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SMART TRUST

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THE FIVE ACTIONS OF SMART TRUST

There are five actions of smart trust:

  1. Choose to believe in trust.
  2. Start with self.
  3. Declare your intent … and assume positive intent in others.
  4. Do what you say you are going to do.
  5. Lead out in extending trust to others.

There is a dramatically increasing number of people and organizations everywhere engaging in the five Actions of Smart Trust–thereby avoiding their opposites and counterfeits–and getting remarkable results, according to Covey and Link.

ACTION 1: CHOOSE TO BELIEVE IN TRUST

Belief in trust is the first smart trust action that the authors consider, and it’s no accident that it’s number one. Belief is essential to getting results, and is the foundation of success. Deciding to believe in trust is the basic choice from which all of the other smart trust actions emanate. However, this belief in trust is not a now-you-see-it-now-you-don’t thing, done only for convenience, appearance, or when there’s no risk involved. Trust has to be the underlying approach that determines day-to-day actions.

Among the companies offered as examples is W.L. Gore & Associates. Founder Bill Gore believed in trust so greatly that he set up what is known as a “lattice organization” that still exists. Employees are considered “associates,” and rate one another’s contributions. A new CEO was chosen in 2005 based on employee feedback of who they would like to follow.

The authors note that many organizations tend to be based on a top-down structure, and an assumption that people cannot be trusted. However, the highest form of control does not come from reams of rules and regulations, but from a high-trust culture.

An extraordinary example of trust–and all the good that can come from it–occurred in 2007, when Ted Morgan, CEO of Skyhook, got a call out of the blue from Steve Jobs of Apple, who was considering using the company’s technology. After fruitlessly trying to get Skyhook’s technology noticed, it seemed as if this was the company’s big opportunity. However, before the deal was done there was an Apple event, and Jobs needed Skyhook’s code to showcase its products there. The code was the key to Skyhook’s technology, and Morgan was advised not to give it out. However, he trusted Jobs, gave him the code, and was rewarded when Jobs showed off Skyhook’s technology to an eager audience. Skyhook took off from there, thanks to a single act of trust between Morgan and Jobs. Who knows what would have happened if Morgan had refused Jobs.

It can be hard to overcome life experiences–ones that have quite possibly led to distrust. However, it can be done. Trust glasses can be put on and used to view the world and govern actions. If a person believes in trust, they can trust. Covey and Link are convinced that developing a belief in trust is the most powerful thing people can do to begin to access the benefits of trust in their lives.

ACTION 2: START WITH SELF

The second smart trust action is to start with self. It is not enough to believe in trust; trust has to begin somewhere. Individuals, leaders, teams, and organizations that operate successfully in today’s world also behave in ways that grow out of that belief. It takes both character and competence to give a person the confidence to not only trust themselves, but inspire others to trust them as well. Self-trust affects not only a person’s worthiness to be trusted, but also the way people see and interact with others. The authors go outside the business realm to offer as an illustration the story of how a young rookie for the Los Angeles Lakers named Magic Johnson rose to the occasion in his team’s 1980 championship series with the Philadelphia 76ers. The Lakers’ regular center, Kareem Abdul-Jabbar, was injured, so Johnson filled in and led his team to victory. He drew on the trust in his own character and competence to inspire the Lakers to victory. It was not ego–self-trust is never ego, arrogance, or bravado–but a quiet confidence –a trust in his own abilities that compelled him.

Other examples of people with the capacity to be trusted include Peter Aceto, head of ING Direct Canada, who trusted himself enough to ask his employees outright if he should stay on, and John Wooden, the legendary UCLA basketball coach who committed to the school when another came calling because he had given his word to UCLA. Another example of a person who has self-trust is Almaz Gebremedhin, a cleaning lady and single parent who put all five of her children through Penn State and was named Good Morning America’s Woman of the Year.

Self-trust works for countries as well. In Denmark, 88.8 percent of the people express a high level of trust in others. Denmark is one of the most productive countries in the world, considered the happiest nation in the world, has the least corruption (along with New Zealand and Singapore), ranks number two on the prosperity index, and has the fifth highest GDP in the world.

