David Morris  00:10

I'm thrilled today to be speaking with Stephen Covey. You know, for over 10 years now our team at HiPER Solutions and I have been studying this 1% of leader that we call a HiPER. HiPER stands for a high impact performer. And these types of leaders are distinct in that they lead with doing effectively whatever it takes to win a worthy mission. And while these leaders have always been important in evolving organizations, today, they are completely critical for getting us out of the situation we find ourselves in with this pandemic, both at a societal level and also at an enterprise level. So, during the course of this series, we will be speaking to different exemplar HiPER leaders. Not only about their success story, but about one trait in particular that really caused each of them to stand out. And really pleased to have Stephen Covey here today, who we are going to zero in around trust and the power of how that was leveraged. So first off, thanks, Stephen, great to connect again. It's been too long.

Stephen Covey  01:20

It's great to be with you, David. You know I've really enjoyed our conversations over the years and also being able to spend time with you at Sundance that that one wonderful summer morning, if you remember.

David Morris  01:31

It was I mean, it was a breakfast; I think we scheduled for an hour or so, and I [it] went well until [into-statement about duration] lunch. I just remember the staff looking at us toward the end!

Stephen Covey  01:42

Yeah, yeah, we were in a gorgeous setting. And we got we got into the HiPER ideas and and had a lot of fun.

David Morris  01:50

Fabulous, well, it's great to reconnect again. And, you know, Stephen, as we were talking about our audience for this podcast are HiPER leaders themselves, and those that are relying on HiPERs and some of the examples there would be owners, investors, board members because, you know, think about right now we're in April of 2020. Okay, we are living through history: 80% of industries, okay, both in government as well as private sector have to redefine themselves. And there are these people out there, you know, that ultimately have accountability; might be the president, might be a governor, okay might be a private equity managing partner, might be an LP. And these individuals are sitting there and ultimately having to make a critical decision and that is: What leader are they going to lean on? What leader are they going to rely on to be able to take the current organization and and [sic] figure out what to do? That is very much what we're focused on in our audience here: those individuals that have to choose which HiPER leader to lean on to bring them through all of this. One of the reasons I was so excited to connect with you is, although you are known around the world as a thought leader in trust, and we want to get into that, we are only focused on individuals who have been successful HiPER leaders themselves. So, I wanted to break up our conversation today really into a couple parts. The first being a little bit about you. And, you know, I know you don't talk about it, most people probably don't even really know about it. You know, most HiPER leaders don't like talking about themselves, and their own success stories. They're so focused on a mission well beyond them. But, I want the audience to understand a little bit about, you know, how you use trust in your own success story, and then we could talk a little bit about when people are hiring a HiPER, choosing a HiPER, what are some traits ultimately that they need to keep in mind to make sure they really check off the trust box? Because, you know, one challenge right now is, while it can be learned, it can take a while as well. So, I do want to get to some basic things that, you know, if you're hiring a HiPER that you'd want to keep in mind as relates to trust. How does that sound?

Stephen Covey  04:05

That sounds great, David.

Yeah, let's let's do it. 

David Morris  04:09

Great. 

So, let's begin a little bit with your story. You graduated Harvard Business School. You joined your father's organization at the time; you became CEO five years later. Tell us a little bit about what the company was like when you joined and what was the challenge you are fundamentally being tapped with?

Stephen Covey  04:27

Yeah, well, here's the good news. You got good news and bad news. And, and again, I've been there about five years and I'd kind of worked my way up by starting in sales and then building a sales team and then leading all the sales team and then I was appointed president & CEO by our board. I will say this, I had the trust and confidence of the board for many reasons, but maybe the main one is that my track record of performance, had given them confidence.

David Morris  04:59

And what was the name of the company at the time, Stephen? 

Stephen Covey  05:00

I'm sorry, say again.

David Morris  05:01

What was the name of the company at the time?

Stephen Covey  05:02

Oh, the name of that company at the time was Covey Leadership Center. 

David Morris  05:05 

Got it.

