How (28 page)

Resting in the status quo leads to stasis and decline. For all great innovations, someone took a risk. They risked capital; they risked their energy; they risked their opportunity cost; and most important, they risked failure. We can’t innovate without the belief that we can succeed, the confidence that others will be there to help us on the journey, and the security that we will not be punished if we fail to reach our goal. A fast-moving world demands innovation for long-term success. Leaders who want employees to take risks must create an environment where risk can flourish, a trust-based environment. Trust enables risk, and risk leads to innovation, the “I” in TRIP.

Progress

What happens if you innovate? You create progress. “P” stands for progress—not just progress in goods, services, and profit, but also personal progress. We toil each day for the satisfaction when we achieve great things, when we help the team, and when we make others’ lives better. Progress is, in this way, intimately related to the pursuit of significance. We go on TRIPs because we want to accomplish big things. We go on TRIPs because we want to solve real problems and because we want to create lasting value. We also progress when we take risks and succeed. When we struggle through the Valley of C and climb the Hill of A, we know that we have grown as a person, that we are stronger and more capable, and, most important, that we have the strength to set out on the next journey, to an even higher hill, and beyond. And isn’t that what the journey is about?

TRIPPING

Trust enables risk, which leads to innovation, which creates progress. TRIP. This is the basic formula for thriving in the hyperconnected, hypertransparent world of twenty-first-century business.

There’s more to this TRIP, as well. The “T” also stands for transparency, which creates trust. Interpersonal transparency is a necessary power to thrive in a connected world, and not coincidentally, it creates trust. I was discussing trust with Roger Fine, former vice president and general counsel of Johnson & Johnson (J&J). I had the privilege of working closely with Roger during his time at J&J, and learned a great deal from him. When we spoke, he zeroed right in on this. “The main way people create trust,” he said, “is by being transparent and being honest. Transparency lets people know when you are telling them the truth, the whole truth, and nothing but the truth, and they know that in a minute. That’s why we believe in the jury system. Jurors can sniff that out. All it takes is a lot of common sense and some basic human instinct; you know when somebody is putting you on and when somebody is really being transparent with you. We all feel that.”
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When you are employing the power of active transparency, people feel that you’ve told them everything—the bad with the good, the negative with the positive—and that you are the kind of person who wouldn’t lie to them and hide something that was against your own interest. So trust and transparency go hand in hand.

“R” also stands for reputation. Reputation both derives from trust and engenders it. We’ll discuss its importance more in Chapter 9.

Trust also frees instinct, another “I.” As humans, we have animal instincts, but unfortunately for our decision-making apparatus, most of our true biological animal instincts have either disappeared or become vestigial. What most people consider instincts are simply a complicated interweaving of experience, judgment, and sense perception that takes place in the synapses of the brain when faced with making a decision. When you are in a trust-filled situation, these synapses are strong. The various centers of your brain communicate seamlessly and rapidly, and you can then make split-second decisions that often pay off.

Athletes know this well. In golf, hitting your ball along a more aggressive line might get you to the hole in fewer strokes but also might lead you closer to hazards that can penalize you. When your swing is working well and you trust it, you feel more confident about taking such risks, so you swing away; you go for it. When you have less trust in your stroke, you take a safer line or shoot for the center of the green rather than for a flagstick tucked behind a bunker. The same principle applies to more reactive games like tennis or basketball, where the action happens so quickly that you often do not have time for considered thought before making a play. If you trust your stroke in tennis you are more likely to attempt a dangerous drop shot or a passing shot down the line. When the trust isn’t there, you’ll make a safer shot to keep the ball in play. All of these instinctual decisions happen in milliseconds because trust builds strong synapses, and these instinctual decisions can often be more powerful and successful than more considered ones. Trust creates the environment where instinct can thrive.

And finally, if you are always on this TRIP and you constantly progress, then “P” stands for perennial prosperity as well. You’ll notice I did not say that “P” stands for profits. The pursuit of progress seldom flows from the pursuit of profit, but rather from the pursuit of creating something of value to others.

DOING TRUST

The $64 billion question (it used to be $64 million) of our time is how do we get this TRIP going? Where does it start? What’s the Big Bang? We’ve already shown that it’s not through rules, because rules can’t inspire that type of certainty and risk taking. If not with rules, then with what?

The answer, of course, lies in the realm of HOW. We tend to trust people who get their HOWS right, people who are transparent, forthcoming, and open, and honest; who share credit and opportunity with us; and who communicate fully, build strong interpersonal synapses, and keep their promises. In short, people with integrity. They collaborate, they embrace, and they engage. If you want trust, you need to find people and companies that create circles of trust around themselves. Like the Olympic rings, the more interlocking circles within a stadium, the more Waves you can make there. We live in a time when trust is the currency of the age. Trust is more valuable than ever before, so you should produce a lot of it. Those who can engender and wield more trust will win.

Mike Fricklas knows that from experience. “In the late 1990s,” Mike told me, “I was negotiating the terms of a major joint venture for Viacom. It involved the acquisition of a business from a major entertainment company in exchange for a stake in the venture. I was leading the team, and the deal had a number of moving pieces. The people on the other side were under a lot of pressure to get a transaction done, but between the time we negotiated the general deal and the time we were to close it, the valuations had moved. At the last minute, their negotiator came to me and said, ‘We really need something more on this because the numbers have really moved dramatically. ’ We weren’t prepared to renegotiate the price at that point because it wouldn’t have worked for our shareholders.”

