Most remarkable about Berkshire is that all these separate entities and people are managed by a headquarters staff of only 25!
How does Buffett handle a span of control that includes 77 direct reports? He operates on the premise of what he and his business partner Charlie Munger call “deserved trust.” They assume their people deserve trust unless they prove otherwise. It’s not blind trust; it’s smart trust. It includes discernment in the selection of people, communication of clear expectations, and establishing high standards of accountability. Above all, it includes the intentional extension of trust. People respond to being trusted. They thrive on it. They’re inspired by it.
When I asked Grady Rosier, who runs a $48 billion business within Berkshire, how Buffett is able to manage so many direct reports, he replied, “You have to understand the core business philosophy at Berkshire Hathaway—trust. Warren’s ability to acquire quality companies is built around trust . . . Warren leaves them in charge of their businesses, and they’re happy about that, and nobody wants to let Warren down.”
What a powerful example of the huge impact extending trust can make!
By the standards of the rest of the world, we overtrust. So far it has worked very well for us.
—CHARLIE MUNGER, VICE CHAIRMAN, BERKSHIRE HATHAWAY
The counterfeit of Extend Trust takes one of two forms. The first is extending “false trust.” It’s giving people the responsibility, but not the authority or resources, to get a task done. The second is extending “fake trust”—acting like you trust someone when you really don’t. In other words, you entrust someone with a job, but at the end of the day, you “snoopervise,” hover over or “big brother” the person, or perhaps even do his job for him.
A simple example of someone who extends fake trust is the faculty advisor to the student council at a junior high school. One of my colleague’s sons, who served on this council, was assigned by this advisor to call a local university about borrowing a game for an upcoming activity. When he did so, he discovered that the faculty advisor had already made the call and arranged to borrow the game. Evidently, this is a typical experience for members of the council.
And what is the impact on initiative and on trust?
A POWERFUL MOTIVATOR
As I learned when my father gave me the responsibility to make our yard “green and clean,” there is nothing that motivates, or inspires, people like having trust extended to them. When it is, people don’t need to be managed or supervised; they manage themselves.
In fact, when people are asked to think of the person who has been most influential in their lives and to describe why that person was so influential, they will usually say, “She believed in me when no one else did,” or “He saw something in me that no one else saw.” What they are basically saying is that that person trusted them, and that they were powerfully influenced by and responded to that trust.
People ask me how I’ve had the interest and zeal to hang in there and do what I’ve done. I say, “Because my father treated me with very stern discipline: he trusted me.” I’m stuck, I’ve got to see the trust through. He trusted me. I trust other people. And they did the job.
—ROBERT GALVIN JR., FORMER CEO, MOTOROLA
By extending trust, you empower people. You leverage your leadership. You create a high-trust culture that brings out the best in people, creates high-level synergy, and maximizes the ability of any organization—whether it be a business, a school, a non-profit organization, or a family—to accomplish what it sets out to do.
TRUST TIPS
To Extend Trust clearly takes strength in Integrity, Intent, Capabilities, and Results. If you’re on the left side of the bell curve, you’re likely not extending enough trust or not extending it effectively. You may want to particularly focus on increasing courage (Integrity) or enhancing your propensity to trust (Intent), or on improving your ability to clarify expectations, hold others accountable, or extend Smart Trust in more actionable ways (Capabilities).
If you’re on the right side, you’re probably extending too much trust and getting burned. You need the judgment that comes from development of the 4 Cores. In the last section of this book, I’ll give you more specifics that will help you move to the “sweet spot” of extending “Smart Trust.”
As you work on this behavior, you might want to consider the following application ideas:
• Think about a relationship where you feel someone doesn’t trust you. Ask yourself, Could this person’s lack of trust in me, at least in part, be a reflection of my own lack of trust in him or her? If you’re caught in a downward spiral, try to reverse it. Start behaving in ways that extend trust, and notice the results.
• On a scale of one to ten, determine where you think you are in terms of extending trust to others, either at work or at home. Imagine the result of moving your performance point to the left (extending less trust) . . . and then to the right (extending more trust). If you rated yourself a five or less, identify one or two steps you could take to extend more trust.
