Real estate is a team sport. How well a team performs as a whole depends on the quality of contributions made by each individual member, as well as how each key player functions within the context of delivering results for a successful outcome; on time and under budget. The cost and speed of success depends heavily on a key ingredient that can make or break the efficiency of a team and–in turn–the success of a project. That ingredient is trust. More specifically, that ingredient is smart trust.
In a book entitled The Speed of Trust (2006), Stephen MR Covey points out that although trust is largely misunderstood, it is critically important to learn the “how” and “why” of building trust to increase good will and efficiency of the team. A compelling excerpt from Covey’s book reads as follows (Covey, 2006, p.1):
The One Thing that Changes Everything
“There is one thing that is common to every individual, relationship, team, family, organization, nation, economy, and civilization throughout the world–one thing which, if removed, will destroy the most powerful government, the most successful business, the most thriving economy, the most influential leadership, the greatest friendship, the strongest character, the deepest love.
On the other hand, if developed and leveraged, that one thing has the potential to create unparalleled success and prosperity in every dimension of life. Yet it’s the least understood, most neglected, and most underestimated possibility of our time.
That one thing is trust.”
When placing this idea within the context of the real estate industry, it is apparent that trust is rare; if not altogether missing. Covey explains how trust can be established, developed, and nurtured by constantly getting better at what we do, and aligning our actions with behaviors that embody trustworthy character and competence.
Trustworthiness and credibility become self-evident. When combined with the energies of people who can see and focus on the same vision, team synergy can produce results better than the sum of all parts.
The High Cost of Low Trust
Trust has an economic impact on all areas of life and business; a trust “tax” when trust is low, and a “dividend” when trust is high (Covey, 2006, p.13). It directly affects the speed and cost of making things happen. To illustrate the point, Mr. Covey dedcribes how the events of 911 impacted the speed and cost of the check-in and boarding process at airports worldwide, as well as the effects of the Sarbanes-Oxley Act that was passed in response to scandals such as WorldCom and Enron. (Covey, 2006, p. 13-14).
When trust is broken, it significantly raises costs and adversely impacts the speed of getting things done. Low trust slows down the pace of accomplishing things, while increasing the cost of accomplishing those things significantly (Covey, 2006, p.13). This applies to all areas of life and business; including the real estate business.
The Process of Rebuilding Trust
Building or rebuilding trust boils down to consistently demonstrating 13 trustworthy behaviors within the context of four categories, also called the “4 Cores of Credibility” (Covey, 2006); namely Integrity, Intent, Capabilities, and Results (p. 43):
These 13 trustworthy behaviors (Covey, 2006, p. 136-222) include:
1. Talking straight
2. Demonstrating respect
3. Creating transparency
4. Righting wrongs
5. Showing loyalty
6. Delivering results
7. Getting better
8. Confronting reality
9. Clarifying expectations
10. Practicing accountability
11. Listening first
12. Keeping commitments
13. Extending trust (smart trust)
Relating the 13 Behaviors to Real Estate
Overall, these 13 behaviors can be used as benchmarks to measure all kinds of situations; whether it means evaluating a contractor, a coach, or any other member of the investment team. In fact, after benchmarking against these 13 behaviors, stark realizations may come to light. You may discover and realize that you don’t have the right people filling key roles in your organization; or on your team. When such a discovery has been made, it becomes imperative to replace untrustworthy people as soon as possible with people who strive to be trustworthy, reliable, and dependable. If not, the dynamics common to low trust cultures will adversely affect performance; increasing operating costs, decreasing the pace of progress, and ultimately devastating the outcome of the best laid plans.
In the coming weeks, I will be featuring a blog post about each of the 13 behaviors as they relate to real estate investing, as well as building a high-performance team of trusted advisors and professionals. It is a way of educating the market in an effort to raise the bar in an industry that typically functions in a toxic low trust culture; where most are in it for themselves at the expense of others. In this respect, educating the market is key.
As the market becomes more educated about trust and its 13 behaviors, the more power there will be to use benchmarking tools that will facilitate the process of building highly effective teams in the real estate sector. People will finally understand how to consciously nurture and build effective teams upon a foundation of high trust, mutual respect, and consideration starting with ourselves.