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The Power and Pitfalls of Trust: How to Get It Right

May 5, 2016

Many think of “trust” as some fuzzy, feel-good impulse that describes an emotional reaction to another person or situation. But as a management principle, that’s all wrong. Instead, trust is a powerful, specific, hard-edged concept that is essential for great leaders.

Trusting wisely leads to better collaboration, greater innovation, more durable relationships, and the sorts of flexible agreements that lead to success in dynamic markets. And it makes for a more enjoyable life. But beware: Trust can also lead to betrayal when it’s poorly grounded. Improperly placed trust can set in motion brand impairment, organizational turmoil, and even reputation-destroying litigation. So, it’s essential to get trust right. You don’t want to be a Pollyanna and you don’t want to be a cynic.

What it Takes to Build Trust
Building trust – who, when and how – is a prerequisite to becoming a great leader, manager, spouse or parent. Because trust means turning over power, you have to be smart about it. Among other things, you must ensure that those you trust: have character (possessing a fiduciary attitude and putting your interests ahead of theirs); are competent (possessing the actual skills to deliver); and have the authority to deliver (empowered to fulfill promises). Remove any of these three preconditions, and it’s folly to give up one’s power and to think trust will lead to success.

In addition, it’s helpful to consider the nature of the type of trust: Is it reciprocal (the highest and most resilient form, occurring, for example, in marriages or business partnerships); representative (like with a doctor or lawyer), or “pseudo” (the most fragile form of trust, like with mafia dons or the temporarily-aligned interests in a contract)?

When trust is well-grounded, it builds on itself in a positive feedback loop that will take us farther than we could go if exercising only our own power. Like being a member of a relay team, our combined effort will beat that of any individual runner. But this takes careful, deliberate work, some of which may be difficult or counterintuitive. In The 10 Laws of Trust, I seek to describe the principles and practices that will enable you to build a trust-powered organization, be it a company, boardroom, community group or family.

When Should You Trust Again?
However, despite your best efforts to build trust, people are fallible. We all fail to deliver from time to time. So, it’s important to understand when to trust again after a betrayal. First, consider if the failure was one of results, effort or character. If somebody simply fails to get the results you trusted them to deliver, my advice is to trust again. If they fail due to insufficient effort, my advice is to understand why and to evaluate whether circumstances have changed enough to merit another try. But if failure happened due to poor character, it is likely unwise to trust them again. People don’t often change their character. Learning to distinguish among the causes of failure is vital to avoiding betrayal.

Today’s presidential candidates are all asking us to trust them. But surveys show that most of us don’t trust politicians. Indeed, they’re at the bottom of the trust list, challenged only by lawyers and Wall Street bankers. Just as we ourselves earn trust, many of our political leaders have earned our distrust. But no organization and no society can long withstand the breakdown of trust. The good news is that organizations respond to trustworthy leaders who are intentional about building trust. In The 10 Laws of Trust, I’ve tried to provide a universal guide for developing a high-trust enterprise – enduring principles for a nation, a business, and a family.

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About The Author

Joel Peterson is the chairman of JetBlue and a longtime consulting professor at the Stanford Graduate School of Business. He also continues to be a highly successful investor and mentor to a generation of young entrepreneurs. His new book, The 10 Laws of Trust,” was published on May 10, 2016.

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