Trusting and Trustworthiness: The Chicken or the Egg?
Most talk you hear about trust uses that one word—“trust.” But on closer reading, the talk turns out to be about one of two very different things: either about trusting, or about trustworthiness.
They are not the same.
Trusting is about the one doing the trusting. Being trusted is about the one who would be trusted, or trustworthiness.
• When you read about the poor charities who got ripped off by Bernie Madoff, that’s about trust-as-trusting.
• When you read about how Bernie Madoff pulled off the con, that’s about trust-as-trustworthiness.
• Surveys that talk about declining trust are usually about a decline in trust-as-trusting.
• When we read stories about how there are more securities violations, we’re reading about a decline in trustworthiness.
Which is the chicken, and which is the egg—trusting, or trustworthiness? Which causes the other? Which should drive policy?
Years ago I consulted to a convenience store chain with a serious store manager turnover problem (150% per year). They wanted us to profile a successful store manager so they could hire to that spec.
Sounded like a good plan.
Until we found out that each store manager was routinely given a lie detector test every month to see if they were stealing.
Let’s say you’re a store manager. After 6 months of being hooked up to a polygraph and asked if you were a thief, you might figure “hmm, someone must be getting away with something—I wonder how he’s doing it?” So you start experimenting.
And in a few months, you’ve a turnover statistic.
So which was the chicken, and which the egg? Trusting, or trustworthiness?
The company management thought the trustworthiness came first, that they were being victimized by untrustworthy employees. They wanted to find trustworthy people, so they could trust.
In this case, it turned out to be the opposite problem. Management’s mistrust lowered the trustworthiness of the store manager. People live up (or down) to our expectations of them.
Sometimes it’s the other way. There are real Madoffs out there, and you’d be a chump not too protect yourself against them.
But here’s the thing. Think of trust as a risk mitigation strategy. Unlike fight or flight—the usual risk mitigation strategies—trust actually alters the risk in question.
If you take a risk and trust someone—or take a risk to show that you are trustworthy—you can influence the other’s behavior. People tend to respond in like manner to well intended gestures.
Madoff is not the norm. To subject every store manager (or any other job) to the kind of scrutiny that would prevent a Madoff can be a very expensive proposition. (See Sarbanes-Oxley; airport security). We need to think very carefully about the right responses to unusual events.
Charles
Your comments on the convenience store scenario are spot on. No wonder they saw the huge turnover!
We see a lot of trust issues in Asia and Singapore where no one trusts anybody and and everyone trusts no one, not even their own brother or sister. Crazy. So, all of this leads to issues such as lack of delegation, business traffic in the business freeways, huge amounts of paperwork to CYA, lack of creativity as it gets stifled, very slow decisions…and downright slow business.
The world has a perception of "hard working" Asia. Yes hard working- not the least bit effective for sure- but hard working because no one trusts anyone and people have to work 2X as hard to get things done. No one has yet to figure this out.
What we see is developed infrastructure and developing mindsets. As a premier nation, the US does not have to worry about maintianing complete dominance as I see the dominace lasting a long time.
PS..Keep up the flow of great information. We like it!
Cheers
Trip Allen, Team Egyii, Singapore
OK, and what’s "the rest of the story"? So you went on a consulting gig with a convenience story company. You found an interesting situation where the company spent a lot of money on lie detector testing, which, according to your thesis, led to the horrendous store manager turnover rate.
Did they believe you? Did they see the error of their ways? Were they able to develop trust?
Now as a tech type person, I could think of indirect measurements to get at the same issue without bothering the managers by strapping them into a machine. When I was working at a consulting company that specialized in technical solutions, a group in a separate department built a doughnut making machine for a well known doughnut chain, that could spit out an endless stream of doughnuts, all the while counting each and every one of them with an impossible to fool or tamper counter. They had a problem with store cooks selling doughnuts out the back door, where the national chain didn’t get its cut of the proceeds. I confess I don’t know the "rest of the story" here, but it was an indirect method of checking on trust.
But how did the real story play out? Is there a HBS case study here of a company turning around its concept of the world by learning to trust its managers, who then responded by being trustworthy?
Jim
Charlie, as always I’m with you on this.
Years ago, I was a consultant in the liquor end of the hospitality business. Most GMs also believed that they were victimized by bartenders and believed constant attrition would save them money for awhile, until the new person figured out how to steal. As in your scenario, management’s mistrust of employees was the problem.
Bartenders were in charge of the "cash cow" of the business but treated like criminals (owners/general managers made no secret of not trusting them & would never consider asking them for their ideas & help because that would give "them" an advantage in stealing more). In those days bars were primarily a cash business – always an issue for petty larceny (including general managers); they paid the bartenders minimum restaurant wages and expected them to earn a living off tips; they never got a break on a shift and if they ate, most were charged for the restaurant food. Needless to say, many honest EEs ended up doing exactly what they were accused of.