Stephen Covey  05:06

Covey Leadership Center was built on my dad's work and, and but here was the good news and and and then I'll give you the bad news. The good news was that we had a good value proposition for our customers, for our clients. In other words, we were adding value to them. They liked what we were doing with my father's work on the Seven Habits of Highly Effective People. And our work on principle-centered leadership. So, we had, we were creating value for clients. That was good. We were growing. The bad news was that we had not yet figured out a sustainable business model that would work for us, so that we could have sustained growth and profitable growth. And so, the situation when I was, you know, just nine days on the job as the new CEO, we go and meet with our bank and our bank wanted to pull our line of credit. That's the first news I get! New CEO, I go and meet with the bank, they say we got to pull your line of credit. And, and and here's the circumstances. We had 17 bank covenants: we were in violation of 10 of the 17 covenants. Because what had happened was this, we had the high growth because again, [we had] a good value proposition. But again, didn't have a good business model yet. So, we had high growth, but we had low margins, very low margins. It was not profitable growth, we had no outside capital, we'd had 11 straight years of negative cash flow, and our, we were real upside-down in debt to equity, you know, our debt to equity ratio, and they're measured in the form of total liabilities to tangible net worth was 223:1, completely upside-down. So, do the math on that for any financial folks who have, you know, high growth, low margin, no outside capital, no out, you know, in lots of debt, you know, we're going to run out of cash. We're going to grow ourselves out of business. And the bank could see it, so they said we got to pull the line. Well, we were able to negotiate with them and we had to sign personal guarantees to keep it afloat. And the issue was, you know, so while I had the trust of the board, I didn't have trust [from] the bank, because we hadn't proved that we had a business yet. We had a great mission, we created value, but we hadn't turned that mission to a business.

David Morris  07:17

I mean, your father, your father's brand was known all over the world, presidents were calling him in for guidance, etc. And yet you were saying the valuation of the company (laughs), when you were brought in for this turnaround mission was how much?!

Stephen Covey  07:31

$2.4 million

David Morris  07:34

Ok, so the company had been around for how long?

Stephen Covey  07:37

It has been around since about, let's see ‘83. So, so that would be about 11 years.

David Morris  07:45

Okay, so just for the audience, and this is a classic example. So, you have 11 years into the business, [the] brand is known all over the place, yet, because of all the debt and challenges it's only worth $2.4 million. And just to fast forward for a moment. Okay. Three years later, when you merge this company, [the] valuation was what?

Stephen Covey  08:03

$160 million.

David Morris  08:06

Okay, so you take nothing from $2.4 million, okay to $160 million in three years. And you didn't even want the role, you didn't even ask for the role, right? You I mean, you got tapped on the shoulder, I mean, what was sort of the the key to this whole thing?

Stephen Covey  08:22

Trust. Trust at every level. We had to build trust on our team and our culture. And when we did that, we could collaborate, could innovate, we could create, we could confront the real challenges that we were facing, which was we didn't have a good business model. And we were in a lot of hobbies, you know, of businesses, which were very mission driven, but we could never make money at. Because we had a great mission, you know, my father's work on principles and leadership, Seven Habits, so valuable everywhere, we found ourselves, doing all kinds of different things. And so, we were in a lot of different hobbies, that we couldn't make money at, and And but when we, when we built trust internally, then we were able to talk about these things, confront them, take them head on. And, and versus skirting them kicking the can down the road, you know, spinning, etc. But, we also had to build that trust with the bank, and that's, you know, the second half of the story with the bank was: they didn't trust us, so we had to supplement that with a lot, you know, personal guarantees. But then, really, over the next year, we, we, we changed our business model, we figured out a way to make money at this, that still created value for our customers. We started to pay down the debt. We started to become profitable. We got out [of] a lot of those hobbies, because we were able to have real conversations, we had high trust, and and we became more profitable, and then we really began to grow our business by building trust with our partners, trust with our suppliers, trust with our clients. And then we started getting, you know, referenceable clients that was would tell other people about us and that was a transference of trust from our client to our prospect, who became new clients, and we really were able to leapfrog this business forward and dramatically change the profitability, the viability and and, you know, grow it from the $2.4 million to $160 million in valuation in a three-year period, because of what we were able to produce and create. But, you know, it didn't just happen. It happened because we built a high trust team and a high trust culture that was innovative and collaborative and creative, and enabled us to address the real issues. And then we extended that trust outward. And you know, so coming out of this, I just became so aware of, wow, trust at every level, with the board, trust with the stakeholders, the bank, trust with your suppliers and distributors, trust with your partners, trust with your customers, and especially the trust inside your own team and inside your own culture. Because a high trust culture is nimble and adaptive, you know, which we need today with all this going on, in this pandemic environment, and and it's also it's fast and, and responsive, but the ultimate outcome is creativity and innovation, and we and we created a model that works. And and, I will say this David, one last point: The pushback I got, when I, because I, had to do some hard things of, of getting out of these hobbies that everyone liked being in, because they were very mission driven. And I had some people say, hey, Stephen, how come you're not as mission driven as your dad is? You know, your dad wants to do all these things. I said, I want to do things too, but if there's no margin, there's no mission. We have a great mission, but we also have to run ourselves like a business to be sustainable. And we have to have trust with our stakeholders, including our bank, and others, it could be investors, other stakeholders. And we had to do that by being a business but we're not an ordinary business. We're a business with a mission. We're a mission-driven business, we what we do matters. And so, I tried to present a third alternative and I liked how you described it: I tried to do whatever it took to win a worthy mission, which was, we have to be a vehicle business with a great mission, and not just a mission that's not a sustainable business. And when we achieved, you know that, that's when great success happened. And then we were able to take our mission all around the world.

