Tag Archives: stephen M.R. Covey


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!

Far more than blind trust, we tend to put on glasses of distrust. We view the world through the lens of suspicion - and with what we feel is good reason. We're bombarded daily with headlines that repeat evidence of today's trust crisis from every possible angle. In addition, our own experience validates it.

Stephen: I remember a time years ago when I was traveling with my parents. We visited a less developed country that was known to be corrupt. We hired a driver we thought we could trust to take us several places, and we left a number of watches and other gifts we had purchased in our bags locked in the trunk of his car while we ded some sightseeing. When we returned, we checked inside our bags to make sure the boxes were all there. They were. But when we got back to the U.S. and opened the boxes, we discovered they were all empty!

Greg: Several years ago my wife, and I invested a significant amount of money in salvage wood from old buildings. We never drilled down on the particulars of the investment because the man handling it was our neighbor, who assured us of the wisdome of the venture and repeatedly told us to trust him. Imagine our shock one evening when we saw the arrest of this neighbor on the local television news. We came to find out that he had sold the same inventory to several other investors as well as to us!

Experiences such as these affect us on a personal level. Even more, deeply wounding experiences - such as discovering someone has lied to you, finding out your spouse has cheated on you, going through a difficult divorce (either as a spouse or a child), having a "friend" talk about you behind your back, discovering drugs in your childs's room, having your wallet stolen, finding our that your child has been mistreated at day care, or having business partner continually break promises to you - can easily shift an innate propensity to trust into an acquired propensity to distrust.
Just as with blind trust, it's sometimes easy to put on the glasses of distrust. In fact, if we start out wearing blind-trust glasses but then get seriously burned, we often swing the pendulum to the other extreme and trade them in for thick glasses of distrust and suspicion. It seems like a natural response in a low-trust world. It's an approach that's easy to hide behind. It feels safer and less risky and that we're more in control. It can make us appear more careful, more intelligent. It seems more expedient in an urgency-addicted world where the focus is on short-term gains rather than long-term sustainability. Moving quickly to distrust and suspicion is the common response of society to almost any violation of trust because it is the easiest lever to pull and seems to provide the best legal and defensive cover. Two examples are the dramatically increased airport security after 9/11 and the Sarbanes-Oxley legislation following the Enron and WorldCom scandals in the early 2000s. Both have clearly served their purpose, but both have also come at a very high price.
Wearing distrust glasses is easy also because many of us are "scripted" to distrust. Even something as well-meaning as Stranger-Danger - an important program designed to help young schoolchildren protect themselves against predators - can condition us at a very early age to become suspicious, wary adults, especially if we don't ever stop to reexamine ur old scripts from a mature perspective.
A Few Examples of Stranger Danger Rules

  • Never talk to strangers.
  • Never accept candy or gifts from a stranger.
  • Never go anywere with a stranger.
  • Never let a caller at the door or on the telephone know that you are alone.
  • Always try to walk with a friend or a grown-up.
  • If a stranger grabs you, yell for help as loud as you can.
Though we've become very good at recognizing the cost of trusting too much, we're not nearly as good at recognizing the cost of not trusting enough. In fact, we seldom, if ever, even consider it, and most of us wouldn't know how to measure the cost if we did. Though we think we're being smart in taking precautions to protect ourselves against all the things that can happen in this low-trust world, the cost of this approach, can be incredibly high, particularly in terms of prosperity, energy and joy. Whenever there is distrust in a relationship, on a team, in an organization, or in a community, a wasted tax - sometimes a huge wasted tax - is being paid. You can see at least some of the seven common low-trust taxes in many organizations: redundancy, bureaucracy, politics, disengagement, turnover, churn, and fraud.

