Stephen M. R. Covey, the New York Times and No. 1 Wall Street Journal bestselling author of "The SPEED of Trust: The One Thing that Changes Everything," speaks with Joe Woodard about the role of trust in business.
During this episode, Joe and Stephen will discuss the various aspects of trust, including personal, professional and organizational trust, and how that trust is key to effective client and firm leadership.
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Full transcript of the episode follows:
Joe: Thank you for tuning into this episode of the Scaling New Heights Podcast. During this episode, we will talk with Stephen M. R. Covey. Our conversation with Stephen and this entire podcast series is made possible by the generosity of our partners Entryless, Neat, and SmartBiz Loans.
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Now, let's learn about Stephen M.R. Covey. Stephen Covey's father, Stephen Covey, was the author of "7 Habits of Highly Effective People." His son is following very powerfully in his father's footsteps with a brand-new Wall Street Journal bestselling book “The Speed of Trust: The One Thing that Changes Everything.” That is also a New York Times bestselling book. It's been translated into over twenty languages worldwide.
Stephen is the co-author of the No. 1 Amazon bestseller "Smart Trust: The Defining Skill That Transforms Managers into Leaders". Stephen brings to his writings the perspective of a practitioner. He is the former CEO of the Covey Leadership Center, which under his direction, became the largest leadership development company in the world.
The company was valued at $2.4 million dollars when Stephen was named CEO and within three years, he grew shareholder value to $160 million in a merger he orchestrated with then Franklin Quest to form Franklin Covey, which today operates in over one hundred and fifty countries worldwide. A Harvard MBA, Stephen co-founded Franklin Covey's Global Speed of Trust practice and currently speaks to audiences around the world. Stephen will be speaking at Scaling New Heights in Orlando June 2017.
Before we get started with our conversation with Stephen, let me tell you about Neat, another of our podcast partners. You may know Neat from the scanner commercials that you used to see on cable television at night, but Neat is much more than a scanner company. As a matter of fact, they are primarily a software automation company.
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Now, to the conversation with Stephen Covey. Stephen, welcome to the podcast.
Stephen: Hey, thanks Joe. Delighted to be with you.
Joe: I tell you, we're very excited to have you on the podcast and we're even more excited that you're coming in person to Orlando at Scaling New Heights 2017. You've planned to speak on the importance of trust in business relationships based on your book "The Speed of Trust". The very title of the book begs the question, what is the connection between speed, which I'm assuming you're saying sort of human pace, organizational pace? What's the relationship between speed and trust?
Stephen: It's an interesting title, isn't it? Usually when people think about trust, they think, trust is slow. It takes a long time to build trust. You can't just do it fast. I acknowledge that building the trust in a relationship on a team, in a culture, with a client, that sometimes can take time, but what I'm highlighting is this: Once we have built the trust, once we establish the trust, then nothing is as fast as the speed of trust.
We can move at an exceptional speed when we with trust, when we have trust, when we've built it. I also believe that once we understand what trust is and the dimensions behind it, the components that make it up, that you can build it even faster than you might have thought was possible when you understand it, how it's built intentionally from the inside out starting with ourselves.
The idea of the speed of trust is to say speed is a huge dividend or outcome of high trust relationships, high trust teams, high trust cultures. When you have a client with whom you have a very high trust relationship where they really trust you and you've earned that trust, you've built that trust. When there's a new opportunity, a new project, and you're already at a place of high trust, you can move at an exceptional speed in your interactions, in your dialogue, in everything that happens. You can move faster with less cost.
When there's low trust, everything takes you longer, costs you more. You have to check, verify, validate, do background checks, all the different things when you don't quite trust someone. I'm just pointing out that there's economics with trust. It's not just a soft, social virtue. Trust is also an economic driver because it affects the speed at which we can move and the cost of everything. I think our own experience validates that when you think about high trust relationships contrasted to low trust relationships and then look at that through the lens of speed and cost. You'll find there's a profound difference.
Joe: In the book, you make a point. You draw an example of the ultimate outcomes of distrust that has really hit our audience’s, as accounting professionals, hearts - that's Sarbanes-Oxley. What's the relationship between Sarbanes-Oxley and everything you've been talking about with the economics of trust?
Stephen: I'll frame it this way and then I'll use Sarbanes-Oxley as an example. I make the point that when trust goes down in a relationship or on a team, in a company, in a culture, in a society, when trust goes down that speed goes down with it. Everything will take you longer to do and cost goes up. Everything costs you more to do. Much, much more. Why? Because of all those steps you have to take to compensate for that lack of trust.
