The Decision to Trust – Harvard Buisness Review

The Decision to Trust

Robert F. Hurley

FROM THE SEPTEMBER 2006 ISSUE

Roughly half of all managers don’t trust their leaders. That’s what I found when I recently surveyed 450 executives of 30 companies from around the world. Results from a GolinHarris survey of Americans back in 2002 were similarly bleak: 69% of respondents agreed with the statement “I just don’t know who to trust anymore.” In that same year the University of Chicago surveyed 800 Americans and discovered that more than four out of five had “only some” or “hardly any” confidence in the people running major corporations. Granted, trusting corporate leaders in the abstract is different from trusting your own CEO, and some companies and executives are almost universally considered trustworthy; but the general trend is troubling.

It’s troubling because a distrustful environment leads to expensive and sometimes terminal problems. We hardly need reminding of the recent wave of scandals that shattered the public’s faith in corporate leaders. And although you’ll never see a financial statement with a line item labeled “distrust,” the WorldCom fiasco underscores just how expensive broken trust can be. When I teach executive seminars on trust, I ask participants to describe how a working environment feels when it is characterized by low levels of trust. The most frequent responses include “stressful,” “threatening,” “divisive,” “unproductive,” and “tense.” When asked how a high-trust work environment feels, the participants most frequently say “fun,” “supportive,” “motivating,” “productive,” and “comfortable.” Clearly, companies that foster a trusting culture will have a competitive advantage in the war for talent: Who would choose to stay in a stressful, divisive atmosphere if offered a productive, supportive one?

Companies that foster a trusting culture will have an advantage in the war for talent: Who would choose to stay in a stressful, divisive atmosphere if offered a productive, supportive one?

It is crucial, then, for managers to develop a better understanding of trust and of how to manage it. I define trust as confident reliance on someone when you are in a position of vulnerability. Given the pace of change in organizations today—mergers, downsizing, new business models, globalization—it is not surprising that trust is an issue. Fortunately, 50 years of research in social psychology has shown that trust isn’t magically created. In fact, it’s not even that mysterious. When people choose to trust, they have gone through a decision-making process—one involving factors that can be identified, analyzed, and influenced.

This article presents a model that sheds light on how the decision to trust is made. (We will ignore the extremes of complete trust based on blind faith and total distrust based on paranoia, and focus instead on the familiar situation in which uncertainty, possible damage, and multiple other reasons to trust or distrust are combined.) By understanding the mental calculations behind the decision whether or not to trust, managers can create an environment in which trust flourishes.

A Model for Trust

Building on the social psychologist Morton Deutsch’s research on trust, suspicion, and the resolution of conflict, and on my own experience over the past 15 years consulting with organizations and executives on trust, I developed a model that can be used to predict whether an individual will choose to trust or distrust another in a given situation. (See the exhibit “To Trust or Not to Trust?”) I have tested this model, which identifies ten factors at play in the decision-making process, with hundreds of top executives. Using it, they were able to identify relationships that would benefit from greater trust and to diagnose the root causes of distrust. Armed with that knowledge, they took concrete steps that made it easier for others to place confidence in them.

via The Decision to Trust – HBR.

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