“We had all the leverage, but were also under a lot of pressure to close, so the dynamic was tense. Someone on the other side of the table asked for a major price concession that I did not feel they were entitled to. The dynamic could easily have been somebody pounding away on the table and taking a hard line. I mean, in this sort of situation, you often see little more than efforts to assert every piece of obvious leverage that they have and not a view toward the bigger picture. But this guy had been really straight with us, and when you deal with someone like that, I am more inclined to say, ‘You have been reasonable with me, so let’s figure out a way to deal with your situation.’ I came up with a creative way of adding a lever that would give him a certain degree of additional protection. It allowed him to report to his team the change he had achieved and made his people more comfortable. I didn’t have to go back to my boss and tell him that the price was going to change, and, as it turned out, the protection we gave up didn’t cost us anything in the end.

“A few years later,” Mike continued, “I was negotiating the M&A side of a complicated deal involving a different Viacom asset to an entirely different company. Another Viacom team was negotiating a related but separate part of the deal. Across the table from our folks was that same guy I just told you about with whom I had done the deal years before. This negotiation, for a million complicated reasons, also got bogged down on some intractable point unacceptable to us, which I also felt was unreasonable. Because of my previous relationship with this other negotiator, I considered calling him directly, but instead decided to let our team take one more shot at it.

“Later that day, the team called me back. They had spoken to their counterpart, and in the course of the conversation told him that I thought his position was unreasonable. He immediately changed his mind. ‘We’ll do this for Mike,’ they reported him saying. I ran into him at an industry event a few months later and thanked him.”
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I told Mike what a terrific example of the currency value of trust this was, and he was extremely modest about it. “Having those good, trusting relationships dramatically facilitates your ability to get things done,” he said. “My wife, with our children, always refers to a ‘ladder of trust.’ You go up one rung at a time, but when you slip you come all the way back down to the bottom. I think there is a lot of truth in that for making deals as well. Once you catch someone not telling you the truth or not dealing fairly, then the trust element really disappears and it’s hard to build back. Things get a lot more difficult from that point on.”

Extensions of trust can occur both as conscious and as unconscious actions. Some people you meet just feel trustworthy to you, and at some level you choose to extend them trust without too much conscious thought. This is the trust that happens at what the neurobiologists call the amygdalic level, that complex interface of oxytocin, error detection, and decision making in your brain. You can become one of these sorts of people. On a one-to-one basis, you can conduct yourself in a way that activates what Paul Zak and others call social attachment mechanisms, behaviors that create physiological responses, release oxytocin, and increase trust. Meeting with people in person when the occasion is important, greeting them with a warm handshake, making frequent eye contact, sharing a meal together, and demonstrating concern for their family members and other passions all stimulate trust responses. As much as it may sound like a homily, science has shown us that caring and honest behaviors increase trustworthiness (note the
and honest
in that sentence; the unconscious brain senses false caring as quickly as it does true caring).

On a companywide level, unconscious trust responses can be activated by what business knows as morale-building programs. Lifestyle programs like on-site child care, flextime, team-building outings, exercise facilities, and family leave are more than just good public relations; they actually raise oxytocin levels in the bloodstream, increasing employees’ trust and productiveness. Even something as unconventional as on-site massage therapy (which, by the way, has been used by such touchy-feely employers as the U.S. government)
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is amazingly effective. Not only does massage send a message that the company cares, but it translates that caring into human touch, a powerful stimulator of oxytocin response.

Strengthening social attachments is just another way of building strong interpersonal synapses with others in your stadium. These sorts of behaviors work especially well with those with whom you make direct contact. But I believe these principles scale also to teams, business units, and companies as a whole. These larger gestures can help to carry your Wave throughout the stadium, even reaching those in the outfield whom you have never met and do not know.

(A point of clarification here: Despite the fact that we talk about “interorganizational trust,” organizations can’t actually manifest trust for each other. Trust flows from individuals. As part of their research, Dyer and Chu point out that a person can place trust in another person or in a group of individuals, such as a partner organization. But a group of people can also collectively hold a trusting orientation toward people in another organization; thus “interorganizational trust describes the extent to which there is a collectively held trust orientation” from one company to another. Although companies cannot extend trust per se, they can act consistently in such a way so as to earn an institutional trust, trust that exists independent of the personnel who might be there at the time.)
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As Mike Fricklas’s wife reminds him, it’s a long, hard fall off the ladder of trust. Trust is destroyed by the suspicion that any person, group of people, or organization is acting in its own narrow interests without regard for mutuality and mutual advantage. The choices you make, as an individual or an organization, send strong messages to the marketplace, and the marketplace responds in countless ways, both easily quantifiable and more ephemeral. Mike also shared with me that he has made it a fundamental part of his professional approach to get to know and build trust with the general counsels of the other big media companies. “Through those relationships,” he said, “we’ve both resolved amicably differences of view that had come up between our companies and been successful promoting issues where there is a commonality of interest across our industry, like antipiracy efforts or new compensation rules.”

TRUST IS THE DRUG

In mid-2006, Jeffrey B. Kindler was named chief executive officer and then later chairman of the board of pharmaceutical giant Pfizer Inc. after several years in which the company experienced subpar performance in rapidly changing market conditions. It’s fair to say he inherited a company operating in a low-trust environment, with the popular public perception of “Big Pharma” linked almost entirely to “big profits.” “I was at a play recently, and there was a line that got great laughs about people going to a charity function to provide philanthropy for a disease invented by the pharmaceutical industry,” Jeff told me. “I mean, when you get to the point where popular humor and popular culture accept the premise that we actually sit around trying to invent diseases so that we can then invent treatments for those diseases and make money, you know, it is appalling.”
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