“We're never so vulnerable than when we trust someone - but paradoxically, if we cannot trust, neither can we find love or joy” Anon
Within the past decades, the design of organizations and how they operate have changed in the face of new international regulations. In some cases, employees have resisted these organizational innovations and often have developed self-protectionist attitudes largely due to what observers call “downward communication flows in organizational hierarchies.” As many organizational scholars have stated, imperfect and non-recursive communication can cause organizational conflict, reducing group effectiveness. Trust in organizations is crucial in promoting group performance.
O’Reilly and Roberts (1977) found that favorable information is often passed upward, while unfavorable information tends to be passed laterally or even neglected in strict and low-trust hierarchies. In other words, trust fosters open communication flows that, in turn, lead to acceptance of organizational reforms and to better participation in organizational life (Porter & Lilly, 1996). The topic of trust has been the subject of a great deal of organizational communication research. Scholars in economics, sociology and psychology have considered the causes and effects of trust and the process of trust formation in organizations. Although theoretical insights have resulted from these studies, the concept of trust remains ill defined, there is still much confusion regarding the conceptualization of trust as a cause and trust as an effect, and trust objectivity still lacks specificity (Park & Won, 2000). Despite limitations in the current state of trust research, it is true that the less trust there is in an organization, the less productive it will be. There is abundant empirical evidence substantiating the importance of trust in the promotion of open communication and group effectiveness (Dwivedi, 1983). (Baek et al. 2008)
WHAT IS TRUST?
Trust is an abstract feeling, which is, at one time, both emotional and logical. Emotionally, it is where you expose your weak underbelly to others, in the belief they will not take undue advantage of your being so forthright. Logically, it is where you have weighed the possibilities of gain versus loss, calculating expected utility based on hard evidential data, concluding that the person in question will behave predictably. In practice, trust is a bit of both. “I trust you because I have benefited from your trustworthiness and because I have faith in human nature.” Such is trust; we feel trust. Emotions associated with trust include comfort, companionship, friendship, love, agreement and relaxation (changingminds.org).
Trustworthiness is the foundation of trust. Trust is an emotional bank account between two people, which enables them to have a win-win performance agreement. If two people trust each other, based on the trustworthiness of each other, they can then enjoy clear empathy, communication, and productive interdependency. If one is incompetent, work on sensitivity and communication. But if one has a character flaw, he or she must make and keep promises to increase internal security, improve skills, and rebuild relationships of trust. Trust or the lack of it is at the root of the success or failure in relationships (akonundrum.xanga.com).
You may be deceived if you trust too much, but you will live in torment if you don't trust enough. Frank Crane
There are a number of different ways we can define trust. The dimensions of trust and consequent definitions are given in the succeeding paragraphs.
It is a normal part of the human condition to be constantly forecasting ahead. We build
Internal models of the world based both on our experiences and what others tell us, and then use these to guess what will happen next. This allows us to spot and prepare for threats and also make plans to achieve our longer-term goals. The greatest unpredictability is at 50%; a reliable enemy can be preferable to an unpredictable friend, as at least we know where we are with them.
Definition 1: Trust means being able to predict what other people will do and what situations will occur. If we can surround ourselves with people we trust, then we can create a safe present and an even better future (ibid).
“The glory of friendship is not the outstretched hand, nor the kindly smile, nor the joy of companionship; it's the spiritual inspiration that comes to one when he discovers that someone else believes in him and is willing to trust him with his friend.” Emerson
Most of what we do with other people is based around exchange, which is the basis for
businesses as well as relationships. At its simplest, it is exchange of goods. I will give you two
goats for one cow. It is easy to calculate the value in such material bargaining. Things get more complex when less tangible forces come into play. A parent exchanges attention for love. A company exchanges not only pay but good working conditions for the intellectual and manual efforts of its workforce. Value exchange works because we each value things differently. If I have a whole flock of goats but no milk, then I can do business with a person who has a herd of cows but no clothes. This principle of reciprocity is what binds societies together. Trust in value exchange occurs when we do not know fully whether what we are receiving is what we expect.
