Sponsored by

Sponsored by Jobs in Pods

TotalPicture Podcast Podcast

Related Media

Podcast Resources

Newsletter

HTML | Text | Mobile

Become a Sponsor

Info!

Information on becoming a Sponsor for TotalPicture Radio podcasts is available on our FAQ page, or feel free to contact us with any questions or concerns.

Suggested Podcasts

Smart Trust: Creating Prosperity, Energy, and Joy in a Low-Trust World

A conversation with Greg Link, Co-Founder of CoveyLink, Franklin Covey's Global Speed of Trust Practice

 
 Greg LinkGreg Link

"High trust people are more likely to be hired or promoted, make more money, get the best projects and biggest budgets, and are the last to be laid off."

On March 14th's NY Times Op-Ed page, Greg Smith, an executive in Goldman Sachs London office, wrote a scathing commentary attacking both the company's leadership and its culture. Smith said he hoped the article would serve as a wakeup call for the company's board of directors. Who do you trust in corporate America? Have a look at the 2012 Economic Freedom Heat Map

Greg Link, co-author with Stephen M.R. Covey of Smart Trust: Creating Prosperity, Energy, and Joy in a Low-Trust World, is our guest today for a special Weekend Edition Leadership Channel podcast on TotalPicture Radio

Link and Covey are leading experts on the subject of trust. Their book develops the ideas Covey introduced in his 2006 bestseller The Speed of Trust.

In the book, Covey and Link look at leaders and organizations that are finding terrific success by cultivating high-trust cultures and relationships, at a time when trust-in individuals, institutions, elected officials-is at an all time low. They also explore in detail the five specific actions that this incredibly diverse variety of high-trust individuals, teams, and organizations from all over the world have in common.

In our interview, Greg discusses why we are in the lowest trust climate in years if not decades; how trust-based individuals, teams, and organizations are thriving in spite of that climate; why trust is probably the most essential life and leadership skill of our time; the Five Actions of Smart Trust; and more.

Here are some bullet points:

Global Economy/financial crisis:

  • -The Chicago Booth/Kellogg School Financial Trade Index of May 2011 showed that only 20% of Americans have trust in our financial system-just 1 percentage point higher than the all-time low hit in 2009 during the global financial crisis.
  • -Trust is the new currency of the global economy. The 2009 Edelman Trust Barometer showed that 77% of respondents refused to buy products/services from a company they distrusted, while 55% were willing to pay a premium to deal with a trusted company.
  • -A Watson Wyatt study showed that high-trust organizations outperform low-trust organizations in total return to shareholders by 286%. A study of Fortune's 100 Best Companies to Work For, which acknowledges trust as two thirds of the criteria, showed those companies outperformed the market over a 13 year period by 288%.

Politics:

  • According to a Gallup Poll, the U.S. Congress gets the worst honesty and ethical rating in Gallup history-lower than telemarketers and car salespeople. How do you know who you can trust when deciding who to vote for? The 5 Smart Trust actions can be used to rate political leaders and presidential candidates.

Career:

  • Trust is THE career skill in the new economy. High trust people are more likely to be hired or promoted, make more money, get the best projects and biggest budgets, and are the last to be laid off. The 5 Smart Trust actions can make you a promotable leader.

Workplace:

  • The two biggest drivers of employee engagement are 1) the relationship of trust employees have with their supervisor, and 2) the trust they have for the organization at large. A UK study contrasting the top 20% of The Times Top 1000 Companies with the bottom 20% in terms of innovation and performance found that trust was "the number on differentiator." A 2008 study showed that a 10% increase in trust inside an organization has the same effect on employee satisfaction as a 36% increase in pay!

Leadership:

The first job of a leader is to inspire trust and the second it to extend it. If you're not inspiring and extending trust, you may be managing or administering but you're not leading. Some leaders don't extend trust because they're afraid of losing control, but the relationship between trust and control is inverse: the greater the level of trust, the greater the actual control.

