It’s readers like you that make blogging so enjoyable! Thanks for the valuable and insightful comments on trust.

As far as the “trust, but verify” debate I think that there is a time and place. Where things go drastically wrong in an organization is when managers feel the need to verify the smallest of daily tasks. If employees sense that leadership is constantly looking over their shoulder they never feel empowered to do their job.

On big stuff, verify, on the small and medium stuff, trust. That’s my two cents at least.

I work on trust, and you do a great job of highlighting the necessary link between trust and risk. In many ways, your 4th point–trust your employees–requires the first three. I have a lot of respect for the experience and wisdom of the military, and this is a great example of it. A lot of experience, well-considered.

Trust makes for enormously efficient and effective operations. Mistrust breeds exactly the opposite–inefficiency and ineffectiveness. Mistrust can cause untrustworthy behavior, and untrustworthy behavior drives mistrust. If not checked, it rapidly develops negative feedback cycles and turns into vicious circles. Turning it around takes the kinds of activities and attitudes you cite.

I must quibble just a bit with a couple of your commenters. You are right in saying that trust is not blind faith, but when Raymond channels Reagan in saying “trust but check,” I think you’ve left trust. Trust exists somewhere between faith and management control systems. If you’re checking, you’re not trusting. Pick one and do it.

Finally, to Greg’s post, I have in 30 years of management consulting not met a more sheep-like risk-averse industry in its daily interactions than the pharmaceutical industry; at the same time, at a strategic level, it continues to roll the dice, often poorly. I see the pharma industry tale not as a victim of regulation, but of one that behaved rather like the finance industry is behaving today, and having brought regulation down upon it. I don’t see risk taking there, I see rigorous cover-your-ass bureaucratic behavior, reinforced at every level. It is more a result of command and control, short-term, process-oriented, financially evaluated, metrics-giddy management styles than it is of regulation. I see plenty of room for pharma management to practice your principles 1 and 3–and no one doing it. That’s not the government’s fault, that’s a management style.

But these are quibbles. I agree w. all your commenters that you’ve written some fine wisdom here, thanks very much.

Without question the level of acceptable risk for any one organization is disseminated over time from the top down and ultimately becomes one of the hallmarks of the organization’s overarching culture. This can be both a strength or a weakness. For large organizations like the military, nuclear industry, or the pharmaceutical industry it becomes very difficult to implement changes in culture quickly as there are in many cases hundreds of thousands of employees to impact.

As a person familiar with the modern state of affairs within the pharmaceutical industry, much has changed since the risk encouraged days of decades past. With regulations from the FDA continually increasing their grip the encouragement for risk within the industry has nearly been completely stifled. As an example, when you seek a patent on a new drug formulary that patent is good for twenty years time. This was the same in the 60s as it is today, the BIG difference being in the 60s is it would take about 4-6 years to get the drug through all of the red tape to be available for legal sale on the market with 16 years of exclusive patent rights to that formulation.

In today’s world, it now takes on average 14 years to get a drug successfully to market with over 80% of formulations failing for one reason or another (often times having nothing to do with the efficacy of the drug). One little mistake in a submission in 100′s of pages of paperwork can signal the death of a potential new drug at worst and about a 2 year delay at best. Of course if a drug sees the light of day it has now only 6 years of patent protection on the market.

This increased era of regulation has really cut the chord on risk taking and it is unfortunate since major breakthroughs never happen without calculated risk from talented individuals.

Again, excellent post.

Wow. I hadn’t thought about that industry, but it definitely provides even more challenges, mostly due to poor and misinformed public perception, but as a great teacher of mine used to remind us, “Perception is reality.”

Amazing that safety may end up being the very thing that kills the industry as a whole. Not to dodge the question, but what’s being done about changing the public’s perception about nuclear energy?

It seems to me like until you change the public’s perception of the industry as a whole it’ll be an uphill battle the whole way.

However, the Nuclear Industry goes to great lengths in order to stifle creativity and risk taking of any kind, and for good reason.

All the negative aspects of risk taking you have laid out are magnified 100X in nuclear. Past mistakes at other facilities have caused catastrophic damage and nearly destroyed the industry. There has not been new construction or a major breakthrough for decades as a result.

With such disaster constantly in our heads, how are we to overcome such fears in order to drive improvement?

You bring up some great points, it’s obvious you’ve thought about this before.

I completely agree that innovation and learning are key to building great organizations. I think what happens sometimes is that those elements are stifled by “training” which takes on a form of learning, but is often viewed by employees as another box to fill, something to get done, rather than a real opportunity to develop.

Not quite sure how to fix this, but I think it may involve a bottom-up training approach where employees have more control over their training rather than being told what training they will receive from the leadership.

I also like what you say about people not knowing how to turn innovations into results – I know in my own life that often keeps me from pursuing some of my ideas.

Thanks for your wisdom J.D.!

Innovation and learning are key!

I’ve seen the death of too many teams and orgs that didn’t integrate learning and growth into their business model. Life’s not static. Business isn’t static (unfortunately, most people think of business development as a one time, up front activity and don’t plan for changes through the maturity levels).

I’m a fan of a diversified portfolio where you have your flagship projects, but you also invest in innovation. Innovation is how you change the game either in what you do, or how you do what you do. Either play is a great move, but I think Peter Drucker and Michael Gerber would learn towards operational innovation.

I get why a lot of folks shy away from innovation. It’s usually because they’re scope driven and they don’t have the concept of fix time, flex scope. Worse, they don’t get the innovation cycles and how to turn innovations into results — so then they get frustrated by their R&D. Really it’s a matter of knowing the key principles, patterns, and practices for effective innovation. I seriously should write a book here, but I’m finishing my others first. It’s so very needed.

The most important thing though in the end … is vulnerability-based trust. When there’s no innovation, and it’s a risk-averse culture, people don’t grow and they’re afraid to fail. People become scape-goats and it’s just bad joojoo.