• If you’re a parent, pay attention to the ways in which you interact with your children. Do you tend to be suspicious, hover over them, or micromanage? Or do you tend to treat them as responsible people who are worthy of your trust? In the section on Inspiring Trust, we’ll talk about how to extend “Smart Trust” to children, but at this point, you might at least want to consider your tendencies and what message they are communicating to family members . . . and what are the results.
SUMMARY: BEHAVIOR #13—EXTEND TRUST
Demonstrate a propensity to trust. Extend trust abundantly to those who have earned your trust. Extend trust conditionally to those who are earning your trust. Learn how to appropriately extend trust to others based on the situation, risk, and credibility (character and competence) of the people involved. But start with a propensity to trust. Don’t withhold trust because there is risk involved.
CREATING AN ACTION PLAN
In the beginning of this 13 Behaviors section, I issued a personal challenge for you to make this material highly relevant and actionable by identifying two relationships—one professional and one personal—in which you wanted to build trust. I said that at the end of the section, I would give you the opportunity to look back, determine which two or three behaviors would make the greatest difference, and create an action plan to create change.
Well, here we are. If you didn’t do it before, I encourage you to do it now. This is where you can make decisions that will build trust, that will transform taxes into dividends, that will improve your relationships with two people, and—geometrically—with many others, as well.
Many people find it helpful to use a chart such as the one on the following page. If this approach works for you, I suggest you start with one relationship. Go over the behaviors. Mark on the continuum where you think you are now with regard to each one. Then go back and circle the two or three behaviors that you feel will make the greatest positive difference.
Identify one or two next steps for each of those behaviors to create change. You may want to use one of the Trust Tips at the end of each chapter, or you may come up with something that will work better in your situation. The key is to make the steps actionable and to make and keep a commitment to yourself to do them.
Then go back and do the same for the second relationship you chose.
As you create your plan, keep in mind that the quickest way to make a withdrawal is to
violate a behavior of character; the quickest way to make a deposit is to demonstrate a behavior of competence. This may help you in determining how to most quickly build trust in your situation.
If you prefer to use a different approach to implementation, that’s fine. However, you may still want to look at the chart. It will give you an overview of all 13 Behaviors, including their opposites and counterfeits. It’s a good way to capture a vision of the way high-trust leaders interact with others.I
BEHAVIOR
CURRENT PERFORMANCE
OPPOSITE/COUNTERFEIT
Talk Straight
C
| | | | | |
Lie, spin, tell half-truths, double-talk, flatter.
Demonstrate Respect
H
A
R
| | | | | |
Don’t care or don’t show you care; show disrespect or show respect only to those who can do something for you.
Create Transparency
A
C
| | | | | |
Withhold information; keep secrets; create illusions; pretend.
Right Wrongs
T
| | | | | |
Don’t admit or repair mistakes; cover up mistakes.
Show Loyalty
E
R
| | | | | |
Sell others out; take the credit yourself; sweet-talk people to their faces and bad-mouth them behind their backs.
Deliver Results
C
| | | | | |
Fail to deliver; deliver on activities, not results.
Get Better
O
M
P
| | | | | |
Deteriorate; don’t invest in improvement; force every problem into your one solution.
Confront Reality
E
T
| | | | | |
Bury your head in the sand; focus on busywork while skirting the real issues.
Clarify Expectations
E
N
| | | | | |
Assume expectations or don’t disclose them; create vague and shifting expectations.
Practice Accountability
C
E
| | | | | |
Don’t take responsibility: “It’s not my fault!”; don’t hold others accountable.
Listen First
B
| | | | | |
Don’t listen; speak first, listen last; pretend listen; listen without understanding.
Keep Commitments
O
T
| | | | | |
Break commitments; violate promises; make vague and elusive commitments or don’t make any commitments.
Extend Trust
H
| | | | | |
Withhold trust; fake trust and then snoopervise; give responsibility without authority.
* * *
I. To see data regarding how we rate ourselves vs. how we rate others on the 13 behaviors, go to www.speedoftrust.com/book-promises.
THE THIRD, FOURTH, AND FIFTH WAVES—STAKEHOLDER TRUST
You now have the trust-building tools—the 4 Cores of Credibility and the 13 Behaviors. In this section, we will focus on the context in which you can use these tools to increase speed, lower cost, create value, establish trust, and maximize your influence and the influence of your organization.
