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What is behavioral economics? Why does it matter to you?

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Podcast Episodes

What is behavioral economics? Why does it matter to you?

148. The Speed and Economics of Trust, an Interview with Stephen M.R. Covey

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Today I am very excited to have Stephen M. R. Covey with us on the show today. In case his name sounds familiar, it’s because his father Dr. Stephen Covey wrote The 7 Habits of Highly Effective People—one of the best known and most highly acclaimed business books of all time.
And his son (our guest) has done some very amazing things in his career as well, living on that family legacy of greatness. As president and CEO of Covey Leadership Center, Stephen nearly doubled revenues while increasing profits by 12 times. During that period, the company expanded throughout the world into over 40 countries, greatly increasing the value of the brand and enterprise. The company was valued at $2.4 million when Stephen was named CEO, and, within three years, he had grown shareholder value to $160 million in a merger he orchestrated with Franklin Quest to form FranklinCovey.
His book The Speed of Trust: The One Thing That Changes Everything, has sold more than 2 million copies and is a fantastic read. While it isn’t specifically naming concepts of behavioral economics, as you’ll hear in the episode it is very well rooted in that space. Today Stephen will share his “economics of trust” equation plus a bonus qualitative measure of trust that didn’t make it into the book. (Stick around until the end to hear that.) He also touches on some of the 13 behaviors that lead to great trust, so it is all about the behavior and economics of trust.

Show Notes:

  • [00:08] In today’s episode I’m very excited to introduce you to Stephen M.R. Covey to discuss his book, The Speed of Trust.
  • [02:35] Stephen will share with you his “economics of trust” equation plus a bonus qualitative measure of trust that didn’t make it into the book
  • [04:47] Stephen shares about himself and his father.  
  • [06:25] He has a feeling of stewardship and responsibility to try to carry on his father’s legacy and the great work he has done. He is very proud of his heritage. 
  • [08:41] In his case there was somewhat a transference of trust from his father to him, but not completely. He had to earn it as well.  
  • [10:20] Stephen shares his experience with a large group of naysayers in the merger and how trust made it work. 
  • [11:49] There is a risk to get real and be transparent, but there is a greater risk of not doing it. 
  • [12:31] The power of going first—of being transparent and vulnerable—invites reciprocity back. The vast majority reciprocate and that is powerful.  
  • [15:40] The key to influence is to first be influenced. In the words of his father, “Seek first to understand and then to be understood.”
  • [16:27] Understanding is not necessarily agreement. If people feel understood they feel much more open to your influence.  
  • [17:29] Trust affects everything. Trust is also learnable as a skill. 
  • [18:50] Trust always affects two measurable outcomes: speed and cost. When the trust goes down in any relationship in an environment you will always find that the speed goes down with it and the cost goes up. That is a low-trust tax
  • [19:56] When the trust goes up in a relationship, the speed goes up and the cost comes down. That is a high-trust dividend.  
  • [22:34] Stephen shares a few illustrations of the speed of trust from his book.  
  • [23:24] Client referrals offer a transference of trust.  
Nothing is as fast as the speed of trust. Nothing is as profitable as the economics of trust. Click To Tweet
  • [28:21] The cost of distrust is very real. The speed goes down and the cost comes up. 
  • [31:19] Smart trust is having your propensity to trust and balancing that with your analysis. Start with the heart and you will see possibilities you would never see otherwise. Then balance that with your head. 
  • [33:46] The vast majority of people respond well to being trusted and they rise to the occasion. They perform better, develop capabilities, and reciprocate by giving the trust back to you. 
  • [36:02] Most leaders can be far more trusting than they are being. Our big challenge is that we are not trusting enough. 
  • [37:47] There is actually more control in a high trust culture than there is in a rules-based culture. 
  • [39:02] Two great practices are to declare your intent and assume positive intent as a starting point. Be trusting as well as trustworthy
  • [41:19] It can help you build trust enormously well and fast to have a process for accountability upfront.  
  • [43:01] Energy and joy are the two keys on the qualitative side. When the trust goes up in a relationship, the energy and joy in all forms go up with it. 
  • [45:01] In high trust cultures people are more energized, more engaged, less stressed, and less burned out. 
  • [47:13] Inspiration is the new engagement.  Inspired employees are far more productive than engaged employees. 
  • [47:49] To be trusted is the most inspiring form of human motivation. It brings us the very best in all of us.  
  • [49:44] Melina shares her closing thoughts. 

Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

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Get the Books Mentioned on this Episode:

Speed of Trust: The One Thing That Changes Everything By Stephen M.R. Covey

The 7 Habits of Highly Effective People By Stephen R. Covey

Indistractable: How to Control Your Attention and Choose Your Life By Nir Eyal

FRICTION―The Untapped Force That Can Be Your Most Powerful Advantage By Roger Dooley

Check out (and preorder!) my upcoming book, What Your Customer Wants (And Can’t Tell You), on AmazonBookshop, and Barnes & Noble.

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