Speaker 1:
From the Library of the New York Stock Exchange at the corner of Wall and Broad streets in New York city, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision, and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plants, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. Now, welcome Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
A company's stock price is a barometer for many things, the current balance sheets, the hard value of the company's assets, its projected growth, confidence in the company's leadership, and the health of the industry sector in general, and the larger economy as a whole. Standing on the floor of the New York Stock Exchange you can literally see and feel any change in the public's trust in the validity of any of those metrics.
Josh King:
One thing that the markets proves is that companies, like people, can spend decades building up trust only to lose it overnight. It easy to think of outsized instances of this happening. Like Enron, spending 21 years, building from a penny stock to a crest of $3,500 a share only to, as its former market maker Tommy Johnson told us on the podcast a while back, plummet back to pennies over the course of just a couple of whirlwind trading sessions.
Josh King:
Certainly, examples like that grab the headlines and lead to countless number of business school case studies, but every minor move in a stock price, up or down, can be viewed as an expression of day-to-day variances in the public trust of an organization. Markets are often described using emotional and seemingly subjective terms, but they actually move in reaction to real events and hard data.
Josh King:
For example, consumer confidence is really just the rapper we use to describe a number of metrics that determine how the public is viewing the world and its relationship to the stock prices. That also means that actions can be taken to try to change the direction and even the outcome of where the market is heading, which leads us to the topic of today's episode and the question, are there ways to analyze and understand how trust in your family, company, and coworkers translates in a performance?
Josh King:
Our guest today, Stephen Covey, would respond with an unequivocal yes, not only has the stats to prove it, but he spent his entire career showing millions of people how trust is the one lever that can transform everything. Our conversation with Stephen M. R. Covey, the author of The Speed of Trust: The One Thing That Changes Everything on the economics of trust, leading through uncertain times and the business of leadership. That's all right after this.
Speaker 3:
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Josh King:
Our guest today, Stephen M. R. Covey is the author of The Speed of Trust: The One Thing That Changes Everything. He's the former CEO of the Covey Leadership Center, where he led the strategy that propelled his father's book, Dr. Stephen R. Covey's The 7 Habits of Highly Effective People, become one of the two most influential business books of the 20th century according to CEO Magazine. The company was valued at 2.4 million when Stephen was named CEO, and within three years, he'd grown shareholder value to 160 million in a merger that he orchestrated with Franklin Quest to form Franklin Covey. That's NYSE ticker symbol FC. Stephen then founded Covey Link, which in 2009 merged with Franklin Covey forming the global speed of trust practice, where Stephen serves as the global practice leader. Stephen, welcome Inside the ICE House.
Stephen M. R. Covey:
Hey, thanks so much, Josh. It's exciting to be with you.
Josh King:
Through the platform that Franklin Covey offers, I imagine that much of your work was already moving into a virtual learning environment, but how did COVID change how you operated and did you need to evolve any of your leadership ideals and reaction to the reality in the ground?
Stephen M. R. Covey:
Absolutely. I think it just accelerated a path that we were already on, but maybe increased it tenfold, 10 times faster, and where we'd already done a lot of our work with leadership development, training, and consulting. We did most of in-person, but we had the ability to do it virtually, and now we're doing the majority of it virtually, 80% of it probably. We probably saw ourselves moving towards that over a five-year period, but suddenly, we moved towards that over a five-month period. I think it's going to prove to be a blessing in disguise in terms of developing capabilities that we needed to get to at some point, and now we've gotten there now. So that's a really a positive.
Josh King:
We've been over 200 episodes of the show, Stephen, and those who listen to our conversations regularly know that very early on in the conversation I'd like to ask our guests a little bit about their background, their parents because so much of our nurture affects who we are. You begin to realize through the conversation how parenting affects the child, but in your case, several of them even mentioned your dad. How did your father get his start before becoming The 7 Habits of Highly Effective People author, the person that we've seen on bookshelves for so long?
Stephen M. R. Covey:
Yeah. Well, he was a professor that would then test and try out his ideas in business settings. So he is always at the forefront of working with some very prestigious clients and that he'd always test his ideas there. He also test them with the family. So we like to say that as kids were the guinea pigs for my dad's ideas around seven habits. We heard them all growing up in our home before he had formulated them and organized them into seven habits. We heard each of them individually.
Stephen M. R. Covey:
I'll tell you what, the defining moment for my father was when he was a young man and he had this opportunity where he was doing volunteer work, and he had a leader who really believed in him and gave him this responsibility that it's seemingly way beyond his level of experience, but he said, "I believe in you. You can do this."
Stephen M. R. Covey:
It just ignited a fire and a passion inside of my father, where suddenly he was put in a role where he was developing and training leaders, some of whom were twice his age, with a lot more experience. Yet, he was giving them leadership development. He began to realize from that experience that he saw his mission in life being one of trying to unleash human potential, and that really turned him on.
Stephen M. R. Covey:
We had a family business at the time. We were in the hotel business, and his father, my grandfather, had been running the hotel business, was hoping my dad would take that on, but my dad came back and said to his dad, to my grandfather, he said, "Hey, I don't want to run the hotel business. Instead, I want to focus on unleashing human potential."
Stephen M. R. Covey:
That sounded crazy to people at the time, but it turned out to be really insightful for finding his voice in his career. Then he ended up writing The 7 Habits of Highly Effective People and Principle-Centered Leadership, and First Things First, a whole variety of books all about really helping people identify the leader inside of them and unleashing that kind of potential that's inside of people.
Stephen M. R. Covey:
So I really do think my father found his voice around unleashing human potential. I was the beneficiary of that growing up in a home because as a parent, he tried to do that with his kids to unleash our potential, to help us see the potential inside of us, and to unleash it.
