David Novak 0:04 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learnings so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Stephen, Mr. Covey. As the CEO of Covey Leadership Center, he built the largest leadership development company in the world and orchestrated the successful merger of Franklin Covey. He is also the New York Times best selling author of the excellent book Speed of Trust. Now, listen, if you've ever felt like your business just didn't move fast enough. You're going to love this conversation. Stephen believes that there's one secret ingredient in a business that can help a team move faster and be more successful. That secret ingredient is trust. And it makes sense, right? If our team members feel like they're always jumping through hoops and being micromanaged, they're never going to do their best work. And they're certainly not going to get their work done quickly. The thing is, as leaders, it's up to us to extend that trust to our teams so that they can go out and do amazing things. And obviously, that's easier said than done. How can we trust our team members more while still minimizing risk and keeping people accountable? Keep listening, because Steven is going to help us learn to extend trust the right way. So here's my conversation with my good friend, and soon to be yours, Steven M. R Covey.

I first met you at the University of Missouri where you met with students all day. And then that night, you gave a fantastic speech for the Novak Leadership Institute. Really appreciated that how you been? Hey,

Stephen M.R. Covey 1:57 

David, it's great to be with you. I'm doing fantastic. And actually that that night at University of Missouri, to speak at your institute was a real treat and thrill for me to be speaking in front of you. Because if you remember, I told a couple of your stories, and it was fun to do it in front of you to make sure I got it right. So I'm doing terrific.

David Novak 2:19 

How many speaking engagements Do you have a year, Steven?

Stephen M.R. Covey 2:23 

I probably do around 100 or so. And yeah, for quite a few. I'm usually out every week, you know, three or four? A week and there might be a few weeks where I don't go out and try to get some writing done some other things, but it kind of goes in spurts. Yeah.

David Novak 2:39 

That's great. Yeah. Steven, I always like to start at the beginning. Can you tell us about your your upbringing?

Stephen M.R. Covey 2:47 

Yeah, well, you know, I came from a great family situation. So I recognized I was, you know, really blessed. We could add a wonderful father and mother. And, you know, my, my father is, is Dr. Stephen R. Covey, he wrote The Seven Habits of Highly Effective People. So I grew up kind of learning the seven habits in our home, you know, before my dad had written the book before he'd gone out and was teaching it, he was testing it with us kids, we were the guinea pigs. And, and, you know, so the positive that is I kind of learned learned, just growing up some of these great principles that, that I took for granted at the time, but it was only later that I realized that, you know, I was getting trained by a great leadership, you know, thinker right there in my own home growing up, and I didn't know it until later. And, and that I had a great environment growing up and, and, you know, worked in a number of different places and kind of tried to find my way and I ended up teaming back up with my my dad and, and then tried to build at the time that Covey Leadership Center to become kind of a global firm focusing on leadership development everywhere. And I, I became involved with that and kind of worked my way up, and then ultimately ran it.

David Novak 4:06 

I want to get back to your childhood a little bit. You said, your dad taught you some really important principles? Was there one that really stuck out? Yeah.

Stephen M.R. Covey 4:15 

It's a famous story in the seven habits and he calls it green, and clean. And the whole idea was, you know, I was just a young boy, I think I was six or seven at the time. And he was trying to teach me responsibility teach all the kids responsibility. So he asked me to take care of our lawn, our grass, and we had a big, you know, lawn, and this is back in the days before automatic sprinklers. And so he had to manually do it and, and so he said, Son, your job is green and clean. And he said, No, that green is the color of our neighbor's yard, you know, because ours wasn't very green. Under his stewardship, he says so that's the color we want. Like, we want the yard to be green, we want it to be clean. And then he kind of taught me what clean look like. And again, I'm six or seven. So I am just a young boy trying to learn these concepts. And he said, No, look, this is your job. I'm giving you this responsibility. And he trained me over two weeks. And then he asked me, Are you ready? I said, I'm ready to add to it, turn it over to me. And, and, well, I did nothing. For the first several days, and this was in the middle of the summer, and there was scorching heat everywhere. And the lawn was turning yellow by the day. And for like four or five, six days, I did nothing. And my dad just said he wanted to kind of take the job right back for me and say, you know, he's just too young, I can't do this. But he stayed with it. And, and he'd set up an agreement that we'd kind of walk around once a week to see how the yard was going as part of the stewardship. And so he said, Hey, Sam, why don't we walk around, see how the yard is going? So we started to walk around, and I looked around in the yard was really yellow. And it was cluttered and messy. And I started to break down and cry and said, Dad, this is just so hard. And he said, What's hard said you haven't done one thing yet. But I'll tell you, David, what was hard was, I was learning to take responsibility. I was learning to, you know, own that job to take it on. And, and and I said, Well, will you help me dad? He said, hey, my agreement was I'd help you if I have time. I said, Do you have time? He goes, I got time. So I ran in the house. And I got a couple of sacks, garbage sacks. And I said, Dad, would you take this garbage sack and pick up that garbage over there? Because it makes me want to vomit. And he goes, I'm your helper, I'll do whatever you say. And it was at that moment, I realized, wait a minute. Look, I'm bossing my dad. And I'm asking him to do this. And he's doing it. And I realized this is my job. And as a seven year old boy, I took responsibility for that job. And, and I only asked for help a couple more times the rest of the summer. And from that point on the job, the lawn was green. And it was clean. And and, and I took care of it. And you know, my father taught that in the seven habits as kind of a win win performance agreement, or stewardship delegation. But I was a seven year old boy, I didn't know what those terms meant. But here's what I didn't know. I felt trusted. I felt my father trusted me. I didn't want to let him down. And so it's a great illustration of kind of how I learned trust, I learned trust firsthand, from my father, extending trust in me as a seven year old to take responsibility based upon outcomes green and clean, you know, so there's, there's a standard, there's an expectation, but I was accountable. I jugs myself against the standards, green and clean. And I owned it. And I rose to the occasion as a seven year old. And my point is, if you can do it as a seven year old, then we can all do it as a 17 or 70 year old, you know, we can learn to take responsibility. But the key is, he trusted me. And I rose to the occasion and responded to the trust.