When we buy a car, we don’t want to be sold a dud which the seller knows is faulty. When I get
advice in business, I want it to be based on facts, not wild theories or half-baked opinions.
Definition 2: Trust means making an exchange with someone when you do not have full knowledge about them, their intent and the things they are offering to you (ibid).
Exchange is not just about an immediate swapping of cows and sheep or hugs and kisses. What makes companies and societies really work is that something is given now, but the return is paid back some time in the future. The advantage of this is that we can create a more flexible environment, where you can get what you need when you need it, rather than having to save up for it. Trust now becomes particularly important, because otherwise we are giving something for nothing. The delay we have placed in the reciprocal arrangement adds a high level of uncertainty which we need to mitigate through trust.
A simple formula for creating trust, often called the ‘golden rule’ is, ‘Do unto others as you would have them do unto you.’ It sets up the dynamics for my giving you something now
with the hope of getting back some unspecified thing in the indeterminate future.
Definition 3: Trust means giving something now with an expectation that it will be repaid, possibly in some unspecified way at some unspecified time in the future (ibid).
When we trust other people, we may not only be giving them something in hope of getting something else back in the future, we may also be exposing ourselves in a way that they can take advantage of our weaknesses. If I buy a car from you and I do not know a good price, you can lie to me so you get a better bargain. If I tell you in confidence about the problems I’m having with work, you could use this to further your own career at my expense. Although the threat of retribution or projected feelings of guilt can counteract your temptation to abuse my exposed vulnerabilities, if you succumb I still get hurt and may still end up with the shorter stick. For our transaction to complete successfully, I must be able to trust that such agonies will not come to pass.
Definition 4: Trust means enabling other people to take advantage of your vulnerabilities—but expecting that they will not do this (ibid).
So learn about trust, how it works and how to build it. If you do it well, other people will give you the earth. If you betray them, they will hunt you to the ends of the earth. (akonundrum.xanga.com).
Building Trust in Business by Trusting
A human being is only interesting if he's in contact with himself.
"I learned you have to trust yourself, be what you are, and do what you ought to do the way you should do it. You have got to discover you, what you do, and trust it". Barbra Streisand
We all want loyal customers and employees, but are you willing to meet them halfway?
The world's financial markets nearly collapsed in the recent past for one reason: lack of trust. Credit, the plasma, nay lifeblood of the global economy, all but stopped flowing. Even big banks refused to lend to each other because they didn't trust they would be repaid. Trust had been taken for granted. Contracts back up our deals and transactions, but who would sign them without trust in their counter-parties? Trust is essential to building enduring connections with employees, suppliers, customers, and the communities in which we do business. And it drives the risk-taking that leads to innovation and progress.
But how do you gain it? It doesn't hurt to be honest and ethical. What most managers
don't get, though, is that the best way to build trust is to extend it to others. I often think of a
“Many theorists see the development of mutual integrative force in an organization. The seminal studies of Deutsch (1958) and Rotter (1967) emphasized the interpersonal aspect of trust in risk-taking, perceptions of vulnerability, and intention to cooperate with others. Based on this, studies were made to examine the relationship between trust and interpersonal behavior. They found that high levels of trust in an organization has a positive effect on open communication (Boss, 1980), heightens the amount and accuracy of information to superiors (Dirks, 1999), and promotes organizational citizenship behaviors (Pillai et al. 1999). However, these results were found only within the confines of trust in organizations. Scholars, such as Boss (1980), Dirks (1999), and McAllister (1995), defined trust as interpersonal trust among peers. Another group of researchers, such as O’Reilly (1978), O’Reilly and Roberts (1974), and Pillai & Williams (1999) studied trust in superiors or seniors. Sociologists and political scientists, however, have focused on trust at the societal level. Giddens (1990) and Luhman (1979) divided the concept into two components, interpersonal trust and institutional trust. Putnam (2000), one of the most frequently cited authors in political science, explored the role of trust in American democracy, local communities. Specifically, Luhman (1979) used the term ‘confidence’ to denote interpersonal trust. Institutional trust was simply depicted as ‘trust.’(Baek et al. 2008)
But how do you gain it? It doesn't hurt to be honest and ethical. What most managers
don't get, though, is that the best way to build trust is to extend it to others. I often think of a 1964 Poona south-Indian restaurant owner who decided, years back, to let customers make their own change from coins he left out on the counter. He was able to serve them faster, yes, but he also won loyal customers and left his competitors behind. A meal cost 4 cents then!