Josh King:
I mean, I'm so curious about that, Stephen. He didn't sit around the dining room table and say, "Now, let me tell you about habit three," but just give us a glimpse of what the Covey dining room table was like.
Stephen M. R. Covey:
Well, we're a normal family. So we'd fight and bicker, and this and that. So we don't think we're some paragon of virtue. We're not perfect. We're normal, but there's no question that my father was always teaching us, and I should also say my mother. They were both great examples and models.
Stephen M. R. Covey:
I remember one time, just one illustration, where my father was teaching habit two, begin with the end in mind. He didn't call it habit two at the time because he hadn't organized that yet, but he did call it begin with the end in mind, and he was saying, "So what does that mean?" He thought about it and talked about it, but then the next week we had another family meeting. We had these weekly family meetings where he'd share ideas, and this time he said, "Look, we're going to get in the car and go to a building."
Stephen M. R. Covey:
So we drove to a building, got to the very top, and then he had a friend there who was an architect, and he came out and he said, "Now, look down below from the top of this building." We looked down, there was a big hole. Right next to this building, there was a big hole where another building was going up. His friend, the architect, pulled out these blueprints and he said, "Right there where you see a hole, there's going to be a building there, and this man has designed that building. Look at this," and he pulled out the blueprints.
Stephen M. R. Covey:
"He is beginning with the end in mind. There's no building there, but he has already mentally designed this building in the form of these blueprints, and we're going to come back here in 18 months and we're going to take a look at this building and suddenly that hole is going to be a building. That is an illustration of this idea of begin with the end in mind."
Stephen M. R. Covey:
So sure enough, we went back some 18 months later and there was a building right there. It was just a metaphor, a graphical metaphor of this idea beginning with the end in mind, and that all things are credited twice, first mentally, then physically, that idea. We just saw it writ large with that kind of illustration.
Josh King:
You were beginning with the end in mind of eventually going into the family business, but you began your post-college career with Trammell Crow ahead of getting your MBA. Was real estate development an interest, and what did that experience teach you based on where you would eventually end up?
Stephen M. R. Covey:
Yeah, I did. I started with Trammell Crow Company. This is in the mid '80s. So the heyday of real estate development in Dallas, Texas, and putting up all kinds of office buildings, very interesting and exciting. That was fun. It was thrilling to see this kind of entrepreneurship. They were a very entrepreneurial company and they were one of the original best places to work in America companies.
Stephen M. R. Covey:
What I learned from my experience at Trammell Crow was they had three key values of work hard, work smart, and have fun. From that, I got a sense of both being around smart people and what they can do, but also the power of a culture that when you have smart people working hard and with a culture with norms, with a true north, and they really live by their values of having fun.
Stephen M. R. Covey:
I remember one time we were working on a big deal with an outside broker, and the broker was just beating us down. So we were the developer trying to get a big tenant in. The broker was just planning everybody off against each other, beating us down. At some point, I remember the partner saying to all of us, "You having any fun on this?"
Stephen M. R. Covey:
We said, "No. This is terrible. This is the worst we've been treated."
Stephen M. R. Covey:
He said, "I'm not having fun either. Let's step away. Let's get out of this. This is no fun."
Stephen M. R. Covey:
So we walked away from a big deal, which was really hard on the broker because we were the dominant player in the space, and suddenly, we're not competing on the deal, but he said, "We're not having fun."
Stephen M. R. Covey:
It wasn't petulant. It was really rather, "Come on. We've got to be fair. This has got to be win-win for this to work. We're not looking for win-lose, but win-win, and we've got to treat each other well. We've got to have fun in the process," but it just taught me that it wasn't just about results. It was about how we achieve the results, the outcomes, and we build that kind of culture. So the Trammell Crow experience was you invaluable to me at helping me understand both the power of a high performance organization, but also a high-performing culture.
Josh King:
So the beginning of your book, The Speed of Trust: The One Thing That Changes Everything, begins with a story of your time at an unnamed investment bank, where you were both gaining business experience and also real life examples of the damaging effects that a lack of trust can show. When did you decide that it was time to put that aside and join your dad at the Covey Leadership Center?
Stephen M. R. Covey:
Yeah. It was a real debate. I did a short stint on Wall Street, as well as the Trammell Crow, and I had opportunities to go back into both those areas, and got my MBA from Harvard Business School. So tried to make a decision, Wall Street, real estate development or do I join with this fledgling family business that had a big idea. The big idea was I knew my father's book, The 7 Habits of Highly Effective People, was going to be coming out in the next year or so. I thought that that was really going to go somewhere because I'd seen for 10 years prior how the ideas resonated with people everywhere, but no one really knew about them yet because we hadn't put it out in a book.
Stephen M. R. Covey:
So I was kind of debating which path to go. I can make a case for all three because I love the real estate development, Wall Street was so exciting, but I really was, at the end of the day, pulled with the idea of really making a distinctive and unique contribution similar to my dad's around the idea of not just developing buildings, not just building buildings, but building people and unleashing human potential.
Stephen M. R. Covey:
That also, I guess, it was in my DNA because the appeal, the draw of that was very strong. Even though I had a little bit of reticence of joining with my dad and just be seen as just a family business and can't you do it on your own type of thing, but I thought, "Well, I don't really care about what other people say. I want to create my own value, find my own path, but I want to do it around these big ideas of unleashing human potential, developing people, developing leaders," because is leadership is really the highest of all the arts because it is the enabling art. It makes us better at everything else we're trying to do.