David Novak 8:05 

Your father was obviously a world renowned leader. And you know, you, you learned a lot from it. But you know, a lot of times in family businesses, you know, people really have a difficult time following their father's footsteps. Was that something that you had to wrestle with?

Stephen M.R. Covey 8:22 

Yeah, it really was, I genuinely even debated do I do this, and identify other things I worked for a short stint on Wall Street, I worked in real estate development. And so the decision to kind of join up with my father was a real kind of wrestle. Because I didn't want to just, you know, be defined by him, I wanted to kind of carve out my own identity. But I felt like, I really, this was before the seven habits book was published, and I just knew this book was going to have impact on people. And I could I could see it, I'd see I'd grown up with it, I'd seen the impacts in a smaller setting. And I knew that once this got out, it was gonna have a big impact. So I decided to do it. But it will say this, David, that the first you know, first 20 years of my career, I kind of carved out my own identity within the firm, which was I went down the business side, I you know, in learning the business and selling in deliver in kind of working with clients and, but I was clearly on the business side of leading teams and, and building the organization. I didn't want to teach her to write, but I thought I'd be just a poor man's comparison to my father. So, you know, I felt I thought I needed to establish my own identity. And I did it by saying like, I'm going to learn how to turn this, these ideas into a business. And and then when I did that, I had you know, we had some success and we built this into a big firm. And it was only after kind of that had happened. When I finally realized you know what, I also have something to say and and, and it was all around and how trust is, is just indispensable for everything and that, that we're kind of assuming that taking it for granted, we need to become intentional about it. And once I felt I had something to say, then I shifted my career, I didn't care anymore, about worrying about being compared to my father and being a poor man's version. I just felt like I finally I have something to say now. And that's where I kind of shifted my career from being a business leader to trying to be a thought leader. And I went into writing and speaking and kind of where I'm what I'm doing now. So I kind of had two careers along the way.

David Novak 10:33 

So you really differentiate yourself from your father as a business leader. And and, you know, for our listeners out there, you when you took over as a CEO, you had a company that was valued at about 2.4 billion, and you grew the shareholder value to $160 million, which is, you know, fantastic performance. And I know, Stephen, you write about the importance of giving the why before the what, how did you use this tenant to grow your business so dramatically?

Stephen M.R. Covey 11:03 

Yeah, we use, we were so clear about our mission. And, and you know, that, you know, why we were doing what we were doing that, you know, it wasn't just leadership development, it was, we were trying to impact people and organizations everywhere, to be able to better fulfill their missions and who they are, and what they were about, our mission was so strong, we we're very mission driven. In fact, so mission driven, David, that sometimes we got involved in a lot of hobbies, a lot of a lot of, you know, important useful things that we could never make money at. But they were good at making a difference in the world. And, and we kind of had to learn that if if we're not making money as a business, we're not going to have a mission. So our mantra became no margin, no mission. And you know, and we had to, we had to focus on the margin, we had to run ourselves like a business that had a great mission. And so we said, luck is not either or it's not, hey, we had a great mission, or we run ourselves like a business. No, it's It's and it's we are a business with a mission. A mission driven business is extraordinary. But the mission is the why, why were we doing this, why we're all about that inspired everybody. And we just also had to discipline ourselves into also being a good business that was responsible, because then we would have more of a mission. And that was a learning that sounds obvious. But when you're very mission driven, you can kind of find yourself going down a lot of paths, many of which you can't make money at because it can fulfill the mission, but you, you can't sustain it. And so kind of learning to be a mission driven business was critical. And so we had plenty of why we needed to then learn that you know, how to how to run ourselves as a good business, too. So that was kind of a big learning. And that's what I tried to bring to the firm to balance my father being so mission oriented, who just wanted to do everything for everyone. And I tried to say, Yeah, let's do it in a way that we can also sustain ourselves.

