Tag Archives: blind trust


In this world who experienced a lot of distrust, with people who in one way or another been a victim of betrayal, of fraud, of scam, of misbehavior, trust has become scarce, and it seems that it has become a "hard currency", it's rare to find. Even some of the people you call "friends" don't trust you that much, even your family members, your mom, your dad, your daughter, your son, your siblings. It seems that trust has joined "honesty" on being labeled by the song "such a lonely word". Trust, has been the currency that every people wants to keep and don't want to spend. And the world has suffered the problems caused by the non-ciculation of "trust" currency. 
For some people, they'd give you some trust but would ask you to pay for more. For some people they just choose to keep trust to themselves, and live their long-boring-lives with distrust. For some people, they trust blindly, thinking they have already been to worst, so just bring it on!
As I was thinking about this issue on trust, I have been aided by this book I am reading by Stephen M.R. Covey called "Smart Trust" and I have encountered several successful people and/or companies in their business because of trust. And it inspired me to give and circulate trust with the people around me. Yet, I am using "Smart Trust" not "Blind Trust" nor "Distrust". 
Here is a list of the philosophies  of leaders and companies with regard to their lives and organizations:
  1. Isadore Sharp, Four Seasons Hotels and Resorts "Trust was the emotional capital of Four Seasons, our ethical imperative for long-lasting success, a code and a compass enshrined in the corporate culture. . . [It] had been the primary reason for our success, crucial to the reputation that precedes us in every deal, in every hotel opening, and in all our operations. . . Like the invisible hand that regulates the free market, the invisible hand of trust had been our guide and our dynamic. And every year, as trust rose, our reputation rose with it."
  2. Al Carey, Frito-Lay "Our team trusts each other. We move faster on difficult decisions. So when you trust each other there's no need for all the extra bureacracy. It can allow you to reduce layers of management. It can allow you to move directly to decisions quicker, because you trust each other. You don't have multiple groups overlooking each other to make sure that people are doing things the right way.
  3. Andrea Jung, Avon "Our entire model has been build around personal relationships with our customers, and that is based on trust. The power of those relationships is the key to our success and to the future.
  4. Charlie Munger, Berkshire Hathaway "Our model is a seamless web of trust that's deserved on both sides. That's what we're aiming for. . . Not much procedure, just totally reliable people correctly trusting one another."
  5. Meg Whitman, eBay "More than a decade later, I still believe that Pierre [Omidyar] was right; the fundamental reason eBay worked was that people everywhere are basically good. We provided the tools and reinforced the values, but our users built eBay. Our community's willingness to trust eBay - and one another - was the foundation of eBay's success. . . eBay is all about trust."
  6. Muhammad Yunus, Grameen Bank "We were convinced that the bank should be built on human trust, not on meaningless paper contracts. . . People everywhere prefer to live in an environment of trust."
  7. Jim Goodnight, SAS Institute "I believe management must trust the people who work for them. You have to treat people like they make a difference. And if you do, they will... When you trust people to do their best, the revenue takes care of itself, even in challenging economic times."
  8. Azim Premji, Wipro "Values are a matter of trust. They must be reflected in each one of your actions. Trust takes a long time to build but can be lost quickly by just one inconsistent act."
  9. Terri Kelly, W.L. Gore & Associates "[T]here are some fundamental things that hold Gore together. One is values to which we all subscribe, in terms of how we're going to treat each other - there's a huge trust element in the Gore culture.
  10. Tony Hsieh, Zappos "We trust our employees to use their best judgment when dealing with eac and every customer."
  11. Ken Chenault, American Express "The competitive advantage of trust has never been more important or more valuable."
  12. John Wooden, UCLA "I believe the following: 'It is better to trust and be disappointed occasionally than to mistrust and be miserable all the time.'"
  13. Google "Too many companies have been built on not trusting people but on making rules and prohibitions, telling customers what they cannot do, and penalizing them for doing wrong. Google has built its empire on trusting us. (Jeff Jarvis, What Would Google Do?)"

If you learned something from this, feel free to buy Smart Trust by Stephen M.R. Covey, and please do spread the news about trust by hitting share. I would also appreciate it very much if you can hit like. Thanks!

