1장
Trust: The One Thing That Changes Everything
In a world where time is money and speed is everything, what if there was one element that could dramatically accelerate every dimension of your life? Stephen M.R. Covey argues that trust is precisely this accelerator. The son of renowned author Stephen R. Covey transformed the Covey Leadership Center into a global powerhouse, increasing profits by an astonishing 1,200% through his mastery of trust principles. This book, consistently ranked among Warren Buffett's favorite business reads and praised by leaders from Richard Branson to Indra Nooyi, reveals why trust isn't just a soft, social virtue-it's a hard-edged economic driver with measurable impact on speed and cost. While most business books focus on strategy or execution, Covey demonstrates that without trust, even the best plans falter. As former Secretary of State Colin Powell noted after reading this work, "Trust is the essential ingredient for leadership success." In our increasingly transparent digital age, where information flows freely and reputation can be destroyed in minutes, mastering the principles of trust has never been more critical-or more profitable.
2장
The Economics of Trust: How Trust Impacts Everything
Trust isn't merely a warm, fuzzy feeling-it's a pragmatic, hard-edged economic variable that dramatically impacts both speed and cost in every relationship and organization. When trust decreases, speed decreases and costs increase. When trust increases, speed increases and costs decrease.
Consider what happened after 9/11. The sudden decline in trust toward air travel created tangible consequences: longer security lines, additional screening procedures, and new fees that cost the airline industry billions. Similarly, corporate scandals led to costly Sarbanes-Oxley regulations, with one section alone costing businesses $35 billion-28 times the original estimate.
Conversely, high trust creates remarkable dividends. When Warren Buffett acquired McLane Distribution from Walmart, the high trust between parties allowed them to complete the $23 billion deal with just one two-hour meeting and minimal due diligence. Similarly, when Herb Kelleher of Southwest Airlines received a major reorganization proposal, high trust enabled him to approve it after just four minutes of review.
This economic impact operates through what Covey calls the "trust tax" and the "trust dividend." The trust tax manifests when people discount what you say by 20-50% because they don't fully trust you. It appears in redundant systems, excessive bureaucracy, office politics, disengagement, high turnover, and even fraud. Though these taxes don't appear on income statements, they're quantifiable and often extremely high.
Trust dividends, meanwhile, act as performance multipliers. In companies, high trust improves communication, execution, innovation, strategy, engagement, and stakeholder relationships. In personal life, it enhances excitement, energy, passion, creativity, and joy. Research supports this: companies on Fortune's "100 Best Companies to Work For" list (where trust is the primary defining characteristic) outperform the S&P 500 by a factor of three.
Trust operates as the "hidden variable" in organizational success. While the traditional business formula says strategy times execution equals results (S x E = R), trust acts as either a tax that discounts output or a dividend that multiplies it: (S x E)T = R. As Thomas Friedman notes, in our global, flat economy that revolves around partnering and relationships, trust is essential-making the ability to establish, grow, extend, and restore trust the key leadership competency of the new global economy.
3장
The 5 Waves of Trust: A Framework for Understanding Trust
Trust flows from the inside out in five distinct but interconnected waves, creating a "ripple effect" that makes trust actionable in different contexts.
The First Wave-Self Trust-centers on the confidence we have in ourselves to set and achieve goals, keep commitments, and inspire trust in others. The key principle here is credibility, which stems from the "4 Cores of Credibility": integrity, intent, capabilities, and results. Without self-trust, we cannot build trust with others.
The Second Wave-Relationship Trust-focuses on establishing and increasing "trust accounts" with others through consistent behavior. This manifests through 13 key behaviors common to high-trust leaders worldwide, including talking straight, demonstrating respect, creating transparency, righting wrongs, and keeping commitments. These behaviors can be learned and applied by anyone to enhance relationships.
The Third Wave-Organizational Trust-addresses how leaders generate trust in various organizations, from businesses to families. The key principle is alignment, which helps leaders create structures, systems, and symbols that eliminate costly trust taxes while creating organizational trust dividends. When an organization's culture, rewards, systems, and structures are misaligned with its stated values, trust breaks down.
The Fourth Wave-Market Trust-deals with reputation and brand, both personal and organizational. This reflects the trust customers, investors, and marketplace participants have in you. Strong trust at this level leads to increased customer loyalty, more referrals, and greater benefit of the doubt during challenges.
The Fifth Wave-Societal Trust-involves creating value for society at large. The principle of contribution counteracts suspicion and cynicism while inspiring others to create value. Though our influence may diminish as we move through successive waves, we all have extraordinary influence on the first two waves.
