Source: The Economist
by Graham Dietz, Nicole Gillespie
May 5, 2012
Learning how to trust
However, high-profile affairs such as phone-tapping at News International, corporate scandals at Olympus and Siemens, or the shenanigans over British MPs’ expenses, suggest that not everybody ranks trust and trustworthiness as a work priority. Indeed, some care little for it, seeing it as naive or unreliable. Some even seek to thrive on wilful mistrust.
Trustworthiness is often undervalued and even undermined by company culture. Employees may want to be trustworthy, but face pressure to cut corners, obfuscate, bribe or dupe customers and regulators—something alleged of Goldman Sachs by Greg Smith, a recently-departed executive. All of which means that the public’s level of trust in business and government is dispiritingly low, according to surveys such as Edelman’s Trust Barometer.
But can such a nebulous, complex and subjective idea as trust be taught? Our experience is that it can. Guiding executives, managers and MBAs through the dynamics of trust can give them insights into problematic relationships and ethical dilemmas, and offer practical ways forward.
So what is trust? Its dynamics are complex and idiosyncratic, but it begins with a judgement about the other party’s trustworthiness. This means evaluating three attributes: their ability, benevolent motives and integrity (some add predictability). If there is enough evidence that a person possesses these traits, we become confident to rely on them in a way that poses a risk to ourselves. We base our judgement on personal dealings with them, third-party testimonies, proxies (such as their training, role and affiliations) or whether we are offered some protection by an outside institution, such as a regulator. When serious doubts exist we prefer not to take a risk.
Every interaction with another is an opportunity to enhance or undermine trust. It depends on what you say and do. Research has uncovered several useful tactics. In our workshops we use fictitious scenarios to help participants work through their real-life challenges. We ask participants to identify a problematic relationship they are facing at work—with a boss, a colleague, a client or a supplier, say—and then analyse the issue.
If the mistrust is more about incompetence than integrity, this can be dealt with through training or mentoring. Dishonesty is much harder to tackle. One senior manager at a bank, for example, who felt stifled by his micro-managing boss, understood that if he pointed to his qualifications and past results (his ability), and then asked to be given a project to lead alone, he could prove himself on his boss’s terms.
At a recent pharmaceutical-industry workshop, delegates tackled the vexed relationship between clinical trials firms and their clients, the big drug companies. Trust between the two sides is in short supply. Getting a new drug to market can take 10 years and $1 billion in America. Proving a drug’s efficacy through clinical trials is both essential and expensive. Hence contracts are often broken for cynically commercial reasons. But there are ways in which to build trust. Both sides could, for example, opt for full transparency. They might also consider drawing up contracts debarring sneaky tactics, replacing them with incentives for collaboration. Finally, the value of personal relationships across the divide should not be underplayed.
The liar’s paradox
Many readers will have had several “ah but…” moments reading this. So have we. Firstly there is the paradox of teaching people how to fake trustworthiness. Fraudsters succeed by giving off convincing signals that mask their real motives or the extent of their competence. The recent trend in public apologies, dripping with faux-contrition and legalistic qualifications, is an unavoidable outcome of people understanding more about how trust works. (Although the lack of sincerity on display suggests that PR-types have much to learn.) One way to combat this is to teach students how to interpret people’s intentions.
Second, the nature of business, especially at a senior level, often means reconciling the needs and expectations of different stakeholders. If there is a conflict, scenario-based exercises help participants to identify which to prioritise and which to heed, and to work through the likely consequences of different interventions.
Finally, individuals may be trustworthy, but can be compelled to act in untrustworthy ways by their employer, or by the norms of their sector. There are plenty of examples, including at the banks during the financial crisis or the aforementioned cases at News International and Siemens. Managers must learn to examine how their organisations promote or hinder trust. Objectively assessing a firm’s trustworthiness can help them strengthen the way it operates. It is as well to learn about this elusive but precious resource, since trust is like fresh air; we only notice it when it becomes scarce or polluted.
Graham Dietz is a senior lecturer in human resource management at the Durham Business School, Durham University. Nicole Gillespie is a senior lecturer in management at UQ Business School, the University of Queensland