Stephen M. R. Covey:
The purpose of healthcare is to heal people, but if you have bad leadership, you have bad healthcare. The purpose of education is to teach students, but if you have bad leadership, you have bad education. So we really need good leadership to elevate every other art that we're trying to do, but what I wanted to do different than my dad was rather than focus on the idea side of it, I thought I'd focus on the business side of it.
Stephen M. R. Covey:
So I joined him with the idea of I'd help him build this into a business, find a business model that could work so that we could scale ourselves and really grow this and reach people all around the world with these powerful ideas.
Josh King:
I mean, talking about scaling it, Stephen, the company's valuation increased I think nearly 70 times, which then led up to your decision to merge with the New York Stock Exchange listed Franklin Quest from this family business, where it's you and your dad and a small number of people making decisions. What affected becoming a publicly traded company have on your business?
Stephen M. R. Covey:
It's night and day, had good and bad. The the good was tremendous because access to capital, the exposure, the credibility, lots of really positive ones, but it clearly was a different kind of approach now because you're subject to the scrutiny of the street and of investors. There is sometimes a drift towards more of a short term mindset. We tried to manage this for the long haul, but that also, though, brought a lot of positives, too, and that it brought a sense of rigor, and of discipline, and of methodical decision making and thinking to really structure this and to really try to learn how to run this as a publicly traded company. We merged with Franklin Quest, which it had already been public.
Stephen M. R. Covey:
So the Covey Leadership Center, which was private merged with a public company to become Franklin Covey, it truly was a combination. So half the business had had good track record and experience with understanding this, but the rest of us had to learn how to do it. So it was a learning experience and a process, but a net positive. It's a journey, and it's a continuous journey because it's always about creating value, deliver numbers on your commitments, doing what you say you're going to do again and again and again, then also recreating, reinventing your stuff to stay relevant, stay current in a changing world. You got to constantly innovate and all of us, whether it be COVID and the pandemic or just disruptive technologies that are hitting us from every side.
Josh King:
One of the things that you're dealing with is you've got this iconic book and the iconic personality of your dad that so many people have seen and read, and at the same time, you're trying to hatch a business and grow a business. When did you realize that you had your own theories of leadership and success? Was all of the awareness about your dad's book either inhibiting or motivating in the decision to write your own book and to hatch your own ideas?
Stephen M. R. Covey:
Yeah. Initially, Josh, it inhibited me initially because it was frightening to say, "Hey, I'm going to write a book, too, and follow the guy that wrote The 7 Habits of Highly Effective People that sold 40 million copies in 48 languages." Initially, it was a big inhibitor because I just didn't want to be a poor man's version of it. So that's where I really felt, "Well, I'll make my contribution on the business side of this, help turn this into a business that's scalable," and I feel like I did that.
Stephen M. R. Covey:
It was only after having done that and after having had my own experience of merging companies and seeing what happens when you have trust and when you don't have trust because trust is the casualty of most mergers, the first casualty. We struggled with building trust between two Arch competitors that came together, and we had to learn how to build trust together.
Stephen M. R. Covey:
I began to see that the value, the power, the impact of trust was profound, and all we'd really done in society was give either lip service to it by saying, "Yeah, of course, trust matters," and we were either too simplistic about it or too academic, but I began to see it. Once I found that I had something to say, then I no longer worried about being compared and being a poor man's version. I just felt like I found my voice, I want to say this, and so I'm going to go down this path. I went down it with boldness and not really worried about the critics.
Josh King:
The copy that I have of The Speed of Trust that we read ahead of this conversation was probably I think version 3.0, but your timing on the first version, 1.0, couldn't have been better as just a couple of months later the whole world entered a trust emergency as faith in previously cornerstone institutions crumbled overnight with the onset of the financial crisis. How did Covey Link, this company that you started that was later acquired by Franklin Covey, weather that period and did your clients quickly see the value of what you were offering to them?
Stephen M. R. Covey:
They really did see it because suddenly, we emerged into a trust crisis everywhere, and the whole premise was with the global financial crisis was that, gosh, of all the challenges facing the world and the extraordinary decline in the stock markets around the world, all the things that happen, if you take ourselves back in time of when the global financial crisis hit, that really the most significant challenge facing the world at a macro level perhaps was the loss of trust, the loss of confidence."
Stephen M. R. Covey:
I attended a meeting at the World Economic Forum, end of September, October 2008. If you remember at that time, that was when the crisis had just hit on September 14th. Lehman Brothers had gone under, and that caused a domino effect and the markets were collapsing everywhere.
Stephen M. R. Covey:
So here it is, this World Economic Forum, the Summer Davos, they asked all the informed participants, which included some heads of state, CEOs of fortune 500 other companies, academic leaders, they asked people what's the most significant challenge facing the world today. What the participants rated the second biggest challenge was the global financial crisis.
Stephen M. R. Covey:
A lot of people were surprised saying, "What could be bigger than what's happening right now?" but I think they got it right because what they're rating as the biggest challenge facing the world was the loss of trust and confidence, the loss of trust and confidence. The reason I think they got it right is because we lose trust and confidence, that exacerbates the global financial crisis or any kind of circumstance. It's really trust that makes our markets work. It's trust that makes our world go round. You take away trust, everything slows down or even grinds to a halt. Trust, in a very real sense, is the new currency of our world today.
Stephen M. R. Covey:
Suddenly, I spent less time, Josh, in having to make a business case for trust with my clients saying why this matters. Suddenly, they saw why it mattered because they saw it crumbling and they saw the cost and the consequence of losing trust in markets, and in organizations, and in workforces, and the impact of that on everything. So I literally spent less time making the case for trust and more time talking about the solution of how you can build trust intentionally, on purpose, and you can behave your way into greater trust just like you can behave your way out of trust.
