FEATURE: Building High-Trust Organizations and Being Smart about Trust

FEATURE: Building High-Trust Organizations and Being Smart about Trust
May 23 12:10 2016 Print This Article

High-trust cultures spread a conversation at a time, a promise at a time, a meeting at a time, a new hire at a time.  I’ve recently written a book entitled, The 10 Laws of Trust: Building the Bonds That Make a Business Great, to lay out principles used by entrepreneurs, business leaders, and non-profit leaders to build organizations that endure. In it, I discuss the best practices of high-trust organizations that achieve a covenant with all of their constituents.

Brands become great when their constituents can trust them to deliver on promises.  And that starts at the top.  Often, the levels of trust within an organization spread to all of its constituents.  In business, this means spreading goodwill and reliability beyond the organization to suppliers, lenders, investors and consumers.

This generally starts with the integrity of the leader.  Only when company leaders have integrity does high-trust have a chance to develop.  And when it does, its fruits are manifest.  Trust accelerates decision-making, resulting in agreements that are both durable and flexible. High-trust cultures help organizations – its associates, customers, and suppliers – not only to deliver their best in good times, but also to recover from set-backs in times of stress.

Inherent in granting trust is a risk of betrayal. It’s natural to worry about balancing the need to trust with the recognition that disloyalty is possible. For some, this means being ever wary, never really turning over power to another.  This is an understandable response; however, the cost of the alternative – of not trusting – can be very high, too.  Another approach is to choose carefully whom to trust and to make sure betrayals are small and recovery swift.

I have had the good fortune in my life to serve as a board chairman, teacher, real-estate entrepreneur, growth-capital investor, father of seven, and spouse of forty-four years — and partner with over 300 people all across the world.  Building high-trust relationships has been at the center of all of these activities and interactions. I’ve only had a couple of betrayals in all of those years and all of those activities.  I’ve concluded that I’ve accomplished more by trusting others than I ever would have achieved through wariness. Learning how to trust wisely has allowed me to take risks I might otherwise not have taken and to empower employees instead of managing everything.  For me, the rewards of trust have been well worth the risk.

But one cannot trust willy-nilly.  The key is to figure out whom to trust and under what circumstances.  As a rule, I’ve found that trustworthy people generally:

  • Attract great people around them (i.e., no cronies, no sycophants)
  • Bring judgment/pattern recognition (i.e., no cases of first impressions)
  • Are committed to truth (i.e., no spin or lack of transparency)
  • View consensus as a strength (i.e., no inflexibility)
  • Set simple and clear priorities (i.e., few off-mission hobbies)
  • Measure what matters most (i.e., no vague, semi-quantitative measures)

Smart trust does not deliver warm and fuzzy feelings, as the above list suggests.  It’s a hard-edged predictor of who will deliver on what they say.  Smart trust is a predictor of future behavior, and an ability to predict the future at some level.

Indeed, this is one of the reasons people don’t trust politicians.  Unless they exhibit all three elements of trustworthiness, we can’t really trust them – or anyone else.  To grant our trust, we must feel confident they have: 1) character (they honor their word and our interests), 2) competence (they know what they’re doing) and 3) authority (they’re empowered to deliver on their promises).  Unless all three are present, we should withhold our trust.

In most cases, we’ve come to see politicians as failing the first test, that of character.  But, more often than not, we can trust them to do what will get them re-elected.  Sometimes they don’t do what they say they’ll do for that reason.  But it’s frequently our misconception of what it means to be competent.  Competence in politics means achieving the possible.  This means compromise – and apparent violations of trust.  But politicians in a democracy generally do not have the power to deliver on their promises.  This is why they’re consistently ranked with used car salesmen and lawyers among the least trusted professions.

Most of us, however, have a chance to build high-trust relationships starting with loved ones, extending to project teams, to communities, and to businesses as a whole.  If we succeed, we’ll find that – like the relay times of a 4X100 team of sprinters will always beat those of the individual runner.  To be on a winning team is the pinnacle of success.  The good news is that there are a lot of things we can do to build high-trust relationships.


Joel PetersonJoel Peterson is the Chairman of JetBlue Airways and the Founding Partner of Peterson Partners, a Salt Lake City-based investment management firm. Joel is on the faculty at the Graduate School of Business at Stanford University and has been since 1992, teaching courses in real estate investment, entrepreneurship, and leadership. Joel formerly served as Chief Executive Officer of Trammell Crow Company, then the world’s largest private commercial real estate development firm. Joel earned an MBA from Harvard Business School and received his Bachelor’s degree from Brigham Young University.

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