The Ingredients and Effects of Trust
The Republican National Convention (“RNC”) was in Milwaukee this past week. Security was ramped up to extraordinary levels throughout downtown.
I had a meeting downtown during the convention. Normally, it takes me less than five minutes to get from the parking garage to the 29th floor of the U.S Bank Building.
While the RNC was in town, it took me 35 minutes to get from the parking garage to the conference room! There were multiple check points. Every single door was locked. At one of the check points I was not on the accepted guest list so I had to make phone calls to get on the list. At another check point they had to create a formal badge for me to showcase in the hallways & use for the elevators. I then had to walk through newly constructed gates to get to the elevator doors.
With the RNC in town, the building security had less trust in me and my intentions in the building. (Completely understood but clear consequences that can be applied to leadership inside an organization.)
The economics of trust in my situation in Milwaukee during the RNC:
TRUST: The Building security team were on high alert (rightfully so) and put in robust processes during the convention. (TRUST DOWN)
SPEED: It took an extra 30 minutes to get to the conference room. (SPEED DOWN)
COST: All of the people and security systems in place who stopped me along the way to my final destination were very expensive. (COST UP)
This experience downtown reignited my appreciation for and the importance of trust. There’s a reason Warren Buffett & Charlie Munger of Berkshire Hathaway declared in the early 1980s that they would only work with people they “like, admire, & trust.”
Munger stressed: “Trust is one of the greatest economic forces on earth.”
Stephen Covey in his book The Speed of Trust gives a formula for Trust that supports Munger:
Theoretical business formula:
S X E = R
(Strategy times Execution equals Results)
Real business formula:
(S X E)T = R
([Strategy times Execution] multiple by Trust equals Results)
Trust creates a tax or a dividend for organizations. Covey writes, “High trust is like the leaven in bread.” Low trust creates politics and bureaucracy.
Trust is the mitochondria (“powerhouse”) of an organization.
As leaders, we bend the culture of trust in our actions positively or negatively. Actions express our priority (not words).
Leaders have an incredible opportunity to tap into the beauty of trust as a growth accelerator. Covey articulates: “Trust is like the aquifer – the huge water pool under the earth that feeds all of the subsurface wells.”
Covey has the best break down of trust as an ingredient list I’ve ever found for leaders:
1. Character (integrity & intent)
a. Integrity – Do what you say you are going to do.
b. Intent – seeking mutual benefits
2. Competence (skills & track record)
a. Skills – Capable in role
b. Track Record – Get results
What is one way you could tap into the aquifer of trust that is outside your normal routine with your team this week?
Onward,
Matt
PS – With a lens on the power of trust: I think one of the most predictive questions for an organization to ask teammates: Do you trust your direct leader?