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When Others Abuse Your Trust

What happens when someone violates your trust? What should you do? What can you do? What works?

Has your trust ever been violated? Did someone, once upon a time, abuse your trust? Have you ever placed your trust in someone or something, only to discover – painfully – that your trust had been misplaced?

Yes, almost certainly, you’ve had experiences like that. And they are unsettling – to say the least. The bottom drops out of something. You feel betrayed. Having been fooled, you feel foolish. You’re left with a pain, a void, a bitterness – and a resolve to do something differently going forward.

But what?

It turns out there are two strategies for dealing with broken trust. And one of them is far worse than the other.

Broken Trust: the Dynamics

Let’s remember what’s going on when trust is broken.

Trust is an asynchronous bilateral relationship. That’s a fancy way of saying that trust consists of a trustor and a trustee. What defines the trustor is the willingness to be vulnerable by taking a risk. What defines the trustee is the response to that vulnerability and that risk.

If the trustee chooses to take advantage of the trustor’s vulnerability by seizing on the risk and turning it to his advantage, then trust is broken, or stalled. If the trustee not only does not take advantage, but also then responds in a similarly vulnerable way (i.e. adopting the role of trustor), then the trust relationship is established, or advanced.

Trust relationships are built by continuous iterations of this risk-taken, risk-respected reciprocal behavior. And trust is broken, or stalled, when one party fails to reciprocate.

Setting up the dynamics of broken trust this way is important, because it allows us to see two ways that trust fails.

  • One is that the trustee abuses the vulnerability of the trustor.
  • The other is that the trustor stops taking risks.

Those Untrustworthy %$#!’s

What do we call those who abuse our trust? Vile, conniving, two-timing hustlers. Lying, two-faced, deceiving charlatans. Con artists, heartbreakers, depraved and immoral cowards. Essentially, we characterize them as lacking in character or virtue.

The implicit problem statement becomes, “How to protect myself from The Untrustworthy?” And the implicit answer is a two-parter:

1. Identify the untrustworthy in advance; and to the extent that is infeasible,

2. Take fewer risks in general.

It’s one thing say, “Never trust Joe again to make the restaurant reservations.” But as humans, we generalize.

  • “If you want something done right, do it yourself.” Ergo, don’t trust anyone to make reservations.  Or,
  • “Once burned, shame on you; twice burned, shame on me.” Ergo, don’t trust Joe to do anything.

If you’re a human being, that gets translated into things like, “Don’t trust emails from Nigeria offering inheritances,” or “Beware of strangers who give you candy,” or “Cross the street if you see black teens in hoodies approaching.”

If you’re a company, that translates into things like, “Show me your ID,” or “Sign this non-compete agreement before we hire you,” or “Click here to acknowledge you’ve read the Terms of Service agreement.”

What has happened here?

  • We’ve gone from identifying untrustworthy agents to a wholesale reduction in risk-taking.
  • To prevent bad things from happening, we’ve cut down on the possibility of good things happening.
  • While blaming others for being bad trustees, we cut back on our role as trustors.
  • In the name of increasing the probability of trust (by screening the untrustworthy), we guarantee the reduction of trust (by refusing to play the trustor role).

In fact, this all-too-human response is all-too-common. Ebola? Close the Mexican border. Significant other cheated on you? “I don’t know if I can ever trust again.” Somebody sued you? Demand an indemnification clause in all future supplier contracts.

At a national level, this is why the TSA is what it is: far better we distrust everyone than try to identify the untrustworthy. At a personal level, this is why Twitter and country music are full of ‘done me wrong’ themes – and why they are so popular.

Three-Step Strategy for Dealing with The Untrustworthy

Yes, Virginia, there really is evil in the world, and just because you’re paranoid doesn’t mean they’re not out to get you. But it’s also true that we systematically over-estimate the level of danger, and over-react by taking fewer risks.  So here’s the three part solution.

1. Soberly Assess the Risk. So she broke up with you. Get. Over. It. So your pride was hurt; how much is that in dollars and cents? So a customer burned you; what will it cost to bring in the SWAT team to deal with a mosquito?

Pain is inevitable – suffering is optional. Tough cases make bad law. The perfect is the enemy of the good. If it didn’t break your bones, or break your bank account – then really, how much harm was done? And we almost always over-estimate the damage.

It takes thoughtful maturity to not over-react. But trust is a thoughtful, mature relationship; if that were not so, every Neanderthal would be doing it.

2. Name It and Claim It, Then Trust Again. Don’t boil in the juices of your own resentment – explain to the other party what it felt like, and offer them another shot. Remember, the fastest way to make someone trustworthy is to trust them.

The highest customer satisfaction ratings come from customer dissatisfaction turned around. The winning strategies in game theory consist of giving people two chances, not one.

Trustworthiness is not solely a static quality, a matter of virtue alone. It is also situational, the result of interactions with a trustor. If you withdraw from the trustor side of the game, you guarantee lower levels of trustworthiness on the other side of the relationship.  (This alone explains much of the dysfunction in the financial services sector).