That's what happened with the big scandals, Enron, Worldcom, and the like. We lose trust in public companies, we lose trust in the public markets. We can't have that to survive as a society. We had to take steps now to compensate for that lack of trust and they were needed. They were necessary and we put in place Sarbanes-Oxley. It's helped. It helped regain and restore some of the lost trust that had been there. But it takes a whole lot longer to navigate through all those rules and complexities of it and it costs a whole lot more.
That's my point – speed goes down, cost goes up. That's always the consequence of restoring lost trust. Same thing has been within the airline industry after 9/11. After 9/11, our trust, our confidence in airplane travel goes way down. Can't have that, so we take steps to increase security, to beef up them so we have more trust and more confidence. It helps and I'm grateful for it, but it takes a whole lot longer to navigate airport lines today. It costs more.
Speed and cost are impacted by lost trust. We have to take steps to compensate for it. It'll take you longer, cost you more. That's the tax, the low trust tax. I make the point also that the dividend is equally real and that when trust goes up in relationships and on teams and cultures with clients in societies, when trust goes up, the speed goes up with it. We can do everything faster and much, much faster and the cost comes down. It costs us a whole lot less.
That is a dividend, the high trust dividend. Really, Joe, it's that simple, that straightforward, that powerful and yet that predictable. It plays out everywhere. Speed and cost are always affected by trust and we see it right in the accounting profession. When we lose trust, we’ve got to take a lot of steps to compensate for that lost trust, so it'll take you longer, cost you more. That is a tax. It's very real.
Joe: Yeah. I really like how you describe it as a tax. Almost like a tollway tax is the image that came to my mind. As I'm trying to drive the roads of life, it's like paying for every mile, paying for every mile. In your book and which I encourage everybody to read "Speed of Trust" by Stephen M.R. Covey, in the book, you break it down as percentages.
We can't get into every concept. Go read the book, folks. You have this idea of trust being a visible asset. You have world class trust, you have trust issues, where trust isn't an issue, and all the different sorts of tax rates you put on that. You categorize the characteristics and discuss how can you determine what your tax bracket is in human relationships. Folks, get that, read that. Maybe, Stephen, you'll have a little bit of time while you're at Scaling New Heights in either your keynote or your breakout to really drill down on those.
Everything we've been talking about up to this point has felt like it's within the category of maybe a little bit of brand trust and a little bit of relational trust, but I want to go back a step. In your book, as you're progressing through the different types of trust, you start with a concept of self-trust.
Stephen: Yeah, absolutely. The basic premise is this: Trust, building trust, sustaining trust, growing trust is an inside out process. Inside out meaning that it starts with each of us. It starts with ourselves. Outside in is where we say it starts with everyone else. It starts with the economy, it starts with the market, with the company, with the client. We look outside of ourselves.
Inside out is we look in the mirror. We start with ourselves. I use a ripple effect metaphor. The drop of water comes down, the ripples, the waves go out. I talk about five waves of trust. The very first wave where trust always begins is with ourselves, self-trust. Self-trust, see, proceeds the next wave, which is relationship trust. Now I'm rippling out from myself into my relationship and then to my team, group, or whatever I call my organization, then into the market, then into society.
There's five waves of trust. From self to relationship to organizational to market to societal. Inside out. The key thing is, Joe, we've got to start with ourselves to really build, grow, sustain the trust. Self-trust is so vital. Here's a way of thinking about self-trust and there's two halves to it.
The first half, and in some ways, maybe the most important half because of how it affects the other half, is this: "Do I trust myself?" I tell you why that's so important. At the end of the day, if we don't trust ourselves, we have a hard time sustaining trust with others in relationships, because at some point, that distrust of self bleeds out, leaks out into those relationships. Whereas when we do have a sense of self-trust and the self-confidence that flows from that, it becomes more natural, more easy, more abundant to build, sustain, grow trust with other people and relationships.
It ripples out naturally when we start with ourselves. The first half of self-trust is, "Do I trust myself?" The second half of self-trust is this: "Do I give to my team? Do I give to my clients, my partners, a person that they can trust?" In other words, "Is it smart to trust me? Am I trustworthy to them?" It's not only trusting myself, which is important, but also being a kind of person that can be trusted.
