Much of the talk about trust is just that – talk about “trust.” We forget that trust is a word for a relationship between two parties, each doing different things. Further, it’s an unequal relationship.
What we call “trust” results from one person (or entity) trusting another. One party trusts; the other is trusted. The result is what is properly called trust.
Unlike other relationship words (like ‘love’) the quality of trust is asymmetrical. To trust is very much not the same thing as to be trusted. Just ask a traveler in a new foreign country. Or a Madoff client.
The asymmetry is all about risk—the one taking the risk in a trust relationship is the trustor, the one doing the trusting—not the one being trusted.
When we describe degrees of trusting, we use precisely that word: ‘He is very trusting.’ While an adjective, ‘trusting’ derives from a verb—it tends to describe a behavior, the act of trusting.
When we describe degrees of being trusted, we use a different word: ‘She is trustworthy.’ ‘Trustworthy’ is also an adjective, but it tends to describe character, an attribute one possesses.
If we’re going to be precise in talking about trust in a useful way—whether it’s personal trust, business trust, or social trust—we need to clear about the risk-asymmetry between the two parties to trust. Absent that simple clarity—who’s doing the trusting, who’s being trusted, and in what realm—there’s not much that can be usefully said.
Here are some examples.
Trusting someone is very useful—if your trust is justified. Things happen faster, better, with higher quality and lower cost. Life is richer. Of course, if your trust isn’t justified, you get burned. Reasonable risk assessment, then, is a valuable skill in trusting.
But trusting cannot obliterate risk, and risk management alone has its limits. To trust only those we have vetted as trustworthy is to make a mockery of trust. Ronald Reagan’s statement “trust but verify” was cynically manipulative. If you can verify, you don’t need trust–you just need an auditor.
Being trusted by others is at least equally useful, and of course the combination is best of all. How can one become more trusted—by customers, employees, friends? There are two basic strategies: the first is to trust the other party, the second is to become more trustworthy.
Oddly, the most powerful strategy for driving increased trustworthiness in others may be the act of trusting them in the first place. Marlon Brando’s Godfather character knew this: so do successful networkers. Like homeopathic medicines, a little trust given can innoculate against large doses of untrustworthy behavior by others. This is due to the deeply embedded human propensity to reciprocate–good for good, bad for bad.
Being trustworthy toward others drives their propensity to trust you—and it’s a less risky strategy than trusting them, since most risk is borne by the trusting party. The effect of trustworthiness on trusting doesn’t rely on reciprocity—it is a unilateral action by the trustee that alters the risk perceived by the trustor.
Remember the asymmetry of trust is all about risk: it comes in many forms, such as asymmetry of information, or of power. Many trust issues present as issues of the asymmetry of power: think asset managers trusting rating services, or consumers trusting credit card issuers. It’s what’s behind jokes like, "I’m from the IRS and I’m here to help you."
There are several ways to manage risk so that the asymmetry is acceptable to both parties. One is simply transparency: the exchange of information.
At a personal level, the decision to reveal information that would put you at a “disadvantage” in a competitive situation is an act of trust. If your client is 58, you are 32, and your client asks your age, do you say, “I’m in my mid-30s?” Or do you say, “I’m 32.” The latter is an act of trusting; it usually makes you seem more trustworthy, and of course it carries some risk.
At a business level, when companies fight greater transparency (presumably to prevent competitive advantage), they are simultaneously destroying the inclination of their stakeholders to trust them, because to withhold information for self-oriented reasons is intrinsically untrustworthy. Too many industries and companies simply do not get this, hence they invite far stronger regulation than need be the case.
I have elsewhere written about the Four Trust Principles: they apply to people and to organizations, and are largely about enhanced trustworthiness.
Personal and business approaches to trustworthiness overlap in the arena of leadership. The general who personally leads his cavalry troops into battle shows that he will take risks on their behalf; the troops’ powerful response is to trust him in return. Trusting given yields trust returned.
Explored carefully, this simple framework tells us how to better navigate the worlds of romance, business, friendship, business regulation and socio-governmental institutions.
Increasing trust starts with asking: who does the trusting, and who is to be trusted? Where’s the risk, and how can we manage the asymmetry?