Smart Trust doesn’t mean that you extend trust to everyone. Based on the circumstances, your judgment may be to not extend trust or to extend only a limited measure of trust—like the chairman did with the former president in the example I used before.
Trust, but verify.
—RONALD REAGAN
Zone 3 (Low Propensity to Trust; Low Analysis) is the “No Trust” zone of indecision. People here tend to not trust anyone. Because their own analysis is low, they tend to not even trust themselves. This zone is characterized by indecision, insecurity, protectiveness, apprehension, tentativeness, and immobilization.
Zone 4 (Low Propensity to Trust; High Analysis) is the “Distrust” zone of suspicion. This is where you find people who extend trust very cautiously or not at all. In fact, some are so suspicious that they do not trust anyone but themselves. People in this zone tend to rely almost exclusively on analysis (usually their own) for all evaluation, decision making, and execution.
Now, here’s what may surprise you. In terms of extending trust, where do you think the greatest risk lies?
Obviously, there’s enormous risk in Zone 1 (Gullibility). If you unquestioningly trust everyone, sooner or later, you’re going to get burned.
Zone 3 (Indecision) is clearly a wipeout. With poor analysis and a low propensity to trust, you’re going to get the worst of both worlds. It’s low return for high risk.
The biggest surprise for most people comes in Zone 4 (Suspicion). Many tend to think that this is the lowest risk zone of all. This is where you analyze and calculate and consider issues carefully. You’re suspicious and guarded, so you don’t readily extend trust to others. You hold things close; you try to keep everything within your direct control.
While it may sound low risk, this is actually one of the highest risk zones of all. When you’re highly suspicious, you tend to try to validate everything, to analyze everything to death—which ends up decreasing speed and increasing cost. In addition, you miss opportunities. You cut off collaboration and synergy. The only analysis you really have is your own, which—believe it or not—may well be limited or skewed; but you may not even realize it because you cut yourself off from access to the valuable thoughts, ideas, wisdom, and perspectives of others.
Ultimately micromanagers who trust only themselves can take their companies only as far as they themselves can take them. They’re unable to leverage themselves. In addition, they’re demoralizing to work with. They run the high risk of driving away their best and most talented people who simply won’t work in a restrictive environment of control.
I once knew a business owner who was so suspicious that his employees might be stealing from him that he would literally interrogate them almost daily. He would even do occasional spot “frisk checks” when they left the office. This man was convinced that people were trying to steal from him. In reality, no one was, but his suspicious actions drove away his most talented people, who wouldn’t tolerate working in such a distrustful environment or for such a suspicious boss.
Managers and leaders in Zone 4 also incur many of the low-trust taxes we talked about in Organizational Trust—including bureaucracy, politics, disengagement, and turnover—and they lose high-trust dividends such as innovation, collaboration, partnering, and loyalty. Sadly, their suspicion sometimes even helps produce the very behaviors they fear, which further validates their suspicion. By treating people as if they can’t be trusted, they help to create the collusive, downward cycle of distrust David Packard talked about with regard to the distrustful behavior of his former employer in locking the tool bins. As he said, “[M]any employees set out to prove [the company’s obvious display of distrust] justified.”
There is no rule more invariable than that we are paid for our suspicions by finding what we expected.
—HENRY DAVID THOREAU
The risk of being in Zone 4—particularly as a leader—is extremely high. It’s the risk of having limited perspective, lack of collaboration, alienation of talent, and lost opportunity. It’s the risk of paying high taxes and forfeiting dividends. And this is one reason why—in this “flat world” collaborative economy—not trusting people is often the greatest risk of all.
There is no point in hiring people with specialist knowledge if you are going to monitor their every move. That is where trust comes in. People not only have to be trusted to do their jobs. They have to be able to trust each other. Successful knowledge work requires collaboration.
—MICHAEL SKAPINKER, MANAGEMENT EDITOR, FINANCIAL TIMES
So why do people get into Zone 4? For some, it may be a fundamental issue of style—an inclination toward extremely high attention to detail, perfectionism, or even micromanagement. For others, it may be a deep-rooted, fundamental paradigm that has to do with their lack of belief in people. Maybe they genuinely think they’re better or smarter than everyone else. Maybe they trust only themselves. Maybe they’ve been burned in the past, and it’s made them overly suspicious. Or maybe no one has ever extended trust to them. Whatever the case, they seem to have the fundamental paradigm that others can’t be trusted. And unless they take the steps necessary to change that paradigm, they will be stuck forever in high-risk, slow-speed, high-cost Zone 4.
You may be deceived if you trust too much, but you will live in torment if you don’t trust enough.
—FRANK CRANE, AUTHOR AND COLUMNIST
By far, the lowest risk and highest return is in Smart Trust Zone 2 (Judgment). There the risk, while real, can be wisely moderated and managed. Not only do you have the personal analysis to carefully evaluate and consider issues, you also have that propensity to trust that releases, encourages, and generates synergy with the creativity and judgment of others. Thus, in Zone 2, “judgment” is geometrically multiplied. The propensity to trust is also geometrically multiplied, as your own propensity to trust becomes the catalyst in creating that same propensity in others. And they want to live up to that trust.
