ChristianSarkar.com

We did this interview a year ago, but he's finally (and deservedly) hitting the best-seller lists - thanks to a strong internet-based campaign. The book >>

Why do you claim that "Trust" is the key leadership competency of the new global economy?
Covey: If you look at the nature of the world today, a foundational condition in Thomas Friedman's flat world is the presence of trust. Put simply, today's increasingly global marketplace puts a premium on true collaboration, teaming, relationships and partnering, and all these interdependencies require trust. In the book I point out that partnerships based on trust outperform partnerships based on contracts. Compliance does not foster innovation, trust does. You can't sustain long-term innovation, for example, in a climate of distrust.

In issue after issue, the data is clear: high trust organizations outperform low-trust organizations. Total return to shareholders in high trust organizations is almost three times higher than the return in low trust organizations.

So we assert that trust is clearly a key competency. A competency or skill that can be learned, taught, and improved and one that talent can be screened for.

Trust is the one thing that affects everything else you're doing. It's a performance multiplier which takes your trajectory upwards, for every activity you engage in, from strategy to execution.

How do you identify a high-trust or low-trust organizations?
Covey: Trust is a powerful accelerator to performance and when trust goes up, speed also goes up while cost comes down -- producing what we call a trust dividend. How do you know if you have a high trust culture? By observing the behavior of your people. In high trust, high performance companies, we observe the following behaviors:

• Information is shared openly
• Mistakes are tolerated and encouraged as a way of learning
• The culture is innovative and creative
• People are loyal to those who are absent
• People talk straight and confront real issues
• There is real communication and real collaboration
• People share credit abundantly and openly celebrate each others' success
• There are few “meetings after the meetings”
• Transparency is a practiced value
• People are candid and authentic
• There is a high degree of accountability
• There is palpable vitality and energy—people can feel the positive momentum

Another very visible indicator is the behavior of your customers and suppliers. What is your customer churn rate? Do you have a history of long-term customer and supplier relationships? What is your reputation or brand equity in your marketplace?

Conversely, when the trust is low, there's a trust tax which changes your trajectory downwards. In our work with organizations, we find that low-trust, low-performance organizations typically exhibit cultural behaviors like:

• Facts are manipulated or distorted
• Information and knowledge are withheld and hoarded
• People spin the truth to their advantage
• Getting the credit is very important
• New ideas are openly resisted and stifled
• Mistakes are covered up or covered over
• Most people are involved in a blame game, badmouthing others
• There is an abundance of “water cooler” talk
• There are numerous “meetings after the meetings”
• There are many “undiscussables”
• People tend to over-promise and under-deliver
• There are a lot of violated expectations for which people make many excuses
• People pretend bad things aren’t happening or are in denial
• The energy level is low
• People often feel unproductive tension—sometimes even fear

These behaviors are all taxes on performance.

The work we do is to establish trust as your organizational operating system. That's a high-tech metaphor, but it's appropriate. We know how trust works, how to measure it, how to establish it, grow it, extend it, and sustain it – with all stakeholders.

Why is trust such a hidden variable to many otherwise competent managers?
Covey: Unfortunately, too many executives believe the myths about trust. Myths like how trust is soft and is merely a social virtue. The reality is that trust is hard-edged and is an economic driver.

For instance, strategy is important, but trust is the hidden variable. On paper you can have clarity around your objectives, but in a low-trust environment, your strategy won't be executed. We find the trust tax shows up in a variety of ways including fraud, bureaucracy, politics, turnover, and disengagement, where people quit mentally, but stay physically. The trust tax is real.

The rest of the interview is available at the Emory Marketing Institute website >>