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Video Summaries of Smart Trust
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1-Page Summary of Smart Trust
The Loss of Trust
Trust is important for individuals and organizations. Some people and groups have a lot of it, while others don’t. Those who do not can perpetuate negative cycles by being untrustworthy themselves.
The news is filled with stories of corruption, fraud and scandal. This has a negative effect on society as trust in institutions decreases. The author believes that high-trust relationships are critical to economic prosperity and even more so for personal well-being because they increase energy levels and happiness.
Trust is important for prosperity. If there’s no trust, then it will be difficult to make money and have a successful business. Companies that are trustworthy experience economic benefits because they can move forward quickly without any problems or issues. On the other hand, companies that aren’t trustworthy suffer from penalties such as redundancy, bureaucracy, politics, disengagement and fraud.
Trust has a lot to do with energy. High trust creates a positive atmosphere that leads to more productivity and creativity, while low trust creates tension that can exhaust people. This phenomenon has a ripple effect throughout the organization, changing the overall spirit of the company in either direction.
People who are engaged in their work and feel like they can trust the people around them will enjoy doing what they do. In a high-trust company culture, employees want to be there.
“The Great Paradox”
There are three elements that can be used to measure trust: individual, institutional and national. Each element improves as trust grows. Despite the worldwide crisis of trust, there are many oases of hope where people build their faith in others based on ancient principles such as having a sense of confidence in them. These leaders include Muhammad Yunus, founder of Grameen Bank; Azim Premji, chairman of Wipro; and Tony Hsieh from Zappos. Their companies have seen tangible profits by increasing their employees’ or customers’ levels of trust in them.
“Blind Trust,” “Distrust” and “Smart Trust”
Many people are either naive or suspicious of the world. This is because they view it through a lens of blind trust or distrust. They might have been conditioned by their families, schools, government and experience to be this way. The outcome of these perspectives can be uplifting or depressing depending on how much you believe in others. People want to believe in each other so giving too much trust is easy until you get hurt like those who invested with Bernie Madoff’s Ponzi scheme. Betrayal often leads to activities based on distrust such as Sarbanes-Oxley Act 2002 and increased airport security after 9/11 attacks which was a natural response to low trust levels
Trust is a very important factor in business. Blind trust and distrust are not good ways to run a company, as they both lead to problems. Smart Trust is an alternative that requires making informed judgments based on the propensity to trust and analysis of three variables: listening to your heart, or intuition; listening to your mind, or logic; and tempering those two by applying analysis. This way of managing can help companies such as eBay and L.L Bean create successful businesses despite the general low level of trust in today’s market environment.
- When you’re deciding whether or not to trust someone, it’s important to consider the situation, the risk involved and your own credibility. If you don’t analyze the situation carefully enough when extending high trust, you’ll be vulnerable to being taken advantage of. On the other hand, if you distrust people without analyzing them thoroughly enough first, then they won’t be able to prove themselves trustworthy. The best way is a combination of both: extend high trust with careful analysis (Smart Trust).
