Start with why

The Definition of Trust
Founded by Sir Francis Baring in 1762, Barings Bank was the oldest merchant
bank in England. The bank, which survived the Napoleonic Wars, World War I
and World War II, was unable to survive the predilection for risk of one self-
proclaimed rogue trader. Nick Leeson single-handedly brought down Barings
Bank in 1995 by performing some unauthorized, extremely high-risk trades. Had
the proverbial winds continued to blow in the right direction, Leeson would have
made himself and the bank extremely rich and he would have been hailed as a
hero.
But such is the nature of unpredictable things like the weather and financial
markets. Few dispute that what Leeson was doing was anything more than
gambling. And gambling is very different from calculated risk. Calculated risk
accepts that there can be great loses, but steps are taken to either guard against or
respond to an unlikely but possible outcome. Even though an emergency landing
on water is “unlikely,” as the airlines tell us, they still provide us lifejackets. And
if only for peace of mind, we’re glad they do. To do otherwise is a gamble few
airlines would be willing to take, even though the actuarial tables are heavily
weighted on their side.
Leeson strangely held two positions at Barings, ostensibly serving as both a
trader and his own supervisor, but that fact is not interesting given the subject
matter. That one man had such a tolerance for risk that he could create so much
damage is not very interesting either. Both of those are short-term factors. Both
would have ended if Leeson had either left the company or changed jobs, or if
Barings had assigned a new supervisor to oversee his operations. What is more
interesting is the culture at the bank that could allow these conditions to exist in
the first place. Barings had lost its WHY.
The culture at Barings was no longer one in which people came to work
inspired. Motivated, yes, but not inspired. Manipulated by the promise of
massive payouts for performance, for sure, but not inspired to work in the best
interest of the whole. As Leeson reported in his own account of how he got away
with such risky behavior for so long, he said it was not that others didn’t
recognize that what he was doing was potentially dangerous. It was worse than
that. There was a stigma against speaking out. “People at the London end of
Barings,” Leeson explained, “were all so know-all that nobody dared ask a
stupid question in case they looked silly in front of everyone else.” The lack of a

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clear set of values and beliefs, along with the weak culture that resulted, created
the conditions for an every-man-for-himself environment, the long-term impact
of which could yield little else than disaster. This is caveman stuff. If the people
aren’t looking out for the community, then the benefits of a community erode.
Many companies have star employees and star salesmen and so on, but few have
a culture that produces great people as a rule and not an exception.
Trust is a remarkable thing. Trust allows us to rely on others. We rely on those
we trust for advice to help us make decisions. Trust is the bedrock for the
advancement of our own lives, our families, our companies, our societies and
our species. We trust those in our community to care for our children so we can
go out to dinner. Given the choice between two babysitters, we’re more likely to
trust a babysitter with a little experience from the neighborhood than one with
lots of experience from far away. We wouldn’t trust someone from the outside
because we don’t know anything about them, we say. The reality is, we don’t
know anything about the local babysitter either, beyond the fact that she’s from
the neighborhood. In this case, we trust familiarity over experience with
something quite important—the safety of our children. We trust that someone
who lives in the community and more likely shares our values and beliefs is
better qualified to care for the most valuable thing in our lives over someone
with a long résumé but from an unfamiliar place. That’s pretty remarkable. It
causes some pause when we consider how we hire people: what’s more
important, their résumé and experience, or whether they will fit our community?
Our children are probably more important than the position we want to fill at the
organization, yet we seem to exercise a very different standard. Is there a false
assumption at play here as to who makes the best employee?
Historically, trust has played a bigger role in advancing companies and
societies than skill set alone. Like the couple leaving their children while they go
out on a date for the evening, groups from within a society would go off with
confidence, knowing that their homes and families would be safe upon their
return. If there were no trust, then no one would take risks. No risks would mean
no exploration, no experimentation and no advancement of the society as a
whole. That’s a remarkable concept: only when individuals can trust the culture
or organization will they take personal risks in order to advance that culture or
organization as a whole. For no other reason than, in the end, it’s good for their
own personal health and survival.
No matter how experienced, no matter how proficient, a trapeze artist will not
attempt a totally new death-defying leap without first trying it with a net below
him. And depending on how death-defying the trick is, he may insist on always
having a net when performing the trick. Besides its obvious advantage of

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catching you if you fall, the net also provides a psychological benefit. Knowing
it is there gives the trapeze artist the confidence to try something he’s never done
before, or to do it again and again. Remove the net and he will only do the safe
tricks, the ones he knows he can land. The more he trusts the quality of the net,
the more he will take personal risks to make his act better. The trust the circus
management gives him by providing him a net is probably afforded to other
performers too. Soon all the performers will feel confident to try new things and
push themselves further. That collection of personal confidence and personal
risk results in the entire circus putting on a much better show. An overall better
show means more customers. And the system thrives. But not without trust. For
those within a community, or an organization, they must trust that their leaders
provide a net—practical or emotional. With that feeling of support, those in the
organization are more likely to put in extra effort that ultimately benefits the
group as a whole.
I will admit that there are always those who will take the risk, for the first time
or repeatedly, without the net. There will always be those who will explore
regardless of who is home holding down the fort. These people sometimes earn
their rightful spots as the innovators. The ones who pushed further, the ones who
did things no one else would do. Some of them may advance a business or even
society. And some of them end up dead before they achieve anything.
There is big a difference between jumping out of a plane with a parachute on
and jumping without one. Both produce extraordinary experiences, but only one
increases the likelihood of being able to try again another time. A trapeze artist
with a personality predisposed to taking extraordinary risks without a net may be
the star attraction in an otherwise mediocre show. But if he dies or leaves for
another circus, then what? This is the paradigm in which someone is motivated
by self-gain regardless of the consequences or the benefits to the organization for
which he or she works. In such a case, the effort may be good for the individual
and it may be good for the group, but the benefits, especially for the group, come
with a time limit. Over time, this system will break down, often to the detriment
of the organization. Developing trust to encourage people other than those with a
predilection for risk, like Nick Leeson, is a better long-term strategy.
Great organizations become great because the people inside the organization
feel protected. The strong sense of culture creates a sense of belonging and acts
like a net. People come to work knowing that their bosses, colleagues and the
organization as a whole will look out for them. This results in reciprocal
behavior. Individual decisions, efforts and behaviors that support, benefit and
protect the long-term interest of the organization as a whole.
Southwest Airlines, a company renowned for its customer focus, does not, as

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a matter of policy, believe the customer is always right. Southwest will not
tolerate customers who abuse their staff. They would rather those customers fly
on a different airline. It’s a subtle irony that one of the best customer service
companies in the country focuses on its employees before its customers. The
trust between the management and the employees, not dogma, is what produces
the great customer service. It is a prerequisite, then, for someone to trust the
culture in which they work to share the values and beliefs of that culture.
Without it, that employee, for example, is simply a bad fit and likely to work
only for self-gain without consideration for the greater good. But if those inside
the organization are a good fit, the opportunity to “go the extra mile,” to explore,
to invent, to innovate, to advance and, more importantly, to do so again and
again and again, increases dramatically. Only with mutual trust can an
organization become great.

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