So how do we know who to trust? How can we operate with high trust in a low-trust world without getting burned? And how can we extend trust wisely to people when not everyone can be trusted? Before we share a framework for thinking about these questions, let's look at a few companies that seem to have figured it out.
When Meg Whitman joined eBay as CEO in 1998, she said the reason was because she was "blown away by the power of trust." The company was founded by the French-born Iranian-American entrepreneur Pierre Omidyar, and from the beginning, it quickly became wildly successful. Today the company has a market capitalization in excess of $35 billion, with 235 million registered users (buyers and sellers) engaging in more than 1 million transactions a day.
So how has eBay managed to become so successful, especially considering the "success" involves millions of transactions each year between people around the globe who don't even know each other? The company was built on Omidyar's high-trust belief that "most people are basically good." Whitman said:

More than a decade later, I still believe that Pierre was right; the fundamental reason eBay worked was that people everywhere are basically good. We provided the tools and reinforced the values, but our users built eBay. Our community's willingness to trust eBay-and one another-was the foundation of eBay's success.

Does that mean that eBay operates on blind trust? Not at all. According to Whitman:

Pierre's premise was not that all people are good; it was that most people are basically good. I agree that it is an optimistic statement, but let's be clear: we did not build eBay by sticking our heads in the sand. We did not ignore or deny that fraud, distasteful behavior, or unlawful activities occurred on eBay from time to time. Quite the contrary: we invested significantly in eBay's Trust & Safety division, which policed the site. We created software that looked for patterns that might be signs of trading in counterfeit goods, illegal building, or even behavior that was simply inappropriate, such as one user stealing a digital photograph from another user's page. But from day one it was clear to us that such behavior involved only a tiny minority of people.

A fundamental element of eBay's approach is self-policing, much like that engaged in by the Maghribi traders in the tenth-century Middle East. eBay buyers and sellers do business in a highly transparent way, publishing onsite feedback on their trading partners after each interaction. This feedback creates a reputation for each trader, which affects his or her credibility in the eyes of other traders. A strong positive reputation increases a trader's ability to do business; a lesser reputation diminishes it. If a trader gains a sufficiently negative reputation, the company's software prohibits the person from trading on the site. In addition, eBay encourages the formation of communities of traders in different category areas to watch out for one another and to be on the lookout for counterfeit goods and rogue traders. 

In Jump Point, Tom Hayes observed:

If we believed that we would or might be cheated, few of us would be eager to transact on eBay. But we do trust, not only eBay as the intermediary, but also the user community itself. The eBay community is self-policing and self-correcting of cheats and fakes. Sellers and buyers earn their reputations. And reputation is one's calling card and bond on eBay. Sure, a cheater may get away with it once, but they system will brand and marginalize that person quickly.

The sociologist Peter Kollock said:

Many participants report that they are more willing to trade with someone with a high rating, or even that they will only trade with individuals with high ratings. In that sense, some traders are able to create a brand identity that increases their volume of sales or even the price at which they are able to sell items. . . Even a few negative ratings can seriously damage a reputation, and so frequent traders are even very careful about nurturing their rating by providing swift execution of honest trades. 

