David Horsager, the author of The Trust Edge talks on What’s Trust Got to Do With It? at TEDxUMN.
Listen to the MP3 Audio here: What’s trust got to do with it by David Horsager at TEDxUMN
Today’s newspapers, and what do the headlines have in common? One thing, trust.
Can we trust the officers? Can we trust the prosecutors? Can we trust turkey is safe in Minnesota, to eat? Can we trust that Democrats, and Republicans will work together to make this budget deal? Can we trust Iran means what they say? Can we trust big business? What’s trust got to do with it? Everything.
Today, I want you to think bigger about trust, and the impact of trust. You know, my kids understand trust. Public restroom, the stall was not available, but as you can see, they trust each other. Every mom in here is thinking: “That boy on the bottom better wash his hands.”
Everything is built on trust, from financial institutions, to personal relationships, everything, and yet we can think we know it all about trust. Do we really, or is it more complex than we might think? You know, we can sometimes think it takes a long time to build trust, and yet in a crisis like 9/11, strangers trusted each other in moments.
A leader can think: “We’ve got to extend more trust. The more we extend, the more we’ll get out of our team.” Unless they extend too much. I hear it all the time today. “People trust the transparent, you’ve got to have transparency, you’ve got to show everything,” and yet confidentiality is also trusted.
My graduate research led me to believe that trust is the single uniqueness of the greatest leaders, and organizations of all time. I love doing the research. I love writing on it. I love working with great organizations: Wells Fargo to FedEx, to the Yankees, to John Deere. But today, I want to go back to my original training ground of trust. Back to where I grew up, the bean farm in North Central Minnesota. You know, I want to think about where I started to think about how a lack of trust is your biggest expense, about how you actually build trust, and that might be more than you think, about how trust is a choice.
Verndale, Minnesota. 500 people live there, a lot more cattle. It’s about a 3-hour drive, Northwest of the twin cities, Minneapolis-Saint Paul. But I didn’t grow up in Verndale, I grew up 8 miles north of Verndale on a 1,200 acre bean farm. I remember taking the bus home every day from school, peering out the window, half way home, I’d look out the window, and there at the end of his long driveway, Mister Olson’s veggie stand, and amidst the produce, right next to the strawberry, the squash, and the sweet corn, was a bucket, a pail with cash bills, money sticking right out of it, plain as can be. But nobody worked the stand.
What are you supposed to do at Ralph’s stand? Pick what you want, make your own change, pay what you owe. He ran the stand, on the honor, or trust system. Whoa! What an efficiency! He saved money, because he didn’t have to hire anybody be there. He saved time, because he didn’t have to be there, and people could choose as fast or as slow as they want, they could pick what they wanted, they could make their own change, people didn’t have to take off food gloves, or latex gloves, they could move right through, and boy, did he have loyal customers. Partly because of trust.
Where we have trust, we have a great advantage. Some of the research showed mistrust more than doubles the cost of doing business. In one of the pieces of research, high-trust companies outperform low-trust companies by nearly 200%. This is basically the sum-up of the first half of my research. Every single time trust increased, just a little bit, this is exactly what happened in organizations, profits, nonprofits, professional sports teams, even governments. Every single time, trust increased a bit, output, morale, retention, productivity, innovation, loyalty went up.
Every time, real cost, time, it all went down, stress went down. Think about innovation, you’ve got a team you trust, you’ll share ideas. Team, if you don’t trust each other, you won’t share ideas. Creativity goes up. I believe the single metric of success comes down to trust. If you think trust is just a soft skill that doesn’t really affect, impact to the bottom line, ask Brian Williams, ask Target Corporation, ask Tiger Woods.
Think of Tiger, one breach of — 27 breaches of trust. He lost $110 million in two weeks, in endorsements that he’ll never recover. Your credit score is a trust score. The more a lender trusts you, the less you pay over the course of a loan. Everything’s tied to trust. There’s even research that shows in countries where citizens trust each other more, poverty is less, and vice versa.
I went back to my university, I was asked to be the commencement speaker a couple years ago at my Alma Mater, I am grateful for that, walked up on campus, and the first thing I noticed on campus is the post office boxes where all the students get their mail. Right? But it’s different, 23 years later, they’re in the same spot, same numbers on them, but 23 years later, every single PO Box has a lock on it, a thumb combination lock, no less, because at some point some freshman put something stupid in some sophomore’s PO Box, now they all have locks. What’s the cost of having that breach of trust? A few bucks for the locks. What’s the real cost? Time.