Greg Link - TotalPicture Radio Interview Transcript

Today's Leadership Channel interview is brought to you by Jobs in Pods, the only podcast where real employers, leading recruiters and staffing agents talk about their jobs and tell you how to get them. Visit jobsinpods.com to learn more. And have a listen to our jobcast with Joe Mastrangelo, CEO of GE Energy's Power Conversion business. At SourceCon in Atlanta, I interviewed Adam Lawrence, the Global Head of Sourcing for Alexander Mann. His keynote speech was on the topic of trust; one takeaway, "Trust is the new ROI."

Joining me today for a Leadership Channel podcast on TotalPicture Radio is Greg Link, co-author with Stephen Covey of Smart Trust: Creating Prosperity, Energy, and Joy in a Low-Trust World. Greg, thank you for taking time to speak with us today on TotalPicture Radio. Greg: Hey, my pleasure. Peter: On March 14th's New York Times Op-ed page, Greg Smith, an executive in Goldman Sachs London office wrote a scathing commentary attacking both the company's leadership and its culture. Smith said he hoped the article would serve as a wakeup call for the company's board of directors.

Greg, this is probably one of the most read resignation letters ever. However, it's not all that unusual, is it?

Greg: No, it's not. As a matter of fact, the verbal evasion of that descriptive corporate culture is pretty common in the Fortune 500 and it's not just limited to the financial services sector. It's just that it goes underground and most people just assume that it's just the way that it is and the bureaucracy and the behavior of our organizations so there's nothing that individuals can do about it, which is totally wrong. We've discovered and illuminated in research in the Smart Trust book countless companies that do just the opposite. It sounds like reading between the lines that Goldman Sachs departed from a previous higher standards that they had that this Smith person was contrasting today to their previous level of culture. So apparently they did have a better culture historically.

Peter: But, Greg, you look at things like the Occupy Wall Street movement that's going on, and I think especially the Millennial Generation has a very low opinion of most corporations in this country.

Greg: Well yeah, most corporations and most bureaucracies tend to lean toward being toxic and it's because of old, commanding control model where leaders felt that they from their position power alone that they could mandate and dictate how behavior goes in an organization. The more enlightened companies, the companies that are succeeding in today's market both with the younger generation and the baby boomers are those that value autonomy, have high standards and treat their customers in ways that they would like their employees to treat their best customers. And that's really the art of the deal and there's company after company that proves the fact that a high-trust companies actually outperform low-trust companies by three times, so they're much more profitable.

Peter: Let's get into some of the concepts that you discussed in your book Smart Trust. You outline five specific actions that - an incredibly diverse variety of high-trust individuals, teams and organizations from all over the world have in common. Can you tell us what some of those are and how you went about discovering them?

Greg: One of the things that I think would be useful to set it up is right now trust is not just some nice-to-have thing. It is a career critical competence that affects the war on talent, the attraction of talent. High talent people love autonomy. They like being trusted. It's reciprocal.

High-trust companies, one of the ways that they're winning and one of the reasons they are more profitable is because they attract and keep talent. High-trust organizations and high-trust people are performing and outperforming the market. High-trust people are the first to be hired, they're the first to be promoted, the last to be let go, they get the best projects, they get the biggest budgets. And so with all those benefits it behooves people and organizations.

We started out with the Goldman Sachs at the cultural level, but we have a tendency and we wrote the book from the inside out; meaning, that the first thing that a leader needs to do is to work on themselves, and there are some actions we have found that have been in common in our interviews of high-trust leaders all over the world. One of the poster child right now that I'm sure your audience is familiar with is Tony Hsieh who's a CEO of Zappos, who in the worst economic times in the last century, the worst decade in history, went from zero to a billion dollar company and sold to Amazon that is online that many of your readers should be familiar with. He wrote a book. When I talk to Tony Hsieh, I asked him, I said, "How did you do that?" He said, "I trusted my employees and I trusted my customers." And as a result, he was able to produce tremendous results. His book is called Delivering Happiness which is indicative of their culture.

Peter: Right.