Surprisingly to the skeptics to the skeptics, out of the 2 million auctions that occurred during the first two years of eBay's operation, only twenty-seven were considered to involve possible fraud, and those were referred to the proper authorities for prosecution. Even today, as the number of transactions has skyrocketed (and along with it the number of fraudulent cases), eBay refuses to allow the extremely small percentage of people who abuse the trust to define the vast majority of users who respect it. Its business model focuses on the great many who can be trusted rather than on the relatively few who can't. And eBay goes to great lengths to weed out those few. The company's objective is not only to increase trust among buyers and sellers but, at a minimum, to increase trust in the system. In 2005, when Omidyar was asked what the most significant lesson learned from eBay was, he responded, "The remarkable fact that 135 million [235 million] people have learned they can trust a complete stranger."
Another company that has figured out how to navigate risk in a low-trust world is Netflix, the DVD rental and on-demand video-streaming company that has more than 20 million subscribers in the U.S.  and Canada. Like eBay, Netflix is based on the idea that most people can be trusted. Subscribers pay a monthly fee in return for renting a certain number of DVDs at a time, which are sent to them in the mail. Though some DVDs are lost or stolen, by and large the Netflix community has proven to be honest, enabling company to operate successfully on the business model of extending trust to customers. Netflix does not allow the small untrustworthy minority to derail the business. In fact, also like eBay, Netflix aggressively seeks to identify and eliminate that small minority through a robust, sophisticated system that monitors suspicious activity and identifies both untrustworthy customers (whose accounts are canceled) and postal delivery workers (against whom charges are filed). Though Netflix can't root out all the offenders, it's remarkable that a high-trust system that involves thousands of postal workers delivering millions of DVDs each week has as few problems as it does.
Another standout is L.L. Bean, a $2 billion online and catalog retailer specializing in clothing and outdoor recreation equipment. It is best known for its extraordinary customer service, having ranked number three in MSN's 2011 Customer Service Hall of Fame. The company's excellent customer service - which grows out of its remarkable customer service - which grows out of its remarkable customer service guarantee - inspires enormous loyalty and trust. The guarantee reads, "Our products are guaranteed to give 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We do not want you have anything from L.L. Bean that is not completely satisfactory."
What's particularly remarkable about this guarantee is the fact that the company puts the evaluation of customer satisfaction completely in the hands of the customer - and not for only thirty days or even a year. There is no time limit. The current chairman, L.L. Bean's grandson Leon Gorman, said this of the guarantee when he first introduced it in 1968: "If we expected customers to trust us in buying products were satisfactory throughout their expected lifetimes."
Now, it's not hard to imagine how customers might abuse this policy and take advantage of L.L. Bean. And on extremely rare occasions, the company has had to draw a line and close an account. An L.L. Bean executive told us, "It is not blind trust on our part. We do occasionally and reluctantly have to suggest that a customer shop elsewhere. But remarkably, we have very little abuse. Our customers seem to appreciate and like being trusted. Particularly in the recent difficult economic times, and customers look to a company where they can trust the value proposition and know that the company will stand behind it."
Now, as you think about eBay, Netflix, and L.L. Bean, notice that the trust being exercised by those companies is different in kind. It's not blind trust; it's not distrust. It's Smart Trust.
(From Stephen M.R. Covey's "Smart Trust")


You've likely been scripted, conditioned, and/or experienced into primarily one set of glasses or the other. Whichever glasses you wear tend to magnify the evidence that fits your paradigm and filter out the evidence that doesn't, and they significant affect the degree of prosperity, energy, and joy in your life. Keep in mind that the differentiation is not all or nothing, black or white. You may be wearing a strong prescription or a mild one. You may switch back and forth. You may even be wearing bifocals, so to speak - looking at your professional relationships with distrust and your personal relationships with blind trust or vice versa. Or you may view your family with blind trust and people dating your daughter with distrust. The point is that whatever glasses you're wearing at any of your time are affecting the way you see the world - and as a result the quality of your life and your ability to enjoy relationships with others and work with them to accomplish meaningful goals.
So why don't you take a moment now and examine your glasses? Remember, they are just "glasses." You can choose to wear them, or you can choose to take them off. 
Thinking about how you see people can help you understand more about whether you have a dominant paradigm that's affecting the results you're getting in your life. Consider the two sets of statements in this table that represents the extremes of blind trust and distrust. Do you identify with one more than the other? Do you tend to respond differently in different situations?
How Do You Tend to See Others?
Blind Trust

  1. I trust people so easily and believe whatever they say. As a result, I often get burned.
  2. I never check up on people or what they tell me; I just always assume the best.
  3. I openly and freely share information about anything and everything.
  4. I accept everyone as trustworthy and feel comfortable with the thought of working openly with anyone.
  5. I trust people to do what they say they will do, and see no reason to question otherwise.
  1. I am inherently suspicious of people and question whatever they tell me.
  2. I always feel I have to investigate people's credibility and validate what they say.
  3. I believe information is power. I hold it close to my chest and give it out only sparingly.
  4. People have to earn my trust before I am willing to work with them.
  5. I tightly supervise my direct reports (or my children or others) and thoroughly and frequently check up on their work.
The reality is that there is a high-cost to both blind and distrust. And whether you're looking at the world primarily through the lens of blind trust or distrust, neither approach is sustainable in the long term. Those who live with blind trust eventually get burned; those who live with distrust eventually experience financial, social, and emotional losses.

