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Trust is Down? Wait – What Does That Even Mean?

Today, it seems nine out of ten stories in the general media are variations on one theme: trust is down. Whether it’s trust in the media, trust in politics, trust in business – it all seems to be heading in one direction.

But wait – what does that even mean?

We hear it all the time. Trust in banking is down. Trust in Congress is down. Trust in the educational system is down. We hear these statements, we say, ‘tut-tut what’s the world coming to,’ and we go on about our business – in large part, because we don’t know what to do about them.

Well, no wonder.  These seemingly obvious statements mask a fundamental confusion about the nature of trust – a confusion that prevents us coming up with basic solutions.

The problem is this. When trust in banking is down, does that mean:

a. that banks are less trustworthy than they used to be?  Or,

b. that people are less inclined to trust than they used to be?

Those are very different problems. Typical solutions to the problem of trustworthiness have to do with ensuring the behavior of the trustee.  Think regulations, penalties, enforcement, behavioral incentives and the like.

We too often neglect the other side of the equation – the propensity to trust. The problem is simple enough to state: you may be the most trustworthy partner in the world, but if the other party is unwilling to trust you, nothing will happen.

The propensity to trust is critical. It amounts to risk taking. Despite Ronald Reagan’s famous quote to the contrary, there is no trust without risk. The dictum to “trust but verify” in fact destroys trust by sanctioning acting on suspicion.

The Hitchhiking Problem

In the 60s, hitch-hiking flourished. By the late 1980s, it was dead.  Partly, hitchhikers were afraid to hitch; but mainly, drivers were afraid of hitchhikers. And it wasn’t due to an epidemic of violence; it was due to a fear of violence.  We lost a great deal when we lost hitchhiking – economically and culturally.  (The move to collaborative consumption, interestingly, is a contemporary resurrection of that idea).

Why is hitchhiking relevant to trust in banking?  Because one common response to low trustworthiness – perceived or otherwise – is a reduced propensity to trust. Which will kill trust just as surely as will low trustworthiness.

There is a huge cost to low propensity to trust; look at The Cost of Fearing Strangers by the Freakonomics folks. We are great at articulating the risk of doing something; we are awful at noticing the cost of doing nothing.

Want a really Big Example? Next time you’re in an airport, look at the social cost of us not being able to trust grandmothers from Des Moines on their flight to Fargo.

The Laws of Trust

To people schooled in free-market economics ways of thinking, trust is hard to make sense of. If the propensity to trust declines, you’d think the market would respond by creating more trustworthy offerings. In fact, just the opposite happens. Suspicious people tend to attract con artists; skeptics get sucked in by fakes.

The reason is simple: trust is not a market transaction, it’s a human transaction. People don’t work by supply and demand, they work by karmic reciprocity. In markets, if I trust you, I’m a sucker and you take advantage of me. In relationships, if I trust you, you trust me, and we get along. We live up or down to others expectations of us.

We have been teaching and practicing business according to the wrong Laws of Trust. The solution for low trustworthiness is not necessarily to trust less, but to trust more, and more intelligently. Maybe you’ve heard, “The best way to make someone trustworthy is to trust them.”

We’re Teaching the Wrong Laws

Our public education and culture is loaded with the free-market versions of trust. We teach, “If you’re not careful they will screw you.” We passcode-protect everything. We are taught to suspect the worst of everyone, be wary of every open bottle of soda, watch out for ingredients on any box.

Then in business school, we are taught that if customers don’t trust you, you need to convince them you are trustworthy – partly by insisting on our trustworthiness.  You can’t protest enough for that to work: in fact, guess the Two Most Trust-Destroying Words You Can Say.

By teaching distrust and confusing trust recovery with messaging, we are teaching entire generations to be suspicious of anyone and everything. By teaching suspicion and distrust, you can make book on it: what we’ll get is a reduction in trustworthiness. Read the Tale of the Thieving Convenience Store Managers.

This doesn’t mean we shouldn’t teach trustworthiness; much of my career has been built heavily around that. But by itself it’s not enough.

We need also to be teaching risk-taking, relationships, and the values of being connected to other human beings –not just than calibrating the dangers of hitchhiking.

Don’t tell me there’s no data.  The General Social Survey has been collecting data on the propensity to trust since 1972. One interesting finding: the propensity to trust is strongly correlated with educational attainment.  What does that say about the social and economic costs of cutting educational investment in the name of lowering taxes?

And don’t tell me I’m naive. I recall a trip to Denmark a few years ago. I left my wallet in a taxi. By the time I discovered it, my client had left me a message to say the taxi driver had returned it to their offices, and they’d paid him to bring it to my hotel. Which he did.

I expressed amazement at how well it had all worked out. My client said, “Nothing to be surprised at. Anything less would have been surprising.”

And I bet the Danes hitch, too.

The Blind Men and the Elephant of Trust

The Elephant of TrustIn my last post I wrote about the silos that exist between and within business and academia when it comes to trust. There are few subjects outside philosophy for which the question of subject matter definition is so important as it is in the case of trust.