Greg: So we've identified these five actions that Tony Hsieh and other executives and individuals have in common. First of all, they choose to believe in trust. That's the first action. They make a conscious choice to believe in trust. They believe that they are responsible, to be trustworthy of leaders themselves. They believe that it's a better way to lead and to live, and they believe that it is reciprocal.

By choosing to believe in trust that it is a better way to work, it changes everything. For example, Pierre Omidyar who started eBay, he did that, took that risk of having strangers trust each other because he had a basic belief that all people are basically good. That belief is the first action that we find in common.

Secondly, they start with themselves. The second Smart Trust action is they start with themselves. They've checked in on their own credibility, their own character, their own competence. They looked at their own motive and their own agenda first before they reach out to others. So they make sure that they personally are trustworthy, that they give the world a person they can trust. They give the world a leader that they can trust. The third Smart Trust action that they have in common is they're open in their communication. They declare their intent and they assume positive intent in others. By declaring your intent, we mean not to have a hidden agenda. How many times when you've gone into an interaction with somebody can you just kind of sense that they're kind of trying to spin you a little bit? You're not sure where they're going with this. What's their real motive? And so you're not really listening to them, you're wondering where they're going. By declaring your intent right out front, to being transparent and being forthright with what your agenda is, that eliminates that so they actually can, in fact, listen to you and you can have a meaningful dialogue.

Declaring your intent is a huge advantage that high-trust people exhibit. And then the assumption of positive intent in others isn't the opposite of that. We have a tendency to assume people are trying to cheat us, particularly the subtitle of the book is in a Low-Trust World. We acknowledge the fact that we can't be Pollyanna about this. This is a very risky environment in which to trust people, whether it's a business sense or in a personal sense; there is a low-trust malaise that is taken on our society. But if you assume positive intent in others and at least have that be your starting point, we still suggest that you do analysis and make sure you protect yourself but fundamentally, you start with the premise that they mean well. The fourth action is that people do what they say they're going to do. I know you have a global audience and these trust principles vary from organization to organization, from country to country. The principles don't; the principles of trust and fairness and all that are universal but how they're exhibited in different countries and cultures may vary a little bit.

The one thing that is common and consistent with all different cultures, we talked to a CEO from a multinational organization in Europe that operates in 180 countries and they validated the fact that people do what they say they're going to do. You trust people that do what they say they're going to do, that 'walk their talk' to use our vernacular, and so they make a promise and keep it. The fastest way to earn trust is to do what you say you're going to do and that's also the fastest way to destroy trust, to say you're going to do something and you overpromise and underdeliver. So that's another key. Finally, the fifth action, and this is the most important one is they lead out - the high-trust people lead out in extending trust to others. That's the title of the book, Smart Trust. It teaches you actually the skill of how to manage risk in a low-trust world and use your best judgment and teach others to use their best judgment, to balance this propensity to trust, this assuming the positive intent in others with the analysis that protects you from some of the hidden agendas that the people may have and then you're able to make your best judgment call.

Those are the five actions that we have found to be common in organizations around the world.

Peter: Yesterday, I was speaking with one of the executives at a company called BranchOut. She was talking about how much she loved working for her company and they have this open vacation policy. You can just take a vacation whenever you want to take a vacation for however long you need to take a vacation. I think that really speaks to what you're talking about here is if you trust the people in your organization and they're doing what they say they're going to do, you can have policies like that.

Greg: Absolutely. That is the ideal example because it sounds counterintuitive. A lot of this stuff is counterintuitive and, again, we're not suggesting you be a Pollyanna. You wouldn't do that in a low-trust culture where your people are going to take advantage of you. Peter: Right.

Greg: But obviously this organization is - the staff has demonstrated competence and character so that it is safe to do that. The beautiful thing about the principle here is that it's reciprocal, that when you do extend trust to people, they naturally want to live up to it. They want to be worthy of your trust. It raises the standard for the entire culture to be responsible and the peer pressure will start to regulate people not taking advantage of it and you don't have to manage from the top down. High-trust companies are a lot more effective. They can operate more as a matrix. Google is another example. They give their engineers 20% of their time to work on anything that they want to do that sparks that creativity. They give them the autonomy, that outlet for their creativity which is, in the war for talent, gives those engineers a creative outlet that keeps them at Google and they're less likely to want to go off and start something on their own. They can actually start things right inside of Google.

