The SPEED of Trust: The One Thing that Changes Everything

by Stephen M. R. Covey

  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 to lose?

  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.

  I am happy to report that FranklinCovey has weathered the storms created by the merger and is 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 trust.

  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 the headlines:

  • “Employees’ New Motto: Trust No One”

  • “Companies Urged to Rebuild Trust”

  • “Both Sides Betray the Other’s Trust”

  • “Consumer Trust Falls in Wake of Scandal”

  • “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. For example, various polls circa 2018 show that in the United States, only 32% of those surveyed tend to trust the media (down from 72% in 1976), only 18% trust the government, and only 21% trust big companies.

  Perhaps even more telling is the loss of trust with regard to people trusting other people. The General Social Survey reveals that only 31% of Americans believe that other people can be trusted, down from 48% three decades ago. Data from the World Values Survey shows that most Latin American and African countries are below 20%, with some countries below 10%. 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 68% of the people in the Netherlands believe others can be trusted, indicating that there are some higher-trust societies. And The Netherland’s figure has increased by 23 absolute percentage points in a five-year period, which demonstrates that it is possible to increase societal trust.

  A nation’s well-being, as well as its ability to compete, is conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society.

  —FRANCIS FUKUYAMA, STANFORD SENIOR FELLOW

  On the organizational level, trust within companies has also sharply declined. Just look at what the research shows:

  • Only 45% of employees have trust and confidence in senior management.

  • Only 18% of people believe business leaders tell them the truth (it’s only 13% for government leaders).

  • Over a recent 12-month period, 76% of employees 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 o
n 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.

  ↓ Trust = ↓ Speed ↑ Cost

  When trust goes up, speed will also go up and costs will go down.

  ↑ Trust = ↑ Speed ↓ Cost

  It’s that simple, that real, that predictable. 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 an added 9/11 security tax with every ticket I buy. So, as trust went down, speed also went down and cost went up.

  Once 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 the same.

  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.

  Our distrust is very expensive.

  —RALPH WALDO EMERSON

  Consider another example. In the U.S., the Sarbanes-Oxley Act was passed in response to several corporate scandals that occurred in quick succession. 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! Some would argue that the Dodd-Frank Act, passed in response to the global financial crisis, has had similar impact. 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.

  When you break the big laws, you do not get liberty; you do not even get anarchy. You get the small laws.

  —G. K. CHESTERTON, BRITISH AUTHOR

  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. Several years ago, Buffett completed a major acquisition of McLane Distribution (then a $23 billion company) from Wal-Mart. As public companies, both Berkshire Hathaway and Wal-Mart were then—and still 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 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, low cost.

  In the future, it is not the big fish that will eat the small fish. It will be the fast one that eats the slow.

  —KLAUS SCHWAB, FOUNDER AND CHAIRMAN, WORLD ECONOMIC FORUM

  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 Barron 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 incredible speed.
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br />   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 customers.

  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.

  Transcendent values like trust and integrity literally translate into revenue, profits and prosperity.

  —PATRICIA ABURDENE, AUTHOR OF CONSCIOUS MONEY

  One time 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.