David Novak 13:07 

During that process. Did you have a defining moment or event that really changed your leadership trajectory?

Stephen M.R. Covey 13:14 

Yeah, I remember when, right. When I first got in David as, as the CEO, of Qatar Leadership Center, it was nine days on the job. And we met with our bank, and the bank said, you know, what, Stephen, we're gonna have the polar line of credit. And, and, and, you know, and we've depended upon that, but what had happened is, again, we were so mission driven, and had been that we were involved in all these things, not making money and what we'd had 11 straight years of negative cash flow, with low margins, with a lot of debt, our debt to equity ratio was 223, to one, and total liabilities, a tangible net worth. And yeah, high growth. So do the math on that, you know, high growth with low margins, with negative cash flow with a lot of debt, you know, we're gonna grow ourselves right out of business. And, and then the bank said, we can't be left holding the bag, we got to pull the line, this is not working. And so you know, we negotiate, I said, Look, I'm brand new. And my focus is really going to be on trying to turn this into a business, not just a mission. And we're going to do all these things. And, and we've negotiated and the bank agreed that they would keep the line if we all signed personal guarantees. So we did. And that's no fun to be on personal guarantees, but you do what you have to do. But then we had to kind of, you know, the defining moment was, we had to perform. We had to deliver, you know, it wasn't enough that we were good people and had a great mission. And we had a good value proposition for our customers. I mean, that was all great, but the bank didn't fully trust us because we didn't deliver we were violating we had like 17 Bank covenants and we are in valuation of 10 of the 17. And so they needed they needed to see performance and growth. And so we kind of, we collaborated and we said, look, we're in too many businesses, we're in too many hobbies, the mission is, is so strong, that we're doing too many things, we can't make money out, we better define it, we've got to focus, we got to become profitable. And what we really did was we we pared down, we became clear about what we could do well and make money out, we defined a business model that worked for us made a great value proposition for customer customers, but didn't know how to make money ourselves. We learn how to do that. And then we built trust, we built trust, internally, we built trust with our partners and with our customers. And from that came referral business repeat business. And it changed everything. And we improved and our margins improved. And we started paying down the debt. And we went back to the bank, you know, sometime later, they said, We like what we see a lot, you're making great progress, then we went back about a year later, and they said, Hey, we love what we see. You've made extraordinary progress, you're profitable, you pay down this debt. And then they said, Steven, we want to double your line of credit, you know, which is trust for the bank. And you know, but it was just as learning that, that you got to perform, you got to deliver, it's not enough to be good people with good cause, if you don't deliver, we have to be of that mission driven business. And when we became that, then we earned the trust of the bank. And from that, we could really have an impact in the world, because now we were available, we are sustainable. And that was kind of a key learning, not only for me, but for our entire firm.

David Novak 16:36 

Right? You talk about the importance of feeding your strengths, and starving your your weaknesses, you know, how have you done this with your own personal leadership?

Stephen M.R. Covey 16:47 

Yeah, well, the whole idea is that, you know, none of us are perfect at everything. But if we can, if you can just, you know, build a team, a complementary team, so that we're not all the same, we're all the same, and not all of us are needed. But we have differences. And those differences compensate for someone's weakness for my own weakness. And so I learned to kind of build a, a complementary leadership team, for me that where I'd bring in people, there were members of the team that saw the world differently, and saw opportunities differently and had different strengths than I did. And rather than being threatened by that, the whole idea was, that's where there's power, that's where synergy takes place. That's where creativity and innovation takes place from our differences, if we trust each other, and you know, differences are strengths when you trust each other, and building a complementary team, where you run with your strengths, and you organize yourself to make your, your weaknesses irrelevant. So if I'm not good at certain things, I bring in a team member that who is and sometimes people can be, you know, threatened by differences, because someone else got a great strength that they don't have. And, and the whole idea of seeing that as, that's part of why we're a team, that's why we work as teams, is we're complementary, you know, Pl II. And so we complement each other, and we help each other we fill in gaps and fill in holes. And it's through those differences that become one team with great strength and great ability to be creative and innovative. You know, there's, it was part of Robert Porter Lynch is the expert on innovation. And he said, innovation flourishes when there's a collision of differences in an environment of trust. So a great team has people that, that maybe bring different perspectives different, you know, they have different strengths, different weaknesses, they come together as a team, if they trust each other, those differences truly are strengths that can be turned into creativity and innovation. If they don't trust each other, they can often divide people and then you're not really a team, you're just a group of people working on a project.