Like the tale of the blind men and the elephant, each party sees an important part of the subject of trust – but then is inclined to view the rest of the world in those terms. As the saying goes, if you have a hammer, the world looks like nails.

So this is my attempt to define the differing perspectives on trust, looking across the fields of business and academia. I welcome your additions or comments.

I identify four important views of trust, and I’ll label them by the best-known holders of those viewpoints. They are distinguished mainly by differing focus on the trustor, the trustee, and the resultant trust, as well as by individual, social or institutional trust.

The Psychologists’ View

The psychologist’s view focuses on the perception of an individual person facing the decision to trust. In the words of Mayer, Davis and Schoorman in an oft-cited 1995 article, trust is:

the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party.

This is a model built around an individual trustor, not a trustee, and in particular about the trustor’s assessment of the trustee’s competence, integrity and benevolence. It’s my impression that this model is typically portrayed in a rational, self-good-maximizing context, comfortable to behavioral economists, for example.

If you search Twitter streams – the democratic way of market research – this is also the most common use of the word ‘trust.’ The twittersphere is full of “don’t trust women, they break your heart,” or “when people lie to me I can’t trust them.” (Though note: twitter users are a whole lot more affective or emotional than the usual behavioral model allows for).

An interesting application of this trustor-centric viewpoint beyond the individual to the corporate perspective is Bob Hurley’s The Decision to Trust, where he deals with group decision-making and cultural factors that affect trusting behavior in the company.

The Political Scientists’ View

Political scientists like Uslaner or Fukuyama also focus on the trustor’s viewpoint, but focus on groups of trustors (e.g. nations, or cultures), and on their willingness to trust generally, e.g. their inclination or propensity to trust strangers. It is from this viewpoint that we read about the greater levels of trust in the Scandinavian countries, or the lower levels of trust in southern Italy or in Wall Street trading firms.

Uslaner calls this generalized trust, something measured in the General Social Survey for decades; it changes slowly, unlike trust in specific people or institutions.

The Corporate Virtues and Values View

Where psychologists focus on the trustor’s decision to trust (a verb), business tends to focus on the trustee’s trustworthiness (a noun). At an individual level, that might be called virtues; at a group level, values.

In my own model, co-developed first in The Trusted Advisor, the Trust Equation is the expression of the the individual virtues of trustworthiness – credibility, reliability, intimacy, and other-orientation. At an organizational level, the Trust Principles are the articulation of group values in my own construct.

A recent example of this viewpoint is PwC Chairman Dennis Nally’s article The Trust Agenda. It focuses on creating value through values, and on creating greater trustworthiness from within; and not much at all on the issues of trusting.

The focus on virtues and values is an obvious one for business, which for the most part is more concerned about being trusted than trusting. Of course, being trustworthy alone isn’t sufficient to make trust happen – you need a trustor. Business in general focuses on the trustor role mainly through the eyes of the trustee, just as psychology tends to view the trustee largely through the eyes of the trustor.

Business and academics alike have trouble defining institutional trust; it makes a little bit of sense to say we trust Citibank (or not), but very little sense to say that Citibank trusts us. Both trusting and being trustworthy are largely individual traits.

The business focus on the trustee therefore makes “a trustworthy organization” at least conceivable, whereas the academics’ focus on the trustor makes “a trusting organization” problematic. The answer, I suggest, is to frame trust issues at the organizational level as being about creating trust-enhancing environments – not just about trustworthiness, and certainly not about abstract entities committing human acts of trusting.

There is one important attempt to rigorously identify objective characteristics of trustworthiness at a corporate level; it is the FACTS model of Trust Across America. It is the most data-based proof I know of the corporate-wide profitability of trustworthy behavior.

The State of Trust View

What happens when you measure the result of the interaction between trustor and trustee? You get something like the Edelman Trust Barometer, which is known for drawing conclusions like “trust in banking is down.”

This is a survey approach to trust. It doesn’t try to distinguish lower trustworthiness in bankers from lower propensity to trust by consumers, but instead precisely tracks the net result of that interaction.

Numbers in the State of Trust view are constantly changing (unlike in the political scientists’ view), because the object of trust is very specific (an industry, a government sector), and there is an implied specific action. Asking “do you trust Amazon” presumes a very specific object of that trust – typically to buy books or to guard data. It doesn’t occur to us to trust Amazon with our babysitting.

By contrast, numbers in the political science view change slowly because, as Uslaner puts it, if I punch you in the face, your trust in me may decline, but your trust in the human race is pretty much unaffected.

The Role of Risk

There can be no trust without risk, Ronald Reagan’s “trust but verify” statement notwithstanding. Risk is implicit in the Corporate Virtues and Values view, and explicit in the other three.

In the corporate realm, partly because of the focus on being trusted, companies have confused risk eradication with increasing trust. There is a vicious paradox of trust – the more either party tries to control risk, the less trust results. Companies who think they are increasing trust by risk mitigation and compliance programs are doing just the opposite – they are eroding trust.

