Smart Trust: Creating Prosperity, Energy, and Joy in a Low-Trust World

So can we really go about trusting everyone around us? Isn't that a bit naive?

According to "Smart Trust," trusting people doesn't have to be risky. This book teaches us how to trust smart, using both our head and our heart with the people around us. According to the authors, developing more trust in our life will increase our prosperity. It will also increase our energy, performance, and joy. We're just happier when we trust more.

What's unique about "Smart Trust" is that it's not just an inspiring read. It's usable. The authors give us five specific actions we need to take to start showing smart trust in our lives. We also get a framework to help us make better decisions about who we trust.

The book is full of real-life case studies, many from the world's biggest companies and best-known leaders. These studies show us how truly transformational, and profitable, trust can be when applied right. And, trust creates a ripple effect in our teams and organizations that can have incredible results. The more trust we give, the more we get. It's a positive, upward cycle.

This is the kind of book all of us can benefit from reading.

Stephen M. R. Covey is the cofounder and CEO of CoveyLink Worldwide. He's not to be confused with his father, Stephen R. Covey, the bestselling author of "The Seven Habits of Highly Effective People." The younger Stephen Covey is a global speaker, consultant, and author in his own right, and the former CEO of the Covey Leadership Center.

You'll find a Book Insight of another of his books, "The Speed of Trust," on the Mind Tools site. This new book, "Smart Trust," expands on some of the ideas presented in that earlier book. We feel it's worth revisiting this topic, because trust is so key to business success – particularly in difficult economic times.

Greg Link is the cofounder of the former Covey Leadership Center, CoveyLink, and the FranklinCovey Global Speed of Trust Practice, a consultancy helping leaders understand and grow trust. He's also an experienced speaker and advisor.

So, keep listening to find out what smart trust really is, why you need to trust yourself first and foremost, and why it's important to let others know that you trust them.

The book is divided into three parts, and comes in at just under 300 pages. The first part examines the importance of trust. It also introduces us to the middle ground between blind trust and distrust. That middle ground is smart trust.

The second section goes over the five actions that make up smart trust. A chapter is devoted to each, so they're all covered in great detail. This second section makes up most of the book.

The last section is very short, with just one small chapter that wraps up the five actions it takes to build trust.

The book opens up with an inspiring story that shows just how powerful trust can be. It tells the story of Muhammad Yunus. Yunus won the Nobel Peace Prize in 2006. He's also the recipient of the American Presidential Medal of Freedom, the country's highest civilian honor.

Back in 1974, Yunus was watching people in Bangladesh slowly starve to death. As he walked the streets, he began to realize that the country's poorest people could be lifted out of poverty if they could only get a small loan. Most of them were women, and they had the skills to make bamboo goods they could sell to support themselves. But the initial investment they needed, which was only a few dollars, was hopelessly out of reach for them. Most of these women were surviving on two cents a day.

Yunus decided to start a bank that would make small microloans to the poorest of the poor. These people had no credit score, no steady employment, no collateral, and often no address. But Yunus felt strongly that if he just trusted them, and gave them a chance, they would repay every cent.

He was right. To date, Grameen Bank has lent over $6 billion in micro loans to the world's poorest people. Yunus has helped lift millions of people, 97 percent of them women, out of crushing poverty. And, 97 percent of borrowers repay their loans.

We can't help but be inspired by a story like this. But you might be thinking that this kind of trust would never work in your industry. Well, the authors tell us that, actually, it can work anywhere.

The authors relate several more stories in chapter one that show us the kind of leaders and companies who are transforming their culture with trust. Zappos, General Mills, IBM, and the Tata Group are just a few of the organizations covered here.

According to the authors, the problem is that we let the five percent of the population who can't be trusted dictate how we interact with the other 95 percent who can be trusted. We thought this was an important lesson that all of us can take to heart.

So, the big question is, how do you do it? How do you start putting your own reservations aside, and wisely trust people in an environment where not everyone can be trusted?

You have to use smart trust. Smart trust is about judgment, and it optimizes two important factors: a propensity to trust, and analysis.

Most of us have the propensity to trust. This is essentially the desire to trust others. It's really a matter of the heart. You go forward with the belief that most people are basically good.

However, this has to be balanced with analysis, which is the other essential element in smart trust. Analysis helps you exercise good judgment when considering whether or not to trust others. To do a thorough analysis, there are three factors to look at.

The first is opportunity. What are you going to trust this person with? The second element to analyze is risk. What is the level of risk with this person?

The last element to analyze is credibility. What is the character and competence of the people involved?

It's important to realize that trust without analysis is blind trust, or gullibility. And analysis without trust is simple distrust. But when we start relationships with both trust and analysis, we can exercise good judgment and get smart trust.

