Trust in business relationships is important for two reasons. First, you need a minimum of trust to engage with your business partners in the first place. This is a no brainer. Second, trust increases performance. You don’t need to take any actions to monitor or control someone you trust.
But how can you trust and be trusted? And are both things connected? In this post, I look at trust from both sides: the “truster” and the “trustee”. My hypothesis: both roles are mutually exchangeable. You cannot trust without being trusted. But lets review a common ways to explain trust first.
What actions lead to trust – The one way explanation
Stephen Covey, PhD (“7 Habits of Highly Effective People”) advocates three behaviours to establish trust: (1) keep your commitments, (2) make your actions transparent, (3) and trust other people. In her article “Value of Trust” Lynda Bourne, PMP established a common objective as a catalist for trust. And mother always said, don’t trust strangers. In practice those three layout in the following way. When you start business with a new partner the following things happen. First, you start with zero trust. You do not overly distrust, but also you aren’t naively giving shipping free gifts. Second, you define a common goal. You believe in win-win and doing business means pulling in the same direction for you. Third, you are extra transparent in your actions and do what you say. You believe your partner needs to see you are going for the common goal. You reduce your efforts for transparency to a acceptable level, once your partner trusts you.
What are the mechanism behind trust – The two way explanation
You start out with a medium level of trust. You don’t trust, but you also don’t distrust. You assume your newly found business partner is judging you in the same way. Since both of you follow a common goal, both of you want to establish trust. Both of you have an extra eye for the other and both of you are extra transparent. Since you pay a great deal of attention to your partner and she is doing anything to show you her actions, your trust grows quickly. Probably the same thing is happening vice versa. With growing trust you lower your level of supervision and also being more trusted, you also lower your efforts to make your actions obvious. Your relation becomes productive.
Lets assume, your partner isn’t trust worthy. He doesn’t make his actions obvious and is not keeping his commitments. You keep observing. With every missed commitment the little rest of trust vanishes. You get suspicious and double your efforts to monitor your partner. Your relation becomes destructive.
In the symmetric case trust is created and business in those relationships strives. In the asymmetric case trust is destroyed and there is no business coming from such a relationship.
Three things you can take from this
- Assume your partner is giving you as much trust as you put in him.
- When you suspiciously watch your acquaintance steps, keep in mind he is watching you too. You should equalise your amount of observation with your level of transparency.
- Trust to be trusted. If he keeps his commitments and is transparent about his actions, you should trust him. Only then can he trust you, and only then can you be productive together. (Corvey’s third advice)