By Stephen M. R. Covey
Almost
everywhere we turn, trust is on the decline. Trust in our culture at
large, in our institutions, and in our companies is significantly lower
than a generation ago. Research shows that only 49% of employees trust
senior management, and only 28% believe CEOs are a credible source of
information. Consider the loss of trust and confidence in the financial
markets today. Indeed, "trust makes the world go 'round," and right now
we're experiencing a crisis of trust. This crisis compels us to ask
three questions. First, is there a measurable cost to low trust? Second,
is there a tangible benefit to high trust? Third, how can the best
leaders build trust in and within their organizations to reap the
benefits of high trust?
Most people don't know how to think about the organizational and
societal consequences of low trust because they don't know how to
quantify or measure the costs of such a so-called "soft" factor as
trust. For many, trust is intangible, ethereal, unquantifiable. If it
remains that way, then people don't know how to get their arms around it
or how to improve it. But the fact is, the costs of low trust are very
real, they are quantifiable, and they are staggering.
In 2004, one estimate put the cost of complying with federal
rules and regulations alone in the United States -- put in place
essentially due to lack of trust -- at $1.1 trillion, which is more than
10% of the gross domestic product. A recent study conducted by the
Association of Certified Fraud Examiners estimated that the average
American company lost 6% of its annual revenue to some sort of
fraudulent activity. Research shows similar effects for the other
disguised low-trust taxes as well.
Think about it this way: When trust is low, in a company or in a
relationship, it places a hidden "tax" on every transaction: every
communication, every interaction, every strategy, every decision is
taxed, bringing speed down and sending costs up. My experience is that
significant distrust doubles the cost of doing business and triples the
time it takes to get things done.
By contrast, individuals and organizations that have earned and
operate with high trust experience the opposite of a tax -- a "dividend"
that is like a performance multiplier, enabling them to succeed in
their communications, interactions, and decisions, and to move with
incredible speed. A recent Watson Wyatt study showed that high trust
companies outperform low trust companies by nearly 300%!
I contend that the ability to establish, grow, extend, and
(where needed) restore trust among stakeholders is the critical
competency of leadership needed today. It is needed more than any other
competency. Engendering trust is, in fact, a competency that can be
learned, applied, and understood. It is something that you can get good
at, something you can measure and improve, something for which you can
"move the needle." You cannot be an effective leader without trust. As
Warren Bennis put it, "Leadership without mutual trust is a
contradiction in terms."
How do the best leaders build trust?
The first job of any leader is to inspire trust. Trust is confidence
born of two dimensions: character and competence. Character includes
your integrity, motive, and intent with people. Competence includes your
capabilities, skills, results, and track record. Both dimensions are
vital.
With the increasing focus on ethics in our society, the
character side of trust is fast becoming the price of entry in the new
global economy. However, the differentiating and often ignored side of
trust -- competence -- is equally essential. You might think a person is
sincere, even honest, but you won't trust that person fully if he or
she doesn't get results. And the opposite is true. A person might have
great skills and talents and a good track record, but if he or she is
not honest, you're not going to trust that person either.
The best leaders begin by framing trust in economic terms for
their companies. When an organization recognizes that it has low trust,
huge economic consequences can be expected. Everything will take longer
and everything will cost more because of the steps organizations will
need to take to compensate for their lack of trust. These costs can be
quantified and, when they are, suddenly leaders recognize how low trust
is not merely a social issue, but that it is an economic matter. The
dividends of high trust can be similarly quantified, enabling leaders to
make a compelling business case for trust.
The best leaders then focus on making the creation of trust an
explicit objective. It must become like any other goal that is focused
on, measured, and improved. It must be communicated that trust matters
to management and leadership. It must be expressed that it is the right
thing to do and it is the economic thing to do. One of the best ways to
do this is to make an initial baseline measurement of organizational
trust and then to track improvements over time.
The true transformation starts with building credibility at the
personal level. The foundation of trust is your own credibility, and it
can be a real differentiator for any leader. A person's reputation is a
direct reflection of their credibility, and it precedes them in any
interactions or negotiations they might have. When a leader's
credibility and reputation are high, it enables them to establish trust
fast -- speed goes up, cost goes down.
There are 4 Cores of Credibility, and it's about all 4 Cores
working in tandem—Integrity, Intent, Capabilities, and Results. Part
of building trust is understanding -- clarifying -- what the
organization wants and what you can offer them. Be the one that does
that best. Then add to your credibility the kind of behavior that builds
trust. (see the 13 high trust behaviors below). Next, take it beyond
just you as the leader and extend it to your entire organization. The
combination of that type of credibility and behavior and organizational
alignment results in a culture of high trust.
Consider the example of Warren Buffett -- CEO of Berkshire
Hathaway (and generally considered one of the most trusted leaders in
the world) -- who completed a major acquisition of McLane Distribution
(a $23 billion company) from Wal-Mart. As public companies, both
Berkshire Hathaway and Wal-Mart 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. High trust, high speed, low
cost.
13 Behaviors of High-Trust Leaders Worldwide
I approach this strategy primarily as a practitioner, both in my own
experience and in my extensive work with other organizations. Throughout
this learning process, have identified 13 common behaviors of trusted
leaders around the world that build -- and allow you to maintain --
trust. When you adopt these ways of behaving, it's like making deposits
into a "trust account" of another party.
1. Talk Straight
2. Demonstrate Respect
3. Create Transparency
4. Right Wrongs
5. Show Loyalty
6. Deliver Results
7. Get Better
8. Confront Reality
9. Clarify Expectation
10. Practice Accountability
11. Listen First
12. Keep Commitments
13. Extend Trust
Remember that the 13 Behaviors always need to be balanced by
each other (e.g., Talk Straight needs to be balanced by Demonstrate
Respect) and that any behavior pushed to the extreme can become a
weakness.
Depending on your roles and responsibilities, you may have more
or less influence on others. However, you can always have extraordinary
influence on your starting points: Self-Trust (the confidence you have
in yourself -- in your ability to set and achieve goals, to keep
commitments, to walk your talk, and also with your ability to inspire
trust in others) and Relationship Trust (how to establish and increase
the trust accounts we have with others).
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The necessity of
influence in a leader’s life and his leadership cannot be over emphasised as
leadership itself is influence. Dr. Maxwell will always say that “if you don’t
have influence, you will never be able to lead others”. Leading without
influence is like gathering water in a basket but with it you are limitless in
your achievement. The power of influence in leadership is typified by mother
Teresa. She was described by Lucinda Vardey as 
I am convinced that in every situation, nothing is as fast as the speed of trust.