In Associations Now, Newton Holt interviews Stephen M.R. Covey (son of the other Stephen Covey), who has a book out about trust in the business world. I particularly liked his response to Newton’s question about how to talk about trust to utilitarian people who see trust as “soft.”
More than anything, the trust message needs to be framed to the ultra-utilitarian, and to all of us, in economic terms rather than in moral terms. The economics of trust are as follows: Trust always affects two measurable outcomes—speed and cost. When trust goes down in a relationship or in a company, speed goes down and cost goes up. This is a tax, whereas the opposite is true as well: When trust goes up in a relationship or in a company, speed also goes up, and cost comes down. This is a dividend. It’s that simple, that real, that predictable.
I’ve written about trust in a few different places—most recently in an article with Madelyn Blair for the Journal of Association Leadership. But I also did an academic paper on it during my graduate studies in conflict resolution, and one point from that paper has always stood out for me.
We use trust (and distrust) to deal with complexity. As we move through the world, we know that anything might happen. The “other” (person, company, coworker, etc.) might act against your interests or they might not. They might do as they say they will, or they might not. We can’t account for all possibilities (it’s too complex), so trust simply eliminates some of the possibilities. But so does distrust. Distrust isn’t just the absence of trust, it is the functional equivalent of trust. It reduces the complexity, but by choosing the “negative” path for the other.
That’s where the speed issue arises. By choosing the negative path, you then have to do all kinds of extra work to protect yourself. That takes time and money in organizations. Trust (assuming the “positive” path for the other) then frees up time and money because you don’t have to protect yourself as much. This is why trust is such a valuable thing. Everyone has less time these days, so maintaining high trust can be a huge competitive advantage.