David Morris  12:19 

I love it.

I love it. What I want to do now is, I want to double-click a little bit on on this trust piece, because one of the things that we find with HiPER leaders, okay, is the contrast between them and a traditional leader and, and by the way, traditional leaders are critical. You really don't want HiPERs, you know, in all situations. You really only want to have HiPER leaders in situations where this type of breakthrough change is warranted. I mean, you have a company, it's been around for 11 years, $2.4 million valuation, great brand, yet in debt. And what what a shame it would have been to not enable the mission that your father had set out with to really have the true sustainability around the world. And, lo and behold, a HiPER leader shows up there, you. Oftentimes HiPERs are not clear who they are, because they're under political, they're not usually asking for a job. They're just, they're just willing to help out if the mission matters. So, you activated; in three years [the] valuation goes to $160 million. And you're attributing a huge amount of this to trust. Now, when I look at traditional leaders versus HiPER leaders, traditional leaders, they're trustworthy, they talk trust, there's trust in all types of books. But, I have a hunch here, Stephen, that there is a difference between what we would call trust, you know, sort of table stakes trust and extreme Trust [please decide if capitalization adds emphasis or confusion]. So, audience, let's think a little bit about a bell jar curve. And let's think about you know, all good leaders. They're all pretty good at trust, and you need trust to be elite. I mean, otherwise, it's some table stakes. But I want to sort of look at the top 5%. You know, Stephen, even the leaders you've come across in the last few years who you would say are the best of the best. Okay, a league of their own on this trust thing. Can you talk to me about a few examples? Just in things you've seen them do that put them into this extreme trust thing, because this is what investors should be looking for, as they are choosing CEOs to come into some of their troubled companies.

Stephen Covey  14:33

Yes, absolutely. And I love your distinction, you know, because like you say, at one level, trust is table stakes: you're not going to go very far without it. But to go to a whole different level of trust is the opportunity and to have that become your currency, so to speak, and your brand, your reputation that you can be trusted, and and, and you know, and they have a track record behind it is so critical. 

David Morris  14:56

Like a Warren Buffett, right?

Stephen Covey  14:57

Like a Warren Buffett

David Morris  14:58

I think that was I heard you say. So, but the people that you've seen who have just completely even shocked you. They, they were even better than you actually (laughs) There’s just some of the CEOs out there, what are the types of things they're doing that put them into this extreme trust category?

Stephen Covey  15:16

Okay, here's a couple of things. First, they always look in the mirror and start with themselves. They focus on their own credibility, their character, their competence. Both character and competence are vital to move to a higher level of trust. And sometimes you might trust someone in some areas, not in other areas. The higher the character, the higher the competence: the greater the trust. And so, the first thing they do is they look in the mirror, they start with themselves. Whereas, you know, other leaders oftentimes will look out the window, point the finger at everybody else, and how come they're not more trustworthy? And they said, look, I start with myself, I model it, I go first. So, leaders go first they start with themselves. But I'll tell you what, let me give you a next key step. So, being trustworthy, you know, looking in the mirror starting with yourself, your credibility is the starting point. But you could have two trustworthy people working together, both trustworthy, and yet no trust between them, if neither person is willing to extend trust to the other. You could have two trustworthy teams working together, both trustworthy in terms of their character and competence, and yet no trust between them, if neither team is willing to extend trust to the other. So, I find that the best leaders are also not only trustworthy, they are trusting, they extend trust, they give trust, they trust people. Now, it's not a blind trust that’s just kind of indiscriminate without expectations and accountability. No, it's a smart trust, with always with expectations and accountability. But their bias is that they can do more if they can empower and trust people. And they believe in people, they see potential, they see opportunities. They see the cast of characters in your language, of the people that are vital to a project and to an initiative, and they extend that trust to them. And what extending trust does to that people is that it, number one, it inspires them. It brings out the best in them, they rise to the occasion, they perform better. And and they also give it back. They reciprocate the trust back to you. And, and, you know, and you mentioned Warren Buffett, you know, he, you know, he's a great investor, but he's also an operator. He's acquired some...what 77 companies? He brings in these new CEOs, they're all independently wealthy, they could all leave, they have no contracts, and they stay. And then because Warren trusts them, and extends that trust and you know, he has all these direct reports that you know, 77 people, you know, his height because he extends such trust to them, and they respond to that and like being trusted and they reciprocate and give it back. And so being trusting is a huge differentiator from, for leaders and some leaders are trustworthy; they're not trusting. Being both is a game changer because of what that does to your capability to transform, to empower, to lift, to elevate, to inspire people, which is so needed today. And I’ll give you one last thing that leaders do then they also try to then align systems and structures around this so that you reinforce the very thing that you're after that, you know, if you say you value collaboration and teamwork, but your reward systems reward independence and competition: that's misaligned. They try to ask about every system, "Does this help trust or, you know, hurt trust?” because we're trying to build a high-trust team and a high-trust culture. So, it's not just you know, “I have pockets of trust,” but “I have a culture of trust”. Because with that, I can move fast and I can, I can collaborate and I can innovate. So, you know, that's a differentiator, the scale, the scope that that these leaders are thinking of, they're not just looking at individual relationships, they start there. But then they expand to building a team, building a culture, which can be a game-changer for everything else.