This framework makes trust actionable by illustrating its interdependent nature and providing a structure for understanding how trust operates in different contexts. By working from the inside out-starting with self-trust and moving outward-we can systematically build trust at every level.
4장
The 4 Cores of Credibility: The Foundation of Trust
The 4 Cores of Credibility are the foundational elements that make you believable to yourself and others. Like a tree, credibility requires all four elements to thrive and create trust.
Integrity, the first core, is the root system from which everything grows. It goes beyond mere honesty to include congruence (walking your talk), humility (putting principles ahead of self), and courage (doing what's right even when difficult). Like Gandhi, whose life was an "indivisible whole," people with integrity inspire trust through their authenticity and principle-centered living. To increase integrity: make and keep commitments to yourself, stand for something meaningful, and remain open to new perspectives.
Intent, the second core, involves your motives, agendas, and resulting behavior. Like a tree trunk-partly visible, partly hidden-our motives are internal but become visible through behaviors. Trust grows when our motives are straightforward and based on mutual benefit. The Dalai Lama captures this perfectly: "How do you develop trust? It's simple: you show your genuine sense of concern for their well-being." To improve intent: examine and refine your motives, declare your intent when it might be misinterpreted, and choose abundance over scarcity thinking.
Capabilities, the third core, are the abilities that inspire confidence-your talents, attitudes, skills, knowledge, and style. Like branches producing fruit, capabilities are essential for credibility. Even with integrity and good intent, without proper capabilities in a specific area, credibility suffers. To enhance capabilities: run with your strengths (focusing on what you do best), keep yourself relevant through continuous learning, and know where you're going with clear vision.
Results, the fourth core, refer to your track record, performance, and ability to get things done. Like the visible fruits of a tree, results give you clout and influence, classifying you as a producer. Without results, you lack credibility regardless of your other qualities. To improve results: take responsibility for outcomes rather than just activities, expect to win (creating a self-fulfilling prophecy of success), and finish strong by seeing things through to completion.
These four cores work together to create credibility. Most people rate their own credibility at 86.6%, while others rate them at just 56.2%-a thirty-point difference highlighting our tendency to judge ourselves by our intentions and others by their behavior. Understanding these cores gives you "trust glasses" to see beneath the surface and identify specifically why you or others are trusted or not, allowing you to pinpoint actions to increase trust in all relationships.
5장
Talk Straight and Demonstrate Respect: Building Trust Through Character
The first two of the 13 trust-building behaviors flow primarily from character and set the foundation for all trust relationships.
Talking Straight means telling the truth AND leaving the right impression-both are vital to building trust. When leaders like Warren Buffett communicate plainly, acknowledging mistakes without spin, they build tremendous trust. The opposite involves beating around the bush or withholding information, while counterfeits include flattery, positioning, or "technically" telling truth while leaving false impressions. In organizations where only 44% of workers trust management's communication, a "spin tax" emerges, creating skepticism and wasteful meeting cycles. Talking straight must balance honesty with tact-it's not license for cruelty but rather for clear, respectful communication that reduces meeting time, increases trust, raises speed, and lowers costs.
Demonstrating Respect means showing fundamental respect for people and genuine caring. This behavior follows the Golden Rule-a principle recognized across virtually all cultures and religions worldwide. Small demonstrations of respect make disproportionately large deposits in Trust Accounts, whether it's a university president using his housekeeper's simple flower arrangements instead of professional centerpieces, executives slowing their speech to accommodate colleagues from different cultures, or simply sending a handwritten thank-you note.
Despite seeming "soft," demonstrating respect directly impacts the bottom line. When employees don't feel respected (with only 29% believing management cares about developing their skills), they withhold their best efforts, innovation, and collaboration. Conversely, when customers and partners feel respected, it leads to significant business opportunities.
These two behaviors work together to create an environment where truth can be spoken with respect and dignity. They establish the character foundation upon which all other trust behaviors can be built. As you practice talking straight while demonstrating respect, you create a powerful combination that accelerates trust-building in every relationship.
6장
Create Transparency and Right Wrongs: The Path to Trust Recovery
Creating transparency means being open, genuine, and truthful in ways people can verify. When Donald Carty was CEO of American Airlines, he negotiated $1.8 billion in wage cuts from unions while secretly arranging executive bonuses. When this was revealed, trust collapsed and he resigned. His successor rebuilt trust through radical transparency-involving unions in management committees and creating an open-door environment.