The authors also examine some companies that once had great trust then lost it. One is Johnson & Johnson, which established great trust in the Tylenol crisis of 1982, then badly fumbled their handling of the Motrin situation in 2008. Another is Toyota, which had established a deep bond of trust with its customers that was shattered when the company mishandled an incident with sticking accelerators.

Restoring trust is much more difficult than establishing trust. Take, for example, the story of Frank Abagnale, Jr. A notorious con man early in life, he turned his life around and restored trust in himself as a security consultant who helped expose potential security system faults for businesses.

ACTION 3: DECLARE YOUR INTENT … AND ASSUME POSITIVE INTENT IN OTHERS

The third smart trust action is to declare your intent and assume positive intent in others. To declare intent, a person is signaling his behavior to others, telling people why an intended action is going to occur. As an example, the authors talk about the Charlotte County, Florida, school district. A hurricane devastated some of their facilities. The district superintendent called a meeting and declared his intent that all employees were going to be paid as soon as possible and that no jobs would be cut. As a result, the district built a strong trust with their employees, one that has carried over to contract negotiations and beyond. Two other famous cases of declared intent are Babe Ruth indicating that he was going to hit a home run on the next pitch and then doing it, and President John F. Kennedy declaring America’s intent to reach the moon by the end of the 1960s.

Declaring intent is a performance multiplier that provides numerous benefits. It creates context, inspires hope, encourages reciprocity, and shows respect for others. It also increases trust. Eli Lilly Chairman and CEO John Lechleiter said: “We’ve learned that the best way of building trust is by letting people see for themselves what we’re doing.”

Failure to declare intent will usually cause people to react in one of two ways: Either they will try to guess intent, or they will project their own intent. In low-trust organizations, the guess is usually a worst-case scenario. A low-trust relationship will cause people to project their fears, suspicions, and worries more often than their hopes and dreams. As Mahatma Gandhi said: “The moment there is suspicion about a person’s motives, everything he does becomes tainted.”

Declaring intent builds trust fastest if the intent is based on caring and mutual benefit. No motive builds trust as quickly and deeply as the motive of caring. Numerous examples are given of caring intent, such as Zappos’ slogan: “Zappos is about delivering happiness to the world.” Another example is Whole Foods’ CEO John Mackey, who said: “Ultimately we cannot create high-trust organizations without creating cultures based on love and care.” Other examples of caring intent include PepsiCo, whose mantra is “Performance with Purpose,” and Procter & Gamble, which strives for “purpose-inspired growth,” evidenced by its giveaway of a water purification powder that resulted in the creation of the Children’s Safe Drinking Water Program.

Most effective leaders assume positive intent, which is an extension of trust. The act of assuming good intent changes the dynamic of a relationship. It inspires reciprocity. It leads to trust-building behaviors. It creates a virtuous upward cycle of trust and confidence rather than a vicious downward cycle of suspicion and distrust.

ACTION 4: DO WHAT YOU SAY YOU’RE GOING TO DO

The fourth smart trust action is do what you say you are going to do. Trust will fail if the person promising trust does not “walk the talk.” Delivering promised results builds trust faster than any other action. This smart trust action combined with action three (declare intent) packs a powerful one-two punch. These two actions have the greatest power to knock out suspicion and distrust. If something happens so it becomes impossible to do what was said, communicate that fact quickly. It helps to reframe expectations and can also engage others in either renegotiating or helping to find alternative solutions.

Doing what you say you are going to do is the ultimate brand creator. It defines a person’s own brand and it defines a company brand. In today’s business world, a strong brand is imperative. The authors cite studies that the trusted brand is the most popular, as well as the most profitable. In addition, trusted brands (Rolex, Sony, Mercedes, etc.) command higher prices in the marketplace. As a bonus, declaring intent and doing what you say are the fastest ways to build a reputation and trust. Among the stories used as illustrations of this action is that of Gordon Bethune, former CEO of Continental Airlines. By instituting a smart trust policy, and doing what he said he was going to do, Bethune turned a struggling airline into the most admired airline in the world.