Stephen M. R. Covey:
So we saw this as a great opportunity to become part of the solution, building high trust in a low trust world. So that crisis of trust really exploded our business because there was such a compelling need and really a recognition, and in many cases, some for the first time of how trust is the new currency of our world today and how this is so vital.
Josh King:
I mean, the book that you produced talks so much about the negative effects of losing trust. You talk about seven low trust taxes. The one that stood out to me was the estimated $100 billion costs of office politics, which seems astronomical, and we don't want to get into real world politics, but how is that amount reached and what causes that loss?
Stephen M. R. Covey:
Yeah. Well, if you just think of when you have cultures within organizations that are politicized, that are low-trust cultures, that are filled with spin instead of straight talk, that are filled with finger pointing instead of people practicing accountability, that are filled with hidden agendas instead of transparency, that are filled with people talking behind others backs instead of going to the person, I could go on and on and on with what I call counterfeit behavior, where you sweet talk people to their face and then badmouthing behind their back. Most organizations are filled with some level of this, but I'll tell you what, when you have a low-trust culture filled with this counterfeit behavior, Jeffrey Immelt called it success theater, trying to portray something that's not real and the like, when this is going on inside of teams, organizations, companies, when there's this low-trust culture, politicized culture, there is a high cost to that.
Stephen M. R. Covey:
You can ultimately put that into economic value and speed goes down. Everything will take you longer to do. Cost goes up. Everything will cost you more. You got to take all these steps to compensate for that lost trust. That is a tax. It's a low trust tax. It's a wasted tax. It diminishes everything that you're trying to do, including also your ability to collaborate, to engage your people, to inspire your people, ultimately, to innovate.
Stephen M. R. Covey:
Low trust is a tax, a wasted tax, but as corollary is that high trust is a dividend. It is a performance multiplier. You move faster with less cost. Nothing is as fast as the speed of trust. Nothing is as profitable as a culture of trust or as agile as a culture of trust. You can move fast. The economics of trust are very real. You can get them working for you just like you can against you. That was a paradigm shift because most people know that trust is a social virtue. They've often never thought of trust as an economic driver that you can put a financial value on.
Josh King:
I mean, this year has shown us that there are real dividends to be paid. You have in your book the logos of 17 companies that have both high brand recognition and market trust. That's on page 272. Their stock prices are up over 50% since the start of 2020. In uncertain times, do you think investors and consumers are looking for stability by turning to these high trust companies?
Stephen M. R. Covey:
I think they are. I think that, ultimately, what they're looking for is solutions and values, and these high trust companies are just better able to pivot, to pivot, to adapt, to respond, to be agile, to galvanize their workforce, to inspire their workforce so that they stay relevant because they're constantly learning, improving, getting better innovating. There's an expression that if you don't like change, you're going to like irrelevance even less. So we got to constantly be changing, innovating.
Stephen M. R. Covey:
So if you've been able to build trust both internally with your own people so that you win in the workplace and then externally with the marketplace, with customers, you built a brand, you built a reputation, and at the end of the day, that's what a brand is, is trust, is trust monetized, is trust with the customers, trust with the marketplace. With that trusted brand, people buy from you more frequently. They stay with you longer. They give you the benefit of the doubt. They refer business to you.
Stephen M. R. Covey:
If you only go outside in, if you only focus on external marketplace trust, you might do it for a while, but it's hard to sustain if you lose the trust internally with your own people. With trust, you'll get the economics of that plane out at every gate.
Josh King:
I mean, you don't want to lose trust even, but sometimes it happens. Let's say you're a company that has lost trust. What's the first step for anyone trying to restore it?
Stephen M. R. Covey:
Here's the key principle to restoring trust, and I'll do kind of its corollary. You can't talk your way out of a problem that you behaved your way into. So if we've lost people's trust because of our behavior, words alone won't get us out of it. We can't talk our way out of it. We got to behave our way back into trust just like you could behave your way out of trust.
Stephen M. R. Covey:
So it would include things like this. First of all, you own it. You take responsibility for it. It's hard to restore trust with people if you're sitting there pointing the finger and blaming everybody else for the loss of trust, but when you own it and take responsibility, that says to people, "Hey, they're real. They're they're taking responsibility. They want to change this." So take responsibility. Practice accountability for it.
Stephen M. R. Covey:
The second thing is you got to right the wrong. You got to make it right when you're wrong, and that might include making restitution, a legal concept to make whole. It might include apologizing. It might include just making it right as best you can, but then it's going to include clarifying expectations of what you're going to do going forward to try to regain, reestablish, restore the trust that's been lost, the kind of things you're going to do to earn it back.
Stephen M. R. Covey:
Then most importantly, it's going to be you're not got to do what you just said you're going to do. You just said you're going to do this to try to regain their trust. Now, you got to do it. You got to do what you say you're going to do. You got to behave your way back into trust. You got to make and keep commitments and behave your way back into trust over time. I'm more, optimistically, you can do this. So could I give a real time example?
Josh King:
Sure.
Stephen M. R. Covey:
Take Zoom. Great company. Eric Yuan, extraordinary leader, CEO. They went I think from 10 million users to 200 million users up to 300 million users I think in a two or three month period. I don't know if this is exact, but something like that, just extraordinary growth. Start price also soared with this, but all these new users, you got to support this, you got to maintain this.
