Stephen Covey is the 7 Habits of Highly Effective People dude. Stephen M.R. Covey is his kid, and M.R. thinks we’ve all developed a bad habit of not trusting each other enough.
A few weeks back, Steve M.R. came to speak in my town, and I was roped into going…I mean graciously invited. Steve M.R.’s topic was “The Speed of Trust,” and I’ll leave aside the water ripple graphic demonstrations momentarily to cut to the chase:
If you’re doing business deals and you actually have to verify that people will do what they promise because you don’t trust them intuitively, just think of the time that wastes! Steve M.R. had numbers, and they ended in words like “trillion.” He especially has a problem with this thing called “due diligence,” which, of course, is where we spend all kinds of money on lawyers and investigators and researchers and documents to make sure our prospective business partners aren’t crooks, incompetents or capital-starved posers. Just think how much better off we’d be if we didn’t spend all that money! So says Steve M.R. And he thinks he proves it. Apparently, Warren Buffett and Wal-Mart did a deal recently in which neither side bothered to do any due diligence, because each just knew the other was trustworthy. The deal was implemented in weeks instead of many, many months.
Steve M.R. loves this! Weeks! All because of trust! Hey, you, everyone else in the business community: Do it Warren’s way!
Of course, if Warren loses $50 billion, he just replaces it with stuff he finds under his couch cushions. But Steve’s treatise did resonate with me somewhat. It took me back…
Paging Rodney King…
As an impressionable high school freshman in 1980, I wrote an essay titled, “One Condition for World Peace.” I explained that, if the Americans and the Soviets would make friends, all the potentially world-destroying nukes would be unnecessary and everything would be cool. How hard could that be? I thought I was a genius.
Of course, a decade later when we defense-spent their communist butts out of existence, I thought to myself, “Oh, this is even better.” But in 1980, I was just naïve enough to think I’d happened upon a brilliant idea.
Steve M.R.’s idea sort of reminds me of that freshman foray into the field of foreign policy. Everyone trust each other! Just think of the time it will save.
Now, Steve M.R. does have an idea (or 49) about how to actually get people to be deserving of such trust. This brings us to the ripples and the branches. A picture of water with cascading ripples shows “Self Trust” at the center, followed by relationship, organizational, market and then societal trust. The tree offers us the “four cores of credibility” and goes from integrity (the roots) to results (the leaves) with lots of tree bark in the middle and possibly some spikes left by radical environmental groups. But I’m supposed to be trusting.
Steve M.R. also gives us “13 behaviors of high-trust leaders,” all 13 of which can be summarized as “don’t be a jerk or an idiot.” There. I just saved you a whole lot of time.
At the conclusion of Steve M.R.’s presentation, a 22-year-old whippersnapper from the company that invited me to the lunch made an interesting observation: “That would have been a really good presentation if he’d made it to a bunch of third-graders,” the whippersnapper said. “Any older than that and there’s no chance of changing anyone’s fundamental behavior or character.”
The whippersnapper is right. Steve M.R.’s theory is as true as my world peace theory was in 1980. If everyone would be trustworthy, we could just believe each other and save time. If we would all just get along, we wouldn’t fight.
But Steve M.R. may have nonetheless stumbled onto a partial truth, and this is where D.F.’s Theory of the Economical Rip-off comes in. As the whippersnapper demonstrated, untrustworthy people are generally going to stay that way, so there’s no sense trying to change the business world to make everyone trustworthy. And Steve M.R.’s fantasy of smooth-as-silk Buffett/Wal-Mart transactions with no due diligence required will remain just that.
But Steve M.R. is correct when he talks about the cost of due diligence. Yeah, it’s a nightmare—time, money, after-the-fact lawsuits. All the stuff we do to try to counteract the reality of our getting ripped off is costing us a fortune. So why don’t we just stop doing it and accept the inevitability of the rip-offs?
See, I’ve been ripped off numerous times, but the worst such occurrence came at the hands of a man we’ll call Ray. Detestable man. Ran up nearly $30,000 in bills with my company. Never paid. We sued. We won. It didn’t matter. He never paid the judgment. We hired lawyers and collection agents to try to collect. They failed.
I’d have been better off if I’d never involved the lawyers and collection agencies. They all cost me more money than if I’d just eaten the loss. I didn’t do any background checks, credit checks or anything like that, but who’s to say it would’ve mattered if I had? Would I really have found evidence that Ray was going to rip me off?
I’m not so sure, but I know it would have cost me a lot of money.
So my theory incorporates half of Steve M.R.’s theory—the part about how much time and money it wastes when you do due diligence—but rejects the other half, which is that you can somehow get people to be more trustworthy.
I say: Since some of you are going to rip me off, don’t make it worse by taking up my time, forcing me to come to meetings and having me sign a bunch of stuff. I need to be ripped off more efficiently, so I can focus my efforts on customers who pay me.
Two years ago, a guy made me come to four meetings with him before he hired me to do $1,000 worth of work that he never paid for. That was a very inefficient rip-off. I need my crooked customers to give me their orders in one quick phone call so I can let them screw me as quickly as possible.
Steve M.R. is right. It’s too much of a hassle to protect yourself against being ripped off. The key is to take it up the wazoo fast and move on. And by no means should you try any of that water ripple or tree branch stuff. You have enough problems without trying to turn human beings into freaks from Steve’s fantasies.
Whippersnappers think they know so much.