ACTION 5: LEAD OUT IN EXTENDING TRUST TO OTHERS

The fifth and final smart trust action is lead out in extending trust to others. This is what leaders do–they go first, they are the initial ones to extend trust. If a person is not inspiring and extending trust, they are managing, or maybe administrating, but they are not leading. Extending trust produces results, increases trust, and elicits reciprocity. Extending trust can break negative cycles of distrust and suspicion. This leads to greater prosperity, energy, and joy for all stakeholders.

Covey and Link offer numerous stories as illustrations of extending trust, such as that of the Ritz-Carlton employee who was searching for a guest’s lost ring. He did not find it, so he searched the laundry. Still not finding it, he took a washing machine apart and there it was. The Ritz-Carlton had extended the trust to him to follow his own initiative, and this sort of trust pays off for the hotel chain. Research reveals that guests who are actively engaged with Ritz-Carlton and its staff spend 23 percent more money than those who are only moderately engaged. A four-point increase in employee engagement scores companywide means an extra $40 million in incremental revenue for Ritz-Carlton.

When leaders lead out in wisely extending smart trust, their actions have a ripple effect that cascades throughout the team, organization, community, or family and begins to transform the behavior of the entire culture.

Businesses can also extend smart trust to their customers. Connecticut-based Zane’s Cycles, one of the three largest bike shops in the United States, allows customers to go for test drives without asking for identification. “We choose to believe our customers,” says founder Chris Zane. The company loses only five bikes each year out of 5,000.

One area in which smart trust can be particularly useful is with mergers and acquisitions. Eighty-three percent of mergers fail to create value, while more than 50 percent actually destroy value, mainly because of the people and cultural differences. Smart trust is the “secret sauce” of a successful merger. It creates the trust necessary to integrate the two cultures.

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BLIND TRUST OR DISTRUST: IDENTIFYING ONE’S GLASSES

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People view the world through two different types of glasses that various factors throughout their lives have helped to shape. Covey and Link identify these glasses as blind trust glasses or distrust glasses and offer a third alternative: smart trust glasses.

Looking through blind trust glasses creates a naïve, gullible, blissful trust in almost everyone and everything. These glasses are easy to wear because they do not require much effort or thought. People want things to go well, so they ignore the evidence. Unfortunately, blind trust glasses open the door for all manner of fraud and schemes. Blind trust is risky, and it typically does not represent the smartest way to operate in a low-trust world.

Glasses of distrust are often people’s choice after they get burned by a blind trust experience. In a low-trust world, glasses of distrust seem like a natural response. They can feel safer, less risky, and give the feeling of more control. While most people realize the cost of trusting too much, they do not stop to consider the cost of distrust. The authors call this a “wasted tax” that can result in unwanted outcomes like redundancy, bureaucracy, turnover, churn, and fraud.

Distrustful behavior often brings huge taxes. The authors relate the story of a business that sold sunglasses. To try and halt inventory shrinkage, which the owner figured was caused by customer or employee theft (or both), he instituted a tie-down system on every frame so that the glasses could not be pulled off the shelves. He reduced the shrinkage problem from two percent to 0.2 percent. Unfortunately, because customers could not try on the glasses, sales decreased by 50 percent. Distrust not only affects relationships with customers, it also affects prosperity, energy, and joy within and between companies.

Neither blind trust nor distrust is sustainable for a lengthy period. Those who trust blindly eventually get burned and those who live with distrust eventually experience financial, social, and emotional losses.

PRISM

DREAM TO REALITY

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Maxwell describes six characteristics associated with people who experience fulfillment as they pursue their dreams:

* Fulfilled people understand the difference between a dream and its realization. The idealized image of a dream that everyone carries in their head is usually not achievable because it depends on everything being perfect. The ideal vision can be helpful for establishing goals and stimulating internal motivation, but it also needs to be tempered with reality.