Stephen M. R. Covey:
The interesting thing is that they had some questions about security. Was this secure enough? Some people were worried that it wasn't. What was remarkable to me was how Eric Yuan took this head on rather than pointing the fingers or blaming or saying, "Well, this is our niche," and this and that. He took a head on. He put out a blog on the Zoom website of, "We got to restore this trust with you. We've lost trust with some of our users around security. Here's our plan to build it back. Here's what we're going to do, take responsibility. Here's what we're going to do to increase the security."
Stephen M. R. Covey:
In interviews, he took head on and said, "We've lost our users' trust." I saw the Wall Street Journal article that had it right in the headlines, "We've got to regain trust." He modeled it through his behavior, which was, "We own this. We take responsibility for it. We're going to right this. Here's our plan to right it, and then now we've got to do this. Give us a chance to regain, restore, reestablish the trust."
Stephen M. R. Covey:
I'll tell you what, they did it. They executed this plan and they've restored it with most people. You can't talk your way out of a problem you behaved your way in to. You have to behave your way out. Zoom's a real time example of a company that has done it exceedingly well.
Josh King:
You take it, you own it, you take responsibility for it. After the break, Stephen M. R. Covey, author of The Speed of Trust, and I will explore the fundamentals of The Speed of Trust and how anyone can use them to become a better leader and person. That's right after this.
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Josh King:
Welcome back Inside the ICE House. Before the break, Stephen M. R. Covey, author of The Speed of Trust, and I were discussing his upbringing and career that led to his decision to codify his philosophies and help others. Stephen, past podcast guest, Richard Edelman, recently wrote an article, COVID-19 and the Return to the Workplace. "We have a trust problem," that's what Richard wrote based on a Edelman trust barometer special report that found that just 14% of employees trust CEOs or senior managers to lead the return to work.
Josh King:
His words provided measured rational steps to raise worker confidence and the safety of returning. Imagine that a high dividend organization would have an easier time at weathering a trust crisis, but how can high tax companies, the way you describe them, overcome this period and perhaps even use it as an opportunity to create future dividends?
Stephen M. R. Covey:
I think you framed that in a great way, Josh. I think this crisis is an opportunity for companies to demonstrate both that they're trustworthy, they're credible to their own people first, but also that they're trusting of their own people because suddenly, we're thrown into an environment where we're going to have people working from home, working from anywhere as opposed to on-site, in-person. You can approach this one of two ways. You can approach it with, "Hey, yeah, you're working remotely and here's some tools to do it, and we didn't trust you before, and we don't trust you now still. Now, we got to just macro manage from a distance, and you're working from home, but we still don't necessarily trust you."
Stephen M. R. Covey:
Now, they wouldn't say that, but it could be manifested in their behavior. I've seen whether they call it productivity software or other things that might be real where they're really trying to get productivity software, but for many employees, it often looks like distress software or surveillance software where, "You don't trust me. You're taking snapshots of my screen every 10 minutes, and it feels like you don't trust me." Again, I'm not against true productivity efforts on that, but oftentimes, that's a counterfeit to the fact that many leaders don't trust their people. So that's one approach.
Stephen M. R. Covey:
Another approach is to say, "Look, we do trust you, and you're working from home. We trust you before, we trust you now even though we're not present and proximate with it, and we're going to empower you." You want to do it with what I call a smart trust as opposed to a blind trust. A blind trust is just indiscriminate, where you trust anyone and everyone regardless of the situation, the circumstances, the risk, the credibility of the people, and that's not smart or where you trust without expectations or accountability. A smart trust always assesses the situation, the risk, the credibility of the people, and then it also has clear expectations and accountability, but with your own people, if you can't trust your own people, you've got a hiring problem or a leadership problem.
Stephen M. R. Covey:
I'll give you a good example of this real time. Siemens, a German-based multi-conglomerate engineering type company, 400,000 employees. Well, they just came out with their new mobile working policy that they said is going to outlive the pandemic. It's a new way of working. They're saying that, "Even beyond the pandemic that we're going to enable our people to work two to three days from wherever they want, whether from home, work from anywhere," but then the most important thing behind this was how they announced this. They announced and said, "We trust you." This is Roland Bush, their incoming CEO, deputy CEO, "We trust you. We trust our people. We're empowering you to shapen your job around what you need to do. We want to focus on outcomes, not just activities. We trust you."
Stephen M. R. Covey:
So here's a great opportunity to do this, to lead out with this trust. At Netflix, they call it freedom and responsibility, "We trust you," Reed Hastings, and Mark Benioff is operating on the basis of trust, leading that with trust in your people. So I would just say if there's not as much trust, here's a great chance to tell your people that you trust them, to be trusting as a leader, as a company because when you give trust, people receive trust, and they return it. There's a reciprocity of trust. They're inspired by it. They rise to the occasion. They perform better, and they give it back to you.
Stephen M. R. Covey:
So one of the best ways to create trust is to give trust. It's that simple, but that difficult, too. You got to do it in a smart way. You also, I just would add one more thing, Josh, is you need to model as leaders your own trustworthiness. I call it credibility. Here's a chance for you to show credibility. The best thing you can show your people right now during a time of crisis is to demonstrate your intent by showing that you care, by showing that you care about your people.
Stephen M. R. Covey:
You build faster through demonstrating care, concern, empathy, and the companies that are doing that well, they show empathy, they show compassion, they show understanding for people are able to build trust faster than those that are just trying to operate business as usual, where people often feel like they're managed like thing instead of managing things, leading people. People want don't want to be managed. People want to be lead. People want to be trusted. They want to be inspired.
Josh King:
Trust your people. Earn the trust of your people. Stephen, public companies also need to have the trust of the markets. Johnson&Johnson, NYSE ticker symbol J&J, celebrated its 75th anniversary of listing this year on occasion that the company celebrated at the NYSE and across its global footprint. Central to that celebration was highlighting the J&J credo written by Robert Wood Johnson himself to serve as the company's moral compass as he was prepared to bring the company public. How has that helped J&J since, and how can other companies convert ideals into actions?
