The 6th law from John Maxwell’s classic book ‘The 21 Irrefutable Laws of Leadership’ states that trust is the foundation of leadership.

trustIt is the glue that holds families, communities, organisations and even nations together. Without it we simply cannot function effectively with those around us.

But what do we mean by trust?

One definition that I particularly like is that trust is a combination of character and competence.

Character is about who you are as a person while competence is about what you can actually do. What is helpful about this definition is that it helps to define trust in a variety of different contexts. So while I can say I trust my wife with having my best interests at heart, I certainly do not trust her to operate on me to take out my appendix because she is not a surgeon! In surgery she is not competent.

Where there is high trust then things move quickly and efficiently. A fascinating business example of this involves Warren Buffet (who has a reputation for being one of the most trusted leaders in the world), the head of Berkshire Hathaway. In 2003 his company acquired McLane Distribution from Walmart for $1.3 billion. Because both companies were publically owned such a deal needed to be subject to all kinds of market and regulatory scrutiny. It would be expected that a merger of this size should take several months to complete at a cost of millions of dollars in order to pay for accountants, auditors and lawyers to verify and validate a huge variety of relevant information. However, what is remarkable is that on this occasion both sides operated with high trust and the deal was made in a single two hour meeting with a handshake! In less than one month it was completed.

Buffet wrote in his 2004 annual report about this: “We did no ‘due diligence’. We knew everything would be exactly as Walmart said it would be – and it was.” In the business world this is amazing to achieve a merger in such a short period of time with minimal costs.

Where there is low trust then everything can be slow and prolonged. Just think of going through security at an airport!

And if there is misplaced trust the result can be disastrous. A relative of mine had a business partner who he thought he trusted. Tragically, after a few years this man ran off with most of the assets of the company leaving my relative in a very difficult financial situation. When we discussed what had happened, I asked him if there had been any warning signs. It turned out there was an apparently trivial character issue he should have paid more attention to. A few months earlier the man in question had borrowed my relative’s motorbike. When he returned it, he did not bother to fill it with fuel. This lack of consideration my relative chose to overlook, but in hindsight it also revealed a lack of consideration and ultimately character.

The fact is that for many high achievers there is the tendency to focus primarily on developing their professional skills, that is they seek to be highly competent. In of itself that is not wrong – I certainly want my surgeon to be highly skilled if they are going to operate on me! But there is much less emphasis on the importance of character.

What are you doing to develop your character?

Character can be thought of in 3 main areas:

Integrity. This is about being the same person wherever you are and whoever you are with. We get the word integer from integrity, which means not being divided.

Authenticity, This is about being true to yourself. It is the opposite of manipulation or pretending to be something you are not.

Discipline. This is about doing the right thing every day regardless of how you feel.

How does the law of solid ground speak into your life?

Do feel free to add your comments below.