The Trust Factor

We choose to do business with those whom we can trust. We may have times when we are misguided by a profitable opportunity and choose to do business with someone we’re not sure if we can trust, and this usually turns out badly. Think of your follow-up systems as a way to build relationships and build trust over time.

What makes people see you as trustworthy?

In a 2006 article in the Harvard Business Review, Fordham University Professor of Management Robert F. Hurley lays out a trust model based on characteristics of both the truster and the situation or trustee:

Characteristics of the Truster

• Risk tolerance. Greater risk tolerance is associated with greater levels of trust. Risk takers tend to act first without extensive analysis. People who are more risk adverse often don’t trust themselves in making decisions and take longer to trust others.

• Adjustment. People who are well adjusted, confident, and happy tend to see the world as trustworthy. People who are less well adjusted may be hypervigilant, suspicious, nervous, and less trusting. They may micromanage others.

• Relative power. Someone who has power or authority is more likely to trust, perhaps because they can penalize someone who betrays trust. If you feel you have less power, you are less likely to trust others.

Characteristics of the Situation or Trustee

• Security. People tend to ask themselves, “What’s the worst thing that could happen?” If the answer is something that feels manageable, security goes up. Higher stakes situations lead to reduced security and less trust.

• Similarities. We tend to trust those who are like ourselves. Similarities may include having like values, being part of a shared group (such as alumni of the same university), sharing a style of dress, or having in common other demographic or psychographic variables.

• Alignment of interest. We tend to trust those who have goals that are in alignment with ours. It is common to assume that parties have aligned interests, but these assumptions must be checked out because it is not always the case that they are aligned.

• Benevolent concern. This means that we feel that the other person has our best interests at heart. It can be a challenge if interests are competing.

• Capability. The more competence and expertise someone has, the more we trust them.

• Predictability and integrity. Does the other person feel confident that you will do what you say you will do when you say you will do it?

• Quality of communication. Do they perceive your communication style as open and honest?

In 2007, researchers F. David Schoorman, Roger C. Mayer, and James H. Davis reevaluated a seminal model of trust they developed in 1995. Their model draws from management, psychology, philosophy, and economics to create an integrative model for what creates trust in business relationships. Trust, they explain, is an aspect of relationships and includes people’s perceptions about integrity, ability, and benevolence (i.e., how much someone wants to do good and not simply enhance their own profits). It is interesting to consider trust between individuals versus organizations. Because companies exist to increase profits, the benevolence motive may not be as strong between organizations as it may between individuals, such as sole proprietors or professionals in private practice. Regardless of whether the relationships are between individuals or organizations, the researchers propose that acting in a benevolent way when exploring options for joint venture partnerships builds trust. Judgments of someone’s ability and integrity are likely to be created quickly, whereas judgments of benevolence may take more time.

Another factor that goes into trust is someone’s willingness to take risks. If power is unbalanced in a relationship, the person who perceives herself as having more power is likely to take more risks. Finally, they propose that we form impressions of trust not simply by assessments (of ability, integrity, benevolence, and risk), which are cognitive factors, but also by our emotional response. As we discussed in Chapter 3, we often have an instant emotional reaction to something or someone. Trust seems to develop differently, however; the emotional reaction develops over time. Researchers Dunn and Schweitzer found that someone’s emotional state at the time impacts how much they trust someone, even when that emotional state has nothing to do with the other person or the situation.

In one study, 78 teams of 3 to 4 undergraduate students each were tracked over 10 weeks. The students completed surveys including measures of familiarity, trust, how often they interacted, citizenship behaviors (such as how willingly they helped each other), the need to monitor each other, and performance. Early on, it was found, trust was one-dimensional (residing within an individual), and as time went on, it became two-dimensional (based on the relationship). This means that time is an important component of trust building. You must stay in touch with people over an extended period of time in order to build trust with them.

Cognitive and emotional trust emerged as separate variables that were built over time. The frequency of interaction was not related to trust. Consider this as you weigh the quantity versus quality dilemma that we discussed earlier—quality may be more important than quantity. Quality of interactions was not examined in this study.

Monitoring behaviors negatively impacted cognitive trust but not emotional trust. Team performance positively impacted emotional trust but not cognitive trust. Other factors that were positively related to trust included familiarity and citizenship behaviors. So the more that someone knows you and the more they feel that you do things to help them out, the more they will trust you. This is related to the familiarity principle called propinquity.

The power of propinquity

Just after World War II, Leon Festinger and his colleagues Stanley Schachter and Kurt Back conducted a classic social psychology experiment. They looked at married veteran students who were living in a new housing development at MIT, the Westgate apartments, to see how social groups or friendships developed. The friendships were based on spatial proximity or propinquity with most friendships between next door neighbors. Friendships between floors were related to proximity to staircases. The students in the study were a homogenous group, and in more heterogeneous groups, propinquity may be shadowed by similarity effects (i.e., “birds of a feather flock together”). The propinquity effect is related to the mere exposure effect, which states that the more exposure we have to something, the more we like it. One study showed that people rated academic journals that they were more familiar with as having contributed more to the field than journals with which they were less familiar. If, however, we do not like someone, repeated exposure can intensify our feelings of dislike. Familiarity, therefore, can intensify the dominant emotion someone experiences. Additionally, recent research has shown that the relationship between familiarity and liking goes both ways—liking can increase our perception of familiarity, and familiarity can increase our perception of liking.

While familiarity can enhance relationships, it may not play a positive role when it comes to the reputation of a company or a brand. Some research has shown that familiarity with a company from presence in the media was negatively associated with reputation ratings (regardless of whether the media exposure was positive or negative). Margaret E. Brooks and Scott Highhouse review research that supports the idea that greater familiarity with a company is associated with mixed emotions and ambivalence about a company. Perhaps this is because the more familiar you are with something, the more associations—both positive and negative—come up. The feelings that are primary in a situation may depend on how someone was asked. For example, companies like Microsoft and Disney tend to come up high in polls of both worst and best companies. If companies are associated with both positive and negative thoughts, it may be that behaviors trigger one of the feelings. For example, behaviors viewed more favorably trigger the positive associations.

If familiarity is not necessarily related to our ratings of a brand’s reputation, what is? There are many factors, but one that emerged in an interesting study is company culture. In this study, both culture and reputation were positively related to financial performance. A strong corporate culture provides a framework for employees’ perceptions of the company’s identity, which provides a sense of mission and collaboration. This can help people to work together and provide more valuable services to clients, which improves the reputation of the company.