I recommended trusting them to be professionals : upgrading the pay sale; gave them more autonomy such as providing free drinks when appropriate; gave them responsibility for inventory and created a profit sharing type arrangement to keep the liquor cost in line w/ usage.
End result – high attrition was eliminated, costs & waste were reduced costs and profitability improved. When treated with respect and "trust", they acted in turn.
What a great example, Barbara, thanks. (This is fertile soil for Peter Vajda–the cosmic karma thing at work with bartenders! I love it).
It seems so obvious–human beings respond enormously to the expectations we set for them. And yet scratch the average business person to ask what the preferred method of motivation is, and what you’ll hear back is–rewards. Money. Incentives. Compensation.
Study after study suggests that people are more strongly motivated by factors like respect and self-fulfillment than by money, and yet–that is not the knee-jerk response of most people in business.
How about a response from our HR and change management readers? What is the practice in the real world? How often, really, do firms and leaders lead with money? And how often with things like expectations?
Thinking about those managers and bartenders, some quotes:
Trip from Eggyi,
Thanks for joining the dialogue. I think this is your first "appearance" here, yes? Sorry for the slow posting.
I am fascinated by your comment about the low pace of trust in Asia. My own experience is that it’s situation. Japan is a high trust culture, but only if you’re in the inner circle, which takes time. China gets rated as high trust in culture surveys, but hardly so by exporters. Singapore is hugely successful, and companies like Singapore Air, as I understand it, do a great job of empowering employees.
Yet your comments resonate with me. A lot of energy gets expanded sometimes just to show the illusion of movement; CYA and so forth, as you point out.
Can you say a bit more about your experience of the several Asian cultures? In my experience, trust is a shared phenonemon at the human level, but its expression varies considerably by culture. Would you care to shed some light for us?
Thanks,
Charlie
Responding to the curious Monk, Jim, sigh–I wish I could say it was a great triumph. As I recall, it was less successful.
In retail, there is operations and there is merchandising. In most retail companies, one or the other function is dominant. In this case, it was operations. The company was run largely by ex-military guys, in a very top-down, need-to-know kind of way.
That’s not a bad model, by the way, for a convenience store; it ain’t Neiman Marcus, and I’m not sure a merchandising-driven model would work all that well when you make so much off coffee, donuts, beer and gasoline.
So here’s the consulting lesson: if you’re going to advise some ex-military Type A guys to do something warm and fuzzy like trust people, you’d better dress it up in operational terms. We did that–made it into operational recommendations, scheduled meetings with determinate agendas, and so forth.
Still, I think the taste of the pill seeped through the sugar-coating, and as I recall there was not a tremendous amount of impact.
Peter–I love the Stimson quote, I’ve been thinking of that lately, thanks for digging it up.
Hi Charlie
Thanks for your response. My response:
Firstly, in Asia family comes first. So yes there is trust there. And yes you are correct, there are small circles of trust. In all Asian cultures it takes time and a lot of effort to gain that trust. And very often that trust factor is not ever established. So what happens in between the time of gaining trust and if no trust is established? This then becomes the problem. Things just don’t get done.
As for Singapore Airlines (SQ), funny you make that comment. There is a perception that SQ is an incredible airline- all new planes, great entertainment system, beautiful attendants (I married one), Etc. If you notice it had its hey day (and its rankings are slipping) and it certainly is far above any US airline (Asian and Middle Easter airlines are the best). There is a lot of "perception" here. All I need to do is quote my wife.."SQ is seniority conscious, you must follow the rules or you are bullied, and you are completely brainwashed." My wife left becasue she is Malaysian Chinese and could not stand the controlled, lack of trust culture. Let me tell you, at least in business, it happens everywhere.
Hope this is interesting. You response would be interesting.
Cheers
Trip Allen, Team Egyii, Singapore
Peter: I loved all of the quotes… thanks.
Trip–fascinating. I have never heard such a simple and cogent explanation of how a "high trust" culture can also be inefficient; namely by wasting so much time in getting to trust. Thank you for that insight.
I wonder if you’d log in and comment on tomorrow’s upcoming post, "Who You Gonna Trust–Your Eyes or Your Grandparents?" It suggests there is an important difference between "generalized trust," and more personal trust, which is parallel to your suggestion.
What I hear you saying is that the low level of generalized trust causes great inefficiencies, while the high level of specific trust–once laboriously gained–offers some great advantages. Does that sound like an accurate description?
Interesting to hear your takes on SQ. The former Chairman, Koh Boon Hwee, was a classmate of mine. And like Singapore’s founding father Lee Kuan Yew, he is a man of strong beliefs. Singapore has done well by many measures through the strong top-down model, but I can easily understand your wife’s disdain for it; I think most Americans also prefer a messier but more democratic model.