The challenge for business –recognize the role of trusting, both within the organization and outside it.

In the academic realm, partly because of the focus on trusting, it’s difficult to account for the boomerang effect of greater trustworthiness that results from being trusted. People have a way of confounding rational-choice models when it comes to trust.

The challenge for academia – recognize the roles of virtues and values in their own terms, not just through the eyes of the risk-taking trustor.

What business can learn from academia: a structured, disciplined approach to studying issues of trust.

What academia can learn from business: a wealth of real-world data to be studied and understood.

————————
So there you have it – my attempt to describe several of the blind men feeling the elephant of trust.

What’s your take on it?

Building the Trust-based Organization

The Elephant of TrustDo your eyes glaze over at that title? Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So I set out to tighten up the perspective.

Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. More often, however, it’s more a situation of the blind men and the elephant: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

This is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into these categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.

Trust as Communication. “Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”

This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.

However, the communication approach begs one huge question – the content being communicated.

Trust as Reputation. The Edelman PR firm’s annual Trust Barometer has been a major communications success.  A sample statement:

Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the 2012 Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.

This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee.  It is also inherently corporate, and therefore impersonal.

Trust as Recipe.  There are probably more approaches that fall into this camp than any other.  It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.

A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language.  They offer  four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.

Trust as Rules-Making. A Harvard Law blogpost titled Rebuilding Trust: the Corporate Governance Opportunity, Ira Milstein points out the critical roles that can be played by boards and shareholders in increasing trust.

A similar point is made from an Asian perspective, in Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.”

While these views may appear slightly narrow, they’re part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.

The strength of this view lies in its linkage of business to society – the implicit statement that there is no Natural Law that says business has any right to stand alone outside a broader social context.

Trust as Shared Value. In Michael Porter and Mark Kramer’s notable 2010 HBR article Creating Shared Value, Porter auto-performs a conceptual sex-change operation on his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.

Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. (Incidentally, this view reclaims Adam Smith from the clutches of the Milton Friedmans and Ayn Rands who suggest competition is purely about survival of the fittest, and restores to him a sense of Smith’s broader views as reflected in his Theory of Moral Sentiments).

They are not entirely alone. The Arthur Paige Society a few years ago published The Dynamics of Public Trust in Business, which similarly stated:

…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.

Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.

Seeing the Elephant Whole

All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”

So what would constitute a good answer?  It must have three parts: a Point of View, a Diagnosis, and a Prescription.

Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.

In Part II of this post, I offer my suggestion for how to best answer the question across all three dimensions.

Why Trust In Our Institutions Is So Low

Heads? Or Tails?The headlines, surveys and news stories are everywhere. Trust is down – in world leaders, in legislatures, in financial institutions, doctors, even religious leaders and educators. It is very, very easy to draw one conclusion from all this – that we have a crisis of trustworthiness.

Not so fast. That is a half-truth.

Trust is a Two-Sided Coin

One of the tragedies of discussions about trust is that the very language we use is flawed. Consider this simple, self-evident truth:

Trust is a non-symmetrical interaction between a trustor and a trustee. One trusts, one is trusted. One does the trusting, the other is the one who is trusted. To trust someone is different from being trusted by someone.

It would seem obvious that if there is a failure in trust, we should look at both sides to determine where the problem lies: is it in paranoid trustors, or in untrustworthy trustees?

And yet – the presumption we all make when reading those news stories is always about the latter – “It’s those lying ___’s, you can’t trust any of them, none of them are trustworthy.”

But what about the other side of the trust relationship?  What’s up with trusting?

The Problem of Low Propensity to Trust

I used to hitch-hike. Who does that anymore? I’m sure the proportion of people who lock their doors habitually has gone up. The proportion of people who buy guns for self-protection has gone up, just as crime has gone down. All these are daily indicators of a decline in propensity to trust.

At a business level, consider the enormous growth in lawyers. Consider the increasing length of contracts, for the most trivial transactions. Consider the ease with which people resort to civil lawsuits. Ask yourself what happened to the handshake deal?

At the national political level, I’m seeing articles about how President Obama might be lying to the world about chemical warfare in Syria. Let’s review the bidding, in reverse chronological order:

  • George W. Bush told us there were weapons of mass destruction in Iraq
  • Bill Clinton said he didn’t have sex with “that woman”
  • George H.W. Bush said, “Read my lips – no new taxes”
  • Ronald Reagan said, “Trees cause more pollution than cars”
  • Jimmy Carter said he had left Georgia with a budget surplus – far from true
  • Gerry Ford lied about discussing East Timor with Suharto; not to mention Nixon’s pardon
  • And Nixon? Well, enough said
  • Turns out even George Washington’s cherry tree “I cannot tell a lie” story is itself apocryphal.

And the press? Well, what about the entire wink-wink/nod-nod approach to Presidential sexual liaisons back in the day of John F. Kennedy? That level of tolerance in the fourth estate is unimaginable today.