Stephen M. R. Covey:
The credo has helped J&J for many years because it's real to them. It's not a plaque on the wall. It's not lip service that sounds good. It's real. It is a true north. It's a compass. You see it manifest in their behavior of how they act. You can go back to Tylenol. What was that? 28 years ago, where they had to scare people to say, "This is the death of the brand. Can't survive," but how J&J responded to it? They went back to their credo, which was a focus on all stakeholders, on doing right by society. They went back to doing the right thing in spite of the cost of it. They took extraordinary measures around this that didn't have to do around not just Tylenol, but other products that were tied to this.
Stephen M. R. Covey:
They really took it head on and, ultimately, by how they did what they did, they showed to the marketplace that they cared more about doing the right thing regardless of the economic cost and consequence of it versus doing the expedient thing that was maybe more economically smarter in the short term. No. They only did this because they said, "Who are we? What do we stand for?" It was real for them. That purpose was embedded into their actions and not just as lip service or a nice plaque.
Stephen M. R. Covey:
So that type of true north and the whole idea, really, the principle is that as a leader is that you try to embed purpose, meaning, and contribution into everything that you're doing because with purpose comes inspiration and you perform better, and you can ultimately innovate that will inspire your customers and stay relevant.
Stephen M. R. Covey:
So, again, it's a circular process. You inspire your own people, it helps you innovate. As you innovate, you stay relevant in the marketplace, and your customers trust you. When your customers trust you, they stay invested in you. They stay committed to you, and you grow. When you grow, you create more opportunities for your people, which enables you to inspire them better. It becomes this virtuous upward spiral of inspiration and innovation.
Stephen M. R. Covey:
My contribution is that in order to maintain and sustain the trust externally in the marketplace, you also need to make sure you build, grow it, sustain it internally in the workplace. The trust that you build externally is enabled because you've also built trust internally. You still have to do things externally with customers. You have to deliver on commitments. With investors, you have to deliver on your numbers. It's just that you can do it so much easier, better, faster if you're doing it from the inside out. It would be incongruent to ask people who you don't trust to go out and build trust with customers. When it becomes natural and abundant to ask people who you trust to build trust with customers.
Josh King:
So you've, by spades, convinced me that trust is the best thing in a sliced bread. How can too much trust be as damaging as too little?
Stephen M. R. Covey:
Well, I would say this, that it's less probably too much trust and it's more too much of a good behavior gone excessive. Any strength pushed to the extreme could become a weakness. So I'll give an illustration of this. One of the behaviors that will build trust is to talk straight, which means you tell the truth, you call things what they are, use simple language. Candor is the language of trust.
Stephen M. R. Covey:
I have a friend, Barbara Rittenhouse, who has the Rittenhouse ranking. She's there in New York City. Her whole thing is that the CEOs that talk straight and tell the truth, just call things what they are like Warren Buffett and others, that they get a better economic return than those that are off skating, that are spinning and twisting. She has strong data and evidence behind it. So that builds trust.
Stephen M. R. Covey:
I could go too far as a leader in straight talk where I'm offensive and I don't have tact and I'm not balancing talk straight with demonstrating respect. I know someone who I worked with in the past, who in the name of talking straight offends about every person he comes in contact with. Too much straight talk where it's just blunt and too brass, too ineffective because it's offensive. You're going to have too much transparency, which builds trust. If you were to disclose things that are confidential or proprietary or violate regulation FD or something, it's just inappropriate all in the name of transparency.
Stephen M. R. Covey:
So my point is any strength push to the extreme becomes a weakness, but you know what? That's not our biggest challenge I don't believe, Josh. I think our biggest challenge is not that we do too much of the behavior. I think our biggest challenge is that we don't do enough of the behavior. Those 13 behaviors, talk straight, demonstrate respect, create transparency, I don't think we do enough.
Stephen M. R. Covey:
I think we do too often the counterfeit, the spin instead of straight talk, the showing respect to some and not to others, you respect those who can do something for you but don't respect those who can't, the hidden agendas instead of the transparency, the overpromising and underdelivering instead of keeping commitments, the finger pointing and blaming instead of practicing accountability. I think we need to do more of the behavior not its counterfeit. That's what will enable us to build the trust that will create all kinds of outcomes and results. So if I could give just a quick illustration of this.
Josh King:
Sure.
Stephen M. R. Covey:
When Alan Mulally got in at Ford a decade ago, he inherits a team. Long story made short, first week on the job, they had their business review meeting. Everyone puts up a slide to represent all the project that they're doing. This is the executive team. 323 slides go up and they have a green, yellow, red metaphor for the project. It's intuitive. Green is good, yellow there's concerns, red there's problems. First meeting, Alan Mulally, brand new CEO on the job. First meeting, 323 slides go up. All 323 were green. Week later, same team, executive team, over 300 slides go up, every slide is green. Third week on the job, same meeting, every slide green. So it's been three straight meetings of 300 plus slides each meeting, every slide being green.
Stephen M. R. Covey:
Alan Mulally pauses and says to his team, "Team, that's three straight weeks. Every slide is green. Here's my disconnect. We're going to lose 17 billion this year. Surely, there's things going on that we're not capturing. I invite you to get real, confront reality, talk straight, be transparent. We can't manage a secret."