3. Be Proportional in Your Response. Of course there are bad apples, Bernie Madoffs, and chronic hustlers. But don’t stop dating because of one bad date. Don’t enact protectionist tariff policies to halt one abuse. Don’t put all your employees through lie detector tests because one stole from you.

The tendency to overreact is natural; but the ability to fine-tune our initial instincts is what makes us human. It doesn’t take much in the way of brains or moral courage to shut the barn door after the animals have escaped; it takes both to intelligently assess the situation, and to think it through.

————–

It’s tempting to view this as just a personal issue, but it’s one of the major trust issues facing corporations. In most Fortune 100 companies, the implicit belief is that the only good risk is a dead risk.  When you hear “risk,” you immediately hear “risk mitigation” and “risk management.” Risk departments are given enormous veto power, and virtually no one challenges corporate lawyers when they pronounce why the company can’t do this or that.

This inability to see risk-taking as the critical, essential role in trust creation is a major reason we don’t trust companies. It belongs right up there with the selfish, zero-sum, Hobbesian, shareholder-value-driven model of the company. If you hear a manager (I’m talking to you, condo association board members) say, “If we did it for you, we’d have to do it for everyone,” you’re talking to someone who not only doesn’t understand trust, they don’t understand management.

If a company doesn’t trust you and me, then we all have very good reason to say, in return – why the hell should we trust you?

Operating Transparently

Transparency is one of the Four Trust Principles for creating trust-based organizations. The other three are other-focus, collaboration, and a medium-to-long term perspective (aka relationships over transactions). Here’s the business case for transparency.

The article Is Transparency Always the Best Policy? first appeared a few years ago in Harvardbusiness.org. The article is about Paul Levy, President and CEO of Beth Israel Deaconess Medical Center, and the answer to the blog’s question, based on this sample of one, would appear to be a resounding ‘yes.’

In matters great and small, Levy has simply made it an operating practice to behave transparently. His great results may surprise many, but they make a great deal of common sense.

If you are transparent about your activities, you are saying you have nothing to hide. If you have nothing to hide, then people trust what you do.

If you are transparent about what you say, then you don’t risk saying one thing to one person and another to another. You don’t appear to be two-faced; you appear to have integrity—you say the same thing to all persons. (And, it’s a lot easier to remember what you said if there’s only one version).

If you are transparent about what you think, then people can observe your thinking, and see that you are not editing what you say. They feel you are available to them, that you are not segmenting them off.

If you are not transparent in your actions, your words, and your thoughts, then people wonder about your motives. Why are you doing what you’re doing?

What is it you really mean when you say something? And what are you really thinking when you’re thinking?

Suspicion about motives colors every aspect of trust—it affects your credibility, your perceived reliability, and the degree to which people confide in you. The antidote to a bad case of suspicion is transparency. It’s as true in the financial and regulatory world, in the world of negotiation, and in the world of accounting, as it is interpersonally.

So Why Aren’t We All Transparent?

With all the obvious advantages that transparency conveys—why aren’t we all more transparent more often?

There are a thousand answers, varying in particular, but with some common threads in general. At the root of it, I think, is fear.

Fear that others will take advantage of us. Fear that we will be misunderstood, or shamed. Fear that others will see the true inner “me” and thus steal the faux power we foolishly think we maintain by being opaque.

Transparency is both a result of lowered fear, and a cause of lowering fear. Sharing information with another encourages another to share with us. Disclosing information within a company—as Paul Levy did so frequently—begets teamwork and lowers suspicion.

The willingness to be transparent in negotiation helps the other party figure out what it is that you want—so the paradoxical result of taking a risk is that you increase the odds of getting what you want.

Transparency is an invitation to collaboration and connection. It lowers fear, it increases trust.

It feels like taking a risk, but it’s really risk-mitigation in disguise.

Operating transparently isn’t just a hospital procedure.

Enabling Stupid Marketing (and #Sales) at the Speed of Light: Part 3 of 3

This is the third part of a three-blogpost series.

  • In the first, I argued that “stupid marketing and sales” – defined as “a stultifying obsession with one’s own product features, to the exclusion of any meaningful focus on customer needs, much less wants” – has become endemic.
  • In the second, I stated three reasons for the endemic status of this sad situation: the complexity of technology, the tyranny of zero-cost marketing, and a pervasive view of business as impersonal and mechanistic.
  • In this third and final post, I want to outline two generic solutions to the problem.

If you want to contribute to a general improvement in the state of sales and marketing, may I suggest that the next time you spot an offender, send them a link to this series.

Hey, it can’t hurt.

Two Fixes for Stupid Marketing and Sales

If the problem is an obsession with features and an absence of other-focus, two solutions present themselves.

  • One is to offer a rich, compelling narrative – a story – that allows the customer to deeply appreciate one set of possible benefits of the product or service, triggering a series of ‘ah-ha’s’ in the customer’s imagination. I offer two great examples of marketers who use this technique.
  • The other is to go straight at the particular customer, suggesting a uniquely relevant scenario for them – and to do so in the familiar-as-etiquette form of a gift. This is an approach I call BARG, for Bring a Risky Gift.

