Bestselling author and speaker Stephen M.R. Covey, who propelled his father's book, 'The 7 Habits of Highly Effective People' into one of the most influential books of the 20th century, reveals his business tips for the 21st century and discusses the companies he has helped transform.
Stephen M.R. Covey also led the Covey Leadership Center to become the largest leadership development company in the world, doubling its revenues and increasing profits by 12 times. In that time, he expanded the firm across 40 countries, before merging with Franklin Quest to form FranklinCovey.
Jessica Amir: Hi, I'm Jessica Amir for the Finance News Network at the 2019 World Business Forum. Earlier we had the privilege of sitting down with Stephen Covey, a world leading author on trust. He also helped propel his father's book, ‘The 7 Habits of Highly Effective People’, into one of the most successful and influential books of the 20th century. Here's what he had to say earlier.
Stephen Covey: Our whole economic system is based upon three things. You've got to have capital, you need liquidity, you also need trust. And you can put more money in the system to try and get money flowing, but if people don't trust people, banks don't trust people and vice versa and there's no trust, nothing flows, nothing works.
Trust is not just a soft, warm and fuzzy social virtue, my big message is trust is financial. It is economic, you can put a value on it. It's a new source of valuation creation. If effects the speed at which we can move and the cost of everything. And there's overwhelming data on this, that without trust you don't innovative, but with trust your ability to innovative goes up by about 11 times. And so this is so vital to respond, to adapt to this changing world. And there's an old expression by Arnold Toynbee, the historian, where he says, "All of history could be described in four words, nothing fails like success."
Nothing fails like success, it sounds like an oxymoron, but the idea is this, is that there's a challenge that comes to people and we develop a good response to that challenge. The challenge comes, our response is good, the challenge comes our response is good. But then the nature of the challenge changes. Disruption, change, digitisation. Collaboration, this new world. Our once successful response no longer works for the new challenge, we need a new response to a new challenge, not the old one. And that requires us to change and to innovate and to collaborate to do that. And we need trust to be able to achieve that kind of creative collaboration and innovation.
And so I would just say that this is the things we're talking about, leadership, trust builds the culture that sustains innovation, collaboration and the kind of leadership that's needed in the world today.
Jessica Amir: How can businesses develop their management teams and leaders?
Stephen Covey: Leadership is a choice, not a position. So, every single person in your organisation can be a leader. And they may or may not be supervising people, that's a position. Leadership is a choice, it's how you go about doing it. And to build a culture of leadership and to build trust as a foundation enables you to do everything else that you're trying to do better. So, our ability to collaborate, to partner, to create high performing teams goes up with trust. Our ability to innovative and to create goes up with trust. Our ability to attract people, to retain people, to engage them and even to inspire them goes up with trust. Our ability to execute in our strategy, everything else goes up. And so there's a lot of important things to do, but trust is the one thing that changes everything.
Jessica Amir: How can businesses use trust in their culture to innovate?
Stephen Covey: I use this one example of this, what Netflix (NYSE:NFLX) has done. Reed Hastings and others, Mark Randolph and others at Netflix (NYSE:NFLX) and how they built a company. And they really were innovators, and they innovated. They even disrupted themselves, because they went with mail order, DVDs by mail, and they were seeing, "You can't do that, you can't ship these out in the mail, people will steal them." But they didn't, and they returned them. And they built a business there, but then they disrupted themselves and went with streaming. And they weren't afraid to do it. But their whole approach is called ‘freedom in autonomy’. They don't have policies, sick days, vacation days at Netflix (NYSE:NFLX). No, they don't have that, they trust you. Take what you need.
But you have a clear responsibility of what you need to accomplish, how you do it. But they have this ‘freedom in autonomy’, my word is trust. And they've built an extraordinary business and company, and they had to change and evolve and innovate because everything's changing around them. But they had the culture to do just that. So, nothing again is as creative as a culture of trust. It helps us navigate our new world today.
Jessica Amir: Can you give an example of a business that you’ve helped transform?
Stephen Covey: One that I personally worked with that I believe I have permission to just mention has been Data3 (ASX:DTL), the IT company. And what they've been doing to try to build a great culture of trust in order to collaborate, to innovate, to create, to partner different and better, to be agile and fast. Because everything is shifting so fast in technology and IT and so how are you going to keep pace with that? You need trust, you need the speed of trust operating.
Jessica Amir: Do you have any parting advice for Australians?
Stephen Covey: Trust is learnable, it's a skill, a competency that leaders and people in teams and cultures can learn and build that kind of environment, that kind of culture. And they have a huge advantage. It's a competitive advantage in their marketplace. So, you've got either a competitive advantage be it around product or scale or scope or size or technology, what about the competitive advantage of a high trust culture? It's a huge asset.