David Morris  19:09

I love the extending trust and you know, it starts it starts with that, it puts you sort of a little bit in a vulnerable position. But, you know, if you're, if you're careful on who you do with and you know, your degree of confidence is very high, they're gonna, they're gonna do well, I would imagine it pays huge dividends. I'm trying to think about some other examples that you're seeing out there. You know, when you see an exemplar CEO at trust, other types of things they're doing, they're extending it: what are other things they're doing that just that that, that get them up that to the 95th percentile of this trust thing?

Stephen Covey  19:50

Yep. They, they, they lead out and model the behavior that builds trust. For example, they create transparency. Transparency builds trust, and especially during a time of crisis, like what we have going on right now. And, and so they're open. They're authentic. And yes, there's a little risk of that because you're vulnerable when you're open. But that builds trust with people, they see that you don't have hidden agendas. You have an open agenda. So, the best thing I know that these leaders do: they declare their intent. And they say, you know, here's my agenda, here's my motive. Here's what I'm trying to do. Here's why. They always give the why behind the what.

David Morris  20:30

As opposed to what? Do you find the other 95% of you know, let's just say good leaders, what would they be more like? What would they not be doing?

Stephen Covey  20:39

What they often do is they say, here's what we're trying to do. They don't open up the why; they don't they don't get get into the why enough. Another thing is they they have an agenda and they often will give a portion of it, but they don't [share], they hold back, they have hidden agendas oftentimes. And again, not necessarily malicious or evil or conniving, but just, they're just not as open and as transparent and authentic and as real. Because again, it takes a little bit of... it takes both courage, it takes a little bit of there's a little bit of risk. You make yourself vulnerable by being open when you declare yourself. And you're saying, “Here's who I am, here's what I'm all about, here's what I'm trying to do, here's why”. And so often, most leaders kind of withhold a little bit. They you know, that that feels a little uncomfortable. It feels like I'm too vulnerable. But the net effect is they they're not leading, they're not modeling the openness, the transparency that will accelerate the building of trust. So, a great one, declare your intent, as a leader and assume positive intent as a starting point, unless you have reasons, you know, otherwise, why that wouldn't be a smart starting point and you'll find yourself building trust more. You know, other behaviors: you know, talking straight, you know, you take things head on, open, candid versus spinning, twisting. And again, I find, you know, the opposite of talking straight is when people lie, that doesn't build trust. Most leaders don't do that. But, but oftentimes people will spin, they'll sugarcoat, they'll position, they'll posture, and the whole culture sometimes is built on spin. And you know, and everyone is, you know, quote, selling hats to each other, if you will, just back and forth. And there's just so much spin going on, versus someone that just: tells the truth, talk[s] straight. uses simple language. Candor is the language of trust, it builds trust faster. And I'll give you one more. One that's really important today and in times of crisis and with this pandemic, and all that's going on is is you know, is confront reality. They they take things head on, even the tough things, and they can receive bad news without punishing the messenger. You know how, David, how a leader receives bad news the first time determines how much more bad news they're going to receive in the future, going forward. And you know, if they're open, and if they're if they're able to confront the reality and take it head-on versus kind of denying it or or skirting it, evading it, avoiding it, maybe giving lip service, you know, talking a little bit about it, but then really kicking the can down the road versus taking it head-on. And I had to learn this, you know, I had to take the challenge with the bank head on, I couldn't kick the can down the road anymore. And I had to be open and transparent and saying, “Hey, team, we have got to build a business model that works without losing any value for customers, and right now we don't have it and right now we're not a sustainable business”. I had to be kind of open and confront this reality and, and talk about it straight, you know, versus kind of spinning and, and and being transparent but in the process. Because of that we were able to build trust faster and the best leaders, you know, they they model the behavior and they go first. They’re the first to demonstrate the respect. They’re the first to, you know, to listen first to others. They’re great listeners. And it takes courage, it takes strength to be a great listener. And, and they and they make and keep commitments. And you know, they do what they say they're going to do. And as I said at the outset, they extend trust they give it and not in a blind way, always in a smart way, using good judgment with expectations and accountability. But, you know, they model these kind of behaviors. And that's what the best leaders are doing that are building high-trust teams, and high-trust cultures, which is really what enables the big transformations, the profound impact, the high impact that you're talking about in HiPER.