Story-telling as an Antidote to Stupid Marketing (and sales)

I am far from the first to point out the power of stories. Something there is that we all love about stories. Stories offer meaning, but in a way that is not preaching.

Even if the ‘moral’ of a story is blindingly obvious, the form allows us to indulge the conceit that we, ourselves, have done the lesson-drawing.

Ian Brodie. @Ianbrodie is an ex-management consultant turned email marketer. He writes an insightful blog – and an even more brilliant newsletter. It’s the latter I want to talk about.

I look forward to reading each newsletter. In the kindest, gentlest way, Ian always manages to appreciate just how a particular email marketing technique, or a turn of phrase, or an approach to marketing, might work. Usually he tells it in the form of a wry, self-deprecating story about himself; occasionally, in the form of a triumphant story about a client.

He doesn’t write directly about me: but in writing insightfully and artfully about himself and others, he tells a story that unlocks my own imagination, and makes me interested in what he’s selling.

Ramit Sethi. @ramit also writes a blog, a newsletter, and various other missives. Some people are put off by the in-your-face title of his website – I Will Teach You To Be Rich.

First of all, he actually can. Secondly, he is a cornucopia of ideas of how to improve your life. But for present purposes, it’s how he does it on which I want to focus: Ramit tells in-your-face stories that rivet the attention and supercharge the imagination.

Like Ian, Ramit is a story-teller. Also like Ian, some of his best stories are about what he himself was, and what he managed to become. He’s also loaded with real life examples of others. Unlike a lot of happy-talk writers, Ramit doesn’t hesitate to describe failure: if you can’t stand the occasional ‘ouch’ of self-recognition, better not risk reading him. But if you can take it, this is great marketing.

Bring a Risky Gift

One of the most powerful forms of marketing – really, of influence in general – is the principle of reciprocity. If I do X for you, you’ll be inclined to return the favor. It’s as basic as a hand-shake.

Think about what you do when a friend invites you to dinner. You bring a gift – maybe a bottle of wine. But if you take a risk, you give some thought to that wine. You spend a little more; but especially, you spend some time thinking about it. Maybe you buy a bottle from Piemonte, because your friend recently returned from a foodie tour of Italy.

Critically, you could be wrong. Maybe they hated Italian wines. Maybe they quit drinking. But that’s the point. If you actually take a risk, you make yourself vulnerable.

Vulnerability and risk-taking are the drivers of trust. There is no trust without risk. Waiting for the other party to take the first risk is like aggressively waiting for the phone to ring. You need to create your own luck, and BARG – Bring a Risky Gift – is how you do it.

The best marketing is not shotgunning features lists into dead, cold email lists, but digging into those lists and doing just a bit of research to actually do something personal – and to offer a gift.

I don’t mean a bribe, or an illegal offering. I mean a sample of your wares. An insight; a tool; a white paper. Something that is valuable, that is clearly aimed uniquely at the target client in a transparent and intentional way, and that entails some risk.

That is what BARG is about. It triggers the reciprocity process. It triggers the trust process by taking a risk. It gives a humble sample of what you can do.

Who does this?  Really good consultants do it all the time. In the larger world of marketing, this is some of what Hubspot Marketing became famous for doing.

The point is, it’s another antidote to the impersonal, features-only approach to “marketing” that has come to plague the field in our time.

 

So, take your pick. Tell rich stories about yourself and your clients; or dig in to real life target clients, and BARG.  Either way, the point is to re-personalize marketing and sales, reconnecting with the human aspect of buying.

Let’s make sales smart again. Sell the hole, not the drill. Make it personal. You don’t have to put up with stupid marketing and sales as a customer; and you surely shouldn’t practice it yourself.

Want Clients to Trust You? Try Trusting Others

Establishing trust is not a one-way street. Trust takes risk.  And that risk doesn’t just come from your clients taking a leap of faith when you hand them a proposal and a firm handshake. To build trust, especially with your clients, YOU have to take the risk too.

So, you want your clients to trust you? Read on…

If you’re trying to sell your services, you already know the value of being trusted. Being trusted increases value, cuts time, lowers costs, and increases profitability—both for us and for our clients.

So, we try hard to be trustworthy: to be seen as credible, reliable, honest, ethical, other-oriented, empathetic, competent, experienced, and so forth.

But in our haste to be trustworthy, we often forget one critical variable: people don’t trust those who never take a risk. If all we do is be trustworthy and never do any trusting ourselves, eventually we will be considered un-trustworthy.

To be fully trusted, we need to do a little trusting ourselves.

Trusting and Being Trusted

We often talk casually about “trust” as if it were a single, unitary phenomenon—like the temperature or a poll. “Trust in banking is down,” we might read.

But that begs a question. Does it mean banks have become less trustworthy? Or does it mean bank customers or shareholders have become less trusting of banks? Or does it mean both?

To speak meaningfully of trust, we have to declare whether we are talking about trustors or about trustees. The trustor is the party doing the trusting—the one taking the risk. These are our clients, for the most part.