My point is not that society has become more trustworthy rather than less – my point is that people have, in many ways, simply become less willing to trust.

Low Trust: A Chicken and Egg Problem

Consider in your own life the truth of this quote: “One of the best ways to make someone trustworthy is to trust them.”  Or, “Whether you think good or ill of someone – you’ll be right.”

The principle of reciprocity underlies a great deal of human relations. We return good for good and evil for evil. The simple nature of etiquette is a way of ensuring that we practice reciprocity in all our daily doings.

So it’s only fair to ask: when there’s a crisis of trust – how much of it is due to lower trustworthiness?  And how much of it is due to our reduced propensity to trust?

You don’t have to be a Pollyanna about trustworthiness to see this. All that’s required is we stop being crybabies repeating endlessly, “Well Johnny did it to me first!”  Get off the paranoid pity pot.

At its extreme, a low propensity to trust descends into paranoia, resentment, low expectations, cynicism, tribal clannish behavior, lower levels of generosity and charity, and a “raise the gates” mentality. It’s not going too far to say that the roots of civic morality lie in the willingness to trust others.

What Can I Do?

Of course we can all do a better job of being more trustworthy. But that’s almost a passive activity, waiting to build up a track record that others can see. Interestingly, it’s a lot easier to practice trusting.  Here are just a few ideas to practice on in your daily life:

  • Smile at someone on the street, and don’t look away immediately
  • Ask someone at the coffee shop to watch your computer while you go to the restroom
  • Think what tool you have that a neighbor might benefit from using, and lend it to them
  • Join some form of the sharing economy
  • Practice not locking your car so often (not everywhere, I know)
  • Ask somebody for advice on something – then immediately take it
  • Ask a stranger to hold your briefcase while you tie your shoes
  • Ask a stranger to take a photo of you and a friend while on a trip

What else? What are some actions you can take to help increase the level of trust in the world? Please add your suggestions to the comments below.

After all, it’s better to light a candle than to curse the darkness.

Trust, Scale, and the Corporation

Erecting Trust in a BusinessI always have trouble answering a question I’m often asked: What company does a great job on trust?  Because the answer is some combination of, “it depends on the definition of trust,” and “hardly any.” Let me unpack that.

Trustworthiness and the Corporation

Mitt Romney’s metaphysics notwithstanding, corporations are not people, apart from a few legal rights. Corporations don’t smile, feel guilty, bleed, or feel emotions. That means: it makes some sense to say “company X is trustworthy,” but it makes little sense to say “company X trusts.”

Trustworthiness attributes that a company can exhibit include reliability and transparency. But to say that a company trusts is simply to make statements about company policies put in place by people. So from one perspective, the connection between corporations and trust is largely a subset of trustworthiness.

Of course, from another perspective it’s meaningful nonetheless to talk about corporations in terms of trust.  That perspective is best articulated by Trust Across America, which uses the acronym FACTS to identify five metrics associated with trustworthiness. Those are: Financial stability and strength , Accounting conservatism, Corporate integrity, Transparency, and Sustainability. Most people would generally agree that those attributes are associated with what we call trust, and I think TAA have done a sensible job of defining and weighting those components.

And yet, that still leaves all that human-y stuff – the bleeding, feeling, risk-taking, emotional parts of trust. The parts that corporations can’t do.

Personal Trust in the Corporation

Corporations cannot trust, but they have enormous effects on whether or not its people trust, and are trustworthy. The biggest influence on trustworthiness and the propensity to trust is not metrics, or compensation systems, or even policies. It is values and culture.  Do the values and culture celebrate honesty, integrity, long-term perspectives, and other-orientation? Or do they stress short-term performance, micro-metrics, “being tough,” and meeting the numbers?

The question of values and culture brings me back to that opening question: What company does a great job on trust?

When I answer “hardly any,” what I’m saying is I don’t see any large corporations that are driven by trust-related values, or support trust-friendly cultures.  I have seen some good examples of smaller-scale organizations that are highly trust-based – a unit at MicrosoftBangor Savings Bank, and Pediatric Services of America, for example But these are relatively small organizations. Where are the Citibanks, General Motors and Oracles in the pantheon of trust-friendly organizations?  Is the problem that trust can’t scale?

Can Trust Scale?

Trust very much can scale. In fact, values-driven organizations scale very well, especially in fast-moving and complex industries, where standardized processes are too complex to keep up with reality.  The issue is not being values-driven – the issue is which values will drive. Goldman Sachs is a values-driven organization; so is Apple. It’s just that the values being valued don’t include trust in the top list.

Now here I’ll get speculative. I think this is because the dominant values in Western business in the last 50 years have been largely anti-trust. The values we have espoused have included competition, the Darwinian-revised version of Adam Smith’s Invisible Hand, caveat emptor, management-by-metrics, management-by-process, and the reduction of all issues to an NPV calculation.