David Morris  24:40

Yeah, this is...this is really illuminating it quite a bit. And you know, immediately it just, you know, the people that I've come across that have this, I can just sort of see all these faces sort of in my mind and again, one of the reasons why we are debuting this with with Stephen and trust is we believe it is a complete non-negotiable character trait for somebody to be in this HiPER category. In terms of understanding, you may recall at our breakfast, we talked about our vision for a world where people are understood. We talked about your father's passion around understanding, and where that ended up in the principles. [I’d] Just love to get a better idea from you on where this understanding of others comes into place with trust. In other words, if if, if you're a leader and you're building trust with your cast of characters or your team, is there any... can you do that without understanding them? Because a lot of the things you mentioned, it seems like are, you know, are sort of the locus of control of the leader themself. Right, but it wasn't so much dependent on them learning about all the people around them. So I just wanted to sort of see what what aspects of trust you feel cannot be achieved unless you really can understand, uh, you know those constituencies around you?

Stephen Covey  26:08 

Yes, you you know, you can have a basic level of trust if if people are trustworthy and and the like and they basically act in a responsible way, they behave in responsible ways. But, but understanding and the behavior I have around it, see I have, in the Speed of Trust work as you know, David, and my work on the Speed of Trust, I have 13 behaviors common to high-trust leaders. The behavior that is tied to understanding is, listen first. All the behaviors are phrased in two-word expressions: listen first as opposed to listen last or to not listen at all and the whole intent of the listening is to seek understanding and and and and the test of understanding is not when you tell the person, “Hey, I understand you” no it’s when they tell you. “I feel understood, thank you for listening”. See, most people listen. Even most leaders, most leaders listen, not with the intent to truly and deeply understand. Rather, most people are listening with the intent to reply, to respond. So, they're patient, they're even respectful. But in many ways, they're kind of just waiting their turn, and sometimes even formulating their reply while the other person is speaking. But, what really builds trust and where you go go to a different in kind level of trust that will lead to a different in kind level of creativity and innovation, is when people really feel that you understand them and that you that you that that in a sense, they influenced you, by you understanding them. And by the way, understanding does not necessarily mean agreeing. You may not agree with him, you may see it different. It just means you're trying to understand them: their point, who they are, what they're about, what matters to them, and, you know, their their argument to their satisfaction. Once people feel that from you, they become far more influenced by you, they're now more open to hear what you have to say and why you have to say it. My father in 7 Habits called this, ‘seek first to understand, then to be understood’ the sequence is what is what matters. And when you lead with listening first, when you lead with achieving understanding, you'll not only go to a much higher level of trust, you'll now also have far greater influence with that person, and together, creatively, you can come up with all kinds of innovation and creativity and possibilities that you could never come up without that. So, it's just different in kind, what you're able to create when you understand each other and the level traffic goes up dramatically. So it's a, it's a supercharger, you know, it’s an enormous accelerator to both building the trust, but also to building the kind of synergy and creativity and innovation of what different, you know, people having different perspectives, but with mutual understanding, are able to take those differences and turn them into our greatest strengths. What we can do together where you create synergy, one plus one equaling three or more.

David Morris  29:31

I encourage all the listeners to pick up speed of trust, terrific book, and you'll learn more about some of the other traits in there as well. I want to move this now into the final section, which, Stephen, is tomorrow, if you're the managing partner of a multibillion dollar private equity fund. You're the Chief Investment Officer of a large pension fund. You know, you're the chairman of a Fortune 100. And in any of those scenarios, you're sitting there, you know, needing to bring in a new CEO, need to bring in a new CEO, a HiPER to be able to pivot the business. You know, imagine if it's a hotel business or an airline business or a large gym chain business or any number of these industries that will never be the same again. How in the course of an interview, and how in the course of reference checks, especially if you can't meet the person in person (laughs), what are some what are some thoughts you may have on being able to assess for this trust component?