The trustee is the party being trusted—the beneficiary of the decision to trust. This is us, for the most part.

The trust equation is a valuable tool for describing trust:

But where is risk to be found? How can we use the trust equation to describe trusting and not just being trusted? How can we trust, as well as seek to be trusted?

Trust and Risk

Notwithstanding Ronald Reagan’s dictum of “trust but verify,” the essence of trust is risk. If you submit a risk to verification, you may quantify the risk, but what’s left is no longer properly called “trust.” Without risk there is no trust.

In the trust equation, risk appears largely in the Intimacy variable. Many professionals have a hard time expressing empathy, for example, because they feel it could make them appear “soft,” unprofessional, or invasive.

Of course, it’s that kind of risk that drives trust. We are wired to exchange reciprocal pleasantries with each other. It’s called etiquette, and it is the socially acceptable path to trust. Consider the following:

“Oh, so you went to Ohio State. What a football team; I have a cousin who went there.”

“Is it just me, or is this speaker kind of dull? I didn’t get much sleep last night, so this is pushing my luck.”

“Do you know whether that was a social media reference he just made? Sometimes I feel a little out of the picture.”

If we take these small steps, our clients usually reciprocate. Our intimacy levels move up a notch, and the trust equation gains a few points.

If we don’t take these small steps, the relationship stays in place: pleasant and respectful, but like a stagnant pool when it comes to trust.

Non-Intimacy Steps for Trusting

The intimacy part of the trust equation is the most obvious source of risk-taking, but it is not the only one. Here are some ways to take constructive risks in other parts of the trust equation.

  1. Be open about what you don’t know. You may think it’s risky to admit ignorance. In fact, it increases your credibility if you’re the one putting it forward. Who will doubt you when you say you don’t know?
  2. Make a stretch commitment. Most of the time, you’re better off doing exactly what you said you’ll do and making sure you can do what you commit to. But sometimes you have to put your neck out and deliver something fast, new, or differently.To never take such a risk is to say you value your pristine track record over service to your client, and that may be a bad bet. Don’t be afraid to occasionally dare for more—even at the risk of failing.
  3. Have a point of view. If you’re asked for your opinion in a meeting, don’t always say, “I’ll get back to you on that.” Clients often value interaction more than perfection. If they wanted only right answers, they would have hired a database.
  4. Try on their shoes. You don’t know what it’s like to be your client. Nor should you pretend to know. But there are times when, with the proper request for permission, you get credit for imagining things.”I have no idea how the ABC group thinks about this,” you might say, “but I can imagine—if I were you, Bill, I’d feel very upset by this. You’ve lost a degree of freedom in this situation.”

While trust always requires a trustor and a trustee, it is not static. The players have to trade places every once in a while. We don’t trust people who never trust us.

So, if we want others to trust us, we have to trust them. Go find ways to trust your client; you will be delighted by the results.

This post first appeared on RainToday. 

Nice Place Here, Shame if Anything Happened

copyright Nate Osborne 2013It’s the opening to dozens of gangster movies. The mob guy with a rakish hat and a sneer sidles into the hard-working good citizen’s retail establishment, knocks some cigarette ash on the floor, and says, “Nice little business you got here, mister. It’d be a shame if something were to happen to it, know what I mean?”

And we do know what he means, and so does the terrorized citizen. It’s the protection racket. If you pay, then indeed, nothing happens. If you don’t pay, well, it’s amazing how bad stuff just happens.

Of course, that doesn’t happen in business today.  Right?

The White-collar, Fully-legal, Hands-clean Shakedown, Corporate Edition

In fact, something much like that does happen – though it’s highly sanitized. It’s legal; no individual has bad or evil intentions; and it’s justified as a business best practice. But the effect is the same – the business at the end of the food chain pays a lot of “insurance” for bad events that don’t look like happening. And instead of mobsters getting rich, it’s lawyers and insurance companies.

A simple example. My firm recently sold a single, one-day, off-the-shelf learning program to a corporate client. The contract and statement of work proposed by the client ran to over 10 pages of fine print.

On our end, it went through the hands of four people, including our lawyer, who I struggle mightily to keep under-employed. On the client side, we know personally of three people with whom we interacted, and I am guessing there were more. Total elapsed time was 2-3 months.

The contract included fairly typical clauses to the effect that we would not steal their intellectual property, lists, or secrets; generously they agreed to return the favor.

It also included clauses saying that we would generally indemnify them against everything from lawsuits about IP to people falling on their sidewalks to taking bad advice from us. (And here I worry about trying to get clients to take my advice!)

Most interesting to me was the clause that – at their request – we would submit our trainers to drug testing and to criminal record searches, through whatever such means as the client would dictate, of course at our expense. Moi? Nous? I mean, we’ve got our faults, but…

All this in order to gain the privilege of giving a workshop on – wait for it – how to establish trust-based business relationships. (And yes, I am painfully aware of the irony, even if the client is not. But you go where you are most needed, and agreeing to a training session on trust is actually a pretty good first step.)