Netflix trusts its employees to take whatever vacation they feel they need. Rock band Radiohead released its last album online, trusting fans to decide how much to pay, and generated more revenue than all its previous releases. The University of Michigan Health System encourages doctors to apologize when they make mistakes, trusting patients to forgive them, risking legal liability. The number of malpractice suits dwindled, and other providers are adopting this approach.
LRN has long moved in this direction. One way that they've extended trust has to do with how colleagues spend company money. They want staff to file honest expense reports. Instead of tightening oversight, they did away with it: no approvals required. They still do random report checks and track aggregates. It helps them arrive at smarter policies on booking airfares, for example. There's a trust payoff, of course, but there's also less friction between managers and team members—and more time to do their jobs. And to inspire their employees to actually care, managers judiciously put their own trust to use.
I remember standing a few steps away from a pond some thirty meters in diameter, idly watching a young kid lobbing pebbles into its center and clapping as the ripples spread. The pebbles weren’t large enough for the ripples to reach land. I walked up to the child and gave her stones to lob, so that the waves could reach us and the girl put her feet into them. That’s when I thought about the Five Waves of Trust. It struck me that the theory could take another view. Sure enough, there is a flaw in that no emphasis is given to the input force. More important, Stephen M. Covey, the author of that book stops at just one drop in the pool; He quotes Bill Gates, “Success today requires the agility and drive to constantly rethink, reinvigorate, react, and reinvent.” Those waves have to keep coming! Trust is an ongoing relationship and, in the example given, it means that those drops or stones never stop creating ripples. Anyway, I’m sure he has conveyed what he wanted to convey, and that’s good enough for me.
“Trust yourself. Create the kind of self that you will be happy to live with all your life. Make the most of yourself by fanning the tiny, inner sparks of possibility into flames of achievement.” Golda Meir
We see here that trust, though an abstract sentiment, is actually a rock hard business asset which can deliver quantifiable economic value. Trust relates directly to speed of execution. When trust is high, speed of execution goes up. If production goes up in a fixed time, costs go down on a pro rata basis. High trust levels, both intra and inter-organization, make for transparent and consequently sound financial sense and it is prudent to build good trust levels.
But the question is: Does trust take time?
How Much Time Does Trust Really Take?
Charles Green, a speaker and executive educator on the role of trust in professional services and other complex businesses asks two questions when talking about trust. He says that those who sell professional services know the power of being trusted, and strive to be seen that way. Consider these statements:
According to him, the answer in both cases is, “it depends. Each of the apparently contradictory aphorism pairs makes perfect sense in a particular situation. The trick, of course, is to know which situation faces us.” In the same vein, consider ‘trust takes time’, and ‘trust your gut’. Which is right? Is trust gained only with the passage of time? Or is it something that comes in a flash, a moment of intuition or feeling? “Most people in business, if asked without reflection, will come down on the side of ‘trust takes time’. And their approach to selling reflects this. They believe that people buy after they come to trust the seller; and that this trust is based on a track record and a history of promises kept,” he adds.
The belief that trust takes time is true enough—but it’s only about a quarter of the story. The rest of the story is a story of trust that hardly takes time at all. And that the sales process—far from depending on the prior establishment of trust—is itself ground zero for the creation of trust.
Trust And Time: The tendency to over-weight the importance of time in establishing trust isn’t just limited to sales. It is reflected in other parts of business, and of society, as well. A few years ago, Warren Buffett bought McLane Distribution, a $24 billion food distributor, in a $1.5 billion transaction. He did no due diligence beyond a 2-hour meeting. Buffett said, “I trusted Wal-Mart, I trusted the people I worked with.” This decision saved Berkshire Hathaway millions in foregone legal and accounting costs; total elapsed time, one month.