* Fulfilled people understand that the size of a dream determines the size of the gap. Large dreams are potentially more fulfilling than smaller ones. However, large dreams also come with a big gap between birth and completion.

* Fulfilled people keep dreaming while making the journey. People must continue dreaming in order to maintain inspiration, motivation, and fulfillment.

* Fulfilled people appreciate each step forward in the journey. Most dreams are achieved slowly, and sometimes the results emerge in subdued ways. As a result, it is important to take joy in the journey and find fulfillment in the small steps along the way.

* Fulfilled people make new discoveries while living in the gap. People have the potential to make many great discoveries while pursuing their dreams. Often, the greatest discoveries are the ones people make about themselves while pursuing a dream.

* Fulfilled people buy into the natural law of balance: life is both good and bad. To reach a dream and to find fulfillment in the process, people must be proactive in both good times and bad. Even when individuals do not feel like working toward their dream, they must persevere anyway.

THE PATHWAY QUESTION

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To answer the Pathway Question affirmatively, people must have a strategy to reach their dream. When Maxwell wants to make progress toward a dream, he evaluates his current position, where he wants to go, and what steps he must take to get to his goal. He recommends three actions to execute a strategy and achieve a dream:

1. Do something. It is essential to get moving and try different things. Even if a person does not know exactly what to do to achieve a dream, it should not prevent them from doing something to get things started.

2. Do something today related to the dream. It is very easy to get bogged down in daily tasks. People who are serious about achieving their dreams find something each day that will bring them closer to their dreams.

3. Do something every day to advance the dream. The secret to success is focused persistence. Doing the right things day after day will result in inevitable progress toward a dream.

In addition to this advice, Maxwell offers four more tips for developing a pathway toward a dream:

* Be flexible. Once a strategy has been developed, it is important to remain flexible. While a dream may remain the same over time, other things may change like timelines, resources, plans, and team members. A rigid mindset can prevent people from achieving their dreams.

* Remove the nonessentials. It is always necessary to give up some things to achieve a dream. Removing nonessentials from a daily routine is a good idea. Often, people are unable to reach their dreams because they try to carry too many things along on their journey.

* Embrace all the challenges. Everyone encounters challenges on the route to a dream. It is best to prepare and face them head on. Failures should be embraced and analyzed. This prevents people from making the same mistake twice.

* Use the SECURE acronym to help with planning. State all positions, Examine all actions, Consider all options, Utilize available resources, Remove all the nonessentials, and Embrace all challenges.

DREAM BIG

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Maxwell suggests that the first vital step to fulfilling a dream is to take firm ownership of it. In his experience, he has found that there are three common reasons why people do not pursue their dreams:

Screen Shot 2015-11-13 at 7.04.24 pm1. Dreams do not come true for ordinary people. Although it is a widespread belief that dreams are only for special people, the author is convinced that everyone can pursue a dream. A dream can serve as a catalyst for making important life changes, no matter how big or small those changes.

2. If a dream is not big, it is not worth pursuing. The size of a dream does not determine its worth. While a dream does not have to be big, it should be bigger than the dreamer.

3. Now is not the right time to pursue the dream. Some feel it is never the right time to pursue a dream, and instead wait for permission from someone else. In fact, only the dreamer can grant permission to follow a dream. Alternatively, people think it is too late to pursue a dream and they give up.

Rather than falling victim to these pitfalls, Maxwell offers five tips for taking ownership of a dream:

  1. Individuals must be willing to bet on themselves. Owning a dream requires people to believe in themselves in a way that outweighs their fears.
  2. It is necessary to lead one’s life, rather than just accepting it. Attaining true personal potential means taking responsibility, and taking an active leadership role in life.
  3. People who own their dreams love what they do and do what they love. Individuals who take ownership of their dreams allow their passion and talent to guide them.
  4. It is not productive to compare a personal dream to others. When people focus too much attention on others, they lose sight of their dreams and what they need to attain it.
  5. Even if others do not understand, it is important to believe in a vision. Dreams often seem outrageous to others. To pursue a dream it is necessary to go beyond limitations, whether they are imposed from within or by others.