David Novak 19:02 

You know, Steven, a lot of writers have a lot of, you know, they don't really have a lot of practical business experience, you know, how much did being CEO of your own company shape your book on the Speed of Trust

Stephen M.R. Covey 19:14 

enormously, because I saw it firsthand. You know, I right out of the gates, I we were working with a supplier or for certain product, we had two suppliers for the same product and when we had high trust with when not so much, and I looked at how with the one, everything would have been fast, there's high trust and we'd get a great product, it was low cost with the other, the trust was lower, we had to put in place all these inspections and processes to make sure everything is okay. And I'd say to my team, who's paying for all of this. They said, Well, we are and I said well, why are we working with them? It cost more they said, Well, we got to have a redundant source. And I remember saying, Boy, boy, there sure is a high cost a low trust isn't there, you know, and I started to see that just From a practical standpoint, when there's high trust, you move fast as low cost when there's low trust, it takes you longer it costs you more. So just practical. So obvious is right in front of me working with suppliers vendors, and I can see it with partners see it with customers see it with their own people. And I began to see the world through this lens. And it came from my own practice my own experience. So everything I learned about Speed of Trust, I learned kind of on the job. And then I validated it with research and augmented it with my client work with and working with organizations. But I'll tell you what, it comes back to my own experience, like with the bank, you know, they didn't trust us, because we were nice people, they trusted us because we performed and until we performed, they weren't going to trust us. And you know, and so it informed me on everything. And that's what I think is I hope is maybe part of what I bring to this trust conversation. As everyone knows, trust is important. I'm trying to show how practical, how tangible it is, in terms of the impact that it has on every dimension of leadership and of relationships of teams or organizations. And I draw that from my experience, but then also how learnable trust is, is somebody who can move the needle on get better at intentionally. And again, that comes from my own experiences and, you know, validated by research, what would

David Novak 21:20 

be a really, you know, clear tangible example of how you built trust in your own company.

Stephen M.R. Covey 21:27 

Well, I remember one of the biggest challenges we had when we did our merger. And we merged Covey Leadership Center with Franklin quest, you know, two great firms independently coming together, forming Franklin Covey, we'd been arts competitors, for years. So when we merge these companies, even though we had good people on both sides, there was distrust, and people didn't trust each other. And, you know, they saw the world through different lenses we'd been, again, arch competitors. This is like Coke and Pepsi. You know, it was it was coming together. And, you know, people saw the world differently, there's just distrust, and there was literally tribal trust, half the company trusted half and half trusted the other half, and no one trusted each other. And I remember coming in and realizing nothing's gonna happen, we're not making much progress. We're trapped, internally focused, and not focusing on the marketplace, because we don't trust each other. And we had to kind of learn how we've got to intentionally build this trust, I'd like to say that the, you know, there's an expression that grew out of the Vietnam War, it says that the first casualty of war is truth. Well, the first casualty of mergers, is trust, unless you're intentional about building it, and trust had gone down. So I remember, you know, I'm president at this, the merge training and education unit, the important engine of the company. And I remember going into this first conference and realizing half the company trusted me to cut the half and half didn't the Franklin half at the time, that's how we saw are we, you know, you know, viewed the world through those lenses. And I could kind of dance around it, I guess, not there. And I remember going in David, and just saying, look, if I go in and just talk about strategy, you know, some people will like it, some won't, I gotta get real. So I went in there, and I just said, look, I can talk about the strategy, what we're going to do, but if you'd like, I could talk about what you'd like to talk about, I took a risk and I made myself vulnerable. A bet that people want to talk about this merger and what's happening and and who's making the decisions and are they qualified, and I take things up, that everyone was thinking, but no one dared say out loud. And and I tried to make it safe to get real. And I'll tell you what, I was supposed to take an hour, this was a big consultant conference of all our consultants are most of them. And I ended up taking the whole day. And we didn't talk about the strategy. We just talked about the merger, what was happening, I was open as best I could, I was as authentic as transparent. I was vulnerable. I tried to listen. And but I'll never forget, at the end of that. One of the leaders said, we built more trust in one day than we have in the prior year. Again, this had been a brutal year. And and, and it was just because we just tried to, you know, be transparent, talk straight, take things head on, be real. And then listen. And then from that, we created an action plans of things we would do to change and, and and we began to build on that trust we built there and intentionally built in a change to everything once we learned to trust each other, then we could perform and do better but we had to kind of apply our own stuff and that was before we taught trust formally So that was from that, and I realized trust is learnable. But it takes these behaviors of transparency and straight talk and listening and showing respect. You know, a lot of the things I know you did, David, from the stories, some of the stories I tell about you of when you went in at KFC, when there was, you know, low trust with the corporation, the franchisees, and you went in and listened, and said, and then you made the decision, we're going to trust our franchisees and I kind of had to do the same, I had to listen. And then extend trust intentionally, to see it come back. And so from that I realized trust is learnable.

David Novak 25:39 

Yeah, fantastic. You know, you say that you that you develop trust through character and competence. Can you talk about a leader who has impressed you with those two traits?

