I spoke to Joel Peterson, the chairman of Jet Blue and author of The 10 Laws of Trust: Building the BondsThat Make a Business Great, about how trust can be more powerful than power itself, how to build a high trust organization, an example of a setback from his career, why he has no typical day and his best career advice.
Peterson is also the founding partner of Peterson Partners, a Salt Lake City-based investment management firm. Joel is on the faculty at the Graduate School of Business at Stanford University and has been since 1992, teaching courses in real estate investment, entrepreneurship, and leadership. Joel formerly served as Chief Executive Officer of Trammell Crow Company, then the world’s largest private commercial real estate development firm. Joel earned an MBA from Harvard Business School and received his Bachelor’s degree from Brigham Young University.
Joel Peterson: Trust is built a conversation and a transaction at a time. In general, it results in ceding some measure of control to another – something we do all the time with professionals, parents or partners, but can be reluctant to do when it comes to politicians, investors or used car salesmen. But, if trust is well-grounded, it can expand our reach and our results by orders of magnitude.
Trust can be more powerful than power. And it’s vital for the collaboration that generates innovation and builds durable institutions. Building an enduring trust is rooted in facts, in truth-telling and in delivering on promises; and it flows naturally from a lifetime of promises kept. Because we trust those who say what they intend to do and who work hard at doing what they say, if you would be trusted, be intentional and disciplined and do what you say you’ll do.
Peterson: I focus in the book on building high-trust organizations; so that starts with the integrity of its leaders. This means not only must they have limited gaps between what they say and what they do; but they also must not have compartmentalized lives where they’re trusted in on arena, but violate trust in another.
High-trust organizations communicate bad news as well as good news and before, during and after key events. They recognize the costs of “spin” and are willing to pay the price of accessibility.
Schawbel: Can you share a story from your career when you were able to build a trusting relationship and the long term impact that it made for you?
Peterson: I made a mistake in the negotiation of a transaction and, before the deal closed, I got a call from the party with whom I’d negotiated the transaction to alert me to my mistake – one that could have cost my firm $millions. I’d built enough trust from prior negotiations to earn this call. And I repaid the alert many years later when taking on problem properties to help this investor realize reasonable returns. What goes around, comes around in high-trust relationships.
Peterson: I no longer have typical days; but I do have a set of habits and commitments that serve as guardrails. I get up early and get in a couple of hours of quiet work before anyone is in the office. I catch up on Saturdays so nothing spills over to the next week. I put my kids first and if they want to talk, I listen. I write them an email update every weekend. I let them know that I love their mother.
Schawbel: What are your top three pieces of career advice?
1. Choose carefully the people with whom you associate in business. As Trammell Crow used to tell me, “You can’t do good business with bad people.” Find a mentor early on if you can (and become one later on, if you have the chance).
2. Pick an industry that’s growing. Growth creates opportunities and dynamism. And change requires you to grow and learn. And learning gives meaning to work.
3. Pick a business with good margins. Margins mean you’re providing something to customers that’s worth more to them than it’s costing you to produce; but profits also mean that you have some pricing power, some brand value – a moat, as it were. This means you can invest in new products and services, the development of your team and can afford the failures that come with experimentation.
Dan Schawbel is a keynote speaker and the New York Times bestselling author of Promote Yourself and Me 2.0. Subscribe to his free newsletter.