Stephen Covey  30:46

Yes, great question. And, and, you know, we've become very good at hiring for competence in identifying competencies needed and the like. We need to become equally good at also hiring for character, because trust is equal parts character and competence: both are vital. And on the character side, you know, I, you know, integrity is a table stakes, that's, I use a metaphor of a tree that's like the roots of the tree, the integrity flowing from your character, but I'm also going to look at the trunk of the tree as the intent. And I'm looking at their agenda, their motives and and how they work. Do they seek mutual benefit? Do they work interdependently? Are they you know, do they do they try to create Win-Win solutions versus, you know, kind of operating out of a scarcity mentality of, you know, a Zero-sum game and there's a pie and there's only so much in the pie, versus someone that knows how to create an expand and grow a bigger pie and views life through the, you know, through an abundance mentality, a growth mindset. That's that's called the intent of seeing mutual benefit, and that flows from character that I want people to win, others to win, as well as myself. So, integrity and intent is what I'm looking for from their character, and I got to get good at learning to how to recognize that. But I also will go into the competence side. And that's [where] we're pretty good at, you know, [when] we look at the the capabilities, the talents, the skills, the expertise, the knowledge that we're looking to hire. And also, we're looking at the results, you know, the track record of performance, and that's like, the fruit to the tree with the capabilities being the, you know, the branches. And you know, so I want all these dimensions. I want to have someone that's capable, that's relevant, that’s current, that’s learning. And in today's world, with so much change and disruption hitting us, to be a constant learner, and, you know, be recreating, reinventing yourself and your team and your, you know, your organization is so vital versus to say, you know, I, you know, here's all I've done in the past that's might be useful for having, you know, showing a track record. The question is, can you learn and relearn and stay relevant going forward? So, I'm trying to hire for both character and competence, and I'm trying to see that play out. If I could do behavioral interviewing of trying to see this in action, you know, tell me about how you took a, you know, a tough situation and and turned it around building a team. I'm looking for: Are they talking about just “I did this. I did that.”? Or are they talking about, “Here's what we were able to do as a team and what we what we created”. And, you know, and that's what I tried to do, you know, years ago at Covey Leadership Center was build the kind of team and culture that could then come up with solutions to our problems. So, I'm trying to basically say is that, you know, I'm looking for someone that demonstrates who they are, and how they work with people through you know, you know, their, their past or their experience, through their track record. Both the character side, the competence side, and the true interdependence and how they they value that. And, and, you know, people there's an expression: people hire for competence and they fire for character. 

David Morris  34:00

Hm.

Stephen Covey  34:01

And you know, and we want to hire both for character and competence and have them be successful and succeed, because they have both, which enables them to build trust, and try to find the ways to look for that. So, when I, when I call people I'm asking, “Tell me about their track record”. And I'm looking not for I but for a we, what they've helped create what they've helped build. Now, they might be a catalyst and a spark, and they demonstrate their capabilities. But I want to know that they can work, play well with others, that they can build teams, that they can build cultures, because the only way we're going to solve the challenges in front of us today is by being collaborative, creative, and innovative. And that's just a different type of thing than just having smarts. And so I've got it I've got to look for all of these kinds of characteristics of both character and competence.

David Morris  34:51

Do you have a single favorite reference check question when you're when you're looking for the character piece. You know, beyond listening to the words they say, is there a particular question that really just you have found to be incredible to get to if this person is at the top 5% of trust? Or if they're like most leaders?

Stephen Covey  35:15 

Yeah. Well, here's one on character, on the integrity side is: “Could you share with me or tell me a time where you did what you consider to be the right thing, even though there was a tremendous cost or consequence to doing so?”

David Morris  35:34

Mm hmm.