Transparency establishes trust quickly. Toyota demonstrates this by openly sharing process knowledge with suppliers, creating collaborative relationships rather than just seeking lowest prices. Similarly, when companies adopt Open Book Management, sharing financial statements with all employees, trust and profitability often increase dramatically.
The opposite of transparency is hiding information, while its counterfeit is illusion-making things appear different than they are. When practiced responsibly, transparency eliminates second-guessing, reduces wasted time, and creates genuine buy-in from stakeholders.
Righting wrongs means more than apologizing-it includes making restitution and then doing a little more. This behavior requires choosing humility and courage over ego and pride. The counterfeit is covering up mistakes, which creates a double trust tax. When you quickly acknowledge wrongs and make sincere efforts to repair them, you build trust rather than destroy it.
Maple Leaf Foods CEO Michael McCain exemplified this when facing a deadly listeria outbreak. He immediately took full responsibility, saying, "This is our fault and we are deeply sorry." Similarly, Oprah Winfrey publicly acknowledged her mistake in defending James Frey's fabricated memoir. These contrast sharply with negative examples like Nixon's Watergate cover-up, which destroyed trust completely.
Despite insurance companies advising doctors not to apologize for mistakes, evidence shows that respectful, empathetic apologies actually reduce lawsuits. People are more likely to sue when they remain angry about not receiving an apology. Johnson & Johnson still receives trust dividends decades after properly handling the 1982 Tylenol crisis.
Together, creating transparency and righting wrongs form a powerful combination for establishing and restoring trust. They demonstrate that you have nothing to hide and that when mistakes inevitably occur, you'll take responsibility and make things right. This creates a foundation of reliability and integrity that accelerates trust in all relationships.
7장
Deliver Results and Get Better: The Competence Side of Trust
Delivering results provides instant credibility and trust. When asked how to establish trust with a new client fastest, the answer is simple: "Deliver results!" This behavior transitions from character-based behaviors to competence-based behaviors, demonstrating your value and performance capability. The opposite is performing poorly or failing to deliver, while the counterfeit is delivering busy activities instead of meaningful results-being active but not productive.
When a division at Covey Leadership Center was perceived as a "hobby" that wouldn't make money, setting clear goals with accountability transformed it. Despite resistance to aggressive deadlines, holding the team accountable led to a successful product launch that generated millions, changing perceptions and building trust throughout the organization. As Pete Beaudreault noted, "The price of freedom is performance"-delivering results gives you more choices and opportunities. It's how you convert cynics, establish trust quickly in new relationships, and restore trust when it's been lost on the competence side.
Getting Better is rooted in principles of continuous improvement, learning, and change-what the Japanese call kaizen. When people see you or your organization as constantly learning and renewing, they develop confidence in your ability to succeed amid rapid change. The opposite-entropy or resting on laurels-diminishes trust, as standing still means falling behind in today's fast-paced world.
Exemplars of continuous improvement include a manager who studied two hours every morning to become an expert, Jack Canfield who reads a book daily, and business leaders like Bill Gates and Warren Buffett who remain relevant through constant learning. In sports, NBA player Karl Malone transformed from a poor 48% free-throw shooter to a consistent 75%, while also revolutionizing strength training standards for the entire league.
To truly Get Better, seek feedback and learn from mistakes. As Elon Musk notes, "I think it's very important to have a feedback loop, where you're constantly thinking about what you've done and how you could be doing it better." The best companies don't just collect feedback; they respond meaningfully to it. When receiving feedback, thank the giver, communicate your implementation plans, and follow through.
Together, these behaviors demonstrate the competence side of trust-showing that you not only have the character to be trusted but also the capability to deliver value consistently and improve continuously.
8장
Clarify Expectations and Practice Accountability: The Foundation of Trust Relationships
Almost all conflict stems from violated expectations. When expectations aren't clearly defined, people guess or assume what they might be, leading to disappointment and broken trust. Clarifying Expectations creates shared vision and agreement upfront, preventing future trust issues that affect speed and cost.
Written agreements help identify and clarify expectations, preserving and enhancing trust over time. However, even written agreements have limitations and cannot replace trust. The Chief Legal Officer of a Fortune 50 company noted, "You can't draw up an agreement thick enough for people you don't trust." Research from Warwick Business School found that outsourcing relationships relying primarily on trust rather than stringent service-level agreements outperformed contract values by up to 40%.
