Smart trust works in business, politics

WE are all familiar with eBay Inc, a US$35 billion (RM107.1 billion) online auction company with more than 235 million users dealing in some one million transactions daily. People, mostly strangers to each other, buy and sell electronic goods, clothes and even cars on eBay.

The main reason the company is so successful today, according to US leadership consultant Stephen M.R. Covey, is trust. In business, as in life, trust matters much.

Covey's latest book, Smart Trust: Creating Prosperity, Energy and Joy in a Low-Trust World, focused on ways to develop optimal trust relationships and how this approach has been successful for eBay and other organisations around the world.

To Covey and his co-authors Greg Link and Rebecca R. Merrill, the answer to how successful companies manage risks in a low-trust world lies in  what they call smart trust, not blind trust or distrust. Blind trust can get us burnt.

In the book, the authors try to articulate  why individuals and organisations have to re-establish trust as a basic operating principle and management philosophy.

"People everywhere are basically good," says former eBay chief executive officer Meg Whitman. "We provided the tools and reinforced the values, but our users built eBay. Our community's willingness to trust eBay -- and each other -- was the foundation of eBay's success."

There are few other examples of good companies that thrived on trust. But there are bad ones, too. However, in general, trust still works. Smart trust -- not blind trust -- equals smart business.

"A fundamental element of eBay's approach is self-policing, much like that engaged in by the Maghribi Traders in the 10th-century Mideast," wrote Covey and Link.

"eBay buyers and sellers do business in a highly transparent way... creating a reputation for each trader, which affects his or her credibility."

It is almost a rediscovery of a timeless principle practised since the time of the Maghribi traders in the 10th century, when trading took place across many miles and cultures just on the strength of a handshake.

In modern times, the success of Bangladesh's Grameen Bank is phenomenal. The bank, set up to help the poor who are perceived to be less creditworthy, has proved critics wrong when a surprising 98 per cent of borrowers repaid their loans, as against 88 per cent among conventional banks.

Business and political leaders, too, have to inspire trust among their followers.

According to Covey, trust is confidence born of two dimensions: character and competence. Character includes the person's integrity, motive and intent with people. Competence includes capabilities, skills and track record.

In the Malaysian context, "political chameleons" at the centre of the National Higher Education Fund Corporation (PTPTN) controversy  who are out to win the people's hearts by fooling them are unlikely to gain the people's trust.

As former US president Abraham Lincoln (1809-1865) once said: "You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time."

A chameleon, as we know, is a small slow-moving Old World lizard with a prehensile tail, a long extensible tongue with protruding eyes that rotate independently and a highly developed ability to change colour.

Figuratively speaking, a political chameleon is a person who changes his or her opinion or behaviour according to the situation. As such, voters often have misgivings about his or her performance as a politician.

As election fever hots up in Malaysia, the opposition is apparently on a campaign overdrive  to discredit the government and instigate the people to go against the mass rapid transit (MRT)   and other high-profile projects.

Unfortunately, common sense does not always prevail these days. Even the relocation of flat dwellers in Kampung Kerinchi, Kuala Lumpur, is being politicised by opposition lawmakers.

Parti Keadilan Rakyat member of parliament Nurul Izzah Anwar unashamedly described the dismantling of the Internal Security Act as a "victory" for Pakatan Rakyat. But she called the ISA replacement bill tyrannical.

   Nothing seems to please the party run by her family and now beset by allegations of morality.

Coming back to Covey's book, the golden rule in all successful relationships is trust.  People want to do business with people they know, like and trust. As in politics, voters will trust the government that delivers.