Stephen Covey  35:35

See, the test of integrity, is doing the right thing when there's a cost or a consequence to do it,  or when nobody is looking, and you still do the right thing. It's easy to have to do the right thing when there's no cost or consequence. The test is when there's a cost or a consequence. And yet, you still did the right thing, even though there was an enormous cost. That's a great integrity-type character question. And on intent, which is also a character is is, you know, to ask something about, “Can you share a situation where, you know, it looked like the whole setup was Win-Lose. It was you know, you had to work together, you had to partner, work together, but it was set up in a Win-Lose situation, were you able to build and transform the relationship and turn it into something that was Win-Win, where you created a win, not just for yourself, but for the other party?” And I'm trying to look for a mindset of creating mutual benefit, because it's the nature of our world today. I'm also looking for a mindset of, do they have an abundance mentality, or a scarcity mentality? You know, a scarcity mentality is, “Hey, if someone else is winning, then I'm winning less”. And there’s not you know, and and, you know, that's not gonna, I'm not gonna build a great team and culture with that. I'm looking for someone that has an abundance mentality. That there's enough for everyone, we can all win. And that knows how to then activate that and create possibilities and options and transform Win-Lose relationships and Lose-Win relationships into Win-Win relationships, into true partnerships based upon trust, and what you're able to do and create and innovate because of that. So, those are a couple of character questions that I think could could be useful that I've often done, you know, “Tell me about an incidence where you did the right thing, even though there's a great personal cost” and, and, and “Can you tell me about a relationship where you've transformed what was Win-Lose or Lose-Win, into Win-Win, you know, into mutual benefit?” And it just kind of I, you know, I can see a mindset of, of, “Do I believe in this, do I believe in mutual benefit? Do I believe in an abundance mentality? Do I have a growth mindset?” and then on the integrity one, you know, you know, “How vital is doing the right thing, and being a person of your words and and, and and having value and living true to those values?” You know, honesty is when your words match, you know reality. Integrity is when your reality matches your words. In other words, you are who you say you are. You know you if you say you value, you know, integrity, then you live by it, if you say you value trust, you seek to create it, if you say you value your family, you honor your family, you know, these types of things. That's integrity, when your when your actions match your you know, your statements, your words.

David Morris  38:34

Yeah, well, this is this is great. If we think about the conversation so far, we, you know, started out [with] the fact that we are talking to a HiPER leader that took an organization from a 2.4 million to 160 million dollar valuation in three years. Absolutely remarkable. Ah, number two, we define the importance of trust and some of the ways to actually validate that the person that you are interviewing or about to bring on board as a CEO has trust. And I think where I'd like to conclude, Stephen, has to do with picking up on the extending trust that you talked about before. One of the things that we have found is HiPER leaders that have been really successful tend to have someone, someone that has tapped them on the shoulder and is giving them air cover. [It] Might be a spiritual guide, or it might be a chair, it may be somebody who's given them backing. I remember you talked about a chair, I think, of yours in the past, but I think the question that I really have is the best way that once that board member, investor, you know, hires the CEO, similar to like, in a Buffet situation, What is the most powerful thing they can do to, quote, extend trust to this HiPER leader so that HiPER leader has the best shot of completely unlocking their full potential?

