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The Transactional Nature of Trust

Guest post by: Robert Whipple

Article Overview: I have studied Trust for several decades, and I have come to believe that trust is transactional in nature. That is, trust is like a bank account where we have a balance and make deposits and withdrawals constantly. This article highlights some ideas about the transactional nature of trust.

The Transactional Nature of Trust

Trust is not a group phenomenon. It is individual. Leaders interact with many people and build trust-based relationships with each of them. Trust between people may be compared to a bank account, where actions consistent with shared values represent deposits and inconsistent actions represent withdrawals. The trust level of a group is the aggregate of the balances of individuals making up the group.

Every action, word, or decision between individuals either adds to, or detracts from, the balance. It is a very sensitive system that can be affected by subconscious thoughts or small gestures. Making small or medium deposits is easy, but large deposits are rare. Unfortunately, withdrawals can be large and devastating. The entire balance can be wiped out in a single action. As a leader, you need to prevent this by making all your actions consistent with what employees hear you say.

By understanding the transactional nature of trust, you can impact the account value in positive ways.

Making continual deposits to the account over time builds trust efficiently so the balance can survive a withdrawal. Being conscious of the effect of withdrawals makes you less likely to make them. The challenge is to recognize how others interpret your words and actions.

Everyone has a frame of reference built from all personal experiences to date. You use this framework to judge everything, and because it is a distillation of your life experiences, you believe it without question.

A college classmate of mine illustrated this by wearing a button containing three of the most significant words in the English language, "I Am Right." He meant it as a joke, but there was wisdom behind the humor. We all walk around with an invisible button declaring, "I am right." If another person does not agree with that judgment, there is a disconnection. Because "I am right," then you must be wrong!

In "Principle-Centered Leadership", Steven Covey concurs:

"The root cause of almost all people problems is the basic communication problem - people do not listen with empathy. They listen from within their autobiography... Perception and credibility problems may ultimately result in complicated knots, what we often call ‘personality conflicts' or ‘communication breakdowns.' Credibility problems are far more difficult to resolve, primarily because each of the people involved thinks he sees the world as it is rather than as he is. Unaware of the distortion in his own perception, his attitude is this: ‘If you disagree with me, in my eyes you are automatically wrong, simply because I am sure that I am right.' "

The phenomenon of judging from your own frame of reference goes on thousands of times every day. It is unavoidable and is the basis of most conflict. You have a great advantage if you can see this happening and intervene, but since you are a player in these transactions, not a neutral observer, it takes tremendous effort. That is why you must train yourself to recognize the moment and resist natural instincts. When you do, you become a stronger leader.

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Article Tags: Consistency, Leadership, Transactions, Transparency, Trust



Related Forum Posts
Re: Essential Leadership skills - Vigilance Trust An ability to DELEGATE
Re: Bad credit guaranteed home loan? - Lending money to people with bad credit was one of the biggest things that put our economy under and many lenders out of business. I'd say if you have this opportunity take it now before it goes away. Trust me, if there are any of these programs left (and don't expect a low interest rate if your credit is bad) they won't be around for ever. At ANY interest rate.
Re: How do you earn trust with an online business? - Add VALUE to your target market. How? Well depends. If your business can start by Educating the target market about how your product or Service can add value to their lives. This can be done via Video (hot right now), basic text, audio etc. I've had a lot of success with Video and am using it primarily as a lead generation tool. If done right your Content can add Value and add to your bottom line at the same time while building Trust.
Re: Do Your Prospects / Customers Trust You? - This is so true. In the software business, if you don't earn their trust in the first few days they start implementing it, they tend to just give up on using it at all.....even if they may have lost a lot of money. With software, silly glitches can have a huge bearing on your newer clients. Especially if they are brand new to software in general. The more established users understand that when you are constantly building and developing the software, there are going to be glitches along the way. Trust is a must!
Women's buying patterns - I'd like to know more about women's buying psychology - what makes them tick? - are they looking for an "experience"? If so, are there important parts of the experience that must exist? - how do you break past Trust barrier? - If you are selling a service what kind of support are women looking for? - do women buy a sampling first to "check out the waters" before they commit to a larger purchase? or do they jump in with both feet?


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