In other words, Zone 2 is literally effervescent. High analysis and high propensity to trust not only create strong judgment, they create a dynamic synergy that produces ongoing and endless possibility.
Remember: Smart Trust doesn’t necessarily mean you extend trust to someone. You may decide to extend limited trust or no trust at all—just as you might do in Zone 4. But while your decision may appear to be the same, beginning in Zone 2 makes all the difference because the approach itself will almost always build trust.
DEFINING THE FACTORS
The Smart Trust Matrix can be extremely helpful as both a diagnostic and a prescriptive tool.
With regard to analysis, it’s helpful to consider three vital variables, which you can do by asking these questions:
1. What is the opportunity (the situation or job to be done)?
2. What is the risk involved?
• What are the possible outcomes?
• What is the likelihood of the outcomes?
• What is the importance and visibility of the outcomes?
3. What is the credibility (character/competence) of the people involved?
Let’s see how these questions would help determine Smart Trust in a real-life situation. Remember my experience with Anna Humphries, the young girl on my Little League flag football team? If we used the analysis questions, we would ask:
“What is the opportunity?” The championship was at stake, it was the last play of the game, Anna was less skillful and less experienced than the other players, and I had played her for the amount of time required by the Little League rules so I could easily call someone else in.
“What is the risk?” We could win or we could lose. The entire team could be enormously thrilled—or hugely disappointed. Anna could feel like a winner, or she could feel like the reason for the team’s defeat—or she could feel like, when push came to shove, I didn’t have faith in her that she could do what needed to be done. I could have been branded as a hero . . . or a fool. And though the outcome of a community Little League ga
me may not seem like the end of the world to most people, it would have been highly visible and important to Anna, the other team members, and everyone else involved.
“What is the credibility of the people involved?” All of the team members were great kids, and they had worked hard to develop their skills to make it to this championship game. Anna’s character was manifest not only in the way she behaved, but also in the way she showed courage in deciding to compete with these boys in the first place. Her competence, however, was not as great as that of others on the team.
Based on the answers to these three questions—in other words, on intellectual analysis alone—many coaches would have made the decision to bring in a different player for the last minute of the game with the championship hanging in the balance.
But then the second factor—propensity to trust—comes into play. And that involves a dimension that is different from intellectual analysis; it involves visceral feelings ranging from suspicious to guarded to abundant (see the expanded Smart Trust Matrix above).
I was not suspicious of Anna’s motives or her intent (which, combined with my analysis, would have put me in Zone 4). Clearly, I trusted her character.
I was guarded in my confidence in her capabilities and in her ability to deliver results (in other words, in her competence), which would have put me either in the upper part of Zone 4, or in the lower part of Zone 2.
I was, however, abundant in my general Propensity to Trust. I believed in the principle of inspiring people through extending trust, and I believed in Anna. I knew that this could be a defining moment in her life.
Though I didn’t have time to consciously go through all of these factors on the field that day, they all came into play as I quickly determined to make a moment of decision a moment of trust. And I believe that the choice I made was clearly in Smart Trust Zone 2. Based at least in part on that choice, we won the game, everyone on the team felt great, and Anna had a significant positive experience in her life.I
Would I still believe that my decision was an exercise of Smart Trust if we had lost the game? Yes, I would. I believe it sent a message not only to Anna, but to every member of the team, that I believed in them and would support them, regardless of what was on the line. Winning the game was not the only issue involved. What was at stake, as much as anything, was the way these kids felt about their efforts, and the way their overall experience in being part of a team would impact their confidence and their ability to feel trusted and to extend trust throughout their lives.
In extending trust, the general guideline is to extend trust conditionally to those who are earning it and abundantly to those who have already done so. Keep in mind that even when you extend trust abundantly, there should still always be accountability because that is a principle that actually enhances trust.
MANAGING RISK
The decision to extend or not extend trust is always an issue of managing risk. In order to get an even better idea of how this plays out, let’s take a look at some of the other examples I introduced earlier and look at them through the matrix lens.
First, let’s look at Warren Buffett’s acquisition of McLane Distribution from Wal-Mart. The opportunity was a potential acquisition. To not do due diligence seems extremely risky, and for most people, it would probably have been. But in this circumstance, the risk was not as great as it might normally have been. Wal-Mart was a public company, subject to rules and regulations and public scrutiny. In addition, the credibility (character and competence) of the people at Wal-Mart were high. Besides, Buffett’s own reputation and influence were extremely high, and—let’s get real here—no one’s going to try to swindle Warren Buffett in a public deal. So Buffett decided to extend trust abundantly and do the deal on a handshake with no due diligence, which dramatically increased speed and lowered cost. Smart trust? Absolutely. That’s Zone 2.
