I’m slowly picking my way through Stephen Covey’s book, The Speed of Trust. In chapter one Stephen makes a compelling argument that trust makes a very real difference in the amount of time and money required to get work done.
Consider the example of Warren Buffet when acquiring McLane Distribution from Wal-Mart. Such a merger typically takes months, with several million dollars for accountants, auditors, and attorneys. The two parties in the case trusted one another; the deal was made with a two-hour meeting, and completed in less than a month. I find Warren Buffett’s words from his 2004 annual report to be very powerful: “We did no ‘due diligence.’ We knew everything would be exact as Wal-Mart said it would be – and it was.”
On the other hand, the incredible cost large companies face of implementing the Sarbanes-Oxley can be attributed to the distrust created by Enron and WorldCom.
The speed of trust is not just for the corporate world. The book suggests that the “office politics” that people hate are usually extra overhead created because people distrust one another.
When describing what trust is, as Covey sees it, he writes that trust is confidence; it’s the opposite of suspicion. When you trust someone, you have confidence in their integrity and abilities. When you distrust someone, you are suspicious of their integrity, agenda, capabilities or their track record. Working with someone you trust is often joyful and efficient; working with someone you distrust is draining, tedious and cumbersome.
My own example: consider even simply going on a camping and fishing trip with someone you have confidence in: you believe they are trustworthy to bring ample supplies; you have confidence in their abilities to be able to help efficiently with all the little duties needed to have a fun and successful trip. How much less would you enjoy a trip like that with someone who you didn’t have confidence in?
I thought it was a surprising coincidence that after reading this chapter I heard a couple more stories in a different context that related to this.
I heard second-hand the story of a successful businessman in the Fargo area. His family has owned a grain elevator for years in the past. When a farmer brings his grain in, an elevator worker scoops a handful of grain out to sample it for chaff and moisture content; the value of the grain depends on the sample. Elevator owners know that the shape they hold their hand in as they scoop up the grain makes a difference in the amount of chaff picked up. There’s a big temptation for owners to pick up as much chaff as they can, and thereby pay less for the grain. When this man’s father taught him to do it, he said, “You hold your hand like this, to get the best possible price for the farmer. The reason, Doug, is that our customers must trust us.”
Later in this man’s life, when his software business was growing but still struggling, this life-lesson of trust was tested. The company had shipped out software with a major bug. The timing couldn’t have been worse: the nation-wide (world-wide?) convention was imminent.
Of course the buzz of the convention was angry customers complaining about the issue. Doug took a huge risk, putting the company on the line. During a talk of the convention he said, “We messed up. We’re working hard to fix it. We know this is costing you money. I can’t make any promises, but send us a bill for the expense we’ve cost you.” This was very risky because the company at this time wasn’t flush with cash. But suddenly so much of the trust (confidence) that had been lost in this company was turned around. The tone of conversations at the convention changed dramatically.
Here’s where the speed of trust hits hard: Out of the hundreds of customers that were invited to send bills, only two did. I suppose this indicates that the customers weren’t as concerned about the money loss as they were the lack of confidence they had in the company, and when Doug acknowledged the mix-up and was willing to go to such lengths to make it right, the trust and confidence was restored.
Looking forward to the rest of the book
Covey talks about how earning and keeping trust sometimes has to be a deliberate effort; you don’t get it by default. People with whom you don’t often interact, by default will doubt you. Covey talks about proactively establishing and increasing trust. I’m excited to learn what he has to say about doing that; hopefully the techniques aren’t ways to fake trustworthiness, but simply ways to express whether you are trustworthy or not. I’m excited about how the ideas in this book might improve relationships in every area of my life.
Link to The Speed of Trust on Amazon.