Trust is the operating system of every relationship.
Think about that metaphor: operating system. You can have great software programs installed on your computer. But if the computer’s operating system has a glitch, nothing seems to work right.
In your work environment you can have world-class processes in place, backed up by well-conceived procedures. But if trust is fragile, you can never achieve consistently good results.
In personal relationships, trust is always the key. It’s possible to like and even love someone. But if strong trust is not part of the relationship it can never reach its full potential.
Honesty, of course, is a component of trust. Yet some people can be basically honest but simply unreliable. Reliability is also a matter of trust.
Nobody understands trust issues better than Stephen M.R. Covey, author of the bestselling book The Speed of Trust. I’ve known Stephen for many years, and sat down with him to explore the role of trust and trust-building in every facet of our lives.
Rodger Dean Duncan: In your work with individuals and organizations, you talk about “low-trust taxes” and “high-trust dividends.” What are some examples?
Stephen M.R. Covey: Trust always affects two measurable outcomes: speed and cost. When trust goes down—in a relationship, on a team, in a company, in an industry, with a customer—speed decreases with it. Everything takes longer. Simultaneously, cost increase. Redundancy processes, with everyone checking up on everyone else, cost more. In relationships, on teams, in companies, that’s a tax. I call it a low-trust tax where literally everything is being taxed off the top. Where trust is low, everything takes longer and costs more.
The opposite is true as well. When trust goes up in a relationship, or on a team, in a company, in an industry, with a client, with a customer—speed goes up with it and cost comes down. Everything happens faster and everything costs less because trust has been established. That’s a high-trust dividend. It’s really that simple, that real, that predictable.
Duncan: What are some illustrations?
Covey: After the 9/11 terrorist attacks, our trust and confidence in flying went down. So we took steps to prop it up. We increased security and beefed up all the procedures associated with flying. Those steps were helpful, but they came at a price. Traveling by air now takes longer and costs more. I’m grateful for the security. It’s important. But it came at a price. We had to prop up the lack of trust. It took time, cost money.
With corporate scandals—Enron, Worldcom, and the like—our trust in public markets went down because we realized there are some people out there “cooking the books.” Trust went down. Congress stepped in and passed Sarbanes-Oxley [Accounting Reform Act]. Sarbanes-Oxley is not trust itself. It’s a series of rules, regulations and compliance measure intended to help deal with fragile trust. It’s helped in that the markets didn’t collapse, as they perhaps could have. But it came at a price. Sarbanes-Oxley takes a whole lot of time and costs a whole lot of money to implement. Speed goes down, cost goes up.
That’s the consequence of low trust. You see it in any relationship, in any business. When trust erodes, speed drops and cost rises.
Duncan: What about the opposite effect?
Covey: Warren Buffet, considered by many to be the most business-savvy investor around, is able to do huge business deals quickly because there’s high trust, because he’s so credible. He extends trust, he builds it fast, and he operates on that premise. He often closes major business deals in less than a month, with little diligence. It would probably be foolish for most of us to try to do such a deal. But in his case, his credibility is so high, the trust is so high, he’s able to do things probably the rest of us couldn’t.
Duncan: That’s a good anecdotal example. What hard data do you have on high-trust dividends?
Covey: A Watson Wyatt study shows that high-trust organizations outperform low-trust organizations by 286% in total return to shareholders. That’s stock price plus dividends—three times higher.
Look at the 100 best companies to work for in America. To be on that list of the Great Places to Work, you must have high trust. Trust is actually 60% of the criteria. You won’t be on the list if the trust is not high, even if you have a lot of other great things about your company. The companies on that list outperform the market by 288%. So you’ve got a nearly three times multiplier when trust is operating as a dividend in your organization.
We see the impact of trust in outsourcing relationships. A Warwick Business School study in the UK showed that outsourcing relationships based on trust, as opposed to those based upon the service agreements—the contract only—the trust relationships outperform the others by 40%. They call it the 40% dividend.
You see the impact of trust in schools. High-trust schools have a 3.5 times greater probability of improving test scores than do low-trust schools.
It goes on and on and on. You see high trust is a dividend, just as surely as low trust is a tax. And suddenly the soft topic becomes hard-edged, it becomes economic.
Duncan: If trust is a competency as well as a character trait, what are some of the specific behaviors that can be taught to people and emphasized in an organization’s performance culture?
Covey: When people look at trust through this fresh lens, they typically “get it” right away. Then they want the framework for building and maintaining trust. So we teach about integrity and intent, the dimensions of credibility that are vital to establishing trust with people. But it’s insufficient by itself to say, okay, I’m credible. At that point it becomes all about our behavior, the way we interact, how we do it.
We’ve identified the 13 behaviors that are common to high-trust people, high-trust leaders, high-trust teams, high-trust companies. They consistently behave in these ways, and they avoid the opposite behaviors, or the counterfeits.
One of the behaviors is to create transparency. Creating transparency means I’m trying to be as open, as authentic, as real as possible. Transparency means “see-through.” The opposite of this behavior is to be obscure, to be covered, hidden. The counterfeit is when people operate with hidden agendas. They tell you “Here’s what I’m trying to do.” But they have another agenda that they’re not disclosing. People sense that, and it makes trust fragile. They withhold. But creating transparency wherever possible will accelerate the building of trust.