Instead of just going and collecting my grades, instead of just going and collecting, for me, my paycheck everyday for scraping plates at the food service for $3 an hour, instead of going, and collecting that note from that sophomore, I have got to use a thumb combination lock. The cost is time. Every time trust increases, everything changes.
What does this mean to you? It’s worth considering what a lack of trust costs you every single day, because it’s more than you might think. But there’s a way to build trust.
Now, the second part of the research, I said: “If trust really is this important, how do you build it?” Is it just honesty and integrity, like people think, or is there more to it? It turns out there was more to it. There were 8 traits that were common to the most trusted leaders, brands, and organizations of all time, even governments, 8 commonalities, I call them ‘pillars’, because I think they hold up this great advantage of being trusted. I’ll just touch on a few of them today, to just get us thinking.
One of the pillars was clarity. We found people trust the clear, and they mistrust, or distrust the ambiguous, and people think they’re clear. Think about this, a leader that’s clear about the vision, we tend to get unify behind. Elections have been won, on this pillar, by probably a worst candidate, but they were more clear. A salesperson that’s clear about the benefits of that product, to me, I tend to buy from. The professor, that’s not clear about the assignment, I get frustrated with. Clarity is trusted.
Another pillar, competency. You know, I might trust you, you’ve got character, you’ve got compassion. I might trust you to take my kids to the ball game, but I may not trust you to give me a root canal. Because you don’t have the competency for it. So you’ve got to stay fresh, relevant, and capable in the area you want to be trusted.
Another pillar, commitment. We found people trusted those that they believe would stick in the face of adversity, that were committed. In 1981, when the new ownership of Harley Davidson took over — by the way, Harley-Davidson wasn’t always the great trusted brand, in the US, that it is today, and a new ownership took over, and they said: “We’re going to be committed in 2 new ways. We’re going to be committed to quality, and we’re going to be committed to our favored first time buyer”, who they defined as, the yuppie that wants to look like a renegade on the weekend, and they stayed committed, and if you were to put $1 in Harley-David stock, in the 25 years before I did the research, your dollar would have appreciated by nearly 18,000%. Commitment breeds commitment.
I had a vice president of sales come up to me and said: “David, I read the book and I loved the chapter on commitment. Can you just tell my team to be committed to me?” No! You’ve got to be committed to them first, because commitment breeds commitment.
People often ask me: “You talk about trust, but how do you rebuild trust?” First, I’ll tell you what it’s not, it’s not the apology. People think it’s just the apology; what if people say: “I’m sorry I’m late”. No you’re not, you’re late every time. The only way to rebuild trust, and there’s a little more to it, in situations, but it basically boils down to this: The only way to rebuild trust, the only way I’ll trust you again, is to make and keep a commitment, quit making them so lightly. Commitment.
Another pillar is consistency. We’re trusted for whatever we do all the time. Right? For good or bad, if you’re late all the time, I trust you to be late. This is why we trust McDonald’s. We might not like McDonald’s, but we trust them, because I’ve had the same exact burger in Frankfurt, Tokyo, and Cleveland. It’s the same. Sameness is trusted. That’s a challenge. In every single interaction we have with every single person, we increase or decrease trust just little bit, because in every interaction, we increase trust, or decrease trust. The only way to build a brand is consistency, the only way to build a reputation is consistency. Whatever you do consistently, consistency is trusted. So there’s a way to build trust.
What does this mean to you? I believe, not arrogantly, but I believe, in our work globally, I believe you can solve every leadership and organizational problem against the 8 pillars of trust. It’s a trust problem. People think it’s a different problem; it’s actually a trust problem, I believe. So it’s worth making a priority of it.
But trust is also a choice. It doesn’t mean I believe we should trust everyone. I mean the most deceptive person is the one who looks trustworthy, but in fact, is not. Right? I don’t trust my flight to be on time. I’ve had experience, just 48 hours ago. I don’t trust that boy with my daughter, I’ve been a boy. I don’t trust reality TV is that real. If you do, you might have a problem. But, where we find it, where we have it, where we can choose it, we can enjoy a great advantage.
