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Trust on the Rocks

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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?

 

 

Trust as Risk Mitigation Strategy

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Forget how you usually think of the word ‘trust.’ Think instead of ‘risk mitigation.’

“Risk mitigation” means reducing risk to an acceptable level. You’re familiar with it if you work in insurance, investment banking, natural resources, infrastructure, contracting, outsourcing, or deal internationally.

It usually comes packaged as high doses of things hard and practical: legal, financial, statistical. Here’s a typical example, this one from IASTA, a supply and spend management firm, lists seven strategies for risk mitigation. Seven ways, that is, to reduce the riskiness of your supply chain.

No surprise, it includes things like dual-sourcing, price hedging, performance-based contracts, and capacity assurance. Basically, ways to make sure your supplier does what you want them to do.

Risk Mitigation is Usually Based on Control

They are all based on the assumption that unless you control your supplier or the conditions surrounding the deal, you are at risk. And the solutions all involve controlling that risk: mainly controlling that supplier.

What’s surprising about that list—shocking, if you think about it–is the absence of trust. (I’m not picking on IASTA; it’s a good list for what it is—a list of controlling strategies). It generally beats the heck out of all the other seven.

What if you could trust your supplier? What if your supplier behaved toward you in a trustworthy manner? In general, your risk mitigation efforts will then cost a lot less, and will be more successful.

Agreement by legal negotiation, and enforcement by legal, process and accounting argumentation is costly. It causes bad blood. It reduces the felt moral obligation of each party to live up to an agreement. It causes delay. And it sure is expensive.

Risk Mitigation by Trust is Cheaper, and Creates Value

By contrast, trust creation costs less than lawyers and accountants. It can often be created more quickly. And it can be far more dependable.

More importantly: if a trustor-trustee relationship is developed, it doesn’t just cut risk mitigation costs, it positively creates whole new levels of value possibilities. Things you’d never do with an arms-length supplier suddenly become possible.

This is not crazy stuff. The truth is, it happens every day: we just don’t think of it as trust. Trust as risk mitigation happens whenever a customer and a supplier keep an informal rolling ‘tab’ of who owes whom. It happens when a client and a professional honor the spirit, rather than the letter, of an agreement. Warren Buffet did it on a grand scale when he bought McLane Distribution.

Simply put, trust is as hard-nosed a business strategy as any involving the usual suspects. There is no trust without risk: trust truly is at the heart of risk mitigation.

And it’s not that hard to do.

Trust-based Risk Mitigation Requires a Change in Belief

The main thing it requires is a belief in the massively predictable human phenomenon that people do as they are done unto. If one party behaves in a trustworthy manner, the other comes to trust. And if one party behaves in a trusting manner, the other party becomes trustworthy.

The predictability of that behavior is way better than any stock market algorithm. Yet it is astonishing how many businesses have been seduced into inherently untrusting relationships. At great cost to themselves, their supply chain, their customers, and even their shareholders.

It is far more profitable to depend on the rules of trust in human behavior, than to always rely on the rule of ‘do unto others before they do unto you.’ (Which, after all, produces an equally predictable negative counter-reaction). 

The amazing thing is that so many businesses, which claim they are focused on financial returns, continually miss this huge opportunity.  I think it’s because they are also bad at personal risk mitigation: the people who run those ‘hard-nosed’ businesses are personally fearful of constructively confronting other human beings, and of speaking the truth about themselves and others. 

People vastly overrate the risk of doing the wrong thing, while they underrate the risk of not doing the right thing.  In business, as in life.  Fear, to many, seems like the sensible attitude.  In reality, trust pays far higher returns.  In life, as in business.