Stephen M.R. Covey 25:49 

Yeah. Eric Yuan, CEO, at at zoom, you know, Zoom video communications, that does these great meetings. I mean, they're, they're a relatively new company, a startup, and but they develop enormous market share fast. And, and you know, he's a great thinker with a great idea of how to meet this need with a simple technology. But he's also a person of great character. And a starting point is, you know, like your dad, he starts with trust, he extends trust to people. And his whole premise is he's trying to build zoom on the basis of trust, both trust internally with each other, so they can move fast and be creative and innovative, through character and competence, but also external trust with customers, and partners, and he really is intentional about it. And they earn it and they give it and know. So he's earned it, you got to earn trust, you got to give trust, and you can't just blindly give it now it's got to be based upon character and competence that's earning trust, character and competence helps you earn it. He's done it himself. But he also gives it he extends it as a leader. And that's a differentiator.

David Novak 27:03 

Yeah, no, you don't believe in blind trust. Instead, you talk about smart trust. And, you know, what do you mean by smart trust? And obviously, Eric Yuan, is an example of who's built that. Yeah.

Stephen M.R. Covey 27:15 

You know, Eric is a great example. And the whole idea of smart trust is that, you know, there's there's both some judgment being given. In other words, it's not just indiscriminately trusting anyone and everyone. Regardless, that would be blind trust. And it's also not trust without expectations or accountability. So I would say that even my dad with me as a seven year old you smart trust, why? Because he said, Look, yeah, he's a young kid. But smart dress is saying, you know, what am I saying trust on? What's the risk involved, was the credibility of the people or the person above, and the risk is not that high for my dad, the lines yellow, so you can live with that it's not going to sink a company. And and you know, what, I was not very credible. As a seven year old, he thought it was in me that I can learn how to do it. But what made it smart is he trained me for two weeks, around results around our expectations of green and clean and around accountability towards the expectations are green and clear that I wouldn't be accountable once a week to my dad, by walking around and showing how green the yard was how clean the yard was. So he built right into this trust that he gave me clear expectations and an accountability to that. So I judge myself. So that was with a seven year old. So you know, imagine as we extend trust as leaders, that, you know, instead of hovering over micromanaging people, trust them, but always with clear expectations around the trust we're extending, and a process for accountability, where they can be accountable around the expectations we've created together. And that way, you don't have to hover over and micromanage then they come to you saying I'm going to be accountable. Let me tell you how I'm doing against the expectation, you know, the expectations we agreed upon. And that smart trust, it's a blind trust to just say, I trust you with no expectations or accountability, or to not use any judgment and extend trust when the risk is too great, or someone's not ready. So if I could come back to you. I don't mean I don't mean I know this focus is not on you, David, but I tell your stories. I've got to tell it when you when you got in it at KFC. When you made the decision, you're going to trust your franchisees you might have had some pushback from some people say we can't trust them. They're untrustworthy. We've kind of proven that. But you're saying now, it's actually smart to trust them because these are people. They're investing in their whole lives, their livelihoods. In this franchise, they care. They want to have a successful franchise and they're good business people and they've invested money this matters to them is sparked. To trust them. We prayed it into agreement. So we have expectations. It's smart to extend trust. And so what while others thought maybe you can't trust the franchisees, you said, No, you can't. And it's actually not a wild, blind trust. No, these are good people who've invested everything. And we have an agreement, so why not trust them. And by leading that with trust, you elicited a reciprocity of trust back, versus kind of being trapped in a cycle of distress where no one trusted anybody, you, you went first. And you it was smart trust, though, I would argue. So, again, it's not a one size fits all, you know, indiscriminant without assessing the situation, the risks or without expectations are accounted buddy is good judgment. And, and what we learn from it, my main point to leaders everywhere, is they need to not just be trustworthy, as a leader, that's, that's table stakes. You need to be trusting, willing to extend it, willing to give it and because you then help people, they perform better, they rise to the occasion and they return it is reciprocal, they give it back to you. And it becomes a virtuous upward spiral, like you manifested at KFC years ago. And then ultimately at yum brands, you know, with by trusting your team,

David Novak 31:15 

extending trust can be very powerful. Can you give us another story of where you saw a breakthrough business idea that came from extending trust?

