The state of trust in America seems to be in free fall. Trust in government, big business and large institutions has unraveled. Distrust has begun to fray the fabric of society and erode trust in community, neighbors and even between individuals. True leaders recognize that a culture of trust is not just a nice-to-have HR program. A culture of trust is key to innovation, excellence and sustainable success.
Legendary leader and entrepreneur Joel Peterson, chairman of JetBlue Airways and founding partner of the investment management firm Peterson Partners, shares his cure for a culture of declining trust in America.
Listen to the full conversation between Deseret News opinion editor Boyd Matheson and JetBlue chairman Joel Peterson on the latest episode of “Therefore, What?” or read an excerpt of the transcript below.
The following has been edited for length and clarity.
Boyd Matheson: Your revised book is titled “The 10 Laws of Trust.” Tell us why is trust such a critical thing for you?
Joel Peterson: Well, I’ve tried to run companies and hire CEOs and work through problems for the past 45 years. And I’ve found that trust is the most valuable currency that you’ve got as a leader. If you have high trust with your team, with your suppliers, with your creditors, with your shareholders, you can do anything. If you don’t, you can do nothing. And I see trust as strained in society today generally. It’s a really important topic. I think people don’t largely understand trust. They think it’s this fuzzy feel-good thing. I like this person, therefore I trust them. And it’s a much harder-edged concept. So to me, it seemed like it was time to get everything down that I learned through the school of hard knocks.
BM: It seems a lot of politicians and business leaders today are no longer about relationships. Everything is just a transaction or a deal, and that seems to be undermining trust within the organization and between organizations. How do we deal with that?
JP: Well, I think it does start with people realizing that life is a marathon. You’re going to run into yourself over and over and over again. Negotiations are serial, not episodic. And so many, many times you’re going to find that you’re negotiating with a person that you met 10 years earlier, and they either had a positive or negative impression. So the idea of building a high-trust brand takes years. It’s a molecule at a time, a conversation at a time. And so that notion is, I think, a really important one for people to say early on in their careers that they’re going to develop a high-trust brand. They’re going to work in high-trust organizations. And then I think it tends to spread.
BM: What are some of the common things that you see in organizations that are red flags in terms of not having the level of trust or culture of trust that they need?
JP: If people are trusted, that usually that means they’re empowered. They can do things, they can make decisions. In an organization where you don’t really trust the leader, what happens is that you’re not sure what he or she is going to say or do. And so people don’t make decisions. They manage information. Nobody’s empowered, and it’s all waiting on the leader to make the call. And most decisions should be made by the team. If you’re in a leadership position and you’re making (most of the) calls, you’ve not done a good job of delegating. High-trust organizations delegate, they empower people and they celebrate their success.
BM: You talk about real cost savings in terms of trust. What is that?
JP: Anytime that there’s low trust, you have lots of lawyers crawling over everything. Lawyers are expensive, lawyers are wary. Lawyers look at worst-case scenarios. They look at remedies. They have a certain way that they process problems. Whereas entrepreneurs are kind of on the other extreme — they’re lighting fires, and they’re maybe taking risks they shouldn’t take. Somewhere in between there’s this place where people are high trust, high contact — relationships, transparency — people are flexible. They innovate. They change direction. Low trust organizations often don’t fix their problems, because you get punished if you make a mistake. So people hide them for a long time. Well, that’s expensive. High-trust organizations experiment, innovate. If it’s not working, they cut off the pilot and move to something else. There’s no recrimination. High-trust leaders absorb blame and reflect credit. And that builds credibility. That builds a sense of, “it’s safe here to try stuff.” So high-trust organizations tend to move fairly quickly, and people are happier.
BM: What do you find with the rising generation, this next crop of entrepreneurs and business people? How’re they viewing trust?
JP: I think they’re a little bit wary. They’ve lived through the meltdown in ‘07 and ‘08. A lot of things that they expected, you know, they were told go to college and everything will be fine. And all of a sudden they have a big bunch of debts, and they don’t have a job. Or buying a house — you know, if you buy a house, you’ll have security for the rest of your life. And they find that houses go down in value.
There have been a lot of things that make them a little more wary than most. I’ve taught at Stanford for 27 years, and I think I’ve seen at least three generations of them. This most recent is wary, they’re cautious. On the other hand, they’re very idealistic, you know, they want to make the world a better place. And they have a sense, a cross-generational sense. They’re not really just short-term, self-interested. They have a real sense of humanity. And so I think there’s some wonderful starting points, and they’ll learn a lot when they’re on the job. And so I’m very hopeful for the generation.
BM: Society often says humility is weak and passive. You say it’s a strength, and it’s critical to building trust. Why?
JP: I think a lot of people don’t understand what humility is. I think the idea that you’re self-effacing, that you’re timid — that is not humility. Humility is that you are learning, you’re willing to say that you made a mistake, you’re vulnerable to the mistakes that you’ve made. People will trust you more. I’ve found that when I admit that I made a mistake people don’t want to beat me up. They say, “don’t take it so hard. Don’t be so hard on yourself.” You know, they actually lift some of the burden, they actually help. And it makes you more vulnerable and more likely to get feedback.
One of the worst things about being a CEO is you can get cut off. People feed you what they think you want to know. And I think if you’re humble, if you’re vulnerable, if you’re open, you can continue to get good information. And if you get good information, you can build a high-trust organization.
JetBlue Airways chairman Joel Peterson is the author of the new and expanded edition of “The 10 Laws of Trust,” now available.