These are serious values, and they are all either anti-trust or trust-neutral (even though, as Trust Across America is demonstrating, trust is associated with higher profitability). And they are extremely dominant values. You don’t get to be a Big Corporation without drinking deeply of these belief systems, taught as they are in MBA programs and the popular business press.

A significant part of building trust in business is going to come not by revising policies and governance, and not by better regulation, but by re-orienting a corporation around core trust values. I see no reason to believe that trust values can’t scale as well as the other values; we’re just awaiting leaders with the vision and courage to lead the way.

Why Experts Are Bad at Sales

Why Experts Are Bad at SalesIf you’re a lawyer, accountant, management consultant, VAR, systems engineer, financial advisor, CRM expert, architect, IT services consultant or even an HR consultant – odds are that you’re ineffective at selling.  That’s the bad news.

The good news is – it isn’t hard to get better.  If you do,  you’ll compete far more effectively against those who haven’t learned the trick. The trick is dialing back the emphasis on expertise.

Trust Sells

Let’s start with the commonsense observation that trust sells – powerfully.  If your customers trust you, many good things follow – higher close rates, lower price sensitivity, greater client loyalty, to name a few.

Trust isn’t one monolithic quality.  In the Trust Equation, we deconstruct trustworthiness into four components – credibility, reliability, intimacy, and low self-orientation.  Data collected over the years (see the Trust Quotient Self Assessment) identify the relative importance of those four factors in creating a perception of trustworthiness.

Trustworthiness Data

For example – gender and trustworthiness. When asked to guess which gender is more trustworthy, about 85% of my workshop audiences guess women; and 12,000 datapoints say they’re right.

Further, nearly all the gender difference is due to different scores on one factor. I also ask workshops to guess which factor that is, and again, they are overwhelmingly right – it is intimacy.

Score two for commonsense backing up the data.  And there’s more. Surveys of trustworthy professions show shifts over time in the least trusted professions – used car dealers one year, lawyers another, politicians another. But the most trusted profession is remarkably consistent – nurses. Again, audiences find that this “makes sense.” And tying the data together, note that of the four attributes of trustworthiness, the one most easily identifiable with nursing is, again, intimacy.

Finally, we were able to isolate six “Trust Temperaments” – differing combinations of high scores from each of the four trust equation components. The three highest-scoring pairings were the three that contained Intimacy as one of the factors.

The combination of high Credibility and Reliability scores is what we most associate with subject matter experts.  And that combination was tied for least trustworthy among the six pairs.

The level of technical mastery required by the professions, for example, is considerable, and necessary. It’s not surprising that people in such lines of work would score highest on the attributes of credibility and reliability, the two “rational” and “hard” components of trustworthiness.

The problem comes when they assume, implicitly, that what their customers most want is a massive display of that expertise. Selling in those businesses, more often than not, is dominated by exhibitions of mastery, methodology, intellectual performances, credentials and references.

But technical mastery is the least effective approach to trustworthiness.  The most effective component of trustworthiness is precisely the one that so many experts shun – intimacy.

The Cure for Expertise

There’s nothing wrong with expertise; it’s necessary. It’s just not sufficient. What’s needed are some basic intimacy skills. That means, above all else, listening.

The listening that’s required is not listening as in being quiet, or even listening as aggressively pursuing questions. It’s listening as a sign of respect; listening with no objective beyond understanding the customer.

This kind of listening is part skill, part attitude. It requires the ability to suspend the overwhelming desire to solve problems. It isn’t easy to do – but it is simple. It is accessible; it can be learned.

Another intimacy skill is the ability to take an emotional risk.  Examples of such risks include saying you don’t know when you don’t know (very difficult for experts, whose careers are based on avoiding such moments), and acknowledging feelings – your own, and those of your customers.

Most technical professionals will remain expertise-based – and ineffective at sales. And that spells great opportunity for the few people and firms who are capable of recognizing the power of soft skills in producing hard results.

This article was first published in RainToday.com in a longer form. 

Trustworthy Occupations

Quickly now – which are the least-trusted professions and occupations?  If you think about it a moment, you’ll probably make pretty good guesses.

Now for a tougher one: which profession is the most trusted? This one, I find, less than half of respondents get right.

Your Profession Conveys an Image of You

The annual Gallup poll of Honesty and Ethics in Professions came out this past November. First, let’s get the fun stuff out of the way.

The next-to-least trusted profession is (drumroll…envelope please) – Members of Congress! Only 10% of respondents rate congressmen as high or very high.  And the big prize for absolutely least-trusted profession? Car salespeople. Aw, and it was so close; they came in at 8%, just two percentage points behind Congress. In fact, last year they were tied.

Well, that was easy. But who was most trusted? Engineers? A respectable 70 points, but not highest. Doctors? Tied with engineers at 70. Pharmacists outperformed doctors, with a rating of 75%.

But the profession that takes the cake for most trustworthy – for about the 13th year in a row – is nursing.

That’s right, nursing. And it makes sense, if you think about it.

