Business Runs on Three Types of Trust; Two of Them You Can Influence

By April 21, 2021 General

Most of us have a tendency to think of trust as a clear-cut dividing line: either you have it or you don’t. For one type of trust that might be true. But there are three types of trust that are always in play with business, two of which aren’t absolute and therefore afford opportunities to grow trust. 

The three types of trust

Ethical trust can often be discerned when weighed against these questions: Is this person honest or ethical? What do they do or what choices do they make when nobody is watching? Are they the type who will (or will not) alert the cashier they gave them too much money back? It comes down this: Can you trust this person to have your best interest in mind personally, professionally or financially? Can you trust that this person won’t stab you in the back? 

All businesses run and rely on ethical trust. There must be mutual trust between parties; one company will deliver goods and services as agreed upon, and the other will pay accordingly and timely. It’s a prerequisite for doing and continuing to do business.  

Even when we’re not quite sure if someone is ethically grounded and deserving of trust, we generally extend the benefit of the doubt until there is a breach of trust. If and when a breach occurs, it’s usually game over.

Most executive teams don’t struggle with ethical trust. If an issue exposes someone who doesn’t have integrity, they won’t continue with the company for long. Ethical lapses that include theft, deceit, fraud, or wrongdoing and violate company, social or moral codes of conduct, must lead to decisive action. While the right and wrong of ethical trust might be easier to spot, it still stings when a person given this trust violates it. Sooner or later businesses will learn ethical lapses of trust aren’t worth the risk.

Performance-based trust doesn’t have the same high stakes attached to it as ethical trust does, but the ongoing work of the business relies on it. To instill it, people need to know: Will this person follow through on what they say they will do? Do they deliver on the results they promise? Is the work completed on time?  

At some point, everyone falls short of expectations. Nobody is perfect all the time. Understanding that performance-based trust is situational means there might be other factors involved that impede performance. Business demands that leaders have these tough conversations, yet too often leaders look for solutions before knowing the root problem, and employees promise better outcomes without an approach to obtain them. 

In the book The Managerial Moment of Truth, Bruce Bodaken and Robert Fritz outline a straightforward approach to having tough conversations that leads to situational problem solving and enhanced trust:

  1. Acknowledge the truth about the current situation (suspend judgment)
  2. Analyze how things became the way they are and why it happened
  3. Create an action plan; agree on how to fix or prevent it from happening again
  4. Establish a feedback system to make sure the action plan is implemented

Situations that cause performance breakdowns can be remedied. Unlike most ethical trust gaffes, anyone who falls short can redeem themselves. 

Vulnerability-based trust is fluid and situational, appearing in top-down, bottom-up, and peer-to-peer situations throughout the business. When people contemplate vulnerability-based trust they are questioning: Will I get “punished” for telling what I believe to be the facts about this issue? Will my words be used against me later? If I say something, am I completely honest or do I sugar-coat it? 

At the core of this trust issue is whether or not companies have built strong cultures that include open and transparent communication. When company culture and morale is low, vulnerability-based trust is low and people hold back. That can prevent any employee from bringing their best and most engaged self to the job. And if trust is lacking, their ideas and opinions about the work can’t be safely shared to make needed improvements.  

Focus on vulnerability- and performance-based trust 

There’s no value in fretting over ethical issues when leadership has set a clear standard of behavior. Instead, leaders should focus their efforts to enhance vulnerability- and performance-based trust. The leader with strong self-awareness and emotional intelligence recognizes these are areas where they can have positive influence. 

There might be a legitimate reason for performance issues that leaders can’t immediately diagnose. It might have nothing to do about the work, but instead outside factors affecting the individual. But to know that requires the individual to trust a leader and to be vulnerable. One form of trust unlocks the ability to enhance the other. 

Trust isn’t as black and white as we think. For leaders, it requires wading into the gray areas. Those who do strengthen the health and culture of the organization by modeling and communicating vulnerability appropriately. This impacts conversations on performance and the plans to improve it. And if you know me, then perhaps I’ve earned the right to say – trust me on this. 

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