Another high-trust behavior is to talk straight. You are candid, real, open and honest with people. The opposite of that is lying. Of course lying obviously depletes trust. Lying generally doesn’t work. The danger here again is the counterfeits. The counterfeit behavior to talking straight is that people spin, they position, they posture. They technically tell the truth, but not all of it. They leave the wrong impression. The net effect is that we aren’t quite sure we can trust them. Many politicians are so filled with spin that people aren’t quite sure if they can trust what they hear. And they generally don’t because they feel like it’s just spin, as opposed to real, authentic, straight talk. And on and on and on. There are 13 of these behaviors.
Duncan: What are some others?
Covey: Another one is keeping commitments. The fastest way to build trust is to make a commitment and keep it, then repeat that process. The opposite is when you violate a commitment. The counterfeit is where you overpromise and under-deliver, so you’re “sort of” delivering on what you said but not as much.
And so it is—practicing accountability, clarifying expectations, showing loyalty, demonstrating respect. I’m just naming some of these behaviors. The point is that rather than remaining this elusive, intangible, mystical concept, trust can be quantified. We can show the credibility and behaviors that enable trust to be built and built fast, in a relationship, on a team, and in an organization. That’s exciting, because then you can turn this into a strength and even a competitive advantage.
Many companies have significant trust problems that impose costly, hidden taxes. That’s because people are behaving in counterfeit ways. They haven’t learned the codified behaviors that will actually build trust. You can repair trust problem if they exist. Conversely, if trust is already good, you can build on that strength and double, triple, quadruple the dividend.
Duncan: Trust obviously has a time component. But in some instances people don’t have the luxury of a lot of time. For example, the nuclear power industry has an aging workforce. A lot of the really smart people are retiring in a short time period and the bench strength isn’t what the industry would like it to be. The younger smart people coming into the industry don’t have the luxury of 25 or 30 years to build up credibility. They need to have an impact virtually immediately. The margin of error doesn’t allow for anything less. So how can the 13 behaviors accelerate the building of trust?
Covey: The kind of environment you just described puts a greater premium on being good at building trust and doing it faster. That’s why I call this The Speed of Trust. Once you’ve established trust, nothing is as fast as the speed of trust. You can move with incredible speed, like Warren Buffet does and like other leaders who have built huge trust accounts with their stakeholders.
The second part of the speed of trust is that once you understand what trust is—the components behind it, the dimensions around it, and especially the behaviors that build it—you can establish trust far faster than you might think possible. It doesn’t have to be something that takes you forever. Yes, sometimes restoring violated trust will take time, and you can’t force a process. But you can accelerate it. And you can accelerate it greatly by understanding and applying and actually turning these behaviors into habits. As you do that, you build trust and you build it fast.
Duncan: What’s the key to accelerating the building of trust?
Covey: Make it explicit. Right up front, make it a clear objective that you want to build relationships of trust, you want to build a team of trust, you want to build a culture of trust. It becomes almost your operating system, so to speak. The cultural operating system of your enterprise is to build a culture of trust. When that becomes explicit and deliberate, great things begin to happen. It raises the ante. People will hold you more accountable and will expect you to hold them more accountable.
Being explicit also accelerates the development of trust because people are aware that you’re trying to do it—it’s important to you. Then when you signal to people your behavior, you tell them what to look for. You tell them what you’re going to be doing, things like this: “Look, it’s important that we create a relationship of trust because with that we can move at greater speed and lower cost. It’s a better quality of life. So here’s what you can know about me. If I make you a commitment, you can know that I’m going to keep it.” See, what you’ve done? You’ve signaled your behavior. You’ve told them what to look for. You’re held more accountable now.
If you don’t deliver on what you just said, then there’s risk to that. You can lose trust faster. But when you do deliver, you can accelerate the building of trust. Because you’ve told them what to look for, they see it more clearly, more obviously, and they give you credit for it. And you literally accelerate the building of trust by behaving in these ways and by signaling to people your behavior. You’ve taken this concept and turned it into a skill, something that you can get good at, not as a form of manipulation because that would never work, but as a competence that is part of how you can lead and part of who you are. You’re creating a culture of trust. That becomes an enormous performance multiplier for any leader, for any company.
Duncan: Some people can be very good, very smart about learning behaviors, even exhibiting certain behaviors. Is it possible to fake it? What if a smart guy goes through a workshop and says to himself, “Okay, if that’s what it’s going to take for people to trust, I’ll just pretend with these behaviors.” How does that work?
Covey: Well, it doesn’t work. Someone might get away with it for a very short time, but they won’t sustain it. Trust behaviors are not something you can fake. Maybe in the short run a manipulator can get away with it. But here’s why it won’t work in the long run. If you separate these behaviors from their foundation, which is credibility—that’s your integrity, your intent or motive, your capabilities and your results—if you sever those, in the long run it won’t work, it won’t be sustainable. It will actually have the opposite effect. It will end up diminishing trust because people will become cynical. They will read through it, maybe not immediately, but they will ultimately. They’ll sense what your real motive is, they’ll see that what you’re really doing is trying to adopt these behaviors as a form of manipulation, as a technique that’s not tied to your character, competence, integrity, and intent. So the net effect will actually be a diminishing of trust.
Genuine trust is an inside-out process that begins first with your own credibility. You always start with self, your character, your competence. Then on that foundation of self-trust and credibility the behaviors can come to life. They work well, and they work fast. You will build trust very fast as you practice these behaviors. We’ve codified these and put them into a user-friendly training framework. When people see them, it’s self-evident. And yet the common practice in most organizations remains the counterfeit behaviors, because that’s what cultures typically tolerate or even encourage.