Stephen M.R. Covey 31:26 

Well, yes, I just was with a leader of a, of a school of an education institution, that they have permission to use his name, Jim gash, president of Pepperdine. And he comes in in his starting point. He's got a dean that he doesn't know. And there was an issue, you know, because he's president, there's, but he knows, he knows some of the other Dean's. There was an issue that had come up on tenure, that was kind of complicated, and it became bubbled up as kind of an issue and it was going to take a long time to kind of wade through this and discuss it and, and he went up to this Dean and said, look, the dean said, I'd be happy to explain, it's gonna take some time. I gotta go through this and a lot of nuance to it. And again, Jim gash brand new leader said, I just want to know to a couple of things. First, is this represent your best thinking, your best work, and your that of your team, the decision you make? And then the dean said, Yes, it does. And then he asked, you know, is was the was the process fair for all parties involved? Yes, it was. And then Jim gash said to the dean, Michael, just move ahead. I trust you. He didn't know he was brand new. But but it was a smart test, because he said, I, well, I didn't know Michael. This is Jim, gosh, wow. Well, I didn't know Michael. I knew these other Dean's that didn't know Michael. And they told me, he's gold. Whatever he says he does, you know, he does what he says you can trust him. And so he extended that trust rather gates. I asked Michael, what did that do for you, he said, it inspired me, I wanted to prove worthy of it. But let me tell you what it did for our team and our culture. We're open, where we can trust each other. We're creative, or innovative ideas flow, we start with trust. And when there's trust, people are not afraid to take a risk, not afraid to make a mistake, not afraid to learn. And we learn better when they're in faster, more more creative, more innovative. And, and, and that's what trust does is it creates the right environment, the right culture, for people to be authentic, to be real, to be transparent, and to take a risk. And it's sometimes even to make a mistake and learn and get better. And you know, the whole Silicon Valley mantra, fail fast, you know, fail forward, fail often as long as you're learning because you don't innovate, if you're not willing to fail, and you won't take that risk that might risk failure, if there's not trust. And so, so trust really, is the fertile ground that that where the innovation takes place, because people are not afraid to take a risk. And so seeing leaders that lead out with that extend that is what then creates that right? Culture, an environment where people say, Gosh, with a leader like this, I can you know, with a culture like this, I can take calculated smart risks and learn to make a mistake and grow and innovate. And so Jim gas did it. You did it at KFC. Eric one, you one's doing it at zoom. Many, many others, including even in, you know, traditional businesses like, you know, going to Warren Buffett and Berkshire Hathaway and how Buffett extends enormous trust to all these independent businesses. He is his boss, he doesn't try to micromanage them. They run themselves and he trusts them. That's why bottom brought him in and and they're innovative. They're Creative that they feel trusted. It just creates the right environment.

David Novak 35:04 

You know, I know you believe in trusting and positive intentions, and you just gave some great examples. But sometimes people do let you down, can you give us a story of what you've done when when people actually betray your trust, which happens, unfortunately,

Stephen M.R. Covey 35:20 

does happen. And, and here's that, I will give you a story that we teach, I'll share a principle. And, and that is that, that I think we got to be careful to make sure that we don't let I'm gonna, you know, the 5% of the people who let us down and betray our trust, define for us, the 95%, who will be inspired by it, who will rise to the occasion and perform better and yet too often, organizations build rules and policies around the 5% of the people who they can't trust instead of the 95% of the people who they can they penalize the many because of the few and it's natural, because whenever we you know, we extend trust and get burned, it's very easy to say, Hey, I tried, trust me, it doesn't work got burned, someone let me down, they didn't deliver, they didn't come through. And that can happen. And I'll go back to this Warren Buffett illustration, because, you know, Buffett is a great investor, but he's also a leader, because he's acquired all these companies. And a few years ago, he had, you know, some 77 acquired companies there 77, effectively direct reports to Buffett. And, and, you know, he calls them is all stars. Well, one of them one of the 77, let them down. And, you know, you can read about this, if you want, it was, you know, a few years ago, where one of them kind of got involved in front running on something, and it wasn't technically illegal, but it felt unethical. At least the perception was, and so Warren Buffett, you know, they let the let the person go. And, and, and they, and they kind of took steps to do that. But what was most significant is Warren didn't let the fact that one of his direct reports, let him down, you know, violated maybe the trust that was there, define how we saw the other 76, he still had the trust in them. He didn't allow the one let down to define the other 76. And that's kind of the key insight and learning is when you have clear expectations and accountability. This is a better way to lead. But there always is a risk. And occasionally, some of my fall short let you down. And you'll learn from that and try to get better around expectations and accountability. And you also try to get better around when you're the smart trust idea that when you are assessing the situation when it makes setting trust on the risk involved. How risky is it and the credibility of the people involved? If it's extremely highly risky, and it could sink the whole firm, then you're going to be really careful that how much trust you give there. You know, but you got to assess that. And then the credibility of the people. I'll never forget David, I presented it that all flag officer conference for the US Navy. This was Admiral Mike Mullen when he was the Chief of Naval Operations, he became the chairman of the Joint Chiefs of Staff right after this. So all the animals in the world of the US Navy, where there are almost everyone. I talked about Speed of Trust, and someone said, somebody has never asked me a question, Stephen. I'm a commander of a nuclear submarine. And we've got protocols to do anything on our boat. Are you suggesting that we should eliminate some of those protocols? Because it's telling our people that we don't trust them? And I said, Absolutely not. Because you've got a nuclear submarine. In other words, the risk is so great, that it would not be smart at all to kind of not have rules and protocols or regulations for everything, because just to greater risk. You know, so I asked, you know, our listeners, are you dealing with nuclear submarines? Are you dealing with that? By contrast, you know, newspapers and news and newspaper stand, someone said, you know, America, what a country you got newspapers, you put a couple quarters in and you pull out the paper, and there's no one there. You can if I wanted to, I could pull out 20 papers. And I said, Yeah, that is trust, isn't it? But you know, pretty low risk. If someone pulls out 20 papers, I lose a few dollars. If I'm a newspaper operator, if someone did it every day, maybe I moved the standard another place. Very low risk. And so I kind of say, what's the risk? Is it nuclear submarines? Is it newspapers, and it's usually somewhere in between? So you use good judgment. And you recognize Yeah, you're gonna get burned occasionally. But But while there's a risk to trust people, I believe David, there's a greater risk not attracts people in our world today, because you don't you don't create that synergy and the creativity. And we're really good at measuring the risk of trusting too much and being wrong, making a mistake and saying, Guys look at the cost, we're not very good at all, and measuring the risk of not trusting enough, and what that does to people and cultures. You know, I follow