Sadly, this is not a unique story. In fact, about 80% of it is standard operating procedure these days. In this case, I sent an email protesting that we felt mildly insulted about the drug test thing. I received back a most polite and apologetic note assuring me that that was surely not the intent, and that they felt badly about it – it’s just that, this is just how business is done – you know, it’s not personal, it’s business.

And voila, we’re back at the movies. See what I mean?

What’s Going On Here 

I want to emphasize, there are no bad intentions here; there are no laws being broken. To use the business vernacular, this is risk mitigation. But it’s risk mitigation gone rogue.

It starts with companies themselves as victims of a shakedown. A lawyer – perhaps their own internal counsel – tells them that they are subject to grave exposure from a lawsuit by some wild-eyed plaintiff’s attorney. Since lawyers vastly prefer to err on the side of caution, they like to be armed with shotguns when they go to hunt fleas.

One form of protection, conveniently served up by insurance companies (who love their lawyer friends) is straight-up insurance. But, apparently cheaper than buying your own protection is to lay off that protection cost onto those who are employed by the company: their suppliers, their employees, and their customers.

And so we get oppressive do-not-compete clauses for employees; mandatory arbitration in the fine print for customers; and send-that-indemnification-downstream to contractors for any risk you can think of.

The Extortionate Impact on the Economy

I welcome the comments of those better versed in economics than I to more accurately describe this, but I can suggest the outlines of four broad effects.

One is simply over-insurance. If I have market power over you (as big companies generally do over little companies, and buyers generally do over suppliers), then I can force you to pay for my insurance. And, I’d prefer to be over-insured rather than under-insured thank you very much, and frankly I don’t care if you have to over-pay for it. In fact, I’ll get it back in nice lunches from my professional partners-in-crime.

I have no idea how to quantify this effect, but since the phenomenon covers every industry, my tummy says it’s Big.

Second, this kind of burden massively adds to the level of transaction costs in our economy.  Initially described by Ronald Coase in the 1930s, transaction costs are non-value-adding costs which enable value-adding through other means, e.g. economies of scale.

But there comes a point when transaction costs begin to overwhelm the possible value they can enable, and cutting transaction costs themselves becomes a more sensible way to achieve economic success.

Are we at such a point?  Consider that the US has the highest ratio of lawyers per capita of any country in the world.  And that the lawyer-per-capita ratio in the US has gone up by 250% since 1950. (Personally, I can assure the reader that the contracting process for training sessions like the one I describe above was vastly simpler 20 years ago. And I sincerely doubt clients got burned, whether by drug-addled trainers or via other means.)

Third, this shakedown amounts to a massive, systemic substitution of check-boxes in place of management to govern the natural friction that exists between contracting people. For example, it substitutes a gigantic system of criminal record checks in place of a few personal phone calls for references. Among the costs of such substitutions is a decline in trust. A big one.

Finally, when you pile on so many transactional, impersonal “risk-mitigation” steps, you open up wide opportunities for corruption of various types. Corruption isn’t just handing over bags with cash. How many times have you heard, “Oh don’t worry about that phrase, we never pay attention to that anyway, it’s just part of the standard form.” How many times have you read the fine print at the bottom of every online purchase you make?

Where there is such casual, wholesale and willful ignoring of agreements, there is a ton of room to become cynical and unobservant about said agreements.

The next level up is easy – think of robo-signing mortgage agreements. And note all the irate protestations by bankers about how this was really no big deal. It’s not such a long step from there to the bags with cash. (Some readers might enjoy Mark Twain’s tale The Man That Corrupted Hadleyburg).

The parallel with moving from locally-made mortgage loans to globally aggregated, tranched and securitized packages is evident. When you depersonalize, you desensitize, and you de-ethicize.

Shades of Shakedowns

Of the two, the gangsters’ shakedown is more honest. It is authentic; you know what you’re being told, by whom, and for what purpose. You know that the threat is real, the intent unmistakable. By contrast, in the modern corporate shakedown, there are no villains, everyone has plausible deniability; they all have clean consciences and clean hands.

The mob had corrupt lawyers who could game the system. In the modern corporate shakedown, it is the system that is doing the shakedown.  We have MBAs, lawyers, and actuaries all soberly attesting that they have lowered the risk of our business contracting system at every stage.

Does anyone else smell a Black Swan here?

The Alternative

A major issue with trust is how to scale it. But maybe an even bigger issue is forgetting what it’s all about in the first place – what we have lost. Here’s a reminder.

I had a conversation with a solo consultant the other day, a disgusted emigrant from corporate America. He now does consulting and coaching for small business clients. His entire contracting process is as follows:

At the beginning of every month, you will send me a check for $5000. For the rest of that month, I will answer the phone all the time whenever you call. Should I ever not receive my check by the fifth day of the month, I will know that you’ve become unsatisfied with my services,  and we shall both expect further conversations to cease.

He has never had a dissatisfied client. His cost of sales is minimal. His legal fees are zero. His risk is pretty much nothing – because he has created a trust-based relationship.