The cost of trust may on occasion be devastating, but the high cost of distrust is virtually guaranteed. (FERNANDO FLORES - Former Finance Minister of Chile)

Low-trust taxes result not only from the way we see but also from the way we are seen - in other words, not only in our not trusting but also in our being perceived as untrustworthy. Consider the economic cost to countries perceived as untrustworthy. There is a direct correlation between the prosperity of various countries and their trustworthiness. As the Zack and Knack study cited clearly, "investment and growth improve with trust."
Moreover, some companies from nations that are not perceived as trustworthy by citizens of other nations inherit a "country tax" as they attempt to do business on a global basis. A company or brand based in Russia, for example, is likely to inherit such a tax, resulting in increased cost and decreased speed in doing business. Conversely, companies based in nations perceived as trustworthy - such as Sweden - receive a "country dividend" that decreases cost and increases speed.
More specifically, think about the impact to the country of Haiti on the world stage when, in the aftermath of the disastrous earthquake in 2010, a former Haitian leader was interviewed and asked whether there were any institutions in Haiti that could be trusted with donations to help with the relief effort. He replied, in effect, that unfortunately there were no Haitian institutions that could be trusted and encouraged donations to go through international organizations rather than Haitian entities.
Much like countries that pay a metaphorical "country tax," industries that are not perceived as being trustworthy pay an "industry tax." For example, since the global financial crisis of 2008, the financial services industry has seen a preciptous drop in its perceived trustworthiness as measured by people's lack of trust in the industry to "do the right thing." As a result, to some degree almost all firms in that industry are struggling with increased cost and decreased speed of doing business. Thought it is possible to break out of and transcend country and industry taxes, the effort is clearly an upstream swim. 
Apart from inherited country or industry taxes, many companies incur huge taxes based on their own distrustful behavior. One example was shared by one of our workshop participants, who told us about a business that sold sunglasses. When the company changed hands, the new owner discovered that the biggest problem was a shrinkage of inventory, whch was costing him about 2 percent of revenues and directly hitting the bottom line. Clearly, the shrinkage was coming from theft, so the new owner thought, "If we could just eliminate that shrinkage, we could dramatically increase profit." He viewed the situation through the lens of distrust. "Somebody is cheating us. It's either the customers or our employees - maybe both. So we can't trust either of them." He put in place a control mechanism to address the problem. On the racks where the frames were displayed, he placed a tie-down on every frame so that the glasses could not be pulled off. That way, no one could walk out of the store with a frame that had not been paid for. The problem was that now customers could not even take the frames off the rack to try them on. So although the shrinage was reduced from 2 percent to 0.2 percent, sales decreased by 50 percent! Without being able to try on the sunglasses and see how they looked in the mirror, people didn't buy them.
An insurance company we were invited to work with in Europe had been burned in the past by a few customers who had filed fraudulent claims. In response, the company put into place a rigorous, even onerous, process of verification and validation so that whenever anyone filed a claim, the starting point with the customer was "We assume you are a crook and you are trying to cheat us unless you can prove otherwise." Since adopting this approach, it had not been defrauded, but its customers had been leaving en masse. They didn't like being treated with suspicion and distrust and were going to companies they felt trusted them. 
The cost of distrust to companies not only affects relationshps with customers, it also affects prosperity, energy, and joy within and between companies. There's a cost to excessive rules and regulations in terms of both administration and also creative energy. For example, althoug Sarbanes-Oxley has served its purpose to help improve accountability in U.S. companies and restore its confidence to the markets, almost anyone involved in carrying out will tell you the requirements is enormous. For the average company, the compliance cost is more than $2.3 million each year. The cost of Sarbanes-Oxleyis hurting especially smaller firms, for which the burden is more than seven times that of large companies relative to their assets. Compliance regulations have become a prosthesis for trust - and a very slow-moving, energy-draining, and costly prosthesis at that!

Our distrust is very expensive. (RALPH WALDO EMERSON)

There's also a cost to organizations in terms of attracting and retaining talent. The vast majority of people, both managers and workers, want to be trusted, and they want to work in high-trust environments. When they're not trusted, they become disengaged (i.e. they "quit but stay"), or they leave - particularly the best performers. Employee turnover in a low-trust environment is substantially higher than in a high-trust culture. For example, compare the average turnover rate in the supermarket industry - 47 percent - to the mere 3 percent in high-trust Wegmans. Or consider the fact that 25 percent of Fortune's 2011 100 Best Companies to Work For - for which trust is two-thirds of the criteria - had a turnover of 3 percent or less! The cost of turnover to a company can be enormous, ranging from 25 percent to 250 percent of pay. 
There's also a cost in partnering and collaboration, both internally within a company and externally with other companies. According to Gallup survey, the best partnerships are almost all characterized by mutual trust, while in poor partnershps, less than 3 percent strongly agree that they trust each other. In most situations mutual interest is not enough to override mutual distrust.
Without trust, we don't trully collaborate; we merely coordinate or, at best, cooperate. It's trust that turns mere coordination into true collaboration. It's trust that turns a group of people into a team.