It's a vice to trust everyone, and equally a vice to trust no one. (SENECA, First-Century B.C. Roman Philosopher)

(From Stephen M.R. Covey's "Smart Trust" if you like more of these you can visit some posts or buy that book.)

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In the extreme, blind trust is a naive, gullible, blissful, Pollyana-ish trust in almost everyone and everything. Wearing blind-trust glasses is easy for many of us at times because it doesn't really require much effort or thought. It's also easy because, as the University of Maryland's Eric Uslaner points out, "We may not be born trusting, but our inclinations to place faith in others start very early in life." Indeed, most children have a high propensity to trust.
No question children are more trusting, and therefore much more creative. Somewhere in adolescence, I suspect that changes.
                                        -Charles Green Founder, Trusted Advisor Associates
Even as adults - even if we have had bad experiences with blind trust - deep inside, most of us really want to trust. We want to believe that somehow our political leaders will really do what they promised us they'd do . . . that our work peers really do have our best interests at heart. . .that some new investment opportunity really will produce a high return with little risk. . .that a spouse or partner really does have a reasonable explanation for what appears to be totally untrustworthy behavior. . .that the e-mail offering a sizable fortune in exchange for providing our checking account number to help someone get funds out of a foreign country really will end up with a life-changing deposit into our account.
Because we want those things so badly, we ignore the evidence. As the expression goes, "That which we want most urgently, we believe most easily." And the cost can be great. When we view the world through blind-trust glasses, we become ripe targets for scams, frauds, and "con" artists. Contrary to the assumption of some people that the "con" in "con artist" is short for "convict" (meaning criminal), it is actually short for "confidence"; in other words, a "con artist" or a "con man" is someone who works to earn your confidence and trust and then, having gained it, takes you for everything you're worth.
If it seems too good to be true, it IS too good to be true. Mark Twain
Blind trust was one of the reasons Bernie Madoff was able to defraud investors out of billions of dollars, deprive thousands of people of their life savings, and wreck charities. After pleading guilty fraud, Madoff  said that he'd had "too much credibility with them" and the SEC mission was that he'd had "too much credibility with them" and the SEC examiners had never asked for basic records to validate his operations. "It never entered the SEC's mind that it was a Ponzi scheme," he said. Additionally, Madoff's accountant did not meaningfully audit Madoff's business or confirm that securities even existed.
Many observers believe that the global financial crisis was precipitated by too much trust being given to the mortgage industry in the United States without sufficient oversight - in effect becoming blind trust that was ultimately abused, resulting in the housing bubble that triggered the problems initiating the crisis. Others point to what might appear to be the near-blind trust given to traders at some financial firms - traders such as Nick Leeson, who was trusted by Barings, the United Kingdom's oldest investment bank, to operate as both floor manager for trading and the head of settlement operations (positions normally held by two different employees for purposes of checks and balances). Leeson engaged in unauthorized speculative trading that literally brought Barings down. 
Pyramid schemes, financial scams, fraud - all add up to an enormous cost, estimated to be as high as $2.9 trillion a year globally, with 88 percent of enterprises having been hit by at least one type of fraud in the past year. Fraudulent activity becomes more apparent in difficult economic times, when perpetrators find it more difficult to hide behind their perpetual cycle of attracting and deceiving new victims. In other words of Warren Buffet, "It's only when the ride goes out that you learn who's been swimming naked." It is also during hard times when people desperately want to believe what they're hearing that they find themselves more likely to extend trust blindly.
There are times when blind trust might appear to work. In August 2010 New York Post articles told of an ad executive who was approached by a homeless man outside SoHo restaurant, asking her for some change to get some Vitamin Water. So the man asked if he could borrow her card and get a couple of other things as well. She asked, "Can I trust you?" "I'm honest, yes," he replied. So she handed him her American Express card. People who saw the interaction thought what she did wa insane and told her they doubted he would ever come back. But little more than ten minutes later, he surprised them by returning with the card in hand. He had bought deodorant, body wash, a pack of cigarettes, and Vitamin Water, totaling about $25. Giving her the card, he said, "Thank you for trusting me."
That particular extension of blind trust turned out to be a good experience for both the giver and the receiver, and perhaps there are some lessons here that can be learned. However, the blind-trust approach is risky, and it typically does not represent the smartest way to operate in a low-trust world.
(From Stephen M. R. Covey's "Smart Trust")