I find that completely unsurprising. That’s just how it works – if we remember to let it.

The Twin Sins of Trust

You’ve probably heard “sins of commission, and sins of omission.” It is usually linked to Christian theology, particularly some of the New Testament gospels and Paul’s epistles , but it also has been used by writers like Moliere, and in discussions of Aristotle.

Anyway, it’s a simple enough idea to be broadly useful. A “sin of commission” is doing the wrong thing. A “sin of omission” is a failure to do the right thing.

Sins of commission tend to be more obvious by their nature – but sins of omission can be catastrophic. Think of a lifeguard failing to respond to someone who “sort of” looks like they are in distress. Think of the “good German” concept (failure to act against the Nazis).

But especially, think of the two concepts as they relate to trust.

The Drivers of Commission and Omission

The nature of trust is that it involves risk. If risk is not present, then we may be talking about probabilities, but we’re not talking about trust. Someone must take a risk for trust to arise.

The risk almost always consists in potentially committing a sin of commission. I answer a question you have; I observe something about you or your business; I tell you what I think you need to do, or I hold forth on some topic. In all those cases – I could be wrong. That is the risk.

Taking that risk opens me to a sin of commission. I might be wrong. You might be offended. I might not get the sale. Everyone might suddenly realize that I’m the blundering fool I’ve desperately been trying to keep hidden from people. And so, we do nothing, because it feels less risky. And in this we are wrong.

But by doing nothing, we open ourselves to the possibility of sins of omission. If I take no pain, I get no gain. Nothing ventured, nothing gained. Wayne Gretzky said, “You’ll never miss a shot you never take.”

And the results are measured in lost opportunity. Love. Repeat business. Deeper, trust-based relationships.

The Calculus of Commission and Omission

Here’s the thing. People systematically over-estimate near-term results and underestimate long-term results; and they over-estimate the pain of commission vs. the pain of omission. We fear losing something more than we fear not gaining something. One bird in the hand is worth two birds  in the bush (i.e. 50% more valuable).

The result?  A systemic bias to absorb sins of omission, rather than suffer sins of commission. Applied to trust, that means the most likely reason for low trust is the failure to take a risk in the first place. And I see this every day, all around me.

I see it in technical and services professionals. They fear being wrong more than they fear appearing silent, and so they say nothing, or they blather on about the unimportant. They are so fearful of emotional connection that they attribute that same fear to the customers, telling themselves that customers really don’t want relationships, that they must remain “professional.” In this, they are painfully, systematically wrong.

I see it in relationships. People are afraid of being vulnerable or hurt, so they shut down, or they pre-emptively attack others.

I see it especially in sales. The fear of doing something wrong leads salespeople to do what they think is low-risk. That usually means sticking with credentials, filling in silences, talking about themselves, or “How ’bout them Bulls.” God forbid they have to answer a question to which they don’t know the answer, or engage the customer emotionally.

Institutional Trust

And then there is structural trust. The more we try to improve institutional trust by guarding against sins of commission, the more opportunity costs of trust we create. When we pass legislation to prevent abuses of trust, when we insist on more insurance clauses in our contracts, and when we build more steps into our business processes, we are chipping away at trust by failing to allow any risk at all. This is why business so easily confuses compliance with trust.

The moral of the story is this: if you strip out all risk, you end up with no trust. And that is not a happy world to live in.

Risk is to Trust as Vaccine is to Immunity

Should you take the risk of mentioning price early on in a sales call?  Should you be candid about your less-than-perfect qualifications for a job?  When you notice the client looking a little distracted, should you take the risk of commenting on it?

In such situations I often hear, “That’s too risky, you can’t do that – you don’t have a trust relationship yet.” Or, “Well, sure you could do that, but only when you have a long history of trust.”

That is a big misconception.

The truth is, you can’t get trust without taking risks. In fact, it is the taking of risks itself that creates trust.

The Case of the Flu Vaccination 

Let’s say there’s a flu bug going around. You’re advised to get a vaccination. But it takes time out of your day, you fear getting a very small flu-like reaction to the vaccination, and you really don’t like needles. So you procrastinate, and never do get around to taking the vaccination.

Meantime, your best friend takes the vaccine the day it comes out.

Five weeks later, you get the flu.  Your friend doesn’t.  You feel miserable; you wish you’d taken the vaccine. In retrospect, the small pain of the needle, the minor inconvenience to your schedule, and the small risk of a mild reaction were nothing – nothing, I tell you – compared to the agony of the flu.

You should have taken the small pain – the vaccination – to prevent the larger pain – the flu. And so it is with trust.

Risk, Trust, and Sins of Omission

Risk and trust work the same way.  A small risk taken early prevents much greater risk down the road. Trust only grows when one party takes a risk, and the other party responds in a trust-based way.

  • You take the risk of answering a direct question about price, even though you haven’t established your value proposition yet. As a result, your client may or may not like your price, but they’ll see you to be responsive and transparent; they’ll trust you a bit more.
  • You take the risk of being very open about a relative weakness in your qualifications for a job. As a result, your client may or may not give you the job, but they’ll note your directness and trust you a bit more.
  • You note your client is distracted, and take the risk of commenting on it. Your client may or may not be startled, but they’ll appreciate your willingness to behave in a personal manner.