Trust is the linchpin of a partnership. With trust, both people can concentrate on their separate responsibilities, confident the other person will come through. . . . Without trust, it's better to work alone. . . . No trust, no partnershp. (RODD WAGNER AND GALE MULLER - Gallup Executives and Authors)

Just think of a typical team meeting in a low-trust culture. You go into a conference room, and you may see meeting rules posted on the wall. They sound like kindergarten rules: "Be nice." "Speak one at a time." "Take turns." A more realistic representation of the rules might be the Miranda rights: "You have the right to remain silent" (because you probably will). "Anything you say can and will be used against you" (because it probably will). It's interesting that even though the United States has a system in which a person is assumed "innocent until proven guilty," people who are picked up by the police are still called "suspects."
Most painfully, there's a cost to distrust in our personal lives. One of the richest experiences of being human is to enjoy open caring relationshps with others. When we view the world through the lenses of distrust, we alienate ourselves. We cut ourselves off from the fullness of the rich relationships we could be having with a spouse, partner, children associates, and friends - even with ourselves.

It is. . . happier to be sometimes cheated than not to trust. (SAMUEL SMILES - Scottish Author and Reformer)

Clearly, although there is risk in trusting too much, there is also a huge risk in not trusting enough. It puts a tax - often a huge one - on every interaction that could be generating prosperity, energy and joy.
(From Stephen M.R. Covey's "Smart Trust")





In Stephen M.R. Covey's book, SMART TRUST he described there the situations and events that made this world seemingly run out of trust. Trust currency has almost reach extinction when all the crisis met, from scandals of corruption, lying, betrayal, warfare, rebellion, etc. These made humanity doubt almost every person he deals with. But this part of his book he called "Renaissance of Trust" of the 'outliers' who chose to trust rather than doubt.
He wrote:
The good news, and the Great Paradox about which we're writing in this book, is the fact that in such a low-trust world, there are "outliers" - people, leaders, companies, industries, and even countries that, like Muhammad Yunus, are helping to create a literal renaissance of trust - and that they are enjoying and spreading the benefits of prosperity, energy, and joy throughout the world. We call this a renaissance because it's not some new fad or technique; it is a game-changing rebirth or rediscovery of a timeless principle that has brought rich dividends to people consistently throughout time, similar to the way in which the Renaissance, beginning in fourteenth-century Europe, elevated all of society and humankind.
Consider the Maghribi traders of the tenth-century Middle East. In the midst of the chaotic, social and political climate in Baghdad at the time, a number of traders emigrated to the Maghrib, an area on the African continent between the Atlas Mountains on the south and the Mediterranean Sea on the north. Motivated by the rich business opportunities throughout the Mediterranean region - and not wanting to see those opportunities imperiled by the political chaos - they set up a system of trade, that could exist independently of government intervention. That system was based on trust. In Jump Point, Tom Hayes observed:

The incentives for participation in the trading were great and the inducements to remain in the trading alliance abundantly clear. Remarkably, the system, even across many miles and cultures, operated basically on a handshake [which itself was an expression of trust that showed that the hand held no dagger]. Given the cost and time of going to court over business disputes - not to mention the often corrupt and uneven disposition of justice from the Fatimidi judges - the Maghribi created their own stateless form of justice that worked very well. The key to ensuring performance and compliance: cheats and deadbeats were immediately humiliated and ostracized. In today's parlance, they were voted off the island. The fear of public reprisal and shunning proved to be an extraordinary self-enforcing mechanism.

