B-School 101, Part II
By Chuck Violand
April 8, 2019
When the professor stated that trust was the most important factor that leads to business success, he couldn’t help but notice the confusion on some of his students’ faces. He figured a good place to explain his reasoning was to show how trust was at the heart of each of the answers they had given when confronted with the question.
“Let’s start with the notion that in business there’s no such thing as a free lunch,” he said, referring to the first student’s comment. He agreed that in a free market economy everyone is responsible for his own wellbeing. And it’s based on us trusting that we’re all playing by the same rules, whether those rules apply to an economic system, society in general, or simply to the company where we’re employed.
The problem comes in when trust breaks down, because we either discover or we feel that the rules don’t apply equally to everyone and that we’ve been misled. Before long, we can start to feel that, rather than there being no such thing as a free lunch, the deck has been stacked against us. Trust soon evaporates.
At first, the argument about hitting the quarterly numbers seemed fairly airtight. The professor conceded that numbers are important and that any business that doesn’t make its numbers―however they’re defined―often enough, won’t be around for long.
But what happens when the need to hit the numbers crosses the lines of ethics or the law? What happens when a big corporation misleads investors about its financial performance in order to support its stock price? Or, when a small business manipulates its sales or expense reporting to secure a loan or to affect employee bonuses? Some will claim that every company does this. But, do they? And is it really invisible to the people who can make a difference in a company’s performance?
How long does it take for investors or employees to lose faith in such a company or for its customers to start buying from other companies they trust? How will this affect hitting those quarterly numbers?
The discussion was then brought around to Harry Truman’s famous sign stating, “The buck stops here.” The professor admired his student’s eagerness to take responsibility for his actions. He found it refreshing. He agreed that business leaders are responsible for everything that takes place within their companies, either directly or indirectly. His concern was with those leaders who should change the sign to read “All the bucks stop here.” In other words, those micro-managing leaders who don’t trust the people in their organizations to do the jobs they were hired to do. Where is that trust?
What kind of people will these companies be able to attract or keep once they discover their boss is a control freak? What kind of business performance can a controlling owner expect to generate if every decision must go through him?
The professor made it clear that he wasn’t naïve enough to think that every business and every person is trustworthy. But he could tell by the looks on some of his students’ faces that they were reconsidering the role that trust plays in business. His hope was that some of them were also rethinking the role that trust will play in their careers … and their lives.