Why We Trust Nurses the Most

The Trust Equation breaks trustworthiness into four factors – credibility, reliability, intimacy, and low self-orientation.  In studies we’ve done on the four factors, it turns out that Intimacy has the strongest correlation with high aggregate levels of trust.  That is, we tend to put more weight on that one factor than on the others.

Think about which of those four traits nurses most clearly represent.  It is intimacy – the sense that we can share our most open, vulnerable selves to another.  More than anyone else, we are willing to stand naked – metaphorically as well as literally – before nurses.  It only makes sense.

The same data suggest that women – on the whole and on the average, though not person by person – are more trustworthy than men. And almost all of women’s better scores have to do with higher scores on the intimacy factor. Need I mention that nursing is primarily a female profession? Again, it just makes sense.

Is Industry Destiny?

Are we doomed to low trust if we’re a lawyer?  A politician? A marketer? Male?  Conversely, are we guaranteed high levels of trust if we graduate from pharmacy school?

No. Trust is experienced at a personal level, and trustworthiness is primarily an individual, human trait. There are highly trustworthy salespeople, and an RN doesn’t guarantee trust.  But there’s no doubt that you have two strikes against you if you’re in a low-trust profession, and you’re spotted more than a few points if you’re in a highly trusted profession.

In the end, though, trust is personal. You have to live up to the world’s expectations – or confound them, as the case may be.  It’s up to you.

Trust Metrics: Breaking It Down

How can you measure trust?

Consider a simple equation:

Trusting  x  Trusted  =  Trust

In other words: if someone is trusting enough to take a risk (the trustor), and if someone else is trustworthy enough to be worth that risk (the trustee), then when the two parties are a “match” – and you get “trust.”

Suppose you could quantify each.  Note that there is more than one way to get the same result for “trust.”  For example:

  • a “trusting” rating of 8/10 and a “trustworthiness” rating of 3/10 might give a “trust” score of 24 out of 100 – 8×3;  and
  • a “trusting” rating of 4/10 and a “trustworthiness” rating of 6/10 would give the same “trust” result – 4×5, or 24.
But what does this mean?

Most of the Data Doesn’t Support Decisions

Most of the trust data out there (think Edelman Trust Barometer, or Pew Research) isn’t about either “trusting” or about “trustworthiness.” It’s simply about the end result, trust. And that’s not very enlightening.

Suppose we get a series of data points about trust, and that they show a decline over time, from 26, to 24, to 20. Does that mean that the trustors got more gun-shy and less willing to trust?  Or does it mean that the trustees became more shady, and less trustworthy?

Measuring only the result – trust – is like saying the results of the Yankees vs.Tigers game was 3-2 – without telling you the winner. It’s like saying that the average household income of a small town is $500,000 – without mentioning that one of the residents is a billionaire. It’s like saying that unemployment is down – without mentioning how you count those who are not looking.

If you were to pass laws about regulation – you might want to know the driver of decreased trust. If you were building a marketing campaign – you might want to know which factor shifted. And if you were observing a pattern between two firms,  you might want to know why trust declined – was it because of less trusting, or because of less trustworthiness?

There’s a lot more to be said about this rarely observed but simple distinction: let me just point out that there are in fact some sources of data that are actionable and help us get at causal drivers, rather than just identifying results.

The Trust Matrix

The matrix below shows some of these relationships.

1. In the upper left box – Individual Trusting – academics are well aware of the General Social Survey, a fifty-year database with an impeccable pedigree, which permits some fascinating conclusions about our propensity to trust others. Hint: it’s gone down. We’re becoming more and more suspicious in principle.

2. In the box Trustworthy Individuals, the pre-emininent database may be my own company’s Trust Quotient. With over 25,000 data points, a time-proven insight called the Trust Equation, we can now state categorically which gender is more trustworthy, which of the four trust factors are harder drivers of trustworthiness, and the relationship of trustworthiness to industry.

3. What about the critical question of organizational trustworthiness? This is a question  we keep trying to answer by reference to trust surveys, which are unable to yield the answer.  The best source I know of is Trust Across America’s database of publicly traded US companies (they’re working on expanding it). They have a composite definition well-grounded in commonsense and objective databases, and some compelling data about the correlation between corporate trustworthiness and economic performance.

4. The bottom left box – an organization’s propensity to trust – is something for which I’m not aware of any data.  Would someone please correct me if I’m in error?  My working hypothesis is that this box has declined considerably.

JP Morgan himself may have lent on the basis of character, but the industry he left behind lends only on secured assets. Except, of course, when they lay off risk through ever-increasingly complex transactions.

Companies routinely won’t even trust small subcontractors, insisting that they self-insure against things like falling on sidewalks. It seems to me that corporations consider a propensity to trust to be roughly tantamount to stupidity. It’s hard to be a trusted organization if you systemically and systematically distrust your stakeholders.

5. Finally, the last column – measurements of trust itself – needs conceptual clarification.  When we look at data that says “trust is down,” there are four meanings.  We might be referring to trust between individuals, trust between organizations, or trust between organization and individual (with two variations depending on which is trustor and which is trustee).

