Trust Part 2: What Is Trust?

Take even a short deep dive on the topic of trust, and you’ll find thousands of related research papers, books, articles, and blogs. Dig into those materials, especially those authored by trust expert Paul J. Zak, and you’ll find trust is among the strongest indicators economists have to predict per capita income across countries. Why? Because “trust is the enabler of global business,” Zak said. “Without it, most market transactions would be impossible.” (We’ll get more into his research findings in a moment.)

But trust doesn’t just help explain GDP per capita — it also explains the overall well-being of people, families, tribes, companies, communities, and nations. Research makes it all but certain that the vast majority of highly successful organizations are high-trust companies (HTCs) that have high-trust relationships with most, if not all, of their Ideal Stakeholders, including:

1. Ideal Customers
2. Ideal Team Members
3. Senior Leadership Team (SLT)
4. Vendors
5. Strategic Partners
6. Investors
7. Communities/Society

HTCs have, relative to low-trust companies (LTCs), stronger revenue growth, better margins, lower customer churn, less team member turnover, more innovation, better risk-adjusted returns on capital, and healthier brands (that is, they’re more respected within their broader communities or society).

In short, trust is essential for a healthy economy, which affords us the opportunity to Work (with a capital W). Together, trust and Work make it much easier for us to live good lives.

But if trust is so obviously important, why doesn’t every society, government, company, group, and individual make it their top priority?

In my opinion, there are a host of reasons why trust isn’t prioritized, including, but by no means limited to:

1. It crosses a number of academic disciplines (such as neuroscience, biology, sociology, history, economics, finance, organizational behavior, psychology, and more).
2. It’s complicated and challenging to measure at individual, team, departmental, interdepartmental, organizational, and societal levels.
3. It’s something we’re still advancing our understanding of, and as a consequence, we’re still in the process of building both a consensus and shared language around what trust is, how to measure it, and how to build and sustain it.
4. It takes a tremendous amount of work, and Work, to build it and keep it — and the Work is never finished.
5. A lot of our leaders are low-trust people, and we’re embarrassed and overly accepting of them.
6. It implies there is a connection between levels of trust and hierarchical thinking, and hierarchy-based systems are not always considered politically correct.
7. It requires longer-term thinking, and the vast majority of people are shorter-term focused.
8. Bad faith actors seem to get away with proverbial murder (so if they can, why can’t we?).
9. Many so-called “elites” don’t believe we can collectively handle the truth.
10. Many believe the ends justify the means.
11. Many believe life is best played with a win-lose mentality.
12. Many people like having an enemy.
13. Many people don’t like to see their enemies win or give them credit for anything, even if they agree in principle.
14. Technology is threatening the organizational, economic, and business models of many of our institutions (like government, academia, and media), and those highly vested in the status quo deeply believe in their institutions and are afraid of the changes to come.

What Is Trust?

Enough of the big picture, fairly depressing stuff for now.

Let’s go academic for a bit…

One of the first comprehensive mathematical derivations of trust came from a 2001 biologically based model introduced by the late Dr. Paul J. Zak and Stephen Knack. It showed that trust reduces the transactional costs of investment decisions by increasing confidence in what the other party will do. Later, Zak expanded on his research on trust as well as wrote a series of research papers, contributed a number of articles to the likes of the Harvard Business Review, and published The Trust Factor — a book I strongly recommend to anyone who is remotely interested in Work, relationships (aka well-being and life), or leadership.

The Biology of Trust

According to Zak in his 2019 article in the Harvard Business Review, “How Our Brains Decide When to Trust,” “Human brains have two neurological idiosyncrasies that allow us to trust and collaborate with people outside our immediate social group (something no other animal is capable of doing). The first involves our hypertrophied cortex, the brain’s outer surface, where insight, planning, and abstract thought largely occur.”

Our second neurological idiosyncrasy is our ability to share people’s emotions (aka empathy). Zak’s research revealed that our ability to empathize increases when our brain releases oxytocin and that humans have more oxytocin receptors than any other animal. That is, “our social nature is anatomically inscribed in our brains,” Zak said. In humans, oxytocin helps encourage socialization by reducing social anxiety, and it also tempers dopamine levels. Zak pointed out that dopamine acts as a reinforcement chemical in our bodies, providing a reliable payoff that means we’ve evolved to need and enjoy being with other people.

Trust, Purpose, and Joy

One of the other insights Zak and his team gave us is the neuroscience around purpose. Zak’s associated research revealed that having a sense of higher purpose also stimulates oxytocin production. This makes sense to me because it’s consistent with my belief that the purpose of life is to make life better and that doing Work that is meaningful (especially doing it with other people we trust) is essential for scaling Maslow’s hierarchy of needs.

So what does it mean to trust someone? Over the years, I’ve come to believe there are multiple dimensions associated with trust, but if you want to make it super simple, there are three primary dimensions: competency, character, and connection.

I love going big picture and then diving into the details. In terms of the big picture, I believe character-based trust became a big thing a long, long time ago. This is the form of trust we developed way, way back when we were running around pretty much naked and needing to figure out whether to trust someone given that, on the one hand, they could kill us, and on the other, they could help us acquire food, protect our family, build a structure to protect us from the elements, maybe teach us something, possibly do the stuff we don’t like doing or stink at doing, provide solace when tough things happen, and even make us laugh.

Defining Character-Based Trust

So what is character-based trust? Character-based trust is all about integrity and intentions: Do we trust the other person’s intentions, and, more specifically, are those intentions in conflict with mine or my needs? A simple example is being approached by a stranger who appears intent on harming us. The form of harm could be physical, financial, emotional, or a bit of all three.

