By alpittampalli on Apr 16, 2012 05:00 am
On December 8, 1987, just before President Reagan signed the Intermediate Range Nuclear Forces Treaty, he uttered these famous words:
“Trust but verify.”
To say this phrase caught on would be a gross understatement. It was everywhere, from military platoons to corporate boardrooms to t-shirts and mugs. To this day, it remains embedded in American culture.
Not terribly surprising. It sounds like the ultimate deal: benefit from all the upside that comes with trust, while limiting the potential downside through verification.
But this is a fundamental misunderstanding. Trust and verify are two completely opposite strategies.
Trust is high variance. It comes with great potential for speed and innovation, but it also increases the chance that things won’t end up the way you want.
Example: Zappos trusts their call center reps with an unlimited budget for serving customers. Reps can act much quicker, with more spontaneity and humanity this way, but every now and then they make some costly mistakes.
On the other hand, verify is a low variance strategy. It’s more expensive, it’s slower, but you retain more control and there are less surprises.
Example: Many decisions at the BBC require six levels of approval. It’s hard to make mistakes when you have that much oversight, but getting even trivial issues resolved can take extraordinary amounts of time.
The INF treaty required both the United States and Soviet Union to inspect each other’s military installations extensively to ensure both parties were honoring their agreement.
It cost both countries tremendous time, money, energy, and focus. Don’t get me wrong, considering the immense risks involved, verify was the right strategy. But don’t get it twisted, it wasn’t trust.
The reason you trust is so that you don’t have to verify.