A vaccination mitigates larger disease. A small up-front risk mitigates larger business risk down the line.

We might call failure to take these risks “trust sins of omission.” They are failures to take a risk; the result is a guaranteed absence of trust.  The small risk may or may not go your way, but if you avoid taking that risk, then it’s guaranteed that you’ll not get the trust (unless your client initiates it, in which case you’re depending on someone else to make your luck).

Risk and Trust

Do you find yourself constantly backing off from taking those early, small risks? The common excuses I hear are reputed professionalism, concern for propriety, and a fear that the client will be embarrassed.

And so you do nothing.  And so trust takes forever. Or a competitor comes in and creates trust by taking a small risk, and your relationship just fades away.

Don’t omit the risk. Take it. Get the vaccination. Make your own luck. Make your own trust.

Trust on the Rocks

You know those exercises where you fall back into a partner’s arms and trust that he or she will catch you?  What if that person is a family member, like a 16 year old daughter, or 18 year old son?

Do you trust them?  What if your relationship is on the rocks?  Literally!

Our family spent Thanksgiving rock climbing, outdoors, at a local quarry.   I like to think of it as complex cliff climbing; though for experts like my kids, the 50-75 foot climbs were mere child’s play.

There’s a lot to learn about trust when rock climbing.  For example, see this three part series in July, 2012 “Three Things You Need to Know about Trust” by Charlie Green.  Three distinct topics emerged:

Trust Fall? Try this!

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

As Charlie notes:  one party must do the trusting, and the other party must be trusted.  That is true in business and personal life, as well as in climbing.  And it’s risky.  All involved must trust each other in order to do well, be safe and have fun. 

Securing the Ropes 

In rock climbing, if the rope isn’t secure at the top of the cliff – well, I don’t want to go there.   So the climber must trust the one who secures the rope.  That person must be credible, one of the elements of the Trust Equation.

Climbers might be comfortable climbing on the ropes they set themselves.  I, for one, am not yet experienced enough to know what a secure top rope should even look like.  However, I do know my kids who secured the ropes.  They are careful, and take calculated risks.  They learn before they do, and they learn from people who know what they are doing.  So I simply trust that it will be done right.  And I don’t worry about it.  How often do we do that in business?  In life?

On Belay – Belay On; Climbing – Climb On

Top rope rock climbing is about more than trusting that the foundation is secure.  It’s trusting that the partner belaying (anchoring and holding the rope at the bottom) you will not let you fall.  And it’s reciprocal.  When there are only two of you, you have to belay the person who belays you.

Belay me downRemember the trust fall exercise?  Try this: imagine you are 50+ feet high on a rock wall with a 90 degree slope, and the only thing between you and a hospital bed is your 16 year-old daughter.

As I leaned back, I worried needlessly about whether the fact that I weighed a lot more than her would send her flying off the ground if I fell.  After all, she wasn’t secured to the ground.  At one point while I was descending, she wasn’t even watching – just feeling the tension on the rope and releasing it at just the right speed so I could safely descend the cliff until I reached the bottom.

I belayed for her climb next.  She didn’t worry about anything.  She tried something.  It did not work.  She fell and trusted that I would catch her.  And I did.  Several times.  Once when she dropped a little further than she would have liked, I got the “how did that happen?” look from her.  But she trusted it wouldn’t happen again.  And it did not.

By trusting her, and her trusting me, we strengthened our bond.  We knew we wouldn’t let the other get hurt, and we got to prove it a few times.  It kind of made us reliable.  This was repeated with each of my other kids as well.  Among all of us, I was the least trusting – and they knew it.

Trust Yourself Too

I had difficulty with one of the climbs – all right, all of the climbs.  But on one of them, my kids gave me sage advice.  “Just trust that you can do it.”  “It will be ok.”  “Take a risk.”  “Try it – we don’t know what will work either until we do it.”  “Commit.”  “The worst that will happen is you will fall and I will catch you.“

They had me on the last one.  And each of them was very reliable.  After all, I got home safely and could write this.

Next time, I will practice trusting even more.  Because the more I can let go of fear and just trust that it will work out, the better I will do, the more I will be able to do, and the more I will enjoy it.  And with rock climbing, with my kids, the more I trust them, the more we connect, bond, and appreciate each other.

Funny thing.  Doesn’t that apply to most everything in life and in business?

 

 

Three Things You Need to Know About Trust: Part 2

There are really only three things you need to know about trust. You can pretty much deduce the rest. The three parts are:

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

Part 2: Trust Requires Risk.

First, there is no trust without risk. Second, only one player takes the risk; this sets up a particular dynamic.

No Trust Without Risk

Ronald Reagan was blowing smoke when he famously said, “Trust, but verify.”  The truth is, if you have to verify, it’s not trust. If it’s trust, then it’s not about verification. (Tellingly, Lenin was fond of the same phrase).