Back to the farm, one more time. We lived down in the twin-cities Minneapolis-Saint Paul, my 4 kids, my wife, and I. Mom and Dad still live up at the farm, they run the farm, Dad’s 85, now. But he kept calling, said: “David when are you going to bring the grandkids up to the rodeo?” Because even though only 500 people live in Verndale, 2,000 people come every night to one of the biggest rodeos in Minnesota. They come to the big Sundby arena, where there’s often a big horse sale, people come from all over, so finally 2 or 3 years ago, I said: “Dad, we’ll be there.” We take the kids out of school, we head up to Verndale, we get the Dad’s got tickets for us, we get to the short line, we get a great spot on the bleachers — Now if you haven’t been to a rodeo for a while, the first half of the rodeo, the cowboys and cowgirls, they rope things. Second half the rodeo, they get bucked off of things. But in the middle, it’s your opportunity for the locals to get involved. They call it “Mutton Bustin”. This is where they let 5 to 8-year-old kids see how long they can last, riding a sheep, a big sheep. So, it’s almost half time, and the big announcer, down by the American flag: “Ladies and gentlemen, it’s almost time for Mutton Bustin. I’m going to read the names, and pull off the hat, those of you families and kids, put your names in the hat, I am just going to go ahead and read out the names. First 8 names that I pull out, come on down here to the bull gate and we’ll get started.” He starts reading off the names: Billy, Susie, Vanessa Horsager, Isaiah Horsager. I look over at my stoic Norwegian father, he just smiled. My 2 kids, they look up at me in terror. I put my arms around Vanessa, and I say: “This is going to be fun.”
We walk around the bleachers, all the way around the American flag, all the way over to the bull gate, and there is a lady that tells us how this works. “Okay, kids, here is what you do, now you just get on the sheep, the sheep takes off, and you’ll fall off, but don’t worry, the whole arena is sand. It’s like a big giant sandbox. This is fun.” My kids are not buying it. Now they know how to do this in Texas, Oklahoma, and Canada but in Minnesota, they are just learning. Because those kids would get on the sheep, they would sit on there like this, the sheep would take off, and the kids would fall off. I had seen this before.
Vanessa, she’s one of the last to go, and I said: “Vanessa, you can’t do it like that. You’ve got to wrap your dangly 8-year-old legs around the belly, you’ve got to pinch your heels as tight as you can. Vanessa, you can’t sit up like this, you’ve got to lay down, velcro your belly to the wool, wrap your arms around the neck, and dig your fingers into the wool, and whatever you do Vanessa, don’t let go.” I’m a great Dad.
They opened the bull gate, and that sheep takes off. People are saying: “Look at the little girl –“ Can you believe a little – you know what sheep does, that runs all the way across the arena, to the far corner, where all the sheep gathered to dump off their kids, that’s what sheep do, they gather together and laugh. First sheep that it sees, it butts it in the side. BAM. She screams, but she holds on. Sheep doesn’t know what to do, so it takes off around the arena. She’s a little bit sideways now, but, second time around the arena, Verndale, Minnesota — 2,000 people standing up, screaming, and cheering. Stoic Norwegian has a tear, it’s his granddaughter.
Third time around the arena, the clowns come out. “Little girl, you can let go now. You can –“ She will not let go. Finally, they get the sheep stopped in the corner, but she won’t get off. The announcer didn’t know what to do, 2,000 people screaming, and cheering. The rodeo Queens is getting off her perch, walking toward the middle with a trophy for the kid that lasted the longest. But, she won’t get off.
“Is there a Dad here?” I’ll never forget it. I walked out into that arena, I walked over to my daughter, I picked up my daughter, 2,000 people stay screaming, and cheering, and I will never forget what she said in my ear: ‘”Dad, why did the clown say: ‘Let go.’? You said ‘Never let go.'” I’m grateful she trusted me, but she also trusted herself, and as important, she knew who not to trust. Don’t trust clowns, they’re scary.
Trust is a choice. Every single time you choose it, or choose against it, it has benefits or consequences. Imagine what would happen, if you could be that person, that was trusted by everybody, every time. Yet what do we know? Organizations don’t get better, countries don’t get better. Individuals get better. But when one person becomes more trustworthy, then a family, a community, a country can get better.
So what’s trust got to do with it? Everything.