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The Speed and Currency of Trust

“Lean” is a hot topic these days, so its worth asking the the question “What basic characteristics of an organization or team are needed in order for Lean initiatives to be successful?” … What do we need in the soil when we sow a lean initiative for that initiative to be nourished and grow?

Trust has got be be pretty high up on the list. I’ll be blunt - maybe you can “do agile” or “do lean” with limited trust, but you simply cannot “be Agile” or “be Lean”, without a high level of real trust in an organization.

Lack of Trust Slows Down Organizations and Increases Costs

Lack of trust, and its related quality, empowerment, within an organization or team has been empirically shown to significantly slow down process and increase costs. Low trust organizations are less competitive and less efficient. We have all seen the typical examples:

  • micromanaging
  • the need for endless contract negotiations and bulky requirements documents and contracts
  • bureaucratic processes for things like purchase orders, travel approvals, and expense management
  • long, time-consuming status reports and status reviews
  • huge approval chains for seemingly small items

We all have our favorite stories… I had a case where I ordered $5,000 of computers, and when the supplier gave me the quote they got the “eco-recovery fee” wrong. The quote was $2 less that it should have been. The order arrived, and I released the invoice for payment, but accounts receivable refused to pay the invoice because it was for $2 more than the purchase order. Having me explain the situation was no good, I had to go to the purchase order group and stand on my head to get a new purchase order opened and approved to cover the extra $2. It had to be signed off by no less than 7 people including a couple of vice presidents! It took 6 months to pay the poor supplier, and my quick calculation was that it cost the company about $1,500 in extra labor!

Its worth noting that I could have gone to my local computer store and purchased the same computers then expensed them (rather than getting a purchase order) and it would have been $300 cheaper, not to mention all the savings in paperwork and pre-approvals. So lack of trust meant my S/W designers had to wait 4 extra weeks to get their computers, the company paid an extra $300 on the order, plus an extra $2,000 or so total for all the internal processioning and bureaucracy. (Oh… and guess how productive a S/W designer is without a proper computer to do their work .. another waste of time and money)

Is it just my experience, or do others notice that there seems to be a correlation between companies that make a big noise about their Lean 6-Sigma programs the amount of bureaucracy, approvals, and paperwork in the organization?

In terms of Agile, note how these Agile principles directly depend on trust:

  • Prefer customer collaboration over contract negotiation
  • Prefer individuals and interactions over processes and tools
  • Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
  • The best architectures, requirements and designs emerge from self-organizing teams.
  • The 5 scrum values: Focus, Courage, Openness, Commitment and Respect.

Brian Watson has a great blog post on The Currency of Trust where he points out an erosion of trust in Big Corporate, and the high price that is paid.

The thing is though … trust is a complex, challenging thing to create and maintain. The definitive work on Trust in an organization is Steven M. R. Covey’s (the son of Steven Covey of 7 Habits fame) The Speed of Trust. Covey spends considerable time in his book analyzing and defining trust.

The Dimensions of Trust

People think of trust as a soft thing, akin to an emotion. But its not… its hard, real, and quantifiable. To be trusted, you must be trustworthy. To quote Covey:

Simply put, trust means confidence. The opposite of trust - distrust - is suspicion. When you trust people you have confidence in them - in their integrity and their abilities. When you distrust people, you are suspicious of them - of their integrity, their agenda, their capabilities, or their track record. Its that simple.

Now here’s the hard part … we tend to think that trust should just be given, that’s its an attitude or emotion. For example, management should just drop all that silly bureaucracy and approvals and trust the staff. But it does not work that way, trust has to be earned. You have to be trustworthy for trust to be given. Much of that bureaucracy may have been put in place because without it low level managers were wasteful: they went on spending sprees, they didn’t properly track their expenses, and so on.

Covey points out that trust is built on two main dimensions. In order to be credible (deserving of trust) you must have:

  1. Character
    • This is your integrity, your motives, your intent with people, your honesty, your ethics
  2. Competency:
    • This is your capabilities, your skills, your track record, your ability to do the job well and to deliver, to make things happen

We typically think of character when we think of building trust, but competency is equally important. People generally feel I’m honest and have high integrity … they trust my character. But there is no way they would trust me, a software technology dude, to perform brain surgery on them. (I have zero competence as a brain surgeon)

The First Wave - Self Trust “Principle of Credibility

Covey points out that you have to start with yourself and your immediate team - He call this the “Principle of Credibility”. You need to be credible to yourself and others by showing both Character and Competence:

  1. You are a person of integrity - you are honest and congruent, you have a reputation for being truthful, and that you would not lie
  2. You have good intent - you are not trying to deceive or protect anyone, that you don’t have any hidden motive or agenda that would color your words or your actions
  3. You have excellent credentials - you have the expertise, knowledge, capability and skill in the area of your work
  4. You have a good track record - you have demonstrated your capabilities effectively in other situations in the past, you’ve produced results, you’ve met your commitments

Covey has a test in his book and on his web site you can take to test yourself in these four areas.

The Second Wave - Relationship Trust “Principle of Behavior

To have trust in an organization, people must interact with each other in ways that increase trust, and avoid interacting in ways that destroy it. Covey calls this the “Principle of Behavior”.

Covey identifies 13 behaviors to build relationship trust. They are are universal, actionable, and are based on the 4 cores of personal credibility above:

  1. Talk Straight
  2. Demonstrate Respect
  3. Create Transparency
  4. Right Wrongs
  5. Show Loyalty
  6. Deliver Results
  7. Get Better
  8. Confront Reality
  9. Clarify Expectations
  10. Practice Accountability
  11. Listen First
  12. Keep Commitments
  13. Extend Trust

Applicability to Agile and Lean

Do the Agile and Lean folks out there note how congruent Covey’s “Principle of Credibility” and “Principle of Behavior” are with Agile and Lean principles and high performance teams? This is what makes Covey’s work do valuable… he has a whole book full of practical advice on how to build Trust and Empowerment through a set of concrete actionable items, 17 in all!

His book is a great resource for Agile coaches and team leaders working to build trust and effective high-performing teams.

Closing Quotations

To quote Covey:

When trust decreases: speed decreases and cost increases.
When trust is low, relationships suffer, production is sluggish, customer retention erodes, employee turnover increases, stocks plummet and the costs are enormous.

When trust increases: speed increases and cost decreases.
When trust is high, customers buy more — more quickly, more confidently, and more often. They stay longer and they refer more of their friends. High trust enables relationships to grow, employee loyalty to soar, stocks to rise, and organizational dividends naturally increase.

Or to quote Brian Watson:

Trust + Empowerment = Higher Earnings

Trust + Empowerment = Higher Earnings

And to quote Rudyard Kipling:

I always prefer to believe the best of everybody, it saves so much trouble.

(I would say that means it also saves time!)