28 May 2020 19:22 IST

The trust account

Trust takes years to gain and a second to lose. Wise leaders learn to earn and protect that trust.

We value trust in normal times, but it becomes an almost priceless currency in a time of crisis, like the Covid one we are in the middle of. It is required more; it is valued more. It is one of the greatest assets of a leader, when she has it, and one of her biggest liabilities if she doesn’t. Her credibility and impact often depend on whether she has built enough of a balance in the trust account. Why does trust matter and how do we build that balance in the trust account?

Trust precedes transactions

Take the typical salesperson. He rushes into making the pitch. His overriding goal is to sell his product or service. But this often backfires into a lengthy, convoluted process. Instead, the first thing he needs to build is trust. The customer wants to know if he can trust us, before he can transact with us. A relationship of trust becomes a lubricant for all transactions that follow. If the customer trusts us, he will still ask questions, but he will more likely trust our answers. When we provide a quote, he will challenge and negotiate, but he will do so from a position of trust. Everything moves faster when there is trust and slows down when there isn’t.

For example, in a client relationship — when there is a lack of trust then there is an over-reliance on the contract — a poor substitute. This leads to a relationship fraught with tension and arguments. I recall a client contract where much time was spent on negotiating, debating and finally agreeing on the contract but with each side having a different perception of the contract. Once the actual work started, at every point of disagreement, the contract was thrust by each party in the face of the other. “But that’s not what the contract says” or “But that’s exactly what we’ve asked for in clause xx”. This puts the whole relationship on thin ice. A contract can’t take the place of trust. People have to build it through their everyday words and actions.

I recall the contract referred to above, creating a very testy relationship, until the point that trust was built. In fact, with my client counterpart, I made a promise that I would never refer to the contract – we should just discuss goals, needs and priorities and how we could each support the other in achieving those within the framework of the contract. I think that helped to build a relationship of trust and created a lot of speed in decision making and actually helped both my own organisation and my client’s move faster towards both our financial and business goals.

A contract should be a vehicle to understand each party’s needs and priorities – it should be thoroughly debated and discussed. Then, it should be put away and the relationship should proceed every day with trustworthy words and actions.

Trust begets trust

When a promise is not kept, or a confidence is betrayed then trust is lost. But when trust is given, it also begets trust. Take Victor Hugo’s classic Les Miserables. When Jean Valjean after being released from prison is sheltered and treated kindly by Bishop Myriel, he is overwhelmed but still cannot resist stealing the bishop’s candlesticks and silver ware. He is caught by the police and brought to the Bishop. But the Bishop tells the police that he had gifted the candlesticks to Valjean and persuades them to release him. With that one act of trust, a life was transformed.

We see this happen in the business world. When a boss gives his trust to a colleague, that trust is often repaid with trust and with performance. When we trust a client, they most often repay that with trust.

Take my own experience of buying from Amazon. I began by only using the Cash on Delivery mode of payment. A reflection of tentative trust or a lack of trust. Paying in advance would have been a risk – will they deliver, will they deliver on time, what if I decide to cancel? But Amazon kept working on making things simpler and reliable — deliveries were as committed, no-questions-asked returns, and refunds were processed promptly. All these processes of trust in me as a customer, also led to my giving Amazon my trust. Today I routinely pay in advance, so I have the convenience of delivery, even if I’m not around. Amazon gains their preferred mode of being paid in advance, but only once they earned my trust.

Trust takes work and values

Stephen M.R. Covey in his book The Speed of Trust runs through what builds the trust account. In a nutshell, Trust = Intent x Competence. Do we have the right intent, do we display integrity in the way our words match our actions, have we created a track record of credibility, have we kept our word? The second variable in that equation is equally important. Do we have the competence that merits trust? Take an example. Let’s say you and I are playing the old trust game of me falling back and you catching me as I fall. Let’s say I weigh over 100 kilos and you weigh less than 40 kilos. Even though you may be my dear friend and I have no doubts about your intent, I will still refuse to play the game with you, because I doubt you will have the strength to catch me when I fall.

Many fund managers talk about management quality as one of the most important parameters they look for. What they mean is this combination – does management have the right intent, and do they have the competence to deserve investor funds. On a recent webinar, one of the successful fund managers went so far as to state that out of the close to 7,000 listed companies, he would put only about 70 in his trusted list — one per cent! That’s how rare trust is.

Covid has shown us a range of trust quotients in our political leadership. In one State, we have the Chief Minister in a blame game claiming that 75 per cent of migrants returning from one State and 50 per cent from another were infected. As an Opposition leader pointed out- if that were the case, infected numbers should be over 10 lakhs. In reality the State was claiming only around 6,000 numbers.

Clearly a trust issue of either intent or competence or both. In another state in South India, the approach of one State to solving the quantity of Covid cases is by just under-reporting, through ridiculously low testing. On the other hand, Kerala and Punjab, which have performed the best in handling the pandemic, constantly underplay their success. They keep reminding everybody that the worst is far from over. They aggressively test to be sure they are getting the right numbers. They will certainly enjoy higher trust quotients with their populations.

The business world is full of examples of companies and leaders who either build or destroy trust. Facebook continues to be dogged by issues of privacy and data protection. Wells Fargo Bank is still to recover from the crisis of mis-selling by their associates. Welspun in India is still grappling to recover trust, after tests by their customers showed they used inferior cotton compared to the claimed Egyptian cotton in their products. Trust takes years to gain and a second to lose. Wise leaders will learn to earn and protect that trust.