Clarifying expectations effectively is always a two-way street. People must have the opportunity to push back and help create realistic expectations that work for both parties. According to an AMA/HRI study, unrealistic expectations are the number one reason for unethical corporate behavior-when people face intense pressure to deliver by deadlines, they start cutting corners.
Practicing accountability significantly impacts trust. In a Golin/Harris survey, "assuming personal responsibility and accountability" ranked as the highest factor for CEOs to focus on for earning trust. This behavior has two key dimensions: holding yourself accountable first, then holding others accountable.
Holding yourself accountable means taking responsibility rather than blaming others. Examples include a buyer who wrote himself up alongside his employee for not knowing company policy, quarterback Steve Young taking responsibility for an interception that wasn't his fault, and Commander Scott Waddle accepting full responsibility for a submarine accident despite others' mistakes. This behavior stands in stark contrast to our increasingly victimized society, where people like former FEMA director Michael Brown blame others for failures.
Holding others accountable builds trust, particularly with performers who want accountability. When people know everyone is expected to be responsible, trust flourishes in the culture. Leaders who don't hold people accountable create disappointment, inequity, and insecurity. This applies at work and home, as illustrated by Stephen Covey's personal story about his son losing driving privileges after speeding. Despite the inconvenience, enforcing consequences taught his son responsibility and built trust throughout the family.
Together, clarifying expectations and practicing accountability create a framework of clarity and responsibility that dramatically accelerates trust in relationships. They prevent misunderstandings before they occur and provide a path forward when expectations aren't met.
9장
Extending Smart Trust: The Ultimate Leadership Behavior
Extending trust is about shifting from "trust" as a noun to "trust" as a verb-becoming not just trusted but trusting. While the other behaviors help you become trusted, this one transforms you into a trusting leader. It creates reciprocity and, paradoxically, is one of the best ways to create trust when it's absent.
Warren Buffett's rapid acquisition of McLane Distribution and the P&G-Gillette merger exemplify how extending trust enables remarkable speed and efficiency. In the latter case, A.G. Lafley and Jim Kilts collaborated without typical advisors, lawyers or bankers-a powerful signal of mutual trust.
Extending trust is based on principles of empowerment and reciprocity, and the belief that most people want to be trusted and will respond positively. Its opposite-withholding trust-creates enormous organizational costs. Senior leaders' distrust of employees often creates a vicious cycle where that distrust is reciprocated.
Companies that extend trust gain competitive advantages: Ritz-Carlton empowers employees to comp up to $2,000 without approval, Nordstrom has just one rule ("use good judgment"), Zappos offers generous return policies, and JetBlue employs home-based reservationists. These trust-extending practices create advantages that competitors can't easily replicate.
Extending trust is one of the most powerful motivators available to leaders. When people are asked about the most influential person in their lives, they typically say it was someone who believed in them when others didn't. As Robert Galvin Jr. of Motorola noted, his father's trust in him created a lasting obligation to see that trust through.
Smart Trust operates at the sweet spot between analysis and propensity to trust. The lowest risk and highest return comes from Zone 2 (Judgment), where high analysis combines with a propensity to trust to create synergy and multiplied creativity. This zone is "effervescent," producing endless possibilities as trust becomes catalytic, inspiring others to be trustworthy.
Analysis involves evaluating three variables: opportunity (situation/job), risk (possible outcomes, likelihood, importance), and credibility (character/competence) of those involved. Propensity to trust ranges from suspicious to guarded to abundant. Smart Trust doesn't always mean extending trust-sometimes limited or no trust is appropriate-but approaching decisions from Zone 2 builds trust regardless.
By extending trust appropriately, leaders empower people, leverage their leadership, create high-trust cultures, and maximize organizational effectiveness. Trust extension brings out the best in people and creates high-level synergy in any organization-whether business, school, non-profit, or family.
10장
Restoring Trust: Rebuilding When Trust Is Broken
While some claim trust can never be regained once broken, the reality is more nuanced. Though there are situations where violations are too severe for restoration, broken trust is an inevitable part of life that we must learn to address. Trust violations create pain, disappointment and relationship havoc-whether through our own mistakes or through competence failures that others interpret as character flaws.
When my son Stephen violated our trust by speeding, his subsequent actions-admitting fault, apologizing, paying fines, and accepting consequences-actually strengthened his credibility. He demonstrated integrity, improved his intent, increased his capabilities through more mature behavior, and produced results as a safer driver. Through implementing behaviors like Confronting Reality, Righting Wrongs, and Keeping Commitments, our trust account grew stronger than before the incident.