Fear-Based Leadership

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Successful leaders who practice fear-based leadership are common, according to Bryant.

Henry Ford’s employees lived in fear of losing their jobs and knew they had been fired when they arrived for work to an empty office or destroyed furniture. The dotcom stock market crash of the 2000s took down the greedy and fear-based leadership of once-invincible companies like Enron and WorldCom. Today, “Boss-Zillas” who use fear to intimidate their employees are not alone; a large survey concluded that 37 percent of American workers report being bullied at work. A 2000 survey reported persistent psychological abuse at work. Bosses are viewed as the main problem.

Fear based leadership shares the following tactics:

  • Using aggressive language and eye contact
  • Criticizing unfairly
  • Blaming without offering reasonable recourse
  • Applying rules inconsistently
  • Stealing credit
  • Making unreasonable demands
  • Issuing threats, insults, and accusations
  • Denying accomplishments
  • Excluding others from opportunities
  • Assigning pointless tasks
  • Personalizing problems
  • Breaching confidentiality
  • Spreading rumors

Great Leaders from Loss

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Many of the world’s great leaders have gained their wisdom and strength by experiencing personal loss. Bryant describes his favorite leaders, those who have weathered the storm and succeeded.

Franklin Delano Roosevelt’s perseverance through crippling polio led him to a four-term presidency. He steered America through the toughest times of economic depression and fascism.

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Mothers Against Drunk Driving (MADD) founder Candice Lightner founded her life-saving cause after the loss of her teenage daughter to a drunk driver.

As a student leader during the South African apartheid regime, Leslie Maasdorp spent 13 months in jail. He managed to earn his degree and later lead post-apartheid South Africa in restructuring and privatizing state-owned enterprises.

Brazilian Rodrigo Hubner Mendes founded the Rodrigo Mendes Institute, a visual arts school dedicated to helping low-income minorities and people with disabilities. Mendes’ own loss of mobility after being shot drove his passion to help others.

Former President Bill Clinton’s well-publicized personal and political setbacks made him a strong and extraordinary global humanitarian leader post-presidency.

Dr. Martin Luther King never gave up, even when threatened personally. “Once you cope with that fear of death, you don’t have to fear nothing else.” He gave his “I Have a Dream” speech 100 times before the historical march on Washington, D.C.

WHY Leaders FAIL

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Leadership and leadership failure are frequently covered topics in today’s business  Screen Shot 2015-11-13 at 5.43.54 pmpress. In Why CEOs Fail , Dotlich and Cairo state leadership failure is generally tied to individual behavior. CEO’s are generally bright, savvy individuals with experience and a good record of success. The authors believe CEO failures occur, not because of insufficient intelligence, but because leaders often act in illogical, irrational ways, usually unconsciously. This poses a vexing question. “Why do such obviously talented leaders also make poor decisions, alienate key people, miss opportunities, and overlook obvious trends and developments?” Do CEO’s have a weak moment, a loss of judgment, or is it something more fundamental?

Dotlich and Cairo identify eleven “derailers”, deeply ingrained personality traits which can negatively affect leadership style and actions. These hardwired characteristics, often begin as strengths, but when overused can become detriments. The authors believe these “derailers” are the fundamental source of leadership failure.

Why CEOs Fail outlines the eleven “derailers” which can cause CEO’s and other leaders to fail. These behaviors are listed and defined as follows: Arrogance was defined by the authors as “thinking everyone else is wrong”. Leaders with this trait can become so convinced of their opinions, they ignore and irritate others resulting in decreased communication and teamwork.

Dotlich and Cairo define the next “derailer, Melodrama, as the use of exaggerated emotion or actions to hold the attention of an audience. Leaders inclined towards melodrama in the extreme can experience separation from others, decreasing dialogue with coworkers, and difficulty in making decisions.

Volatility, defined as “uncontrolled mood swings” often becomes an impairing behavior when leaders “become a slave of their volatile nature not masters of it.”