David Novak 40:19 

you, Steven on Twitter. And I love this tweet that you you did, which is nothing fails like success. Explain what you mean by that and give us an example?

Stephen M.R. Covey 40:30 

Yeah. Well, the whole idea is that it sounds like a paradox. But you know, this is comes from Arnold Toynbee, the historian says, you can just describe all civilizations, the rise and fall by that mantra, nothing fails like success, because what happens is a challenge comes and, and society learns to develop an effective response to that challenge, or a company learns that an effective response to that challenge, the challenge comes, we've learned a response, it works that success, then what happens is the nature of the challenge changes because of disruption because of other things, new challenge. Now, our once successful response that worked so well, with the old challenge is no longer relevant for the new challenge. Hence, nothing fails like success, we need a new response for the new challenge. And I think a great way of thinking about this is kind of is disruption and the change. So if you look at Netflix, and what they did, well, they kind of disrupted blockbuster, Blockbuster, the great video chain, had 9000 stores, all based upon kind of a physical model of stores and, and VHS, and then DVDs, and you'd go into the store and, and return it and they had late fees, and all this, it was all part of their business model. And, but everything was moving towards, you know, first mail, DVDs by mail, what Netflix did, and then later streaming, Blockbuster was slow there one successful response, these physical stores, when the challenge changed to a new world of technology enabled by technology with both mail and streaming, they stayed with their own their old response that works in the past, but doesn't work in the new world. And they didn't disrupt themselves. Netflix actually came to them and said, we'll be your online version. They said, No, they didn't want to disrupt that, you know, lose the success, but they ended up becoming disrupted. Today, there's one blockbuster store left from 9000. And Netflix has gone on, you know, first with DVDs by mail, but then they realized they gotta change that they're gonna disrupt themselves and go into streaming, or else they're gonna, you know, lose that business like never mind like Blockbuster did. And they, they kind of always are just trying to stay at the forefront of the new challenges need require a new response, not just the old ones successful response. That's the idea. And the premise is all companies need to be looking at this and staying relevant and all leaders, all of us as leaders, we also need to be looking at the changing landscape and environment and saying, are we learning? Are we responding to this new world? And such that, you know, we have a new response for the new challenge in front of us?

David Novak 43:11 

That's great, you know, I'd like to move to sort of a little fun thing I like to do, which is a lightning round of questions. What leader do you admire most? And why?

Stephen M.R. Covey 43:22 

So many? I'm gonna say, Abraham Lincoln, no, historical. I'll tell you why. Because, you know, he was able to unite after the most divisive thing imaginable, you know, with malice toward none with charity for all. That mindset of generosity, that spirit, that mindset is extraordinary. And we need that kind of leadership in our world today. We're so divided.

David Novak 43:52 

What three words best describe you?

Stephen M.R. Covey 43:54 

Well, maybe this is aspirational, David. So I hope maybe some of might say these describe me. I hope someone would say trusting. I hope someone would say kind. And I never believe you can be too kind and I hope someone would say generous. But what would be your

David Novak 44:13 

biggest pet peeve? I would say

Stephen M.R. Covey 44:15 

arrogance and hubris in anybody in in a leader, especially the you know, the person that's I'm the smartest guy in the room. And then that arrogance and hubris, who just felt by all versus the leader that that tries to surround him, him or herself by people they see as even better than them.

David Novak 44:36 

Now, if you could trade places with one person for a day, who would it be?

Stephen M.R. Covey 44:42 

I would say the current secretary general of the United Nations, and I don't even know his or her name right now, because of just the the fact that are the challenges in our world in our society. And how How you would think about that. And approach that would be fascinating.

