I recently read a statement that made me stop and think.  The statement is: “Trust is probably the most important currency of business.”  If you don’t trust someone, then you move much more slowly.  You do your due diligence.  You make sure that you have all the right provisions in the contract.  You set up reminders to follow up on a commitment.  You end up spending more money and time on a transaction.

On the other hand, if you trust someone, you can do things on a handshake.  You walk away with an assurance that things will get done smartly.  The only surprise is when you’re expectations are exceeeded.  You don’t spend as much time and effort on the project.

For example, Dov Seidman of LRN recently was faced with the decision to let go a number of his employees at LRN.  But he did it the right way as he explains in his article in Business Week.  LRN gave severance packages with no strings attached.  They let their employees take their cell phones and laptops.  They shared internal memos with customers to keep them apprised of the changes.  The result (in spite of the lawyers who counseled against it): a succesful restructuring.  In short, it takes trust to build trust.  LRN will be all the better for it.  Through these small actions they have built up more trust in their trust bank account.  Way to go LRN!