Our Weekly Read column features Fortune staffers' and contributors' takes on recently published books about the business world and beyond. We've invited the entire Fortune family -- from our writers and editors to our photo editors and designers -- to weigh in on books of their choosing based on their individual tastes or curiosities. In this installment, reporter Caitlin Keating reviews Smart Trust, The Trustworthy Leader, and The Progress Principle, three new books that address the role that trust and related emotional issues play in business success.
FORTUNE -- In business as in private life, all successful relationships run on trust. Yet we often get trust wrong, giving it either too readily or too stingily. From Bernie Madoff to the mortgage industry, con artists have always operated by persuading naïve investors to give their trust. On the other hand, relationships often fail because one or both parties are afraid to give trust.
That's the premise of Stephen M.R. Covey's Smart Trust: Creating Prosperity, Energy and Joy in a Low-Trust World. "[T]hose who live in blind trust eventually get burned; those who live with distrust eventually experience financial, social, and emotional losses," writes Covey, the son of Stephen R. Covey of The 7 Habits of Highly Effective People fame.
Successful companies and people find a middle way that Covey and co-authors Greg Link and Rebecca R. Merrill call "smart trust." For example, eBay's (EBAY) 235 million registered users are mostly strangers to each other. Yet they engage in one million financial transactions a day. According to former eBay CEO Meg Whitman: "[M]ore than a decade later, I still believe … the fundamental reason eBay worked was that people everywhere are basically good."
So how do successful companies manage risk in a low-trust world? Among many other examples, the authors point to Netflix (NFLX), which built a thriving movie rental business on trust. Netflix trusted all customers to mail back their DVDs, occasionally eliminating unreliable customers as a cost of doing business. If Netflix hadn't extended this original trust, they wouldn't have nearly as many subscribers. Less happily, Netflix's business suffered last year when it abruptly changed its pricing structure, which many customers viewed as a violation of trust.
A related topic is how successful leaders inspire trust. Amy Lyman, cofounder of the Great Place to Work Institute, has been studying this question for about 30 years. In The Trustworthy Leader, Lyman argues that trustworthy leaders inspire cooperation from their employees, which in turn produces a strong sense of commitment and loyalty throughout the organization.
While Covey and co. highlight the important of trust in general, Lyman focuses on the workplace. She presents detailed examples from many industries, including healthcare, retail and real estate, using her institute's Trust Index to measure the quality of relationships between employees and their leaders. (Fortune partners with the Great Place to Work Institute to produce our annual list of the Best Companies to Work For. The Trust Index is a pillar of our ranking methodology.)
Finally, Teresa Amabile and Steven Kramer wrote The Progress Principle: Using Small Wins to Ignite Joy, Engagement and Creativity at Work to try and understand how various aspects of an employee's work and personal life affect performance and motivation at work. Amabile teaches at Harvard Business School. Kramer is an independent writer and researcher, as well as Amabile's husband. In the course of their research the authors analyzed nearly 12,000 diary entries from hundreds of employees at many organizations.
Although Amabile and Kramer pile up an impressive mound of data, their conclusions are generally unsurprising. For example, they found that "participants … experienced much more positive emotion when they made progress than when they had setbacks." They also found that happy employees tend to perform better. Strikingly, managers are often clueless about the importance of these "small wins". In a survey conducted for the book, only 35 out of 669 managers ranked progress as the number-one motivator, after recognition, incentives, interpersonal support, and clear goals.
Entrepreneurs like Tommy John's Tom Patterson are looking to take advantage of a growing market of increasingly fashion-conscious men. First stop: underwear.
By Colleen Leahey, reporter
FORTUNE -- The days of over-sized jeans sagging from the derrieres of men everywhere are no more. Skinny jeans, tailored pants, and fitted oxfords are de rigeur, leaving little room for excess fabric in the undergarment department. Boxers or briefs used to be the only question MORE
Jan 27, 2012 11:25 AM ET
Our Weekly Read column features Fortune staffers' and contributors' takes on recently published books about the business world and beyond. We've invited the entire Fortune family -- from our writers and editors to our photo editors and designers -- to weigh in on books of their choosing based on their individual tastes or curiosities. In this installment, reporter Daniel Roberts reviews Fraternity, Diane Brady's chronicle of five young black men recruited to Holy Cross, MORE
Jan 27, 2012 5:00 AM ET
Dieter Zetsche of Daimler-Benz and Carlos Ghosn of Renault and Nissan are a cultural and business odd couple. But their working together should terrify their global competitors.
By Doron Levin, contributor
FORTUNE -- This year may be remembered for Franco-German cooperation. While both countries' leaders try to hold the Eurozone together, French car company Renault will be working with the German Mercedes-Benz to navigate an increasingly difficult global auto market.
The chief MORE
Jan 23, 2012 12:35 PM ET
The leaders of corporate America have never been his biggest fans. But while they still don't want him in the White House, they love the way he runs Congress. By Ann Reilly Dowd with Madeline Jaynes
Jan 22, 2012 9:30 AM ET
FORTUNE -- If what really wows CEOs about Newt is his ability to get things done, a question naturally arises: How does he do it? By now, most people know Gingrich is a keen reader of books by the like of quality guru W. Edwards Deming and Peter Drucker (whose The Effective Executive is one of Newt's favorites), and a student of the tactics of leaders like the Duke of MORE
Jan 22, 2012 9:30 AM ET
The northern Spanish wine region takes top honors this year for its diversity of wine-making styles and its unbeatable value.
By Gregory Dal Piaz, Snooth
Photo: Alex Porta/Flickr
Looking back on my reams of tasting notes and experiences, one thing really stuck out in 2011. Rioja is producing some of the finest wines available at prices that can make a Scotsman blush. Rioja is my region of the year for 2011. The northern MORE
Jan 20, 2012 12:52 PM ET
Our Weekly Read column features Fortune staffers' and contributors' takes on recently published books about the business world and beyond. We've invited the entire Fortune family -- from our writers and editors to our photo editors and designers -- to weigh in on books of their choosing based on their individual tastes or curiosities. In this installment, executive editor Stephanie N. Mehta reviews Greedy Bastards: How We Can Stop Corporate MORE
Jan 20, 2012 5:00 AM ET
Our Weekly Read column features Fortune staffers' and contributors' takes on recently published books about the business world and beyond. We've invited the entire Fortune family -- from our writers and editors to our photo editors and designers -- to weigh in on books of their choosing based on their individual tastes or curiosities. In this installment, senior editor Matt Vella takes a look at Revolution 2.0, Wael Ghonim's account MORE
Jan 20, 2012 5:00 AM ET
The innovative Internet startup is carving a new, lucrative niche in automotive retailing -- but not without some difficulty.
By Doron Levin, contributor
FORTUNE -- Truecar, the latest Internet startup to carve a niche in automotive retailing, is running into roadblocks as it tries to expand.
The Santa Monica, California-based company is scrambling to avoid a host of legal and public relations pitfalls so it can expand its car-buying service, which it claims MORE
Jan 18, 2012 2:18 PM ET
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