By exercising trust and using social sanctions rather than legal recourse, the Maghribi traders were able to participate successfully in Mediterranean trade for several centuries.
Even in the midst of today's crisis of trust, we have modern Maghribi traders, many, in fact, who give evidence to the reality that trust is simply a better - a more prosperous, more energetic, more joyful - way to live and to lead. One example is Azim Premji, chairman of Wipro, one of the largest IT services companies in India. To give you an idea of the trust-building values on which Premji operates, one morning he sent a communication to all the managers at Wipro that he was flying down to take up much of their time, but he felt the matter was important and he needed to speak with them directly. In the meeting, he explained that a general manager would be leaving the company because he had inflated a travel bill. The manager had made a significant contribution to the organization and the amount of the indiscretion was not large, but it was a question of principle. Premji said he had come down to personally explain the situation because he didn't want any rumors surrounding the man's departure and he also wanted to make it clear that any attempts to belittle this individual would be met with a similar swift and appropriate response.
In another instance, some critical consignments for Wipro were being held for clearance at the Mumbai port at the same time a government budget presentation was being made. Many people believed that the presentation might result in an increase in the duty rates Wipro would have to pay, so the customs officials thought they would take advantage of the situation by offering to clear the consignments quickly in exchange for a small consideration. Due to the irregularity of the transaction, the issue had to go all the way up to the chairman. Premji said, "Go and plead with the customs officials unfailingly every day to speed up clearance of our imported consignments purely in the normal course. Do not part with a single rupee. If your efforts do not succeed, do not lose heart. If at the end we have to pay a much higher duty, never mind. We will pay. But make diligent efforts to clear our consignments only in the normal course."
Premji 's trustworthy behavior has created trust. As a result, he has been recognized by Time magazine as one of the hundred most influential people in the world and by the Financial Times as one of twenty-five people worldwide who are "dramatically reshaping the way people live, work or think [and] have done most to bring about significant and lasting social, political or cultural charges."

Nobody can enjoy the fruits of success if you have to argue with your own conscience.... People may listen to what you say but they will believe what you do. Values are a matter of trust. They must be reflected in each one of your actions. (Azim Premji - Chairman, Wipro)

Another modern Maghribi trader is Tony Hsieh (pronounced "Shay"), the CEO of Zappos, who began his career just out of college in 1996 by creating company with his roommate called LinkExchange. Two years later, the two sold the company to Microsoft for $265 million. Why did they sell? According Hseih, it was because the company culture had gone downhill. "When it was just five or ten of us," he said, "we were all really excited, working around the clock, sleeping under our desks, had no idea what day of the week it was." But by the time the company roster reached a hundred, Hsieh "dreaded getting out of bed in the morning and was hitting that snooze button over and over again."
That's why, when Hseih became an adviser and investor and eventually the CEO Zappos, his top priority was creating a company culture that would incorporate not only prosperity but also energy and joy. In the process, he took the company from almost no sales to more than $1 billion in sales annually and put Zappos on Fortune's list of 100 Best Companies to Work For. And the way he did that in the midst of what's been called the worst economic climate in decades was to trust his employees and his customers.
The Zappos culture literally epitomizes trust. In his book, Delivering Happiness, Hsieh says, "We don't have scripts [for their customer service call reps] because we trust our employees to use their best judgment when dealing with each and every customer." Unlike at most call centers, call times are not tracked, and reps are encouraged to take whatever time is needed to make a customer happy. Hseih says, "Empower and trust your customer service reps. Trust that they want to provide great service... because they actually do. Escalations to a supervisor should be rare."
Zappos also trust its customers, giving them the opportunity to order any shoes they want, try them on, and return what they don't want - with free shipping both ways and a 365-day return policy. In addition, the company consistently behaves in ways that inspire trust. In May 2010, for example, a pricing error resulted in all items available through 6pm.com a Zappos sister site, being offered for a six-hour period at a maximum price $49.95. Because some of the items carried on that site normally sold for thousands of dollars, the six-hour sale resulted in an enormous loss to Zappos. Nevertheless, Zappos honored the advertised price.

While we're sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up. We apologize to anyone that was confused/or frustrated during our [sic] little hiccup and thank you all for being such great customers. We hope you continue to Shop, Save. Smile. at 6pm.com.