The authors believe the next “derailer”, Excessive Caution, causes leaders to fear making the wrong decision. Instead of making any decision, a cautious leader may procrastinate, conduct more research, and actually make the problem bigger.

Habitual Distrust is defined by Dotlich and Cairo as “a continual focus on the negatives.” Distrustful leaders are often skeptical regarding other’s motives and can create work environments where suspicion becomes a virus. Eventually, workers fail to accept feedback and nobody relies on anybody.

The authors define Aloofness as “disengaged and disconnected actions.” Aloof leaders often possess management styles which cut them off from people, ideas, and information. Aloof behavior tends to accelerate during periods of stress.

Mischievous leaders think “rules are made to be broken.” This derailer appears when a manager challenges tradition by acting impulsively without taking into account the impact of their actions.

The next derailer, Eccentricity, is described as “being different to be different.” Eccentric leaders can be brilliant idea generators who create unique environments. However, the authors note there can be a thin line between unique innovation, and confusion and irritation.

Passive Resistance is a behavior where a leader “says one thing and does another.” This derailer can result in confused and angry direct reports and alliances and teams which fall apart.

Perfectionist leaders are known for “getting the little details right and the big things wrong.” These leaders may have difficulty with delegating and often place stress upon themselves when projects are not being done efficiently.

The last derailer, Eagerness to Please, is defined by the authors as “always wanting to win the popularity contest.” CEOs and other leaders with this trait avoid conflict even at the expense of productivity.

Love Leadership approach

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In a world where people are seemingly obsessed with success, Love Leadership makes the case that the path to sustained success is paved by leading with love, not fear.

Screen Shot 2015-12-22 at 7.10.06 pmDrawing from his personal transformation, interviews with well-known leaders, and anecdotes, John Hope Bryant explores love and fear leadership styles, proposing that love leadership acknowledges a person’s need for external success while tapping into the internal strength one gains by overcoming personal insecurities, limitations, and failures. Love leadership recognizes the wisdom gained by personal and business setbacks, the power of developing long-term relationships, and the wealth achieved by serving others.

Screen Shot 2015-11-13 at 5.34.53 pmBryant explores five “laws” that are fundamental to a love leadership approach:

  1. Loss Creates Leaders. Inner strength and wisdom are the products of legitimate suffering. Most great leaders have gained wisdom after enduring loss.
  2. Fear Fails. Although leading through fear continues to be prevalent today, fear-based leadership is self-defeating and does not lead to sustained success.
  3. Love Makes Money. Basing business success on caring for others and doing good makes an individual wealthy and is critical to long-term success in business.
  4. Vulnerability is Power. Opening up to others can be one’s greatest strength because it encourages people to do the same.
  5. Giving is Getting. The more a leader gives to others, the more likely he will attract good people, inspire loyalty, and experience true wealth.

WHAT REALLY MOTIVATES PEOPLE

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The real story of motivation lies in human nature; people have an innate desire to learn, grow, enjoy, and excel at what they do; make contributions; build lasting relationships; and achieve a sense of wholeness. Whether they recognize it or not, what truly motivates them is having three core psychological needs met: autonomy, relatedness, and competence, collectively known as ARC.

Screen Shot 2015-08-12 at 6.52.11 pm1. Autonomy: People need to understand that they have choices and their actions are of their own volition. This can be seen at an early age (e.g., babies’ desire to feed themselves and not be fed) and is never lost. While employee empowerment may be considered cliché, studies confirm that productivity, performance, and well-being suffer when autonomy is not present.

2. Relatedness: People need to feel connected to others without fear of ulterior motives, and feel they are contributing to something greater than themselves. When people spend a majority of their waking hours connected to their work, it is vital that their relatedness needs are being met.

3. CompetencPRISMe: People must feel able to overcome challenges, take opportunities, increase their skills over time, and experience growth and achievement. When leaders immediately cut training programs when finances tighten or limit educational opportunities to higher-level employees, they send the message that they do not value employee competence.