Peter: You had said earlier in this interview that companies that exhibit a high-trust capability have three times higher income. Where does your statistics come from on that?

Greg: We've actually got several in the book and it's well documented. We've got some great footnotes in the Smart Trust book, but one of them is from Watson Wyatt from the study the high-trust organizations against low-trust organizations on total return to shareholder. The other more common one that you're familiar with the Best Places to Work survey the Fortune does every year, and they compare the 100 companies that made that list every year for the last 13 years. So this is a long-term thing. This is through the whole 13-year period and they found that the return - and, by the way, to make that list, to become one of the best places to work, 67% of the criteria is based upon trust. And so it is really correlative with what high-trust companies are doing. When they measure those top 100 performance over the 13 years against the market, it outperformed the market by 288%, which is nearly three times.

We've got several different sources of research that validate that this is a true outcome.

Peter: Back to Tony Hsieh and I have interviewed him, and a huge part, of course, of their success and his whole book is around the culture of Zappos and creating a culture where people want to go to work every day. How does culture fit into this whole trust paradigm?

Greg: Émile Durkheim was a sociologist in Europe years ago and he said when mores (or values, I guess) are sufficient, laws are unnecessary. When mores or values are insufficient, laws are unenforceable. So if you've got a low-trust culture, a bunch of people that are really low character, you can set all the rules and policies you want, they're not going to follow them anyway. And so the key to getting a good culture is to create standards of behavior that everybody aligns with and everybody steps up to. Nordstrom, for example, they have a policy and procedure manual that is a postcard. On one side it says, "Welcome to Nordstrom, we have just one rule." You turn it over on the back it says, "Use your good judgment in all situations."

Now, you can't start a culture, you can't throw out the policy and procedure manual and start there. Nordstrom has hired for it. They've reinforced it. They've trained and they've created a culture of high performers that hold each other accountable to the higher standard. So you don't have to manage from the top down. The team itself has a standard and they will not let people cheat the customer or cheat their fellow workers or the company at large. And so they create this expectation of high performance and an expectation that this is what we stand for.

That's why branding is so important. Companies that have great reputation it's because they have great cultures because they follow through, they keep their promise to the customer, so to speak. And that's what at the end of the day, all a brand is trust monetized.

Peter: And you use as an example in your book is Apple.

Greg: Absolutely. And that's because they perform. They've had both character, they've taken care of their customers. Remember when the first iPhone came out at $600. Steve Jobs after a couple of months wrote a memo to all the customers and said we've reached an economy of scale faster than we expected, and so we feel we overcharged our customers and he gave everybody $100 store credit because they were going to lower the price on the iPhone. He took care, he took responsibility for that. He just didn't stick to his early adopters. He took responsibility.

The flipside, so there's two sides to trust. There's the character's side and then there's also the competence side. And they've performed. They've exceeded all expectations. If anything, they've led our expectations.

Peter: What are some of the things in doing the research in writing Smart Trust that perhaps you weren't expecting to find that you learned in writing this book and doing the research?

Greg: The thing that surprises the most is how - even inside organizations that have evidence that trusting the customer and trusting their employees are the better way to go. In other words, they have their own case studies inside of some of these organizations that demonstrate that it's better to create a high-trust environment. They still don't embrace it fully. There's still rules, regulations, they write these policy and procedure manuals for the 3% of the people they can't trust, rather than for the 97% of the people that they can trust. When Gordon Bethune took over Continental Airlines, he wrote a book called From Worst to First. Continental Airlines, if you recall in the '90s was in bankruptcy and Gordon Bethune was the 10th CEO. When he took over he said that the culture was like abused children, they just didn't trust management. The first thing he did is he went out in the parking lot and burned the policy and procedure manuals as a demonstration that we are going to treat you as adults and we're going to work together, because people reciprocate.