Both halves of those questions - trusting yourself and giving to others a person, a leader, a partner, an accountant that they can trust - the makeup of this self-trust is really the same thing. It's the key principle of credibility. "Am I credible?", which comes from the Latin term "credere", which means "to believe". "Am I believable? Am I credible?" If you are, you'll tend to be trusted and to trust yourself. If you're not, you'll have a hard time building that trust.
I start with self-trust in saying, "How credible am I? How credible are we? How could we increase our credibility as a person, as an accountant, as a leader? How can I become more credible where I trust myself more and where I give to my clients, a leader, a partner that they can trust?" I focus on the dimensions of credibility that I break down into both the character side of it and the competent side of it.
I even go one level deeper than character and competence. I go into four cores of credibility: two coming from our character, two coming from our competence. Here I use the metaphor of a tree. Envision a tree, if you would, where you've got the roots of the tree and then the trunk and then the branches and then the fruits. The roots and the trunk is on the character side, the roots being integrity, the trunk being intent, my motive, my agenda. That flows from my character, integrity and intent. That's vital but by itself is insufficient.
The upper half of the tree – the branches and the fruits – is the competence half. The branches represent my capabilities. "Am I current? Am I relevant?" The fruits represent the results, my performance, my current performance, my past performance because that gives people confidence. That combination of integrity and intent flowing from my character and capabilities and results flowing from my competence, that comprises credibility for me as a person.
The more I increase my personal credibility, the more I trust myself and the more I increase my professional credibility, the more others trust me. That self-trust is the foundation of which we build all other kinds of trust including the relationships, the team, the organizational. It's got to start with ourselves. So often when people talk about trust, they look outside of themselves to everybody else, but it's got to be inside out. That's what I mean by that. Self-trust is where we begin.
Joe: I really love what you're saying there, Stephen. I'm not going to ask you to agree or disagree with me because my position on this is radical, but I am very, very bold in saying that self-confidence is a myth because we can't look within the realm of ourselves, our fears, our failures, our guilt, our worries. We see the worst of ourselves and we're going to somehow go to that well and manufacture confidence. What I've said is that confidence comes from competence - a consistent pattern, behavior, and results.
What I'm gleaning here is that self-trust is the actual source of confidence and it is fed by competence. Basically, what you're saying is, “if I say what I say with integrity, if I do what I do with capability and consistency and effectiveness and I have a nice solid pattern of that, then I'm going to get confidence.” Right?
Stephen: Yep.
Joe: When I'm confident, I will then inspire confidence in me on the part of others. They'll trust me to do what I say I'm going to do.
Stephen: You captured it beautifully, Joe. That's exactly it. Self-trust becomes self-confidence. It's something that we've earned and demonstrated through our pattern, our track record. It's that combination of the character side, which is their integrity. I like how you said it. You say what you're going to do, then you do what you say you're going to do. It's got to have the competent side.
We consistently come through, deliver. We are always working on our capabilities to stay relevant, current, but then we consistently deliver and come through. Those are the fruits. That's the result. That type of pattern, that track record really gives ourselves - we can say, "You know what? I do what I say I'm going to do and I can trust myself." From that emerges a natural self-confidence. It's not artificial, it's not a psych up thing, where you just try to come from the recesses of your mind and psych yourself up.
No, this is real, it's authentic. It's real authenticity of who you really are. It's who you are and what you can do. That you're a person of integrity and that you're current and you're capable of delivering in the area of your expertise, in this case accounting and bookkeeping and advising clients. When you start with that self-sense of self-trust that becomes and evolves into a true self-confidence. In fact, it's interesting. Trust and confidence in many languages are the exact same word, like in Spanish and in French.
Joe: Really?
Stephen: Yes. Same word. In English, we have two words: trust, confidence. There's a slight distinction perhaps, but when someone asks me what's my definition of trust? I say, "I'll give it simply. It's confidence." It's a confidence that comes from having both character and competence. Character and competence create a confidence which is a trust. Self-trust is and becomes self-confidence, but it's not artificial, it's natural and authentic.
It evolves from who we are and what we can do. Our character, our competence. It flows naturally. Then you hit the second half so beautifully as well, which is when we have that, when we start with that, that character and that competence, then that inspires confidence from others towards us. They say, "Oh, look. Look at Joe. Look at Dave. Look at Susan." This is who they are, this is what they can do. That character, that competence that inspires confidence from me and I have confidence in them.
