Ep. 027 Interview Series: Don Trone on Behavioral Governance and Exemplary Leadership

Business Breaks - All Things Business

Guest Bio:

Don Trone is widely known as the "Father of Fiduciary Responsibility", which is about managing the assets of another person and is a legal responsibility. He has researched, written and taught about this topic for 35 years and strongly believes that fiduciary responsibility should be seen as a gold standard.
Don is the author or co-author of ten books on the subject of fiduciary responsibility, portfolio management, and leadership. He is a graduate of the U.S. Coast Guard Academy, having served for ten years on active duty, most notably as a search and rescue helicopter pilot.
He has a Master’s from The American College and has completed post-graduate studies in theology from the Pittsburgh Theological Seminary and Trinity Episcopal Seminary.

Episode Summary:

- Introduction to Don Trone and his background with coast guard and fiduciary responsibility
- Difficulties in identifying dishonesty and harm to society
- Behavioral governance for identifying exemplary behavior and selecting the right person for each job
- The wisdom of Native American behavioral governance and the importance of stewardship for the tribe
- The importance of simplicity in communication, how complexity inhibits trust when communicating
- The 3 critical elements for the formation of trust: compassion, character and competence
- Don's research on the key leadership behaviors and characteristics
- Fraud risk and bad behavior in organizations
- Key takeaways on trust formation, collaboration, adaptability and alignment
- Don's approach to creating accessible microlearning courses

Introduction and Background:

- Don Trone's background in the Coast Guard had a significant effect on his view of fiduciary responsibility and leadership.
- He worked on projects researching Hurricane Katrina and the leadership and decision-making processes of the Coast Guard.
- He developed a framework for leadership, stewardship, and governance and met Dr. Sean Hanner, who conducted research in the field of NeuroLeadership.
- Don Trone wrote a book for Native American Indians that won an American Graphic Design Award in 2000.
- He produces microlearning courses, podcasts, and videos that convey a concise message.
- Don previously opposed online learning but technology advancements have made it possible to improve upon traditional classroom learning with virtual training.
- He wants to take advantage of new technology and reach people through bite-sized pieces rather than books.
- Don Trone was a Coast Guard long-range search and rescue helicopter pilot assigned to a remote island called Sika in Alaska in 1985.
- He realized that there was no responsibility or training programs for the 17.5 million lay fiduciaries and wanted to change that.
- He decided to focus on fiduciary responsibility as his passion and career for the rest of his life, realizing that he could save and improve lives by improving investment decisions.

Complexity versus Simplicity:

- The Coast Guard's simple mission of "save lives" during Hurricane Katrina demonstrates the importance of simplicity in decision making.
- Complexity can sometimes be relied on by professionals to prove their knowledge and expertise.
- However, complexity can actually inhibit the formation of trust between professionals and clients.
- Complexity generates cortisol, the hormone associated with the fight or flight response, in the brain which inhibits trust formation.
- Professionals should aim for simplicity in their messaging if they want to be trusted and viewed as effective stewards and leaders.

Leadership and Management:

- Being a leader or manager comes with the risk of getting betrayed.
- Teams need to be trusted before they can prove their trustworthiness.
- It's difficult to detect when a team member is waiting to betray the trust that you built with them over time.

Behavioral Governance:

- Don Trone, an expert in leadership behavior, and his colleague conducted research on leadership behaviors and characteristics starting in 2007.
- Through research, they (Don and his colleague Sean Hannah) compiled an inventory of leadership behaviors and identified commonalities between leadership and effective decision making and project management.
- They combined their work, and their research validated everything they were doing in the fiduciary world.
- They named this new body of research Behavioral Governance.
- They narrowed down a list of behaviors and characteristics to ten, five for leadership and five for stewardship, that were directly correlated to the six neurological markers of exemplary leaders.
- The five leadership behaviors all begin with the letter C, and the five stewardship behaviors all begin with the letter A, which was not an arbitrary selection but rather based on their neuroscience research.
- According to neuroscientists, there are three things critical to the formation of trust: compassion, character, and competence.
- The order of importance is compassion first, then character, then competence.
- When building competence, it is important to have discipline and a framework to avoid omissions.
- Many issues in regulatory and fiduciary litigation come from forgetting to do something rather than making an active mistake.
- Collaboration is a critical leadership behavior identified among the ten behaviors.
- Collaboration is a newer phenomenon in the leadership world, becoming prominent around 2010-2012.
- Prior to that, the dominant leadership style was command and control.
- The CEO's role is now to define the why and let the team figure out the what and execute.
- Leaders must make sure everyone is heard and that introverts are given an opportunity to express their opinions.
- Psychometric testing of professionals shows that collaboration scores are lower among professionals over 45.
- Being adaptive and aligned are also important, and listening skills are critical for great leaders.
- The CEO must think about how to adapt to new ideas and align with goals and objectives while ensuring everyone is contributing in a collaborative way.
- Behavioral governance is applicable to any industry.
- Previous training for lay fiduciaries was not effective because it was only applied once a quarter.
- A framework was developed that could be used every day by anyone in a leadership position.
- The framework includes leadership and stewardship behaviors that improve decision making.
- The goal is to keep the framework simple for easy execution in any situation.
Don's contact details:
[e-mail]
3ethos Leadership training:
Home - 3ethos
Don's LinkedIn profile:
(5) Donald Trone | LinkedIn

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