JetBlue Chairman Joel Peterson Discusses Why High-Trust Organizations Succeed
It’s hard to keep track of the many scandals that have shattered consumer faith in companies over the years. Negative buzz and outright crimes have caused prominent companies to crash and burn. But one of the things that can help prevent misdeeds, missteps, and outright company failure is trust. Building a culture of confidence strengthens business relationships, improves morale, and boosts interactions with clients, colleagues, and vendors.
Lack of trust is a huge problem for American businesses. According to a 2014 survey of U.S. workers conducted on behalf of the American Psychological Association, almost one-quarter of respondents revealed they don’t trust their employers, and one-third said their employers aren’t always honest with them. More than a quarter admitted they intend to seek employment elsewhere.
But when employers provide transparency in daily operations, workers are more likely to stay and even refer others. As chairman of JetBlue Airways and a founding partner of Salt Lake City-based investment firm Peterson Partners, Joel Peterson has seen the difference trust in the workplace can make. In his book, The 10 Laws of Trust, he describes how businesses can create and nurture such an environment. Peterson recently brought his expertise to a SoFi event in New York City attended by 80 SoFi members.
We asked Joel to share his thoughts with us on how a culture of trust gives businesses an edge, and how leaders can build and maintain a positive, open environment. Here’s what he told us.
SoFi: How does investing in building trust impact a business?
JP: Those that don’t spend any time developing trust and relationships that matter save time in the short run, but it costs them a lot of time in the long run, especially when the chips are down. Organizations that are high-trust tend to be more flexible and more innovative, and they deal with problems better. Trust strengthens work relationships, leading to more positive outcomes with creditors, suppliers, and customers.
SoFi: Let’s take an example of a company that didn’t really invest in building trust. What’s the toll?
JP: All of the failures you’ve seen are the famous ones, like Enron and WorldCom, based on financial misdeeds. There’s a lot of ‘hiding the ball’ in some organizations, and when it’s discovered, whatever trust level was there is destroyed. That often pulls the whole company down.
SoFi: Let’s talk about those who do really invest in the culture of accountability and trust — companies like Salesforce and Zappos. What have they done that’s set them apart?
JP: Both of those companies are known for standing for values and creating an atmosphere of collaboration, trust, and reliability around their values. They experiment. Some experiments work, others don’t, but they don’t tend to punish people when attempts fail. I think a lot of innovative organizations are characterized by that. Salesforce’s accountability program is an example of how important it is to have a culture of accountability in order to build trust. If people don’t know what’s being measured, they don’t know when they’re succeeding or failing, and therefore they become mistrustful. They feel exposed all the time. I think there has to be transparency around what is being measured.
SoFi: Many SoFi members are young managers who are really interested in innovative ways to become better leaders. What advice can you give them to help them grow?
JP: When you lead people, they follow—that’s key. But most people don’t do a very good job of attacking summits they don’t want to climb. You may be able to force some to do something that isn’t that interesting for a short period of time, but really great managers help groups determine the summits they want to climb. Then, those managers set the metrics and provide provisions and encouragement. The real job of a leader is to help employees set meaningful objectives, and then provide feedback all along the way.
SoFi: What are some effective steps managers can take to build trust among their employees?
JP: People trust you when they believe you’ve got their backs and that you’ll deliver on your word. I think the best way to earn that trust is to listen to them. I call it listening without an agenda. You start by caring about people, which means really listening to them and capturing what it is they care about. Once you’ve done that, it’s a question of having clear objectives and noticing when people do things that are great. Celebrate accomplishments, and give credit to the people who deserve it. Leaders who fail to build trust are those that blame people when things go wrong, but grab credit when things go right. High-trust leaders, though, deflect credit and absorb blame.
SoFi: Sometimes, no matter how much employees buy into the culture of a company or believe in its mission, motivation falters. What are some ways that employees can quickly get the perspective they need to push forward and accomplish their goals?
JP: Leaders are vital to that, because it’s their responsibility to help employees have a line of sight from their jobs to their objectives. If you’re an accounts receivable clerk, you really need to understand why getting invoices paid on time makes a difference to the cash flow of the company. You need to know that cash flow is crucial to the company’s ability to service debt and to pay employees, which allows the company to grow. In growing, the company is satisfying its customers and providing something that’s worth more to those customers than it costs the business to produce. The job of a leader is to make sure everybody sees that they are a part of something meaningful, so they realize that what they are doing really matters.
SoFi: How can theses rules of trust be applied to relationships and home life?
JP: I think the principles are the same. Fundamentally, we trust people who do what they say they are going to do. If you’re in a position of authority, and your character and competence are questioned, you won’t earn trust. For example, in some families, the objective is to raise kids. You know what you want for kids. You also have a whole series of sub-objectives, and you measure them. You give feedback and try to capture your kids doing great things, and then you celebrate it. You also laugh a lot and create an atmosphere where failure is a prelude to success. You don’t say, “You did bad”; you just say, “We tried something, we didn’t get the results we wanted, but let’s try again.”
Joel Peterson’s insights reveal key ways to help build trust in your organization. Transparency, active listening, and creating an atmosphere where failure can still lead to success, can make all the difference. For many, this trust is what inspires employees to remain engaged, loyal and become empowering leaders themselves.
If you’d like to learn how to build a great and trusted reputation for your career success, sign up for our upcoming webinar here.