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The Truth About Trust

The Truth About Trust

by Joel Peterson
author of 10 Laws of Trust

Intuitively, we know that different levels of trust exist in different kinds of organizations.

No-trust organizations, such as prisons, rely on force. Low-trust organizations, such as dictatorships, live on fear.

The motivator in most business organizations is reward. Only high-trust organizations are motivated by duty and love, by a sense of meaning and mission—even calling. The bonds between parent and child often yield this sort of trust within a family, for example.

While combinations of these motivators are present at different times in most organizations, only those organizations in which exists a sense of responsibility to all constituents, and a sense of meaning or mission, will consistently be moved by higher-level motivators such as duty or love.

As the image below illustrates, there is a hierarchy of motivators.

The half-life of the motivating force increases as one moves from left (Force) to right (Love), and as the source of the motivator moves from extrinsic to intrinsic.

Naturally, trust grows when people relate to the mission of an organization and have leaders and employees committed to that mission.

What tends to motivate people within any organization tells you what level of trust you might realistically hope for.

The good news for leaders is that other than in prisons and asylums, trust levels are not fixed by the nature of the organization.

As a leader, you can move the needle. The goal of any leader should be to move to the high-trust end of the spectrum and thereby to reliance on mission, caring, meaning, and duty.

Here’s where adhering to the 10 Laws of Trust can make all the difference.

As trust declines, people grab power

Another way to contrast low-trust with high-trust organizations is to compare the role of power in achieving desired ends.

In low-trust organizations, power plays the key role in attaining goals.

In high-trust organizations, authority is still vital, but it tends to be distributed and is aimed at a shared mission. And it is seen not as a personal asset to be wielded by leaders for their own benefit but as both a duty owed to those granting it and a responsibility to those over whom it extends.

Figure 2 compares how leaders view power in low- and high-trust organizations.

Stanford professor Jeff Pfeffer asserts in Power: Why Some People Have It—and Others Don’t that power flows to those who break rules, make credible threats, self-promote, and use its exercise as a technique to coerce others—the essence of a low-trust organization.

In high-trust organizations, however, such behaviors are anathema.

Pfeffer’s thesis ignores the essence of high-trust organizations and their leaders. Power in high-trust organizations derives not from scheming or techniques. It is less imposed than freely granted. Durable power derives from trust and is distributed as an expression of trust.

As Rod Kramer, another Stanford professor, has remarked, “Power without trust seems like a hollow victory for a leader and a thin platform from which to lead.”

Ultimately, for all the bare-knuckled, power-grasping tyrants who have succeeded (if only for a season), there are many other leaders who have labored to create the greatest good for the greatest number of people.

These high-trust leaders have developed durable organizations and flexible, trusting teams, working together to achieve more than any of them would have accomplished individually.

Trust—well-grounded—depends on three conditions

To safely and reliably allow others to act on our behalf—which is what we mean by trusting them—we must be able to count on three underpinnings: Character, Competence, and Authority.

  • Character means that those we trust will value our interests as their own.
  • Competence means that those we trust have the requisite intelligence, ability, and training to achieve our best interests.
  • Authority means that those we trust are empowered to deliver on promises. When all three conditions are present, trust develops naturally, almost reflexively.

But when any of the three is absent, trust must take a holiday.

To trust in the absence of any of these three elements is not smart but naïve—and eventual betrayal is almost certain.

Those who meet these three conditions for being granted our trust (Character + Competence + Authority) almost always possess a broader view of life’s purpose than merely securing the best personal outcome in every single transaction, in every conversation, in every negotiation.

People who see life as a marathon rather than a sprint, as a narrative in which everything eventually connects, are the best bets for long-term trust.

These individuals tend to have an enlightened, all-things-considered self-interest. They choose to act in the belief that trustworthy behavior pays dividends, if only in the harmony that comes from a lifetime of durable, high-trust relationships.

Possessing a bone-deep belief that they are accountable to more than just their own interests, they are simply unlikely to betray another’s trust.

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Joel Peterson

Joel Peterson is the chairman of JetBlue Airways and the founding partner of Peterson Partners, a Salt Lake City-based investment management firm. Joel is on the faculty at the Graduate School of Business at Stanford University and has been since 1992.

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