Everybody likes to operate in an environment of trust. When you deal with people you trust, things get done faster, stress is reduced and new opportunities open up. As E.M. Forster once wrote, “One must be fond of people and trust them if one is not to make a mess of life.”
And many businesses are able to do just that. McDonald’s has maintained trustful partnerships with its suppliers for decades, which gives it a competitive advantage. Even on Wall Street, most trades are done on a virtual handshake over the phone. While the lines are recorded for verification, most deals go off without a hitch.
Yet we must often deal with people we don’t trust. Sometimes we even need to work with people we intensely dislike. Still, the more trust we are able to build, the more successful we will be. Honesty is, of course, a good policy, but honesty alone won’t solve basic problems of trust. Rather, we need to identify the sources of mistrust and work to eliminate them.
Rule #1: Nobody Thinks Of Themselves As Evil
For most of my adult life, I worked in very difficult business environments where trust was a rare thing indeed. Often, the rewards for dishonest behaviour were great and the punishments for corruption either meagre or nonexistent. So in order to be successful, I had to build trust with untrustworthy people and somehow not get ripped off (or worse) in the bargain.
What I learned over the years is that no one thinks of themselves as evil, even those who do truly awful things. Invariably, they found a way to justify their actions, even sometimes insisting that they were morally imperative. Often, they tortured logic to arrive at these rationalizations, but what was important was that, at least to them, they had good reasons for what they did.
To understand what I mean, let’s look at the case of American politics. As cognitive psychologist George Lakoff explains in Moral Politics, liberals and conservatives see issues through different frames. While those on the right favour a system of punishments and rewards, liberals want to build a society based on nurturing and enablement.
Just like those on the opposite ends of the political spectrum often find themselves unable to find common ground because they frame things differently, we commonly hit the same obstacle in business life. It’s a tough problem and one that is hard to get past. The best way to understand how to overcome it is by thinking about the prisoner’s dilemma.
A Losing Game
We tend to assume that if we act rationally, rather than emotionally, we should be able to arrive at a basic framework for agreement based on facts. Yet in the early 1950’s, researchers at the RAND Corporation were able to show that’s not true through a simple game called the prisoner’s dilemma, which involves two partners in crime being interrogated separately.
Here’s how it works: If both prisoners cooperate with each other and neither confesses, they each get one year in prison on a lesser charge. If one confesses, he gets off scot-free, while his partner gets 5 years. If they both rat each other out, then they get three years each—collectively the worst outcome of all.
Notice how from a rational viewpoint, the best strategy is to defect. No matter what one guy does, the other guy is better off ratting him out. Yet in the pursuit of self-interest, both are made worse off. It’s a frustrating problem. Game theorists call it a Nash equilibrium—one in which nobody can improve their position by unilateral move. It takes trust.
And that’s what I found in my experience in developing markets. People who were corrupt and dishonest didn’t see themselves that way, in fact quite the contrary. They simply saw the world as one big prisoner’s dilemma and refused to be fools. Yet you don’t need to cross an ocean to see the prisoner’s dilemma at work, most organizational environments will do.
A Real World Prisoner’s Dilemma
We tend to associate lack of trust with dysfunctional organizations and that is certainly part of the problem. Poor leadership often leads to internal factions at war with each other. Collaboration is difficult, if not impossible, and politics takes precedence over performance.
Yet high performing organizations also run into trust issues. As General Stanley McChrystal describes in Team of Teams, when he took over Special Operations Command, he found that although he led some of the highest performing units in the world, they often failed to integrate effectively.
The problem wasn’t that his soldiers were incapable of building trust—within their teams trust and interoperability were at elite levels—but that each unit was laser focused on its own mission. Unfortunately, their dedication to their own unit made it hard for them to see the bigger picture. The esprit de corps was so strong that outsiders were suspect.
In a sense, it was a prisoner’s dilemma writ large. Each team’s complete dedication to their share of the task led them to neglect the needs of other teams, which resulted in diminished overall performance.
Strategies For Building Trust
Traditionally, the most effective option for overcoming a prisoner’s dilemma is the tit-for tat-strategy, in which you start out cooperating and then replicate whatever the other player’s last move was. So if he cooperates, you do the same, if not, you retaliate. It’s a simple rule and in a long line of experiments, it’s been proven to be amazingly successful.
However, while tit-for-tat may be a successful strategy for an individual, in a real world organizational context it becomes less practical. Surely, “cooperate, unless someone screws you, then screw him back” leaves much to be desired as an organizing principle. This is especially true if both players are employing it and fall into an endless cycle of retaliation.
A more viable strategy that is emerging for leaders is to network their organization by creating personal relationships among people from disparate groups through embedding, combined training, liaison programs and promotion policies. McChrystal used all of these to create trust among his high performing groups.
Further, research into to networks finds that it takes relatively few connections to drastically reduce social distance, so a networking strategy is viable even for large organizations. Even if two people have never met, a mutual relationship with a trusted third party can help close the gap quickly.
In the final analysis, trust is personal, not professional. It can’t be legislated or mandated but arises out of shared experience.
Image via flickr