The perils of trust

May 28, 2008
“Guard against the prestige of great names; see that your judgments are your own; and do not shrink from disagreement; no trusting without testing.” - Lord John Emerich Edward Dalberg Acton Trust may be a rare and fragile commodity in trucking these ...

Guard against the prestige of great names; see that your judgments are your own; and do not shrink from disagreement; no trusting without testing.” - Lord John Emerich Edward Dalberg Acton

Trust may be a rare and fragile commodity in trucking these days, but this is so for some very good reasons. I don‘t have to sit here and write stories about how freight brokers have betrayed a trucker‘s trust, delaying or even defaulting on payment for a delivered load - that‘s a story you‘ve all experienced first hand, sad to say.

Nor must I re-tell tales of shippers being deceived by fly-by-night truckers, lumpers fleecing drivers, or any number of broken relationships within this industry. We‘ve seen them all before and will see them again, unfortunately, for these are just everyday hazards in business, much less trucking‘s world.

I talked to Bob Voltman, executive director of the Transportation Intermediaries Assn. (TIA), about this very topic a few years ago and while he pointed out to me that trust works 99% of the time in transportation, the consequences when it does NOT work out can be severe.

“That 1% could put a small carrier out of business or cause a shipper‘s factory to shut down,” he noted. That‘s why when TIA was formed in 1978, the first thing its 14 original members did was to formulate and sign a code of ethics. “To us, ethics is a badge of honor; it's the ‘Good Housekeeping‘ seal of approval. It tells the market that we agree - of our own free will, without government oversight - to follow a set of rules regarding payment, conduct, etc.,” Voltman explained.

“For there are no cops on the business beat in transportation - no enforcement of contract rules like what we have for trucking and railroad safety,” he added. “It‘s still a market where a great deal of trust is needed in order to function properly - trust between the shipper, the freight broker or third-party logistics provider and the carrier that services will be provided and paid for.”

Professor Jerry Osteryoung with the college of business at Florida State University also has some thoughts on this from a broader perspective, though he readily admits these aren‘t the happiest of thoughts, which I‘ll let him explain in more detail. Professor Osteryoung, the floor is yours:

“After reading this, many people will think that I have been dropped into a big pit of pessimism; however, I really hope that every reader will understand the message I am trying to get across: Trust should always be monitored. For you can never assume that it is there and that it will always be reciprocated.

In business, we have to trust that our staff is being honest with us and that our employees are protecting our assets. There is just no way for any entrepreneur to be completely protected from employee theft at all times. If we were to make a business theft-proof, the rules and regulations would be onerous, taxing and so detailed that nothing would ever get done. There are just always going to be penetrable holes in our theft shield. That being said, however, trusting in employees too much will allow you to relax the theft shield to a point where it becomes very dangerous.

All of us have frailties and weaknesses, and I just might have the most. If you put enough temptation in front of some people, they will steal from you, and they will continue this dishonest behavior until it is stopped. After all, if an employee gets away with stealing once, they will think that they can do it over and over and never get caught. It is the job of the entrepreneur to minimize the temptation to steal.

One entrepreneur had a very trusted employee steal from her. The entrepreneur thought that this employee was always looking out for her best interests, and as a result, she allowed too much trust to develop between them. She inadvertently found out that this very trusted employee had been stealing from her for over five years.

While the theft was awful in terms of the monetary loss, the betrayal of trust was what shook this entrepreneur‘s values and foundation to the core. She had a fundamental belief and expectation that if she looked out for her staff, they would look out for her. When this belief collapsed, she just seemed to lose her bearings and confidence.

With time, she eventually did recover, but her trust foundation was never fully restored. What she did gain as a result of this situation was an insight into the unreasonableness of her initial assumption. Trust is not always a two-way street.

She is doing very well now, but she clearly understands that no trust can ever be 100%. She set up a number of additional checks and balances in order to reduce the potential for theft as much as possible, and she is so much more cautious about limiting the amount of blind trust.

This is a lesson that every business entrepreneur can benefit from. No matter how long an employee has worked for you, you still need to be cautious, as employees and situations change. Limit trust and utilize checks and balances to protect yourself and your business. You cannot assume that your trust will be reciprocated.

In addition, trust issues are not limited to direct monetary theft. Entrepreneurs must trust that employees are doing their jobs as intended. Even things like incorrectly priced bids, unauthorized overtime on the time clock and missing office supplies are all indirect violations of trust.”

As usual, you can reach Professor Osteryoung by e-mail at [email protected] or by phone at 850-644-3372.

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