In the Third Wave—Organizational Trust—we will deal with establishing trust with internal stakeholders. The focus will be on creating alignment that will eliminate taxes and increase dividends inside the organization.
In the Fourth Wave—Market Trust—we will deal with establishing trust with external stakeholders. The focus will be on building a reputation or brand that inspires trust in the marketplace.
In the Fifth Wave—Societal Trust—we will talk about building trust within society based on the principles of contribution and global citizenship that are rapidly becoming recognized as an economic, as well as a social, necessity.
As we move into this section, I encourage you to make a choice now that will affect how you read these next three chapters and the impact they will have on your ability to build Stakeholder Trust. This choice involves defining “organization” on the level, or within the context, that is most actionable for you.
If you are a president and/or CEO of an organization, you may want to define organization on the “macro” or broadest contextual level. The glasses through which you look at this material would be your organization as a whole, so your internal stakeholders would be all who work within the organization. All other stakeholders—including customers, suppliers, distributors, and investors—would be considered external.
If you are the manager of a department or unit within an organization, you would want to define organization on a more “micro” level. Your organization would be your department. Your internal stakeholders would be those who work in your department. In this context, your external stakeholders would include all those outside of your immediate department, including other departments within the company, customers outside the company, or even so-called internal customers you might serve within the company.
If you are a school district superintendent, your organization would be your school district. If you are a school principal, your organization would be your school. If you are a teacher, your organization would be your class. If you are a student, your organization would also be your class. If you work on a team, your organization would be the team. If you have a family, your organization would be the family. In each case, internal stakeholders would be considered in the chapter on Organizational Trust, and external stakeholders in the chapters on Market and Societal Trust.
Whatever your role, I strongly believe you will get the most out of this section if you define your organization on the most actionable level—in other words, in the most relevant context in which you have stewardship—and you use that as the lens through which you read and engage with this content. Once you complete this section, however, you may want to go through it a second time at the most macro level, defining your organization as the entire company, in order to open up a whole new level of insight and application.
THE THIRD WAVE—ORGANIZATIONAL TRUST
THE PRINCIPLE OF ALIGNMENT
Organizations are no longer built on force, but on trust.
—PETER DRUCKER
In our work with clients—before we even talk about the 4 Cores or the 13 Behaviors—we often ask four questions which I’d like to ask you now. If you will take a few minutes to answer these questions in your own mind before reading further, it will make a big difference in your ability to engage in and apply the ideas in this chapter.
How would you describe a low-trust organization?
How would you describe a high-trust organization?
Which description best represents your organization?
What are the results?
In our workshops and presentations, participants typically say that in a low-trust organization, they see cultural behaviors such as the following:
• People manipulate or distort facts
• People withhold and hoard information
• Getting the credit is very important
• People spin the truth to their advantage
• New ideas are openly resisted and stifled
• Mistakes are covered up or covered over
• Most people are involved in a blame game, bad-mouthing others
• There is an abundance of watercooler talk
• There are numerous “meetings after the meetings”
• There are many “undiscussables”
• People tend to overpromise and underdeliver
• There are a lot of violated expectations, for which people try to make excuses
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�� People pretend bad things aren’t happening or are in denial
• The energy level is low
• People often feel unproductive tension—sometimes even fear
Participants say that in a high-trust organization, they typically see different behaviors, such as these:
• Information is shared openly
• Mistakes are tolerated and encouraged as a way of learning
• The culture is innovative and creative
• People are loyal to those who are absent
• People talk straight and confront real issues
• There is real communication and real collaboration
• People share credit abundantly
• There are few “meetings after the meetings”
• Transparency is a practiced value
• People are candid and authentic
• There is a high degree of accountability
• There is palpable vitality and energy—people can feel the positive momentum
Before we can even ask participants which list best represents the company they work for, most are already looking at that first list, laughing, and saying, “That is our company. That’s exactly what happens in the organization I work in.”
Then we ask them questions about the results of these behaviors, such as:
• What is it like to work in your company?
• What percentage of your time is focused on the real work?
• What is your ability to partner—internally? Externally?
• How are “sacred cows” dealt with?
• How collaborative is your culture?
• What is innovation like?
The SPEED of Trust: The One Thing that Changes Everything Page 29