Now let’s take another example: the woman I mentioned in the 13 Behaviors chapter on “Extending Trust.” As you may remember, the CEO of the company she had decided to buy didn’t want to do an employment agreement. “You’re buying my company,” he said. “You’ve got to trust me.” She did—and it turned into an absolute disaster. Smart Trust? No. In this case, she didn’t have Warren Buffett’s clout and he didn’t have the credibility or public accountability of Wal-Mart. So to extend trust abundantly without doing “due diligence” probably didn’t show the best judgment. This was in Zone 1—a high propensity to trust, low analysis, “gullible” transaction.
Take another example—me extending trust to my son Stephen by letting him drive the family car. There was obviously significant risk. (After all, he was a teenager!) However, the risk was somewhat mitigated by the fact that he was generally well intended, and he’d taken a driver’s training class and passed the exams necessary to get his license. In addition, we had an agreement in place that provided clear consequences for misbehavior or bad choices. Well, Stephen made a bad choice and drove too fast. And with the agreement in place, he was the one who primarily had to deal with the consequences of his choice. Was this Smart Trust? I think so. It was certainly smarter than the alternatives of extending trust unconditionally (Zone 1) or not extending trust at all.
In parenting, you’re always dealing with issues of extending trust with children, and sometimes it can be a real roller-coaster experience as they go through the maturing process. I’ve found it especially helpful as a parent to make a conscious effort to stay in Zone 2—to have a high propensity to trust, but also to do the analysis so that you extend trust in a way that encourages and helps a child take trust seriously and grow in the ability to handle a stewardship responsibly.
Obviously there’s room for variety in approach even in Zone 2. Depending on the situation, Smart Trust judgment could involve anything from extending complete trust to extending no trust at all, or from extending trust in some core dimensions (Integrity, Intent, and Capabilities, for example), but not in others (i.e., Results). It takes into consideration the general dividends of high-trust relationships, as well as the specific situation, risk, and character and competence of those involved. It combines the propensity to trust with analysis in a way that truly maximizes dividends and minimizes risk.
The obsession with measurement is the problem. There is something we can use instead of measurement: judgment. Some of the most important things in the world cannot be measured.
—HENRY MINTZBERG, AUTHOR AND PROFESSOR
WHY MANY TRUSTED MANAGERS NEVER BECOME LEADERS
Throughout this book, I have said that “leadership” is getting results in a way that inspires trust. Many trusted managers—credible people who have high character and technical competence—never become “leaders” because they don’t know how to extend Smart Trust. They essentially operate in Zone 4, the zone of suspicion. They may delegate, or assign tasks to others with parameters for their accomplishment. They may extend fake trust—in other words, give “lip service” to extending trust, but micromanage the activities. But they don’t fully entrust. They don’t give to others the stewardships (responsibilities with a trust) that engage genuine ownership and accountability, bring out people’s greatest resourcefulness, and create the environment that generates high-trust dividends.
While delegation is intellectual, entrusting is visceral—it’s something you feel. When people don’t learn to extend trust, they don’t become “leaders” in the full sense of the word—either at work or at home.
At the end of one program, a man who was retiring as general counsel of a company came up to me and said, “My legal training and experience have given me a propensity to not trust. At times, this has served me well, but much of the time it has created huge problems. It’s gotten me bogged down in expensive and time-consuming legal relationships, and it has hurt me enormously in personal relationships as I have extended my professional mind-set into my personal life. Now I’m beginning a new career, and I’m inspired by this idea of starting with a propensity to trust. I don’t
know what the results will be, but I am convinced that this is the front edge. It’s a better place to start.”
I certainly agree—it is a better place to start.
The number one job of any leader is to inspire trust. It’s to release the creativity and capacity of individuals to give their best and to create a high-trust environment in which they can effectively work with others. And this is true both at work and at home.
The first thing for any leader is to inspire trust.
—DOUG CONANT, FORMER CEO, CAMPBELL SOUP COMPANY
So how do you inspire trust? By doing the things we’ve been talking about throughout this book. First, you inspire trust by starting with yourself and your own credibility (the 4 Cores). Second, you inspire trust by consistently behaving in trust-building ways with other people (the 13 Behaviors), including purposefully and wisely extending trust to others (Smart Trust). In your larger leadership role, you use the 4 Cores and 13 Behaviors to create the alignment in your “organization” (your business, department, team, or family), reputation in the marketplace, and contribution in the world. As you do those things, you will get results in a way that inspires confidence and trust.
Some leaders have detail-oriented styles that—while they’re not really micromanagement—may nevertheless be seen as not trusting. Considering the taxes of low trust, it’s wise for all leaders to think about the way their style is perceived, and for those who are more detail-oriented to make an extra effort to communicate and practice a fundamental propensity to trust.
The SPEED of Trust: The One Thing that Changes Everything Page 36