The US auto industry is notorious for its history of combative relationships with employees (the UAW) and its various suppliers. By contrast, the Japanese auto industry has seen its suppliers as integral parts of a larger system. The resultant lower costs per car probably contribute more to the Japanese industry’s competitiveness than the US industry’s health care and pension costs. The general business costs of low trust are massive. Think of the expenditures on legal fees. The added accounting costs based on ISOs. ILO SAPs. Sarbanes Oxley. The costs of disclosure. Of regulation. The burden of low trust shows up in sales as well—and, like the auto industry, much of it is the fault of sellers ourselves. Why?
The Trust Equation: The concept of ‘trust’ is reflected in the four factors of the Trust Equation:
Here TQ stands for Trustworthiness Quotient, C for credibility, R for reliability, I for intimacy and S for self-orientation (Green 2008).
Of these four factors—credibility, reliability, intimacy and self-orientation—only one of them necessarily requires the passage of time. That factor is reliability, because by definition it requires repeated experiences. The emphasis on reliability is what drives so much of the approach to selling primarily used in professional services: references, lists of past clients, success stories, resumes, and processes. All are heavily built around the idea that being trusted, you accumulated experience built over time. But reliability is only one factor of four. And the other three often, sometimes mainly, are created in a conversation, even a moment. Credibility is established not just in histories, but in symbols, credentials, and insights—and in a firm handshake, a look in the eye, and a straight answer. Intimacy is established not only by knowledge acquired over time, but by a knowing nod, a sense of empathy, and a recognition of the personal. Self-orientation is not just established through a history of customer-focused behavior, but by how we conduct ourselves daily, what queries we ask, and whose concerns dominate our reactions in the moment. Let’s look at them in detail.
We’ve already factorized our trust equation:
Credibility: Credibility is the area most commonly achieved. It focuses on technical expertise… plus presence. Presence refers to how we look, act, react, and talk about our technical expertise. You must illustrate not just assert. It takes a moderate amount of time to establish compared to the other components of trust. The rational part of credibility (believability - not telling lies) can be examined or checked pretty quickly (i.e., references). The emotional side of credibility (honesty - telling the complete truth) takes longer to evaluate because honesty has to do with being comfortable with you. You must allay any suspicions of incompleteness, whether unconscious or subconscious. Two things do this quicker than anything else:
A few ways to enhance Credibility:
1. Tell the truth.
2. Don’t exaggerate.
3. Avoid saying things that could be read as lies. (e.g., "We’ll put our best people on it.")
4. When you don’t know, say so quickly and directly.
5. If you don’t really belong there, don’t put yourself there in the first place
6. Do your homework.
7. Love what you do.
Covey also writes about similar feelings when describing trust. His first ripple symbolizes self trust, with the inner-sense of contentment. Actually, he likens self trust to credibility. Credibility has four adjuncts, he adds: Integrity, Intent, Capabilities and Results. He says “Integrity goes beyond honesty, including congruence, or practicing what you preach; humility; and courage of convictions. Two additional tips on increasing your integrity:
1. Make and then keep personal commitments to yourself.
2. Create a personal mission statement articulating what you want to be known for.
Intent: Rebuff any ulterior negativity. Your motives, agenda and behavior must be totally transparent. Do not give anyone the chance of pointing a finger at you. Refine your motives,
announce your intent and never block anybody’s path to progress.
Capabilities: Defining capabilities as your unique personal blend of talents, skills,
knowledge, capacities and abilities, he pulls out an interesting acronym: TASKS!
Ergo, the way to increasing your personal credibility is to develop your T-A-S-K-S. And keep developing them, lest you go stale.
Results: Results matter. They reflect your track record. You have to be a 'doer' not a 'talker'. Great leaders get results in ways which will inspire and enhance trust. Outstanding companies build trust by being completely open, transparent and honest with everyone.
