I’ve been thinking a lot about why it is that trust in business is so important to me. Is it because it just feels like the right thing to do? (Yes) Is it because it take less energy to be trusting than suspicious? (Yes) Is it because I have been let down, like most people, by trusting someone too much? (Yes) And why do I care so much when the attitude of “trust is fine… unless its going to cost me money then it’s everyone for themselves” seems acceptable to a significant number of business people? (Good question!)
I finally think I’ve found the right way to describe why trust in business is so important to me, but it took the help of Steven Covey, author of a book titled The Speed of Trust, to sum it up with just a few simple words. (I must admit to not having read the book yet – maybe it will go on the list of books for my . The way I discovered Steven is via a podcast from John Jantsch at ).
Steven’s idea is simple: the more trust that exists in a relationship, the FASTER and CHEAPER it is to do business. To help keep this brief, let’s jump straight to some examples:
- a trusted employee can be given a job and left to get on with it, while an employee that has not built that same level of trust must be closely monitored, costing you time and money and also likely lowering their motivation and results.
- a trusted supplier you can be called on at any time and you know you’ll be looked after, while working with a supplier where that high trust doesn’t exist requires addtional time negotiating prices and terms and fully documenting everything, which in turn slows things down and adds costs for you and the supplier (which are most likely passed on to you through higher prices).
- having a trusted business partner means all your energy goes into making the business a success, while working with a business partner that isn’t trusted leads to wasted time and energy as you both try and drag the business in opposite directions or work to different goals, or worse still having to worry about your partner trying to improve their own position at your expense.
And the list goes on.
Importantly, a lack of trust does not mean that someone in the relationship is not trustworthy, it just means that they haven’t yet built up a trusting relationship. That may be as simple as just not knowing each other long enough to build such a relationship. Also, relationships may start with a certain level of trust based on things like brand or reputation, referrals, testimonials, etc.
So the benefit of trust is not just about feeling good and doing the right thing. It is real and it can be measured, and when looked at that way makes it hard to justify continuing any significant business relationship where a high level of trust does not exist. In other words:
- Employees that you do not trust (not just the outright liars, but those who can’t be left to do a job without constant supervision) should be “managed out” if they can’t be changed in a short period of time (remembering how much it costs to try and change them).
- Suppliers that are not trusted should be replaced. Even if you think they are the cheapest, when you add in the cost of all the wasted time caused by a lack of trust they are probably not the cheapest after all.
- Clients that you do not trust should be politely told that you cannot continue to serve them, at least under the current arrangement. This will free you up to focus on the clients you do trust and are therefore easier and more profitable to deal with.
- Hardest of all, if you’re in business with a partner you do not trust you should be starting the process of ending that relationship. Now.
The short term costs in doing these things will be forgotten quickly when you are working only with people you trust. Things will be happening quicker, easier and cheaper than before, and all of your energy will be going towards positive actions and moving your business forward.
Of course, while it may be harder to accept, there is always the risk that it is you that is the one in a relationship that is not trusted. This may not necessarily be because you are not trustworthy, but could be due to a misunderstanding, poor communication, or simply because the other party doesn’t know you well enough yet. Not being trusted by others will cost you even more time and money than working with people that you do not trust. Clients will not use you, or will be slower to act when they do, and will pay you less for your goods or services due to the higher risk they feel they are taking. Suppliers will be less generous with their terms and will put other clients’ needs before yours. Employees will be working for you more for the money than the relationship, increasing your wage bill and staff turnover and lowering their motivation and performance.
So if things aren’t going the way you think they should with your business, take another look at the major problem areas and examine whether it could be due to a lack of trust on one or both sides of a relationship. If it is a big part of the problem, now that you know the real cost to your business, what do you plan to do about it? I cannot tell you what to do without knowing more, but what I can tell you is that you MUST take action. These can be difficult discussions to have and the temptation is there to just hope for things to work out. However, one or two uncomfortable conversations are nothing compared to the feeling of regret you will suffer if things don’t improve because you did nothing when you knew action needed to be taken.
I have provided a link to John and Steven’s podcast below as its well worth a listen, as well as a link to Steven Covey’s website. If you get a chance to read his book before I get to it I’d love to hear what its like!
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