Stephen Covey  39:57

Great question. I think the best way to do it is to be intentional and deliberate about it. Tell them, “We hired you and we believe in you, because I trust you. I trust your character. I trust your competence to try to do the right thing, to build this team, to build this organization, whatever it might be.” And when you tell people that you trust them, they tend to respond to that, and they rise to the occasion. Especially these you know, HiPERs, you know, are going to respond to that. But a HiPER also extending trust. People tend to respond to being trusted. It is inspiring. It motivates. People don't want to let that person down, they want to rise to the occasion, they want to perform better, they want to prove the trust was justified. It brings out the very best in them. And so sometimes people are extending trust and, and but they they don't couch it that way. They kind think it’s implicit or it's implied. I find it's far more powerful to be intentional and deliberate about it and to say, “I trust you, I trust you to lead this team, I trust you to do that. And I'm confident you're going to live worthy of that trust, you'll rise to the occasion. And you know, and it's a smart trust, it’s well-placed because I believe in your character, I believe in your competence.” And I'll tell you what, you talk about inspiration: to be trusted as the most inspiring form of human motivation. It brings out the very best in all of us. And and you know, I I had this with my father when I was seven years old. He trusted me to take care of the lawn. You know, we had a lot of grass in our backyard, you know, he called this green and clean is a whole [sic] nother story from the Seven Habits book, but as a seven year old, he turned over the job of taking care of the lawn. This is back before automatic sprinklers, you know, years ago, and, and, and he says, “I trust you that you'll make the lawn green and clean.” I was seven years old, but you know, he trained me I'll tell you what, I was too young to be motivated by, you know, an allowance or anything else. But I felt my father trusted me, I didn't want to let him down as a seven year old, I responded to it. Imagine me as a 57 year old now, or as a 27 year old or, you know, or 37, 47, whatever! People respond to being trusted. So, tell them that you trust them. Extend the trust intentionally, deliberately, and [the reason] why. And, and I saw a leader one time, get up in front of the entire company, and say, you know, “I've got the best team. It's working directly with me, and I trust every member of this team.” And then he went, “John, I trust you, for these reasons. And Susan, I trust you for these reasons.” And, you know, it was not fake. It was real. It was authentic. And you know, it was really powerful. I saw another leader when they just did a merger and they and they brought in a new company and they said to this company, “We bought you because you're really good at what you do. And we want you to keep doing what you're doing. We trust you. And we're going to try to get out of your way. And we want you to know, we are we bought you because of your strength and we trust you to keep doing it. Here's some guidelines. Here's our values. Here's who we're about, we trust you.” I'll tell you what, people respond to that, they rise to the occasion. Why would all these people stay on with Warren Buffett, when they're independently wealthy now after being bought out, and they have no contracts? Because they love being trusted by Warren Buffett, and they don't want to let them down. And they work harder, because they feel that trust, they want to give it back. So, you know, and Warren says that to them, “I trust you. That's why I bought your business. And and, and I want you to keep running it.” And they don’t want to let Warren down. So that's the idea is, is be deliberate, be intentional. And you know, there's an expression that says the quickest way to make someone untrustworthy, is to tell them that you don't trust them and to show them all the reasons why you don't, the quickest way to make someone trustworthy is to tell them that you do trust them, and why you do, and they tend to rise to the occasion and respond to that. Now look, you got to be smart about it. You know, I'm not just saying blindly extend trust to everyone and anyone because that wouldn't be smart in today's world. You’ve got to use good judgment, I call it smart trust. But when you, as you know, as the the, the person on the board, the leader, bringing in the new CEO, the investor bringing in a new operator, if you're making a decision that you're bringing in this person, because they're qualified, they have the character, they have the competence, then give them that confidence: Tell them you trust them. That's why you're hiring them, tell them that. They respond to that they're inspired by by that they'll actually perform better, and you'll bring out the very best in them. And you know, again, always with expectations and accountability, which keeps it a smart trust, even my dad with me at age seven, there was expectations and accountability and the job was, green and clean, you know, results-focused words of what he wanted our lawn to look like, green and clean. So, it wasn't a blind trust of, “Take care of the yards”. It was a smart trust of, “Son, take care of the yards. How you do it is up to you. I care about two things, that the yard is green and that the yard is clean. I trust you.” And you know, and I responded to that. So, you want to do the same, always with expectations, always with accountability to those expectations that you create together. But be deliberate, deliberate about extending that trust on purpose, because of what it does to people: how it inspires them. And I love what you just said, David, in a sense, probably all of us, at some point in our life have had someone who believed in us, who had confidence and confidence in us who took a chance on us, who extended trust to us. Maybe they believed in us even more than we believe in ourselves; that tapped us figuratively on the shoulder and gave us responsibility and extended trust to us. We all have probably had someone like that, and for whom could we be that kind of person to create that kind of inspiration in their lives through trust. That's the power of that, you know, I say the life changing power of extending trust.

David Morris  46:25

Well, Stephen, this, this has been really tremendous. And thank you, in terms of this next chapter, and as we move into the next normal, I can't imagine a trait more important in a HiPER leader than what you talked about today. While everyone can improve, and this is, as you mentioned, something you can learn and train and [there are] so many great materials you put out there, Stephen, that people can benefit from to get better in it. Our feeling at this point for investors and board members is, you know, to find someone that's already been trained very much in this, hopefully by Stephen’s materials, and, and to get us to get us back to greater heights than society's ever been at before. This will be key components. So, thank you.

Stephen Covey  47:16

Absolutely. David, you're welcome. I agree with you. This is foundational to a HiPER leader, it becomes their currency. And it's how they operate. And it is how they why they can do what they can do, because of the trust that they have, because of who they are: their character, their competence, even when they're doing hard things. And in fact, maybe especially because they're doing hard things. They need to rely upon that currency of the trust, but they themselves are also the catalyst for extending that trust through their extension of it to other people. And you know, and helping to transform teams and relationships and even cultures ultimately, so yeah, I think that the connection of of trust, both being trustworthy and extending trust, being trusting is vital to HiPER leaders. 

David Morris

Thank you, Stephen. 

Covey

Thanks, David. Great to be with you.

David Morris    48:06

Thank you for joining today's HiPERLeadership with Stephen Covey. Subscribe to hear additional HiPER leader interviews, each of whom will exemplify a trait as an owner, as an executive sponsor, as an investor. Driving breakthrough change depends on having a HiPER leader on your team. Our goal is for these sessions to enlighten you so you become even more effective at identifying a HiPER leader for your most important initiative.