To improve your results:
Reliability: Reliability is about whether clients think you are dependable and can be trusted to behave in consistent ways. It is determined mostly by the number of times the client has interacted with you. We trust those we know the best and assign less trust to those whom we have not interacted. Judgments about reliability can be borrowed by checking experiences others have had with you but these are estimates that can be quickly revised by direct client experience. Reliability links words and deeds, intention and action. This action orientation distinguishes reliability from credibility.
The rational part of reliability is the repeated experience of links between promises and action (you do what you say). This is done formally by meeting due dates, increased quality levels, increased sales, etc. but also seen less formally in how long it takes someone to return a
phone call, whether meetings are cancelled or kept, quality and timeliness of day-to-day
communications, etc. The emotional side of reliability is revealed when things are done in a way the client prefers, or to which they are accustomed. We unconsciously form opinions about someone’s reliability by the extent to which they seem to anticipate our own habits, expectations, routines, and quirks. Thus, reliability in an emotional sense is the repeated experience of expectations fulfilled (emphasizing the importance of personality profiling in quickly revealing someone’s personality expectations). Thus consistency may be construed as rational reliability in terms of the client’s preferences (emotional reliability).
A few ways to enhance Reliability
Intimacy: Intimacy and self-orientation are the most effective source of differentiation in trustworthiness. People trust those with whom they are willing to talk about difficult agendas (intimacy), and those who demonstrate that they care (low self-orientation). Intimacy is needed to make a connection to the interior, emotional state of the client. It does not mean that private lives necessarily get shared. What it does mean is that things personal, related to the issues at hand, get shared. Intimacy is about emotional closeness concerning the issues at hand. It’s a game of mutually increasing risk. One party offers a piece of himself or herself and the other party either responds (deepening intimacy) or they don’t (drawing an intimacy line). Trying to establish intimacy too soon in the client relationship can backfire. It is the scariest part of trust because it is about who we are more than any other aspect of trust. It requires courage. Many assume intimacy takes the longest to develop but when done well, it is potentially the least time dependent.
A few ways to enhance Intimacy:
Self-Orientation: There is no greater source of distrust than account service people who appear to be more interested in themselves than in trying to be of service to the client. Self-orientation covers anything that keeps us from focusing on our client. Things like a desire to jump to the solution, a desire to always be right, fear of not knowing what to do or say next, fear of rejection, etc. can keep us preoccupied with our own agenda and it will directly reduce trust.
Clients recognize excessive self-orientation through such things as:
A few ways to demonstrate low self-orientation:
They start with, "Stating the obvious, new clients should have lower numbers than existing clients. In the new client case we might rate the client’s initial perception of your credibility as 6 (above average) on a scale of 1 to 10, probably based on reputation and experience. Reliability, which typically takes longer to establish might be somewhere around 3, and intimacy, which would not be far along at this point might be a 3. Self-orientation would be high since in sales situations we typically believe the other party is looking after #1. So the self-orientation score might be an 8.
Low self-orientation is very rarely the starting assumption.
6+3+3=12; 12/8 = 1.5
So, with most new clients we have lots of work to do in the trust area. With existing clients the score usually looks more like this:
Credibility = 7; Reliability = 8; Intimacy = 5; Self-orientation = 4
7+8+5=20 and 20/4=5
Perfection would be a score of 30. You’ll never get there though you should try. A more realistic goal is between 12 and 20. Remember the score changes as the relationship and the type of projects change. Also, with intimacy, the client may limit how close you get so your score may never be above average. The most important area to focus on is self- orientation.
For example, let’s say you have a good client and you see the opportunity to pitch a new project to the client. This new project would involve new people in an area you haven’t worked in before with that client. You boldly ask for the new project without setting the stage in terms of the client’s best interest. The trust equation of the existing relationship is a 10 but let’s look at how pitching this new project this way would affect the relationship.
Credibility: 4. The current account service person’s credibility is low because she has to bring someone new into the relationship. The new person’s credibility is only gotten from the current account service person’s testimonial, whose motives may seem mixed.
Reliability: 2. No track record regarding new area or new person.
Intimacy: 3. Broadened agenda without involving the client. No questions asked, no real
discussion of the issue, just a big pitch.