To Mean What You Say, Say What You Mean

Any of us – not just researchers or academics or survey-takers – can contribute significantly to the discussion of trust simply by being clear about what we mean. If you want to say that bankers have become banksters, then point to data about the decline of trustworthiness on the part of banks – not to composite data that blurs the trustor-trustee distinction.

If you want to say that trust is up in the sharing economy, then use data that talks about the propensity to trust, not just the end result of trustor-trustee interactions.

I have a feeling that some significant chunk of the debate about trust could be improved by simply using clearer language to reflect clearer thinking.

Trust is Down? Wait – What Does That Even Mean?

We hear it all the time. Trust in banking is down. Trust in Congress is down. Trust in the educational system is down. We hear these statements, we say, ‘tut-tut what’s the world coming to,’ and we go on about our business – in large part, because we don’t know what to do about them.

Well, no wonder.  These seemingly obvious statements mask a fundamental confusion about the nature of trust – a confusion that prevents us coming up with basic solutions.

The problem is this. When trust in banking is down, does that mean:

a. that banks are less trustworthy than they used to be?  Or,

b. that people are less inclined to trust than they used to be?

Those are very different problems. Typical solutions to the problem of trustworthiness have to do with ensuring the behavior of the trustee.  Think regulations, penalties, enforcement, behavioral incentives and the like.

We too often neglect the other side of the equation – the propensity to trust. The problem is simple enough to state: you may be the most trustworthy partner in the world, but if the other party is unwilling to trust you, nothing will happen.

The propensity to trust is critical. It amounts to risk taking. Despite Ronald Reagan’s famous quote to the contrary, there is no trust without risk. The dictum to “trust but verify” in fact destroys trust by sanctioning acting on suspicion.

The Hitchhiking Problem

In the 60s, hitch-hiking flourished. By the late 1980s, it was dead.  Partly, hitchhikers were afraid to hitch; but mainly, drivers were afraid of hitchhikers. And it wasn’t due to an epidemic of violence; it was due to a fear of violence.  We lost a great deal when we lost hitchhiking – economically and culturally.  (The move to collaborative consumption, interestingly, is a contemporary resurrection of that idea).

Why is hitchhiking relevant to trust in banking?  Because one common response to low trustworthiness – perceived or otherwise – is a reduced propensity to trust. Which will kill trust just as surely as will low trustworthiness.

There is a huge cost to low propensity to trust; look at The Cost of Fearing Strangers by the Freakonomics folks. We are great at articulating the risk of doing something; we are awful at noticing the cost of doing nothing.

Want a really Big Example? Next time you’re in an airport, look at the social cost of us not being able to trust grandmothers from Dubuque on their flight to Grand Rapids.

The Laws of Trust

To people schooled in free-market economics ways of thinking, trust is hard to make sense of. If the propensity to trust declines, you’d think the market would respond by creating more trustworthy offerings. In fact, just the opposite happens. Suspicious people tend to attract con artists; skeptics get sucked in by fakes.

The reason is simple: trust is not a market transaction, it’s a human transaction. People don’t work by supply and demand, they work by karmic reciprocity. In markets, if I trust you, I’m a sucker and you take advantage of me. In relationships, if I trust you, you trust me, and we get along. We live up or down to others expectations of us.

We have been teaching and practicing business according to the wrong Laws of Trust. The solution for low trustworthiness is not necessarily to trust less, but to trust more, and more intelligently. Maybe you’ve heard, “The best way to make someone trustworthy is to trust them.”

We’re Teaching the Wrong Laws

Our public education and culture is loaded with the free-market versions of trust. We teach, “If you’re not careful they will screw you.” We passcode-protect everything. We are taught to suspect the worst of everyone, be wary of every open bottle of soda, watch out for ingredients on any bottle.

Then in business school, we are taught that if customers don’t trust you, you need to convince them you are trustworthy – partly by insisting on our trustworthiness.  You can’t protest enough for that to work: in fact, guess the Two Most Trust-Destroying Words You Can Say.

By teaching distrust and confusing trust recovery with messaging, we are teaching entire generations to be suspicious of anyone and everything. By teaching suspicion and distrust, you can make book on it: what we’ll get is a reduction in trustworthiness. Read the Tale of the Thieving Convenience Store Managers.

This doesn’t mean we shouldn’t teach trustworthiness; much of my career has been built heavily around that. But by itself it’s not enough.

We need also to be teaching risk-taking, relationships, and the values of being connected to other human beings –not just than calibrating the dangers of hitchhiking.

Don’t tell me there’s no data.  The General Social Survey has been collecting data on the propensity to trust since 1972. One interesting finding: the propensity to trust is strongly correlated with educational attainment.  What does that say about the social and economic costs of cutting educational investment in the name of lowering taxes?

And don’t tell me I’m naive. I was in Denmark a few months ago. I left my wallet in a taxi. By the time I discovered it, my client had left me a message to say the taxi driver had returned it to their offices, and they’d paid him to bring it to my hotel. Which he did.

