The Relationship Between Trust and Risk

Why is trust important?

A basic fundamental to all relationships is trust or the lack thereof. This might only stem from the general trust that we have in members of our society and communities, or it could be trust we have build up over time with specific people.

Not only is trust dynamic between people and over time, it also depends on the situation. An example of this is that you might trust one of your friends with your emotions and deepest secrets but won’t trust them with your money. Clearly here you trust them but only with certain information or actions.

This difference in trust levels for the same person at the same time can be caused by a few things.

Ability

In the example your friend might not be very good with money or might be a kleptomaniac as an extreme example. These facts don’t mean you won’t trust them at all. You have just learned to not trust them in these areas since that will not have a positive outcome.

Time and consistency

If your friend continually demonstrates that your confidence in them to keep your secrets are not misplaced your trust will continue to grow in them. The key here though is consistency, an inconsistent record is worth a lot less than a lower value (ability) consistent trust since breaks in trust takes time to repair or might not ever be repairable.

Why is trust important

Turning our focus now on the professional relationship, we need to understand why trust is important. The most basic reason is that a group that has a high trust between them turns out to be much more effective, since much less effort is spent checking on each other and protecting yourself from people in the group. Trust also enables a much higher degree of autonomy which improves happiness. The benefits don’t stop there but the basic take away is more trust is better with the caveat that it is real and earned.

How do we earn trust

“OK cool”, you might say, “I am sold on this being a good thing but is this not just something that I can’t control”? Someone either trusts me or they don’t right?

Well not necessarily, you can be very intentional in earning trust and go to lengths not to lose trust. The good news is that you have taken the first step towards this by realizing the value of trust.

Time

Yep no way to manipulate time yet so this one is out of our control.

Ability

We can invest in our abilities and be the best at our tasks as we can be but this is not really not revolutionary.

Risk

We can however inflate the normal growth of trust over time by understanding that risk is part of the trust equation.

An example will help demonstrate this concept. Imagine that you have to trust your friend from before with some money but it is only a small amount that would not affect you that much, say R50. You might be comfortable with that right? Well what if this situation was the same but you have to trust this person with R500 instead? Or what about R5000 or R5000000? These are very different because the risk factor has changed.

What does this have to do with gaining trust though? Well lets examine what happens if you do give this friend the R500 and she does not break your trust. This makes you trust her more because there was risk in the action but it was paid back. Compare that to the gain in trust if the amount was R500000? Clearly the amount of trust earned would be much more due to the higher risk and temptation to break the trust.

From this we can learn that if we can manage the risk of a situation we can either bring the risk down to the level that we have with that person to enable us to make the situation happen. Or we can increase the risk if we are able to deliver on the trust to gain even more trust. Just be very careful here because remember a break of trust is very hard or impossible to repair.

So how do we apply this? We can for example earn trust faster by valuing the trust and making sure that we deliver on that trust to the best of our abilities. Or if we can manage the risk we can have access to responsibilities we could not have before.

Awesome, we have it all worked out!

Unfortunately not. Managing the risk is an art and changes from domain to domain but at least we know what we are looking for and we can try to manage it instead of it just letting life happen. I hope this was helpful and I would love to hear other views or thinking regarding this.