Self-orientation: 8. All the talk is about what we can do for the client, no indication of a focus on the client’s perspective or personal issues.
Trust score = 1.13
So you can see how quickly a good client can be lost if you take your eye off the trust ball.
On the other hand if trust is well built...
If you maintain your self-orientation at desired levels, your clientele grows, as does your prestige and reputation. Don’t leave the beaten path and get excited by what appear to be gates opening wide to let you in even though you start to bloat, disregarding the tenet that self-Orientation has to be kept down on a no-option basis. When I was moving to my new house, a carpenter came to me on recommendation. He did an excellent job and pretty quickly too. Now a friend of mine was moving into the area and needed a carpenter. I recommended the bloke who had worked for me. Unfortunately, he was preoccupied in a neighboring city, so he sent his younger brother instead, an equally good manager and worker. This guy’s eyes lit up when he saw the affluence of my friend and, in a fit of greed, quoted double my price for less work. Not only did he get kicked out, but he also lost out on a hefty pile of money as a new expensive high-rise building came up with 85 deluxe apartments. His self-orientation had been hiked from 3 to a massive 7.
A seller with low self-orientation is free to really, truly, honestly focus on the customer. Not for his own sake, but for the sake of the customer. Such a focus is rare among salespeople.
Looking at trust this way covers most of the common meanings of trust that we encounter in
everyday business interactions. Note that the meanings are almost entirely personal, not institutional. People don’t primarily trust institutional entities, they trust other people. The components of credibility and reliability are sometimes used to describe companies or Websites, but at least as often to describe people. The other components—intimacy and self-orientation—are almost entirely about people.
Trust in selling requires good “scores” on all four variables in the equation. But the most important, by far, is low levels of self-orientation. Living the four trust values is the best way to increase your trustworthiness (www.collieassociates.com).
Building Trust with Marketing Strategies
Robert Middleton has his own way of generating trust through marketing strategies.
A Marketing Strategy is an activity that gets the favorable attention of an ideal client for your service and builds enough trust that they will want to explore doing business with you.
Remember, a Marketing Strategy doesn't sell. Only the Sales Process can do that, but it can prepare the ground by building that trust. One of the biggest areas of confusion in marketing is which marketing strategy to use and in what order. This is solved by this chart on Building Trust Through Marketing Strategies:
A neat way of summarizing what we have been saying graphically.
The Trust Creation Process
As trustedadvisor.com says, “Trust typically gets created at the individual level, between people, and usually in conversations. According to them, the Trust Creation Process is a five-step model for that process:
a. Inadequate listening, and
b. Jumping too quickly to the final, action, step.
The Trust Principles
Being or becoming trustworthy cannot be reduced to pure behaviors. You can’t bottle it in a competency model. Our actions are driven by our beliefs, and our beliefs are driven by our values or principles. Trustworthy behavior is way too complex to fake without the beliefs and values behind them. If your values don’t drive you to behave in a trustworthy manner all the time, you’ll be found out quickly, according to Charles Green. He explains further.
The Trust Equation and the way we use the Trust Creation Process model are really just outcomes of the principles we hold. The way to become trusted is to act consistently from those principles—and not just any set of principles will do. There are four specific principles governing trustworthy behavior:
Focus on relationships nurtures transactions; but focus on transactions chokes off relationships. The most profitable relationships for both parties are those where multiple transactions over time are assumed in the approach to each transaction.
How to Enhance Rapid Trust Creation
There are things we can do to increase the power of rapid trust creation without compromising on the validity or deservedness of that trust. They can all be done within the
sales process itself. Green suggests a few:
We don’t have to wait for the passage of time to create trust, and then the right to sell. We can develop trust within the sales process itself—rapidly, and legitimately.
Covey has taken the aforementioned nine points made by Green into consideration under what he calls his second wave of trust, relational trust. He has a few pointers to add:
In his Five Waves of Trust, he lists many other factors like Listen first; Meet commitments; Be accountable; etc. which we have covered already and some which we will revisit when we discuss Robert Hurley’s opinions on trust.