What's most impressive about Hsieh and Zappos is the results they've achieved in the midst of an economic downturn. And those are not just financial results, though they are clearly impressive. To Hsieh, the most important results Zappos has created have to do with energy and joy. In fact, delivering happiness to Zappo's people, customers, and partners is really what defines the company. The company's vision and purpose statement is clear and distinct: "Zappos is about delivering happiness to the world."

An enormous pleasure in life is to be rightly trusted. (Charlie Munger, Vice Chairman, Berkshire Hathaway

Wipro and Zappos are only two of literally thousands of teams and organizations that are creating the ripple effect of this modern renaissance of trust that is gaining momentum around the world.
Denmark-based LEGO trusts customers with tools to "do their own thing" in creating, designing, and assembling their own kits of LEGO bricks. LEGO's view is that the consumer owns the LEGO brand as much as the company does.
Amazon creates customer trust by providing an online shopping experience second to none, including serving as a broker or middleman to a variety of resellers - even undercutting its own pricing sometimes in order to provide every possible choice to consumers. Amazon founder Jeff Bezos says, "If you do build a great experience, customers tell each other about that. Word of mouth is very powerful."
Geisinger Health System increases trust with its patients by providing "surgery with a warranty" - a flat rate for heart bypass surgery that includes preoperative, postoperative, and follow-up care for ninety days, resulting in significantly improved outcomes on nearly every measure.
Max Hamburgerrestauranger [Hamburger Restaurants] of Sweden publishes its total carbon emissions for all items on the menu, allowing customers to consider the impact on the environment in making their choices. Operating with this kind of transparency, as well as providing the best-tasting sandwiches satisfaction ratings in its industry nine years in a row.
In addition to creating with customers, thousands of teams and organizations are also working to create high-trust cultures. The India-based Tata Group has created such a culture for its 400,000 employees through its "Leadership with trust" maxim, which plays out in the company's purpose ("To improve the quality of life of the communities it serves."), its Code of Conduct, and its philanthropy.
In 2003 IBM inspired employee trust by engaging all 319,000 employees worldwide in a three-day intranet "values-jam" to re-create the values they felt should govern the company. One of the three values they selected was "trust and personal responsibility in all relationships." Today they model that trust by openly embracing telecommuting and flexible work arrangements as a better approach for the majority of its workforce, resulting in enhanced productivity and loyalty.
General Mills create employee trust through its commitment to sustainability, including its relentless CSR initiatives and its commitment to "nourishing lives." As a result of this trust, GM CEO Ken Powell is perhaps the most popular boss in America, with a 100 percent approval rating from his own people in 2010. 
The Dalton Company, a building services firm in Canada, creates employee trust with its "alternative approach to building," which starts by enhancing trust with its own people, moves out to its trade partners, and ultimately becomes a force in restoring trust within the construction industry as a whole.
Virginia Mason Medical Center in Seattle inspires employee trust through its "Physician's Compact," an agreement that transforms the often tenuous, adversarial relationship between hospitals and physicians into a high-trust relationship built on clear expectations and mutual accountability. the result is a high-trust culture that ultimately ripples out into the communities Virginia Mason serves.
Government and societies are also taking part in this renaissance of trust. As part of a campaign to tackle endemic corruption, the attorney general's office of Indonesia led in setting up "honesty cafe's" that put the responsibility on people to pay for their meals by putting the money into plastic cash boxes on their own. According to a New York Times article, "By shifting the responsibility of paying correctly to the patrons themselves, the cafes are meant to force people to think constantly to the patrons themselves, the cafes are meant to force people to think constantly about whether they are being honest and, presumably, make them feel guilty if they are not." As of this writing, the cafes are considered a success, with more than seven thousand in operation in twenty-three provinces. In Transparency International's inaugural Corruption Perceptions Index in 1995, Indonesia was ranked dead last out of all the nations surveyed. By 2010 that ranking had moved up to 110th out of 178 nations, and the honesty cafes were recognized as having contributed to the popularity of Susilo Yudhoyono, the nation's first popularly elected president, who championed the program as part of his massive anticorruption campaign.