Trust can be restored at every level, from societal to personal relationships. The Republic of Ireland demonstrated this by transforming their nation through education reform, labor collaboration, and technology investment, consciously implementing behaviors like Confronting Reality and Delivering Results to build global credibility despite technological disruption.
When I became CEO at Covey Leadership Center, I questioned the education division's value and violated trust by challenging its existence and discussing concerns behind the director's back. After implementing proper financial reporting, we discovered the division was highly profitable despite discounted pricing. I immediately apologized to the director and became the division's champion. This sincere apology not only restored trust but enhanced it significantly.
Unlike transactional business relationships, family trust violations have more profound implications. One powerful example involves a respected doctor whose affair devastated his marriage and reputation. Healing began when he ended the affair, asked forgiveness, and his wife chose to stay while demanding changes. He faced his community with humility rather than trying to lie his way out. Over time, his marriage, family and reputation began to heal.
Often the hardest trust to restore is trust in ourselves. When we repeatedly break promises to ourselves or violate our values, we lose faith in our own reliability. Restoring self-trust involves applying the 13 Behaviors to yourself: Talk Straight to yourself without rationalization; Demonstrate Respect by not beating yourself up; Create Transparency by facing weaknesses directly; Right Wrongs by forgiving yourself; and continuing through all behaviors.
When others have broken your trust, restoring that trust is your choice alone. Two guidelines can help: First, don't be too quick to judge-give others the benefit of doubt and don't assume competence failures are character failures. Second, be quick to forgive, which differs from trust. Forgiveness means cleansing yourself of anger and vindictiveness, refusing to judge others, and letting go of things beyond your control.
For many, broken trust represents a dead end-the termination of relationships, opportunities, or self-confidence. However, broken trust can actually become a significant beginning. In either case, the process of restoring trust builds your self-trust and personal credibility, helping you establish, grow, restore, and extend trust on every level of your life.
11장
Trust as the New Currency: Why Trust Matters More Than Ever
We live in a world where trust is increasingly the defining factor in success or failure. Ten key trends make trust more important now than ever before:
First, we live in a world of declining trust. By most measures, we inhabit an increasingly low-trust world. This makes us more cautious and suspicious, creating a vicious downward cycle of distrust. While distrust is contagious, trust is equally contagious-creating disproportionate advantages for leaders who know how to build it.
Second, trust is the engine of the sharing economy. Industries once led by specialists are now being disrupted by everyday people through ride-sharing, home-sharing, peer-to-peer lending, and crowd funding-all creating marketplaces facilitating transactions between strangers based on mutual trust. In this economy, doing the right thing and doing the economic thing naturally converge.
Third, today's work demands increasing collaboration. Teams often include members from different departments, buildings, and countries, with many operating virtually. While we have the technology tools for collaboration, trust is the ultimate collaboration tool. Trust transforms vendors into partners and groups into teams.
Fourth, change is the new normal in a disruptive world. Trust is both the most perishable commodity in high-change environments and the only means to generate the speed and commitment necessary to navigate rapidly shifting terrain.
Fifth, our multigenerational workforce necessitates a different approach. Millennials and younger generations want to be trusted rather than managed. While all generations desire trust, traditionalists believe trust must be earned, while younger generations believe trust should be given.
Sixth, trust is the critical enabler of strategic initiatives. When you improve trust, you improve engagement, execution, innovation, retention, recruitment, collaboration, productivity, safety, and sales. Most organizational performance issues are actually trust issues in disguise.
Seventh, trust itself has become a key strategic initiative. Organizations worldwide are making trust an intentional focus of operations, both internally and externally. Leaders increasingly understand they must develop trust from the inside out.
Eighth, "culture" has reemerged as an imperative for organizational success. However, without a foundation of high trust, all other cultural efforts are insufficient. A high-trust culture is the necessary starting point for any other cultural modifier.
Ninth, yesterday's style of management is insufficient for today's leadership needs. The old "Command and Control" leadership style remains the primary operating style for most organizations today. However, the leadership style that succeeds today is "Trust and Inspire."
Finally, trust is the new currency of our world today. Without trust, no amount of money can secure meaningful exchange. When people see an entity as trustworthy, the trust dividends afford access, opportunity, and influence money alone couldn't buy. As Alibaba founder Jack Ma noted: "What we got is not money. What we got is trust from the people... when you trust, everything is simple. If you don't trust, things get complicated."
In this environment, nothing is as fast as the speed of trust, as profitable as the economics of trust, or as relevant as trust's pervasive impact on every dimension of our lives and work.
