A new model explains the mental calculations people make before choosing to trust someone
Robert F Hurley

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 simil-arly bleak: 69 per cent of respondents agreed with the statement ‘I just don't know who to trust anymore’. The 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 at times terminal problems. When I teach executive seminars on trust, I ask participants to describe how a wor-king environment feels when it is characterised 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’, ‘suppor-tive’, ‘motivating’, ‘productive’, ‘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?

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 orga-nisations today – mergers, downsizing, new business models, globalisation – 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, analysed, and influenced.

This article presents a model that sheds light on how the decision to trust is made. By und-erstanding the mental calculations behind the decision whether or not to trust, managers can create an environment in which trust flourishes.

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 organisations 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. 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.

Decision-maker factors: The first three factors concern the decision maker himself: the 'truster'. These factors often have little to do with the person asking for trust: the 'trustee'. They are the result of a complex mix of perso-nality, culture, and experience.

Risk tolerance: Some people are natural risk takers; others are innately cautious. How tolerant people are of risk has a big impact on their willingness to trust – regardless of who the trustee is. Risk seekers don't spend much time calculating what might go wrong in a given situ-ation; in the absence of any glaring problems, they tend to have faith that things will work out. Risk avoiders, however, often need to feel in control before they place their trust in someone, and are reluctant to act without approval. Not only do they not trust others, they don't even trust themselves. Research by the organisational anthropologist Geert Hofstede suggests that at some level, culture influences risk tolerance. The Japanese, for instance, tend to have a lower tolerance for risk than Americans.

Level of adjustment: Psychologists have shown that individuals vary widely in how well adjusted they are. Like risk tolerance, this aspect of personality affects the amount of time people need to build trust. Well-adjusted people are comfortable with themselves and see the world as a generally benign place. Their high levels of confidence often make them quick to trust, because they believe that nothing bad will happen to them. By contrast, people who are poorly adjusted tend to see many threats in the world, and so they carry more anxiety into every situation. These people take longer to get to a position of comfort and trust, regardless of the trustee.

Relative power: Relative power is another important factor in the decision to trust. If the truster is in a position of authority, he is more likely to trust, because he can sanction a person who violates his trust. But if the truster has little authority, and thus no recourse, he is more vulnerable and so will be less comfortable trusting. For instance, a CEO who delegates a task to one of her vice presidents is primarily concerned with that person's competence. She can be reasonably confident that the VP will try to serve her interests, because if he doesn't, he may face unpleasant repercussions. The vice president, however, has little power to reward or sanction the CEO. Therefore, his choice to trust the CEO is less automatic; he must consider such things as her intentions and her integrity.

Situational factors: The remaining seven factors concern aspects of a particular situation and of the relationship between the parties. These are the factors that a trustee can most effectively address in order to gain the confidence of trusters.

Security: Earlier we dealt with risk tolerance as a personality factor in the truster. Here we look at the opposite of risk – security – as it relates to a given situation. Clearly, not all risks are equal. An employee who in good times trusts that his supervisor will approve the funding for his attendance at an expensive training prog-ramme might be very suspicious of that same supervisor when the company is making layoffs. A general rule to remember: The higher the stakes, the less likely people are to trust.

Number of similarities: At heart we are still quite tribal, which is why people tend to more easily trust those who appear similar to themselves. Similarities may include common values, membership in a defined group, and shared personality traits. In deciding how much to trust someone, people often begin by tallying up their similarities and differences. On the flip side, a lack of similarities and shared values explains why, in many organisations, the workaholic manager is suspicious of his family-oriented employee, or the entrepreneurial field sales group and the control-oriented headquarters never get along. It's more difficult to trust people who seem different.

Alignment of interests: Before a person places her trust in someone else, she carefully weighs the question, "How likely is this person to serve my interests?" When people's interests are completely aligned, trust is a reasonable response. A fairly unsophisticated leader will assume that everyone in the organisation has the same interests. But in reality people have both common and unique interests. A good leader will turn critical success factors for the company into common interests that are clear and superordinate.

Consider compensation policies: We've all heard of companies that have massive layoffs, drive their stock prices up, and reward their CEOs with handsome bonuses, all in the same year. It's no wonder that so many employees distrust management. Aligned interests lead to trust; misaligned interests lead to suspicion. A transparent, rigorous process for decision making leads to higher levels of organisational trust. Opaque decision-making processes, which may appear to serve special interests whether they do or not, breed distrust.

Benevolent concern: Trust is an issue not because people are evil but because they are often self-centred. We've all known a manager whom employees don't trust because they don't believe he will fight for them. In other words, he has never demonstrated a greater concern for others' interests than for his own. The manager who demonstrates benevolent concern – who shows his employees that he will put himself at risk for them – engenders not only trust but also loyalty and commitment.

Capability: Similarities, aligned interests, and benevolent concern have little meaning if the trustee is incompetent. (If you are going to have surgery, you are probably more concerned about your surgeon's technical skills than about how much the two of you have in common.) Managers routinely assess capability when deciding to trust or delegate authority to those who work for them.

Capability is also relevant at the group and organisational levels. Shareholders will be suspicious of a board of directors that can't establish reliable processes for compensating CEOs fairly and uncovering unethical behaviour. A customer will not trust a firm that has not demonstrated a consistent ability to meet his or her needs.

Predictability and integrity: At some point in the trust decision the truster asks, "How certain am I of how the trustee will act?" A trustee whose behaviour can be reliably predicted will be seen as more trustworthy. One whose behaviour is erratic will be met with suspicion. Here the issue of integrity comes into play – that is, doing what you say you will do. Trustees who say one thing but do another lack integrity. The audio does not match the video, and we are confused as to which message to believe. The result is distrust.

In my executive-coaching work, I have seen some managers consistently overpromise but underdeliver. These people are well-intentioned, and they care passionately about their work, but their enthusiasm leads them to promise things they simply cannot produce. Despite their hard work and good intentions, colleagues don't trust them because of their poor track records.

Level of communication: Because trust is a relational concept, good communication is critical. Not surprisingly, open and honest communication tends to support the decision to trust, whereas poor (or no) communication creates suspicion. Many organisations fall into a downward spiral. Miscommunication causes employees to feel betrayed, which leads to a greater breakdown in communication and, eventually, outright distrust.

Once these ten factors are understood, executives can begin managing trust in their own relationships and within their organisations. The trust model can also be applied on a broader, organisational scale. Broken trust can be mended over time if leaders consistently engage in the right behaviours.

Trust is a measure of the quality of a relationship-between two people, between groups of people, or between a person and an organisation. In totally predictable situations the question of trust doesn't arise.

When you know exactly what to expect, there is no need to make a judgment call. The turbulence of outsourcing, mergers, downsizing, and changing business models creates a breeding ground for distrust. Leading in such an environment requires acting in ways that provide clear reasons to decide to trust.

There is no returning to the days when organisations expected – and received – unconditional loyalty from employees. But by using this model, you may be able to create a more dynamic and sustainable foundation for productive relationships.

the author is a professor of management at Fordham University in New York.
Email: Rohurley@fordham.edu