At one extreme, trust is bordered by blind faith, which is unbounded by data or reason. At the other, we have statistics, where risk is strictly a matter of probabilities and assumptions, governed by the rules of mathematics.

Trust lies curiously in between faith and probability – and a little off the straight and narrow of the continuum as well.  A psychological relationship, it involves one party willingly putting itself in harm’s way of the other, with a significant but not perfectly quantifiable chance that the other may abuse the situation. No wonder we speak of it often with metaphors.

People say trust mitigates risk. That’s true, but it’s also true that risk creates trust. Without risk-taking, there can be no trust. We forget this when we try to create trust by eliminating risk.

Why is this important? If you remove temptation or risk, you create an artificial dependence outside of the critical trust relationship. For example, if you render financial institutions completely non-risky by over-doing tick-box compliance, you will also choke off trust. Trust eats risk for breakfast, and becomes stronger for so doing.

As with many things trust-related, this is paradoxical. Trust reduces risk, but it also thrives on risk. Robotic safety and predictability are components of trust, but small ones. A completely mechanical world may be risk-free, but it’s also trust-free.

One Player Takes the Risk

In its pure form, one party trusts, while the other is trusted. In my classes, it’s a running joke I play: would you rather get better at trusting? Or at being trusted? So far, every class has opted to get better at being trusted. Doh! That’s the non-risky choice.

It’s human nature to wish others to take the risk. Sometimes, we’re lucky. The other person asks us out first; the customer shows their hand first, reducing our fears about price; the interviewer shares something personal about themselves, setting us at ease.

If you’re willing to run your business dependent on the kindness of strangers, that’s fine. But if you prefer to make your own luck – or trust – you’re going to have to learn to take risks. As Wayne Gretzky said, you’ll never miss a shot you don’t take; but of course, you’ll never score a goal either.

One of the biggest barriers to trusting is the cult of trustworthiness. The professions in particular like to cloak themselves in the idea of a Trusted Advisor that is strictly about trustworthiness – but not about trusting.  Such ideas include the high-minded virtues of integrity, tell-it-like-it-is courage, and a professional remove. But they frequently don’t encompass vulnerability and emotional risk-taking.  They should.

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In the third part, I’ll talk about the reciprocity of trust – how the role of trustor and trustee gets traded back and forth, and what that means for the development of trust.

Three Things You Need to Know About Trust: 1 of 3

There really are only three things you need to know about trust. You can pretty much deduce the rest.

I’m going to write about each of them in a separate blogpost, but here’s the one-liner version of each:

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

If you understand those three points, you can figure out things like trust recovery, rapid trust creation, and trust-enhancing cultures.

Trust is a Two-Player Game

For trust to exist, one party must do the trusting, and the other party must be trusted. That sounds dirt-simple, until you pick up the paper and realize how much talk about trust simply doesn’t mention it.

How many articles and surveys have you read that talk about “trust” as if it were some simple, unitary phenomenon?  Answer: most.

Those articles that say “trust is down,” “trust in banks has declined,” “people I know are more trusted–” all suffer one great defect: they don’t tell you why the trust is up or down.

It’s simple, if you ask the question correctly. If surveys show that trust in banking is down, is that because banks have become less trustworthy? Or because people have become less inclined to trust? One is a problem of ethics and trustworthiness; the other is a problem of risk-taking, education and fear.

You can’t design policies or laws or actions if you don’t know which problem you’re trying to solve.

If you can’t directly address trusting and trustworthiness, then measures of “trust” alone can’t be trusted – they could be influenced by exogenous factors like GDP growth.  And they are.

Trusting and Being Trusted

Trusting is about intelligent risk-taking.  Being trusted is about trustworthiness.

When someone says trust is really an issue of character or integrity, they’re talking about being trusted, not about trusting.

And when someone says, “trust but verify,” they’re talking about trusting, not about being trusted. (Though notice: if you have to verify – it’s not really trusting).

When you talk about trust in your organization, or with your clients or customers, you would probably prefer that others get better at trusting – to save you the trouble of getting more trustworthy!

We don’t have a lot of control over others’ propensity to trust, though we can certainly influence it.  But we have a lot of control over being trusted. And by far the best way to be trusted is to simply be trustworthy. One way to think about that is through the Trust Equation.

Trust is a Relationship

Trust is a relationship? Well, that’s what being a “2-player game” means. Before you think this is another “Doh” moment, note what it implies. It means the absence of trust is the absence of a relationship. It means when we think about business outside the framework of relationship, we are not thinking about trust.

What do market share, competitive advantage, markets, cost reduction, and value chains have to do with relationships? Not much. And therefore they have little to do with trust.

One driver of the level of trust is, simply, how we view business. Our view of business for the last several decades has been about competition, not about collaboration; about opposition, not about relationship.

A big reason those articles show that “trust is down” is because we have stopped thinking about relationships, and focused instead on competitive marketplaces.

Wanna know why trust is down? Start with the absence of relationships.

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Next post: Trust Requires Risk