Stephen M. R. Covey:
What was going on there, Josh? These were not bad people doing bad things. No. They're good people. They were cut in a culture of what I call counterfeit behavior. Everyone was spinning. Everyone was posturing. Everyone was trying to put the best foot forward, not taking the issues head on. It was kind of the culture that you didn't address those things in front of the team so you just hit them or disguise them or didn't confront them head on.
Stephen M. R. Covey:
So now, Alan Mulally is saying, "Get real. Let's talk straight. We can't manage a secret. We got to be transparent. We got to take these head on."
Stephen M. R. Covey:
So next meeting, he invited them to do it. The very first slide out of the gate was put up by Mark Fields, the head of North American operations, and he puts up a red slide. Now, Alan Mulally sees it and he claps and he says, "Mark, that's great visibility. What's going on and what can we do to help?" From that moment, things began to change and the slides became red, and yellow, as well as the green ones, and they got real about it.
Stephen M. R. Covey:
In the book written about Alan Mulally, American icon, he's quoted a saying that, "The day that the culture began to change at Ford was the day that Mark Fields put up the red slide," and I would add to it, and to which also Alan Mulally rather than shooting the messenger, Alan Mulally clapped and said, "Mark, that's great visibility. What can we do to help?" because that shows the culture, we're real. We're trying to get real with our behavior. We're trying to behave our way into greater trust in order to innovate and collaborate and solve our problems. Otherwise, we're just dancing around. We're not addressing the real issues. We got to confront reality. We got to be transparent. We got to talk straight. These are all behaviors that help us build trust, and we need that now more than ever before.
Josh King:
Technology allows us to ascribe fault quite easily, Stephen, as there is data on almost every interaction that occurs, but how can a leader convert blame into accountability?
Stephen M. R. Covey:
To use the metaphor that Jim Collins used in his book, Good to Great, the window and the mirror, the window and the mirror. The premise is this, that the great leader, when things go wrong, looks into the mirror and takes responsibility. When things go well, the great leader looks out the window and gives people the credit. The mediocre leader does the opposite. The mediocre leader, when things go well, they look in the mirror and they take all their credit, and when things go wrong and bad, they look out the window and they blame everybody else, but that doesn't build trust.
Stephen M. R. Covey:
What does build trust? What really will transform a team in a culture is the leader that takes responsibility, that practices accountability starting with him or herself, that looks in the mirror and says, "I'm going to own this. I'm going to take this on."
Stephen M. R. Covey:
So when Alan Mulally is saying, "I invite you, take this head on, own it," and Mark Fields leads out with it saying, "I own this. Here's a red slide, red chart," right out of the gates, that kind of modeling of the behavior of accountability, you own it, you start with yourself, you hold yourself accountable first, then you hold others accountable second. So you model, you lead from the inside out. It's just so much more powerful. You'll have so much more influence with people.
Stephen M. R. Covey:
The key to influence is to first be influenced by owning, being responsible, taking responsibility, looking in the mirror, starting with yourself. Leadership at one level is so simple. When you model with that, people see that your actions are aligned with your words. That's real authentic. That's authenticity that you are who you say you are. That's to be not just to seem. Then people are drawn to that. They're inspired by it, and that gives you influence. It gives you moral authority. It gives you credibility. It gives you clout.
Stephen M. R. Covey:
Then from that, you can now have greater influence to trust people, to inspire people, but it starts with that modeling. So it's got to be inside out in the long run and outside in is useful to realign, restructure, but if you want to have transformative change that's sustainable, it's got to be inside out. Meaning, we all look in the mirror.
Stephen M. R. Covey:
Imagine if everyone were to do it, take responsibility as a leader, as an executive team, and it could be on your team within your little box, within your function, your division, your group, you model it as a leader on the team, you model within your team and you ripple out from there inside out wherever you stand. That's the way forward, and it's the only way forward. Models can become mentors, and we need both today in today's world. We need models and mentors of getting results in a way that inspires trust.
Josh King:
Talking about modeling, authenticity, and vulnerability, Stephen, Jeff Sprecher, our own founder, CEO, and chairman of Intercontinental Exchange, held a town hall last week to address the entire company on the state of the business, our COVID response, and to answer employees questions. One topic that appeared to be top of mind for him was the need for the company and the employees to not be afraid to take risks. How can a company encourage risk taking without rewarding failure?
Stephen M. R. Covey:
It's a really important question because as Jeff Bezos from Amazon said that, "Invention and failure are inseparable twins, and if we're not willing to take some risk, we won't innovate." So we always want to try to contain it within a certain framework or a box. You don't want to sink the firm and a Barings Bank type of thing, where it could literally sink a firm and where there's too much trust, too much risk being placed, but you want it within a box, within a framework, but on Silicon Valley they're calling it fell fast, fell forward, fell often, but learn faster.
Stephen M. R. Covey:
So the whole idea is to learn from failures. As you're trying to create the right kind of culture, this is where if you build a high trust culture, then you'll find that people are far more willing to take a responsible, calculated, smart risk. You're far more willing to take a responsible risk and fail and learn and get better and ultimately innovate.
Stephen M. R. Covey:
In a low-trust culture, they just won't do it. They'll be afraid to do it because it could be career limiting or even ending, and they're afraid of that. Jeff Bezos, again, said, "We are the best at innovation at Amazon because we're the best at failure." Again, that's a paradigm. It's a paradigm shift.
Stephen M. R. Covey:
So I think the best way to create that paradigm shift is to build a high-trust culture. There's a study from the consultancy, LRN, that shows this. In a high-trust culture, people are 32 times more likely to take a responsible risk than they are in a low-trust culture, 32 times more likely. Again, responsible risk. So within the box, within the framework that we articulate, and they're 11 times more likely to innovate because, again, you won't innovate without taking risk and sometimes failing, but 11 times more likely to innovate, 32 times more likely to take that risk. When the innovation flows from it, 11 times more likely and six times more likely to get better performance from the innovation that flows.
