Trust is so basic to business that it is rarely discussed in an analytical and accessible way. The book “The Speed of Trust” offers critical advice for entrepreneurs on how to actively manage trust in order to accelerate growth and reduce costs, while avoiding missteps. The more trust within a company, the faster it can move with lower costs. Think of the adverse impact 9/11 had on the time and cost of air travel — longer lines and more security — because of the damage it did to trust.
The speed at which you can assess and extend trust determines how fast your business can grow because it affects every relationship. That is, relationships with employees, new hires, business partners, investors, and customers. I expect discussion of trust – it’s meaning, development and measurement – will rise as social networking begins to dictate who consumers are influenced by. For instance, Ebay was built entirely on community trust through its rating systems. As Seth Godin notes, today Yelp is drives companies to make better products based on customer reviews.
Why listen to the author?
It’s fair to say that Stephen M. R. Covey has spent his life and career studying the principles in this book. He is the son and business partner of Stephen Covey, author of “The 7 Habits of Highly Effective People,” which was named the most influential business books of the twentieth century.
The Big Ideas:
The author does a masterful job of clearly dividing trust into four core components: integrity, intent, capability, and result. The first two define character; the latter two define competence. Measuring where trust falls short with any of these components provides a road map for how to repair, build, or extend trust. Furthermore, the book articulates how to build trust with more than a dozen concrete actions. Finally, the book provides helpful rules to prioritize your trust investments.
Integrity. Without integrity you have no foundation on which to place trust. Covey defines integrity as being honest, telling the truth, and leaving the correct impression. Beyond honesty, integrity requires three things:
- Congruence: Behavior consistent with your values inspires trust.
- Humility: What is right has to be more important than being right.
- Courage: When the right action is hard, integrity requires courage.
Intent. The author defines intent as plan or purpose, and breaks it into three components:
- Motive: This is the “why” of intent. The most motive trust-inspiring motive is one that shows genuine care for your employees or customers. If your motive doesn’t have this, then be prepared to pay a “trust tax.”
- Agenda: What do you intend to do based on your motive? The agenda that inspires the greatest trust is mutually beneficial.
- Behavior: This is the actual action that results from the motive and agenda. The behavior that inspires the greatest trust is acting in the best interests of others. As an entrepreneur, I focus on customer and partner relationships that focus on shared win outcomes.
Capability. Do you have the ability to accomplish the required task? This is critical, since you won’t deliver without it. The author breaks down capability into four key parts: talent, attitude, knowledge, and style. The more these suit the needs of the situation, the higher the competence. As I assess investment opportunities, I often focus on management team capabilities: can they meet the demands that a company’s high growth requires.
Results. The most powerful and simplest test for trust is results — not just what the results were, but how they were accomplished. This is critical for entrepreneurs thinking of starting a new venture. In interviewing senior executives, I place the greatest weight on proven results, their contribution to prior successes and its relevance to our company needs.
Inspiring/Investing In Trust. The author identifies 13 different initiatives entrepreneurs can take to inspire trust. Since creating trust in your workplace is essential to driving growth, the key issue is how and where to make those trust investments. Ask yourself these questions:
- What can you gain from investing in trust?
- What are you risking by putting resources toward building trust?
- What is the character/competence of the individual or organization in which you are making the investment?
Clearly, the lower the risk, the safer the investment. The higher the risk, the more you need to see strong character, competence, and prior results to justify the investment.
I felt this book had clear relevance to many of my startups and portfolio companies. As a model for my life – I have always felt the more trust you develop, the more effective you will be as an entrepreneur. The same goes for personal relationships. Most relevant to an investor, our fund places a lot of trust (shown in-part through multimillion dollar investments) in the entrepreneurs in which we invest. As a result, we focus on their track record, capabilities, and how well they manage their money, as a predictor of how they will use our money. We also seek to provide support through a board of advisors consisting of other executives with a track record of success and capital efficiency, to help improve the team’s capabilities.
At a glance:
Title: The Speed of Trust: The One Thing that Changes Everything
Authors: Stephen M.R. Covey, Stephen R. Covey, Rebecca R. Merrill
Publisher: Free Press
Length: 384 pages
(Editor’s note: Javier Rojas is a managing director leading U.S. investment activities for Kennet Partners. He submitted this story to VentureBeat.)