Unlike the other two dimensions of trust, character-based trust is best assumed to exist. This is tough for a lot of people due to some form of prior life trauma or disappointment. Like it or not, the challenge with character-based trust is that, since trust is in part chemical, if we approach people assuming we cannot trust them, it actually makes it far more likely they will not trust us. It’s kind of like oxytocin gives us this innate “trust Geiger counter,” and the other person’s trust Geiger counter goes off if our Geiger counter is going off. This is part of the logic behind Ronald Reagan’s famous line “trust but verify.” I won’t go deeper on this today, but the research is pretty clear that people who insist others must prove trustworthiness spark distrust, not trust (if you want to go deeper, check out Douglas McGregor’s Theory X and Theory Y leadership concepts).

Defining Competency-Based Trust

After our species developed some confidence in our ability to assess whether we could trust someone’s character, I believe we then moved on to figuring out the competency-based trust thing.

In my opinion, competency-based trust likely became important as we learned to divide and conquer, and trust that others were capable of doing the things that we chose to rely on them to do. By having each person specialize in a different skill or task, ancient communities allowed individuals to focus on what they were good at, what they loved to do, and what they could get better and better at. Becoming better at something is an innate need, in my opinion, because developing proficiency (in particular, proficiency in something that others value) helps us matter more and more to our tribe. This not only increases our sense of belonging but helps us develop and fortify our self-esteem.

While I obviously have no clue how this all unfolded, I wouldn’t be surprised if the third dimension of trust — connection — didn’t start to be a thing until we kept trying to figure out why the heck we still didn’t trust certain people even if they seemed competent and we had no concrete reason to doubt their character. I still think we are developing our ability to understand connection-based trust.

Defining Connection-Based Trust

Connection-based trust is all about the non-competency, non-character things that keep us connected in a healthy way. These things are a kind of bridge that makes the other two forms of trust relevant: the obvious things that attract us to one another and make it easier for us to maintain bonds.

That’s a lot of stuff to think about and work on, right? We won’t go much deeper into unpacking all the components of connection-based trust in this article, but let’s go a bit deeper into the values component.

I deeply believe that values came into being as we became members of larger, more complex tribes. For years, I believed and taught that trust was only about personal character and competency, but as I began to dig deeper into why some tribes didn’t get along, it became clear that oftentimes they just don’t trust the implications of the other tribe’s values. In fact, I would argue that this component of connection-based trust has become even more important for some, if not most, people than the other two dimensions.

Let’s walk through a short analogy looking through each of the three lenses of trust before we get into why I think overweighting the values component of trust isn’t a particularly healthy thing for society.

How Our Relationship to Water Models Trust

Water is pretty important stuff — something we literally cannot live without. When we drink it, there’s a huge amount of trust involved, even if we don’t realize it.

First, there’s the character component: We trust it won’t harm us. That means we trust that no one has poisoned it and that it is free of harmful organisms or pollutants. (Of course, there are many stories out there about water systems that people haven’t or shouldn’t have trusted.)

Next, we know we’re going to need a dependable flow of this clean, safe water, so we’re inherently trusting the competency of someone or something to bring it to us, whether that’s a utility company, a pipe, or a stream.

Finally, there are values: We trust that the people or objects bringing us safe water will not possess a set of values that somehow endanger our continued access. As an example, someone may believe we should no longer have access to the water if we say or do something that they disagree with.

Mess with either of the character and competency dimensions while elevating the importance of the values dimension and our trust in both the water itself and our water supply goes down the proverbial drain.

We could go deep on every one of the connection components, but each is a whole article on its own. It’s very important that we understand that not only are there three dimensions of trust but that one is “earned” (competency), one is “lost” (character), and one is “developed” (connection).

While all three dimensions of trust are critical, my experience suggests that competency-based trust — especially compared to character-based trust — is fairly easy to ascertain. First, unlike character-based trust, we don’t have to just give it out. It’s not only quite okay for it to be earned and proven, but it should be — otherwise it’s often tantamount to throwing someone into the deep end of the pool without knowing whether they can swim. Consequently, with a reasonable amount of work and skill, a good leader and coach is capable of ascertaining whether a prospective or current team member has the competencies necessary to properly perform the duties associated with their roles, accountabilities, and responsibilities.

Conversely, if we operate with the mindset that everyone has to earn our character-based trust, we’ll create a “tit for tat” system that substantially reduces the likelihood that others will trust us when it really counts.

Finally, there is connection-based trust. One doesn’t need to dig into the headlines these days to see example after example where people will trust someone just because they are in their tribe regardless of whether they trust their character or have any sense for their level of competency. Painful examples are presented to us every day if we look for them, but a particularly timely example is our current political landscape, where people trust each other based first upon their shared values, even though the person they’re trusting on a matter that requires deep expertise has literally no subject matter competency. Meanwhile, those with even minimal subject matter expertise can tell that the person being relied upon has no clue what they’re talking about. But if the expert and nonexpert share the same values or are in the same tribe, the subject matter expert may ignore the transgression.

I get the world is complex, but I hope we all agree it would be a far better place if subject matter experts called out the ignorant (or worse) for putting forth ideas they know are bad faith simply because they think it advances their cause. To me, those who operate with the belief that they can act in bad faith as long as “the ends justify the means” have done serious damage to the trust among people from different political parties in the United States as well as to the reputation of most of our major institutions, like the government, the media, and academia. I’m not here to take on any of those institutions in this post. What I am hoping to convey is that trust is core to every relationship, that it is three-dimensional, that each dimension is important, and that no leader or company will go far without being trusted by the vast majority of its Ideal Stakeholders.

With that said, let's assume that as a reader of this blog, you're deeply concerned with being a trusted leader. How do you begin? Ask yourself: Are there opportunities to increase one or more of the dimensions of trust up and down and across my organization? How can I increase opportunities to communicate and strengthen connections with all of my stakeholders?