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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?

320. Trust: The Key to High-Performing Teams, with Stephen M.R. Covey (refreshed episode)

This episode of The Brainy Business podcast features an insightful interview with Stephen M. R. Covey, author of The Speed of Trust. Covey shares his expertise on building trust through transparency and authenticity, drawing from his personal experience within Franklin Covey.

He explains how trust serves as the foundation for effective relationships and collaboration within teams. Covey dives into the quantifiable value of trust, showcasing its impact on speed and cost. He shares two compelling examples to illustrate the economic benefits of trust, including the power of referrals and Warren Buffett’s surprisingly successful acquisition deal.

Throughout the conversation, Covey emphasizes the need for discernment in extending trust and the importance of creating a high trust culture. The episode provides practical insights and actionable strategies for leaders and managers to nurture trust within their organizations. By listening to this episode, business leaders can gain a deeper understanding of the economic and psychological benefits of trust and learn strategies to foster trust within their teams for increased productivity and success.

In this episode:

  • Realize the significant role trust plays in enhancing teamwork, productivity, and collaboration.
  • Uncover the transformative power of transparency and authenticity within organizations, through the personal experiences of Stephen M. R. Covey.
  • Appreciate the crucial interplay between trust and successful change management during periods of organizational transitions.
  • Discover the foundational role of trust in boosting both speed and cost efficiency in business operations and its impact on economic outcomes.
  • Identify the balance and discernment imperative in extending trust, a concept encapsulated as ‘Smart Trust.’
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IN A RUSH?

HERE'S A 2 MINUTE TIP.

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SHOW NOTES:

00:00:00 – Introduction,
Melina introduces the episode and welcomes Stephen M.R. Covey, the son of Stephen R. Covey, author of The 7 Habits of Highly Effective People. They discuss Stephen’s family legacy and how he has built upon his father’s work with a focus on trust.

00:02:18 – The Importance of Trust,
Stephen explains the concept of trust and how it impacts relationships and organizations. He shares a personal story about the Franklin Covey merger and the importance of transparency and authenticity in building trust.

00:06:11 – Trust and the Covey Legacy,
Stephen discusses how his family legacy and the reputation of his father have influenced the level of trust people have in him. He emphasizes the importance of backing up trust with skills and research.

00:08:37 – The Gift of Transparency,
Stephen shares a story about a meeting he had with the Franklin Covey employees after the merger. By being open, transparent, and addressing their concerns, he was able to build trust and create a stronger team.

00:13:13 – Calming the Elephant,
Melina relates Stephen’s story to the concept of “calming the elephant,” referring to addressing the underlying concerns and fears that people have during times of change. She shares an example of how taking the time to listen to an employee’s personal stress helped improve their productivity.

00:14:44 – The Economics of Trust,
Stephen discusses the economic impact of trust in organizations, and explains how his formulas for the economics of trust work.

00:15:20 – The Power of Understanding,
Understanding others increases influence and builds trust, leading to better teamwork and improved outcomes.

00:17:15 – The Economics of Trust,
Trust affects speed and cost in any relationship or environment. When trust decreases, speed decreases and cost increases. Conversely, when trust increases, speed increases and cost decreases.

00:20:33 – Examples of Trust in Action,
Trust is a vital factor in word-of-mouth referrals, where trust leads to faster and less costly acquisitions. Stephen shares an example from Warren Buffett’s handshake deal, which was completed quickly and without the traditional due diligence process due to high trust.

00:25:44 – The Cost of Distrust,
Distrust leads to longer processes and higher costs, as seen in increased airport security measures and compliance rules after corporate scandals. The cost of distrust is real, while the dividends of high trust can be monetized.

00:28:22 – Balancing Trust and Caution,
It is possible to be both too trusting and too suspicious. Finding the balance of smart trust involves being aware of potential risks while also recognizing the costs of not trusting enough and stifling creativity and innovation.

00:31:05 – The Importance of Smart Trust,
Stephen Covey discusses the concept of smart trust, which involves assessing the likelihood, cost, and consequences of extending trust to someone. He emphasizes the importance of credibility and judgment in determining how much trust to give and acknowledges that blindly trusting someone who has proven to be untrustworthy is not wise.

00:32:33 – Building Trust and Overcoming Fear,
Covey explains that extending trust can lead to great outcomes and results, as most people respond well to being trusted. He encourages leaders to focus on the 95% of trustworthy individuals and not let the 5% of untrustworthy people define their approach. Covey suggests using judgment and assessing the risk before trusting someone, but also highlights the importance of not being overly cautious and missing out on possibilities.

00:36:04 – The Power of High Trust Cultures,
Covey discusses how high trust cultures can be more effective and accountable than rules-based cultures. He explains that when trust is present, people hold each other accountable and the culture itself becomes a reinforcer of trust. Covey emphasizes the need for organizations to design for the majority of trustworthy individuals rather than focusing on the few untrustworthy individuals.

00:37:29 – One More Behavior: Practicing Accountability,
Covey introduces the behavior of practicing accountability, which involves creating agreements and expectations with individuals and allowing them to take responsibility for evaluating their own performance. He believes that involving people in the accountability process can build trust and lead to greater commitment and engagement.

00:46:15 – The Power of Trust,
Trust is the most inspiring form of human motivation and brings out the best in people.

00:46:30 – Conclusion
Melina’s top insights from the conversation. What stuck with you while listening to the episode? What are you going to try? Come share it with Melina on social media — you’ll find her as @thebrainybiz everywhere and as Melina Palmer on LinkedIn.

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