David Novak 45:05 

Share a random fact about yourself, a few people would know,

Stephen M.R. Covey 45:09 

I love musicals broad were Broadway musicals. And when I'm in New York or London, I'm making a point almost every time to go to plays. And, and I see, and I love musicals. So I've seen all the classics, I bet I've seen Phantom of the Opera and lame is probably 30 times each, I've seen have, I've seen Hamilton 17 times, which is a lot, because it's only been out five years, I think, right? Or four or five years. And I've seen it 17 times. And so I love musicals, and most people wouldn't know.

David Novak 45:44 

You know, we're about to wrap this up. I've got a few questions. But you know, what would be if you had to summarize what will be your three bits of advice for aspiring leaders?

Stephen M.R. Covey 45:56 

Yeah. I would say this is going to tie back to kind of what I believe, you know, my world is, the first would be the great leadership is getting results in a way that inspires trust, in other words, is when you know, you got to get results, you got to perform, or is not going to work, but some people could perform. But do it in a way where the the trust goes down, and the capabilities of the people go down, you know, they're killing the goose that lays the golden eggs, if you will, you've got to get results in a way that inspires trust so that your buddy to get results and next time has just gone up unifying it, David is taking people with you, yes, you got to perform, and you got to take people with you, then your ability to perform has just gone up and you've got people that can do it for you and with you, because you take them with you. So for me, it's getting results in a way that inspires trust, I'd be the first. The second is, as a leader, yes, you yourself, clearly you need to be trustworthy. That's the starting point. But you've got to also be trusting, you got to be willing to extend that trust. And it's back to our whole conversation. Yes, there's a risk to be smart about it. There's a risk to trust, and there's a risk not to trust. And I think not trusting is the greater risk in today's world, a collaborative, interdependent world with multiple generations, characterized by disruption. And we need change, we need innovation, we need collaboration, and you got to trust to create that. And third, I would say, to try to, as a leader, try to create and tap into meaning, purpose and contribution. So that you're making a difference in the world. And that's even more than mission, vision and values. mission, vision, and values are important. And companies should have that. And but someone could have mission, vision and values. And yet the the people involved might not feel that they're tapping into meaning, and tapping into real purpose and into contribution. And when you when you when you create and tap into comission, you know, tap into meaning, purpose and contribution that inspires people.

David Novak 48:21 

Great. You know, I want to wrap it up with this final question here. And I loved it when you tweeted, whenever possible, finish strong. How do you apply this thought as you think about your future? And what's next for Stephen, Mr. Covey.

Stephen M.R. Covey 48:38 

I love this expression by my father, so much of my learnings are come from my father. And he said, live life in crescendo. And the whole idea of you know, crescendo in music is that you're, you're moving up. And the whole idea is that your greatest contribution is always in front of you. You always view that way that you live life and crescendo. And so my father who wrote the seven habits, one of the great best selling books always felt like his greatest book was still in front of him. It was still out there. And he tried to live that I look at you, David, you know, CEO of yum brands recognized internationally one of the great CEOs, I believe your next act as the leader of David Novak leadership, and helping teach leadership to people and organizations. I believe this is going to be your greatest contribution. You're going to live life in crescendo I'm trying to do the same. And and you know, my focus is on trust. I feel called to do trust. I don't know exactly where this is going to take me. But I believe that my greatest contribution is still in front of me. And so I'm trying to live my life and crescendo, always believing that my greatest contribution is in front of me. And I learned that from my father. I'm trying to do that model.

David Novak 50:00 

myself. Well, you know, Steven, I really appreciate you taking the time to share some of your insights. Your book Speed of Trust is just phenomenal. But your passion for the subject just comes through in spades. And I'm gonna always remember the thought of living living my life and crescendo. You're certainly doing it. And thank you for being with us on this podcast.

Stephen M.R. Covey 50:22 

Thank you so much, David. It's fabulous to be with you. And again, I greatly admire and appreciate you. Thank you.

David Novak 50:37 

Well, I just love how Stephen talks about trust, he makes so much sense. As leaders, we tend to think, man, if I trust someone with this project, and it goes wrong, it could really cost us. But how often do we think about the cost of not trusting someone, if we look over people's shoulders and require approval at every turn, is costing us productivity and morale and innovation and all sorts of things. But with Stephens idea of smart trust, we can empower our people without exposing our business to too much risk. So let's try it. This week as part of your weekly personal development plan. I want you to find a place to put this idea of smart trust to work in your organization. Look for an area of low risk, where there's someone on your team who you think is ready to take on more responsibility, then come up with some appropriate ways to show that person that you trust them to make the right decisions. Because Take it from me, the more you can wire your organization around trust, the faster you can move, the better your results and the happier your team will be. So do you want to know our leaders lead what we learned today is that great leaders extend trust the smart way. Thanks again for tuning in to another episode of how leaders lead where every Thursday, you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be