What type of trust are you creating?
After the invention of the telephone, a strange thing happened. People using it for the first time struggled to talk and hold a conversation. It wasn’t just because the connections were crackly, there was something different going on. This was the first time people were having conversations with someone without seeing them.
There was even a debate over the best method to answer the phone. People criticized Thomas Edison for being too informal when he suggested you could just pick up the receiver and say, “hello.”
The phone was challenging because people could not read the facial expressions, cues, and body language they were accustomed to in everyday conversation. The indicators of trust and meaning people were used to interpreting no longer worked. Some people even complained about how exhausted they felt as they had to listen to every word the other person was saying. (It’s less clear if Edison also invented covering the receiver and making a talking gesture with your hands while rolling your eyes.)
These communication challenges made businesses slow to use the phone for sales. Sales were traditionally made over lunches or in person. Businessmen didn't feel they could trust others the same way to make a sale on the phone. The phone had created a new system to communicate. While it had incredible potential to connect people, it also highlighted how trust is commonly built for business transactions and shared goals.
Before we dive into the phone's limitations, we need to look at what makes up trust in a business transaction? When you examine the research, there are a lot of different answers. The simplest definition is trust in business is “a willingness to take risk.”
In every business transaction, there is both trust and risk. It’s like you want to cross a river and see a bridge. There’s a risk with the bridge, but you walk across when you trust who built it. When you feel enough trust, you are willing to take a risk. Both these forces are in tension. If the risk is lowered, I can reduce the trust I need to make a transaction to make it happen. This is where many businesses function as a system or platform to remove risk.
Companies like Uber reduce the risk of a ride from a stranger and allow me the trust to get in a car. Ideally, the degree of trust and relative risk in the transaction are well matched. If things go badly on my ride like my Uber driver keeps falling asleep at stoplights (true story), I can message the company, and they will address it. Uber will give me a refund and apologize, and I’m happy they acted and used them again. Uber created a system to provide a specific type of trust.
This type of trust can be broken down into two components:
Ability – do they have the skills or resources necessary to do the job?
Integrity – will they do what they say they will do? This is based on perceived trustworthiness and reputation.
These two factors, ability and integrity, are usually assessed first in the decision to do business. When you decide someone has the ability to do the job and believe they will do it as described, you have transactional trust. Transactional trust is a willingness to take a risk once. You feel confident that risk has been reduced enough in the short term.
Transactional trust allows me to stop at a sketchy gas station and feel confident buying a Diet Coke and beef jerky, but not a “fresh” hot dog. The ability of the store to sell it to me is there, and I’m buying the integrity of the brand. Just like the telephone provides easy communication, transactional trust offers a system to seamlessly supports millions of transactions a day.
Transactional trust, like the telephone, has limits. What made those first telephone conversations difficult was what was absent, seeing (and likely judging) the person talking with you.
In college, I worked for an investment company selling 401k plans to businesses. I probably called every business in my state over those 18 months, but I didn’t sell them on the 401k plans; I sold them on an appointment. An appointment where a broker would meet the business owner and sell them on our 401k plan management benefits. It was done that way because we knew business owners felt the most comfortable doing business in person.
I was reminded of this reading Robert Iger’s book, The Ride of a Lifetime. As the CEO of Disney, he tells the stories of how he negotiated blockbuster deals to buy Pixar with Steve Jobs, the Star Wars franchise from George Lucas, and the Marvel acquisition. Each of these deals were agreed on in person, leader to leader. Once the high-level details were negotiated, then the details were worked out by the staff and lawyers.
It’s situations like this where the third element of trust is required – good intent. Also called benevolence in the research, it’s the belief that not only is their ability and integrity, but a belief in the other person. This level of trust usually takes time to access and decide if the other person has good intentions and if they will be a good partner in the inevitable ups and downs of a complicated transaction.
When you have all three components of trust: ability, integrity, and good intentions, you are willing to take more considerable risk or repeated risk because you know the other person will be an excellent partner to work with. This is Partnership Trust, a wiliness to take risks repeatedly.
Partnership Trust has all three components so if something goes wrong and something is messed up, trust doesn’t collapse. You know the other party has good intent and will fix what was messed up. What’s different is this trust is not based on the system but the individual. Even if there are failures in the system, you know the individual you trust has good intent.
This is the complicated thing about trust, for us to have a willingness to take a risk, we need ability and integrity. Then over time, those factors get baked in, and good intent becomes an important part. Partnership trust is not just for deals between CEOs, it is also apparent with the business we enjoy being repeat customers. Companies grow when they can create this trust level because their customers repeatedly buy from them and feel a personal connection.
Ask yourself whether you are building Transactional Trust or Partnership Trust in your work. The good news is that it’s easy to analyze the parts of trust working well and where you need improvement. You can ask questions like:
Ability - Did we show them that we did the work?
Integrity - Did we tell them how it went as planned or how we adapted when things changed?
Good Intent - Did we show good intent and make a stronger emotional connection, so it’s not purely transactional?
This three-part framework can also help when your gut tells you not to trust someone or not to do a deal. You can ask yourself:
Ability - Can they do the job?
Integrity - Do I believe they will do the job?
Good Intent – Do I think they have good intentions?
Once you identify what’s making you uneasy or not willing to take a risk, you can dive deeper and try to learn more or ask questions to ensure your gut feeling is accurate.
Next time you are building a pitch or trying to make a sale, think about creating trust with what you say and how you present it. What type of trust are you trying to create? Are you building a system for transactional trust, or do you need partnership trust to meet your goals? Is it something you could close over the phone, or would you be better off meeting in-person and establishing partnership trust?
Lastly, if you find yourself at a sketchy gas station, only buy the “fresh” hotdogs if you really know the person selling them.
Sources:
Iger, Robert. (2019). The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company. Random House.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An Integrative Model of Organizational Trust. The Academy of Management Review, 20(3), 709. (One author, James Davis has an interesting Ted Talk on this model)
Thompson, Clive. (2016, March). Texting Isn’t the First New Technology Thought to Impair Social Skills. Smithsonianmag.Com. Retrieved March 25, 2022, from