Joel Peterson has a variety of jobs over the years and decided to write a book about trust because in our economy we see a lack of it. Mr. Peterson teaches at Stanford; is the Chair of JetBlue Airlines; runs some private equity positions and is an interesting speaker – you can see one of his presentations on Google Talks on You Tube.

Trust is one of those elements a free society is founded on and when done well – it elevates everyone around; when done poorly everyone feels betrayed. Therefore it involves a balance. Trust is one of those intangible elements where it takes a lifetime to build up, but can be destroyed in a single act. Then it depends on what the actors do to begin to build it up once again.

The definition of trust is seeding authority to another or giving away some control.

In many times there will be minor betrayals because we are human – the best response is to nip it in the bud or try to get to the root cause and understand why the person took the action they did. If it is a major betrayal, it will be tough to overcome; for individuals it may takes years and the only time you will be over it is when you can think of the future rather than the past.

For a company – the words and actions of the leaders must sync up. Companies all have value statements – in a crisis do the values and actions link? If they do not, the company will have major problems. If they do, the people in the company will be better. Part of communication is using the two ears, one mouth or listening to people. When you communicate – do not just communicate the good stuff, do not put a positive spin on the bad. People will see through the words – be honest, as open as possible and care about people so they can act properly. Mr. Peterson believes in the power of accountability which means give trust incrementally and measure the results. As people deliver on their actions, then you can give more trust and measure the results. In this fashion, it is good for people to played and worked on teams – you have to trust your teammates to do a good job. For management it is a continually process of who you want on the bus and who you do not want on the bus. Mr. Peterson believes leadership can be taught or learned.

Mr. Peterson gave an example of JetBlue. At one of the airports, a forced landing happened and one of the attendants got off the airplane before the passengers. One of the core values of the company is safety (its number one value). Every Monday Jet Blue sends an email to every employee and the issue on the next Monday was it asked its employees what should happen to the person that went off early? The overwhelming response was the person broke the safety value and should be dismissed. The person was let go.

Trust starts off with good character then you have to add on competency. Competency means the ability to deliver the results including the authority to act. In the case of JetBlue – Mr. Peterson often asks a training sessions do you believe the pilot is of good character. The usual answer is yes. Do you believe your mother is good character. The answer is yes. Do you believe your mother could fly the plane? The answer tends to be no. Just having good character is not enough, they have to have the ability to do the job.

Living the values is what values do you commit time, money and mental energy on? If those three things are what the company says it values are then the values are what the company says they are. If the time, money and mental energy is something different then the values of the company are different. The values of company are the values of the people who work there. One method to determine the values is ask what does winning look like?

How do you know a person should be taken off the bus? There tends to be red flags  always asking for confidential information; lack of transparency; holding information close to the chest; giving spin information; someone who never asks but always knows it all; not a team player.  What happens if you work for someone like that – Mr. Peterson believes it is very hard for people to change their values which leads to your solution of change internal jobs or move to a company which has your values.

Linking to dividend paying stocks, we trust the management will continue to act in a good measure for their company has been in operation and profitable for a number of years which allows them to pay a dividend. While we hope no major crisis will occur, they usually pop up from time to time, it is what does during the crisis which is important. If they performed to our expectations, the company will likely come out stronger and the stock is worth holding. If they did not do what their values say, it is time to look for alternatives.

There are more questions than answers, till the next time – to raising questions.