When you give trust and extend trust to people, they have a tendency to want to be worthy of that trust so they - like you mentioned with the vacation policy, they don't want to abuse it because they appreciate the fact that the culture is treating them or the company is treating them like an adult and that they can be trusted to have that kind of level of responsibility. And so the culture either becomes a gradual upward spiral or a downward spiral.

The thing that surprised us the most is how much evidence there is - inconvertible evidence like we talked about - high-trust companies are three times as profitable and yet we operate as if that evidence isn't there. We operate in rules and regulations and trying to force people to work. Engagement - engaged cultures, happy people like you mentioned, like to come to work at Zappos. That's an engaged culture and that's better - it's better for everybody.

There's higher energy and more joy, as we also say in the subtitle. And yet in spite of all that, we still behave counterintuitively than that. The leaders still have a tendency to go to the command and control model.

The minute somebody gets promoted, they feel the power and they start to mandate things which makes resentment in the culture. The people that used to work alongside of, now all of a sudden you create this resentment and it just takes the fun out of work completely and then it lowers productivity and it destroys engagement. We keep repeating that cycle over and over again, particularly in large companies but it also can be true in a small company.

That was a surprising thing that in spite of how obvious this is and how much evidence there is, that it's a better way to lead and a better way to live and creates more energy and joy, so many companies are still stuck in the old, antiquated command and control model.

Peter: You're so right. I've been doing this show for a long time and it's one of the things that just really constantly amazed me because you look at engagement scores which correlate directly to the bottom line of an organization. If you've got a disengaged employee population, chances are you're not going to be making very much money and yet companies continue to, as you said, do this command and control style of management.

Greg: Here's the cost, here's the danger. For anybody that's listening that's in a leadership or a company role, you are driving the talent away from your organization. High-trust companies attract talent. The people that are high-trust that like to be trusted, that behave in a trusted manner and that like autonomy are drawn to high-trust companies.

When you have a company that's toxic, you've got the opposite problem. Not only are you losing the best people, you can't attract any new ones. And if you're an individual that has a career and is looking at this from a career standpoint, as I mentioned before, high-trust people are the first to be hired, first to be promoted, get the biggest budgets, best projects, and they're the last to be laid off. On an individual level, there's a tremendous advantage. We suggest that the ability to learn how to grow trust in yourself and be more trustworthy is a career critical skill that you can learn.

This whole concept, the Smart Trust is a skill, how do you manage risk versus return in a low-trust world because, ironically, the fact that it is so low-trust, it gives you a unique competitive advantage because while everybody else is risk-averse and kind of a deer in the headlights and everybody is afraid and there's low unemployment and we've lost confidence in the economy and so everybody is kind of in a wait and see mode. Those who can be proactive and demonstrate confidence - because that's another word for trust - demonstrate confidence in themselves and be high-trust people are going to find that they have a tremendous competitive advantage over all the other job seekers or people that are trying to be promoted.

Peter: I agree with that. I think you've just shared some really great insights from your book Smart Trust. Greg, thank you very much for taking time to speak with us today on TotalPicture Radio.

Greg: Thank you so much. We appreciate your interest and good to all. Thank you.

Greg Link is the co-author with Stephen Covey of Smart Trust: Creating Prosperity, Energy and Joy in a Low-Trust World, published by the Free Press an imprint of Simon & Schuster.

You'll find this interview along with resource links in the Leadership Channel of TotalPicture Radio, that's totalpicture.com. We encourage you to sign up for our newsletter, follow us at Jobs in Pods, on Twitter, Facebook, and join our LinkedIn community Recruiting with Social Media.

This is Peter Clayton reporting. Thank you for tuning in to TotalPicture Radio, the podcast for career advancement, leadership development, business trends and innovation.

Peter Clayton

About Peter Clayton

Peter Clayton, Producer/Host, is an award-winning producer/director of radio, television, documentary, video, interactive and Web-based media who has created breakthrough media for a wide array of Fortune 100 clients.

Discussion

Posting advertisements, profanity, or personal attacks is prohibited.
ads by google
Posted in:
Interview Channels,
Leadership Interviews