I expressed amazement at how well it had all worked out. My client said, “Nothing to be surprised at. Anything less would have been surprising.”

I bet the Danes hitch, too.

Three Things You Need to Know About Trust: Part 3

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 3: Trust is Reciprocal–and What You Can Deduce From It All

Trust is created when one party takes a risk, and the other reciprocates positively. Think of a handshake offered, and returned.

Trust is AC, Not DC

We saw in Part 1 that one player does the trusting, and the other is trusted; the one doing the trusting is the one taking the risk.  That’s true – but only for the instant of that trust transaction. Trust is rarely built on one exchange alone, and the roles cannot stay fixed.

If you focus on being trustworthy, and your client trusts you, good for you. You can play that game for a while, but eventually your client will notice, ‘Wait, I’m taking all the risks here – what’s up with that?’ And at that point, they will stop trusting you.

You cannot escape the need to trust, as well as to be trustworthy. You have to take a risk too. Virtue may be its own reward, but unless you season virtue with risk-taking, you won’t get trust out of the recipe. To use an electrical metaphor, trust is not like direct current, moving in one direction – it’s alternating current, constantly changing direction.

Trust: Deducing Everything Else

In this brief series, I’ve claimed that “all you need to know” about trust is these three propositions – trust takes two players, it requires risk, and it must be reciprocating – and that you can deduce the rest. Let’s test that claim.

Organizational trust.  You may have noticed all my points have been about personal trust. What about organizational trust – trust in corporations, congress, the professions?

House Speaker Tip O’Neill famously said, “All politics is local.” In the same sense, all trust is personal. Trusting is something we do with our hearts and brains, one by one, personally; and trustworthiness is an attribute we ascribe almost entirely to individuals. (An exception is reliability: it makes linguistic sense to say that “GE is reliable,” or not. It is nonsense to say “GE is emotionally intelligent.”)

You can design corporate cultures to either encourage or discourage trusting and/or trustworthiness. And that’s pretty much it. Corporations may legally be people, but in the court of human nature and trust, they are largely environments which condition trust – they are not agents of trust themselves, only people are.

Trust, Virtues, Values, and Risk. The tools of individual trustworthiness can be found in the Trust Equation. The tools of individual trusting are about socially acceptable risk-taking. The tools of organizational trustworthiness and trusting – because organizations are environments for trust enhancement – can be found in the celebration of virtues and values.

Virtues are the personal attributes of trustworthiness – encouraged socially.  Values, or principles, are a set of guiding beliefs that govern interactions with others. Since trust is about relationship (remember Part 1), values drive the environment that creates or hinders trust. Among the most powerful trust-enhancing values are collaboration, transparency, and a long-term perspective. Organizations run along those lines create trust wherever they touch.

Trust Recovery. The business world frequently confuses “trust” with reputation, image, or poll ratings. This leads companies with trust problems to seek PR firms to focus on improving their reputation.

  • When your real trust levels exceed your reputation, you have a communications problem.
  • When your reputation exceeds your real trust levels, you have something a lot more serious, and throwing communications-only solutions at it is like throwing water on a grease fire.

Trust broken can be recovered, by the three basic principles above. It requires engagement by both parties, it requires risk-taking (particularly on the part of the offender), and it must be reciprocal. The biggest threats to trust recovery are an inadequate acknowledgement of the degree of rupture, and a refusal to accept the values required to change the state of trust.

Restoring Trust. The social issues facing us from lack of trust are real, and important. They can be addressed using the three principles above.

First, our trust crisis is not due to a global increase in the birthrate of morally impaired people. As noted in Part 1, trust is two-party game. It is about relationship. Trust failures are failures of relationship. Where we have lost trust, we have lost the ability to interact in relationship with others.

There are many reasons for this, including business thought leadership, an over-reliance on market solutions, and increased wealth disparity. All of them have emphasized the individual over the group.

The way to restoring social trust does not lie in better gun laws, tweaked incentives, stepped-up financial sector enforcement, or religion in the schools. It lies in Gandhi’s dictum to ‘be the change that you want to see in the world.’

It lies in the three trust facts: trust is a 2-player game of reciprocal risk-taking.  That means:

  • Trust is a personal job, not just one for leaders
  • Leaders must lead personally – by example, not by exhortation
  • Design environments that encourage people to trust and be trusted
  • Trust is about relationship – the Golden and Platinum rules apply
  • Trust is about relationship – anti-trust behavior is immature and socially poisonous
  • No pain no gain – there is no trust without risk
  • Trust is AC, not DC – you can’t always just be trusted, sometimes you have to trust
  • Trust is reciprocal – to make someone trustworthy, trust them
  • Blame and an inability to confront are the death of relationships and of trust
  • Run your life like you’d be proud to have it on the front page of the paper

If a trust issue sounds complicated, you’re over-thinking it. Go back to basics. There are only three things you need to know about trust, the rest you can deduce.