It ripples out from there. That's exciting because it's not psychological, it's not artificial, it's who we are and what we can do. Character and competence. We can get good at this. I break it down one level further into those four cores so that I make it very practical and tangible and actionable for leaders and for accountants and people to build their teams and their organizations and build the relationships with their clients that are based upon trust.
Joe: I want to just drill down on something you're saying with character here, because you make it very clear in the book that character needs some kind of a compass. You quote everybody from Mahatma Gandhi to Roy Disney to the chairman and CEO of Xerox about this importance of a higher source of value from which we derive our character and that serves as a principle higher than ourselves, so when we're down in the weeds and all the grayness and all the subjectivity of life, we can pull the compass out, point it, and walk in the right direction. A higher principle, a higher value I think is what you described in the book - character emits from that, combine that character with confidence and you're a person of self-trust.
Stephen: You're credible and you can trust yourself. Absolutely.
Joe: Now, we've talked a little bit about relational trust. I wish we had time to drill down on that one, but we talked about how if we don't have it in human relationships, it puts a tax on life. I think that tax could be domestic, it could be personal, it could be professional. You talk about all that in the book. I want to get to organizational trust, which is the next ripple.
We deal with this as both business owners, many of the folks listening to this podcast own their own firm and employ people. Others sit as members of teams in accounting firms. We all have a mandate, whether we've taken up the mandate or not, to lead our clients and our clients' organizations. How does all this self-trust and relationship trust factor into organizational trust?
Stephen: To use that metaphor of the ripple effect, it's the next wave as you ripple out. My point is your ability to lead the organization and lead your team - if you're an entrepreneur, if you're the owner of your firm, to lead your firm and your team and then also to lead in the client engagement and the client relationship – when that comes from a base of inside out meaning that I start with my own credibility and my own self-trust which turns into self-confidence, then I build relationships of trust, it becomes then again natural and abundant to build a team, a group, an organizational trust. It's inside out.
If I've neglected the first two levels of self-trust which is about the credibility and the relationship trust which is about the behavior, then the organizational, if I just go skip and go straight to that, I might not have paid the price to have earned that trust position. I might not be ready to lead out in those ways. This flows naturally at the organizational level.
The nice thing is for an entrepreneur and an owner of a business, it's building that trust right within your group, your team, your organization, but also now you have the ability to go out as you work with the clients and to really lead the client and to help them. You're now in a position to be a true trusted advisor. You have an expertise and they need that expertise. They trust you, you're trustworthy, and your organization, your team is trustworthy, because you're building this, you're rippling inside out as you're moving out. Now, as you move out, you're now in a position to really have an impact on the client. You can really lead your client. This is where you can bring your expertise to bear.
I love the whole metaphor of Scaling New Heights for the conference and the idea that we're saying, "Look, we're already doing a lot of quality work for our clients and important work in the bookkeeping and the accounting. There's even new heights that we can achieve with them. There's new places we can go with them. There's new ways we can lead them and add value to them and become a trusted advisor, a trusted partner that's able to deal not just with some of the current things we're dealing with, but even go beyond that and adding value in new and different ways because we're seen as a trusted person.
Our team, our group is seen as a trusted organization that has character and competence. The competence includes where the industry is going and where society is going and the implications of that and how we can add value to them in these different ways."
Again, it ripples out, but it goes to the organization. Once you build that trust in the organization, it ripples out to that next level which is now the clients that we're serving and addressing. I think the opportunity there is to truly become a trusted advisor, a trusted partner. That will enable us to scale new heights and to add even greater value than we're already adding. That value is so vital in a changing world. It's also a differentiator from others that might only add some value but not the level of value that could be possible if we were in a position of being a true trusted advisor or a partner.
Joe: That's exactly right. We tend to spend all our time documenting what did happen with no analysis and real interpretation of that information with no implication or projected analysis on what's going to happen. And what's going to happen is the most important information for the business owner and therefore for our clients who are business owners.
Thank you for tuning into today's podcast and our conversation with Stephen M.R. Covey. Before we wrap up, I want to tell you about a special offer for our podcast listeners from SmartBiz Loans. SmartBiz Loans is a lending facilitation company that takes the headaches out of securing SBA loans. Now these are traditional SBA low-interest bank loans with an easy online application process. Your clients can receive funds as quickly as seven days after their application is complete and approved.
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As always, we encourage you to stay tuned, stay connected, never stop learning, and scale new heights.