The authors give us more real-world case studies that show how trust tempered with good judgment can transform entire communities. One example we really liked took place in Vancouver, British Columbia. The Royal Canadian Mounted Police partnered with the local community and started handing out positive tickets. These were given out whenever an officer saw a young person doing something right.

The tickets could be redeemed in local businesses for pizza, ice cream, or movies. The tickets showed young people they were trusted, and they began to interact with officers and businesspeople in a very positive way. As a result of the program, juvenile arrests dropped over 53 in three years. The amount of money spent processing offenders dropped 90 percent. And 95 percent of the youths that were arrested were not arrested again.

According to the founder of the program, the positive tickets were a gateway to relationships built on trust.

The authors next give us a framework that helps us intelligently navigate risk so we can spend more time and energy on trust. This framework, which is based on five specific actions, makes up the rest of the book.

The first action is choose to believe in trust. The second is start with self. The next, declare your intent... and assume positive intent in others. The fourth action is do what you say you're going to do. The fifth action is lead out in extending trust to others. So, let's take a look at a few of these.

The first action, choosing to believe in trust, is the foundation for all the others. The authors state that belief is critical to getting results in any area of our life. Beliefs drive your behavior. And, this is true whether our beliefs are right, or wrong.

Trust is a choice. And when we make the choice to believe that others can be trusted, we inspire ourselves, and others, to take actions to extend that trust.

The authors admit it can be incredibly hard to take this first action, to choose to believe in trust. This is especially true if you've experienced an intense betrayal, or gone through several smaller ones. But if you can make that first step, your life could be transformed for the better.

The second action, start with self, is just as important as the first one. In this chapter the authors talk about why trust has to start with you. That is, first of all, you have to prove to yourself, and then to others, that you're trustworthy.

Starting with self is all about taking responsibility for your own actions, and being credible. Credibility is made up of character and competence. And it's the combination of these two things that enable us to trust ourselves.

Often, people distrust others because deep down, they see themselves as untrustworthy. Until you learn to trust yourself, you won't be able to trust anyone else.

There are some wonderful quotes and inspiring stories in this chapter. One of these is from the acclaimed American basketball coach John Wooden, who said, "Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are." We thought leaders, especially, would find this quote motivating and inspiring.

The third action, Declare your intent, and assume positive intent in others, was probably our favorite. The reason we liked this action so much is because communicating our intention to trust, and assuming, first, that others can be trusted, is often overlooked by people.

When we declare our intent to trust others, and we say why we're disclosing this trust, we don't leave any room for miscommunication or assumptions. Doing this actually accelerates trust dramatically because we're giving right from the beginning. It's human nature to want to reciprocate.

An insightful point the author includes here is that we tend to judge ourselves on our intentions, and others on their observable behaviors. By declaring our intent to trust, we can dramatically influence how others see us, and increase the chance that they'll trust us in return.

One of the ways you can declare your intent to trust is to tell the other person what your most important priority is. This is especially true in negotiations. Instead of hiding your intent and priorities so the other person can't take advantage of your weaknesses, the authors provide several stories that show what can happen if you make a full disclosure right from the beginning.

When we don't declare our intent, we leave it to others to wonder what we're doing, and why we're doing it. It creates fear of the unknown, and often causes distrust because people think we have a hidden agenda.

But when we're completely open with others, and we tell them what we're doing and why we're doing it, they don't have to wonder. They know. They see we trust them with this information. And this inspires them to trust us back.

The last two actions, each with their own chapter, are like the first three. The authors spend time explaining the action in detail, and then give plenty of inspiring case studies and quotes to show us what that action looks like in business, and in other relationships.

So, what's our last word on "Smart Trust?"

We really enjoyed this book. The authors did a great job making the book highly readable as well as practical. There are thought-provoking questions at the end of each chapter that help you dive deeper into the issues covered. We also liked that the authors created a framework to guide us into trusting more in our life.

That said, this book isn't filled with tips, strategies, or how-tos. The framework the authors provide is easy to follow, but much of the book is written to convince us why this is the best path to follow, and to show us the great leaders already on this path of trust.

In the end, it's up to you to make your own choices about how to implement the framework in your life. Again, though, there are questions at the end of each chapter which help you analyze what you've just read, which may help you apply the lessons.

As you've heard, the book is largely filled with stories that illustrate how powerful trust can be. The authors use these stories to teach the lessons they want us to take away. Although they're relevant and inspiring, the sheer number of them might get a bit wearing for some readers. They did for us about half way through. So, you might find yourself skimming a bit. You can always go back for more inspiration later on.

All in all, we can easily recommend this book. It's a practical, and inspiring, read.

"Smart Trust," by Stephen M. R. Covey and Greg Link, is published by Free Press.

That's the end of this episode of Book Insights. Thanks for listening.