Stephen M. R. Covey:
The point is you need that kind of culture. It's not just words, it's actions. It's in the behavior. So when someone fails and makes a mistake, it's how you respond, how we learn from it, how we get better from it, how we use that failing as learning to drive innovation and not as means to punish or to destroy someone's career or their livelihood or what have you.
Stephen M. R. Covey:
So it's a whole new mindset, whole new paradigm. It also enables the collaboration and differences coming together in an environment of trust, which is the source of innovation. Innovation flourishes when these differences come together in an environment of trust and our differences become our strengths and the source of our advantage is, do we value the differences?
Josh King:
I mean, Stephen, as we wrap up today, we've talked a lot about trust as the foundation of innovation and also organizations and people and leaders that have low trust, but do you think that at the core people and organizations are predisposed either to distrust or to trust? Where are we at our baseline?
Stephen M. R. Covey:
Yeah. Where are we at our baseline? I'll tell you what, that will vary for different leaders, for different companies, and even different countries. Sociologists measure trust with the world value survey question of, do you believe that most people can be trusted or can you never be too careful in dealing with people? In som countries like in Denmark, 89% of people start with the premise that most people can be trusted, just in society at large. In other countries, in certain parts of South America, it's at 13%, which start from the premise that you just can't trust anyone. Only 13% can be trusted.
Stephen M. R. Covey:
So we're influenced by our society, in the societies we grow up with, our cultures. We're influenced by our companies, and even as a leader, but I have a strong bias and premise that says this. As a leader, to start with trust, have your starting point be I start with trust until proven otherwise, especially with my own people. It's a better starting point. You'll go farther. You'll go faster.
Stephen M. R. Covey:
In fact, it was Jim Burke, former CEO of J&J, who said, "I have found that by trusting people, until they prove themselves unworthy of that trust, a lot more happens." It's a better way to begin that you start with trust until proven otherwise. So that's my strong bias.
Stephen M. R. Covey:
Some of our listeners will have that inclination that they say, "Yeah, I start with trust until proven otherwise." Others might start from the standpoint, "Hey, I don't trust until people prove that I can and should trust them." Look, I understand that. I'm not asking in the long run that you violate that principle that if someone's not trustworthy that you trust them. In the long run, I'm saying if they're not trustworthy, don't trust them, but I'm saying suspend that for just a moment.
Stephen M. R. Covey:
If you'll appropriately, again, within a box, start with trust, extending trust in the right way, you will be amazed at what that does to people, how it brings out the best in them, how it inspires them, how they give it to out to you, and you'll go to another level.
Stephen M. R. Covey:
I'll give you one illustration just to try. I'm just trying to make this real for people. I look at what Satya Nadella has done at Microsoft. Really, I mean, when he got in, they were seen as they've had their best days and now they're kind of just they had a brand and they've done some good things, but their best days were in the past. That was kind of the belief of many, certainly probably on the street and also among the technology workforce, but what he has done through his leadership, his modeling of authenticity, and vulnerability, and humility, and courage, empathy, and performance, his trusting of his people, of his workforce, the whole idea of a growth mindset that people have greatness inside of them, and our job as leaders is to bring it out, I believe in people and their ability to grow, to change, to improve, to get better, and his desire to embed meaning, purpose, and contribution such that there's inspiration in the culture.
Stephen M. R. Covey:
What he's done is he's built now at Microsoft a great culture that is a talent magnet for great people. They're inspired, they're engaged, they're innovating. As he says, "Our industry respects not tradition, but innovation." They're innovating again, and they're also performing on Wall Street, in the marketplace because they're delivering results for their customers. We need more trust in our world, not less. We need more trust and it's a low-trust world, and we need to be catalyst to bring about a renaissance of trust in a world of declining trust one person at a time, one leader at a time, one company at a time.
Stephen M. R. Covey:
If we get enough of us, we can become co-catalyst together to help bring a better renaissance of trust. Just remember this that while it takes two or more people to have trust, it only takes one to start, and each of us can be that one. That's the idea, the power of The Speed of Trust.
Josh King:
Building a renaissance of trust, starting with trust until proven otherwise, Stephen Covey, we've literally only scratched the surface today. Where can our listeners hear more about The Speed of Trust?
Stephen M. R. Covey:
I'd invite you go to our website speedoftrust.com. There we have a variety of tools, videos you could access for free, other things that you can kind of dive deep into this simple but profound idea of trust being the one thing that changes everything, so speedoftrust.com. You can also follow me on Twitter, @StephenMRCovey or LinkedIn and other social media channels. Love to have you connect, follow around what I think is the currency of our world today, trust. It helps us solve the problems of inspiration and innovation, the opportunities really of inspiration and innovation. Trust is the one thing that changes everything, including those two key elements, inspiration, innovation. So speedoftrust.com would be a great place to learn more.
Josh King:
The one thing that changes everything. Thanks so much, Stephen, for sharing it with us and for joining us today Inside the ICE House.
Stephen M. R. Covey:
Hey, thank you, Josh. Love being with you, and I wish you and your listeners every success going forward.
Josh King:
That is our conversation for this week. Our guest was Stephen M. R. Covey of Franklin Covey. That's NYSE ticker symbol FC. If you like what you heard, please rate us on iTunes so other folks know where to find us. If you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us, @ICEHousePodcast.
Josh King:
Our show was produced by Pete Asch with production assistance from Stephen Romanchuk, Ken Abel and Ian Wolff. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. We'll talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of legal clarity.