Trust as a Strategic Advantage (Part 1)
By: Uwe Weinreich
Tags: Business Psychology, Strategic Advantages, Strategy, Trust, Customer Relationships

Image: © Adobe Stock

7 Misconceptions about trust in business

More than ever, trust is an essential component of any business. When trust is established, people decide faster, relationships are more robust, and customers are usually inclined to pay more. Probably every company strives to establish trust. But which is the best way? Before answering that, let us first take a look at common misconceptions.

#1 We can build trust

Wrong. Enterprises can only create trustworthiness through their behavior towards customers and the public in general. Trust itself is something that people place in a relationship. It is an attitude of customers towards a person, institution, company, or system. Trust originates in the mind of the one who trusts and can therefore not be build or modified by someone else, e.g. a company.

Correct: We can build trustworthiness and hope that people will trust us.

#2 Safety + security + full control = trust

Wrong. Full safety and security create a controllable environment where trust in theory is not needed. In contrast, we need trust precisely in gradually uncontrollable, insecure, and often ambiguous situations where it is impossible to know every necessary information to be sure of something.

Correct: Safety + security + full control = no trust needed. (But, honestly, this status can never be reached. Therefore, trust will always be a part of any positive relationship)

#3 Trust and distrust are opposed

Wrong. Both are tremendous reducers of complexity and work the same way. As soon as we trust or distrust, life gets easy. We don’t need to analyse deeper and decisions are clear. Although — important for enterprises — the results differ completely.

To trust that things work without understanding them, that people act correctly without controlling them directly, helps us live reasonably calm and confidently, and makes acting in a complex world possible.

Correct: Trust and distrust are distinct, but functional equivalents. Both freeze a (contrary) direction of decision.

#4 People are suspicious by nature

Wrong. Besides a small group of notoriously suspicious people, most of us are inclined to build trust. We all have a natural disposition for trust, and it is triggered by specific signals of a situation or communication. Otherwise, life would be overwhelming. A lack of trust would lead to extensively controlling behavior that inhibits action.

Correct: Trust is a robust natural state, but it can be destroyed in seconds

#5 People place trust in a person or company if perceived benevolent

Partially wrong. Although often mentioned, in my opinion, benevolence is a supporting but not a constituting factor. Benevolence can help to appear trustworthy, but it is not mandatory. If you were injured in an accident, you would not care if the paramedic was benevolent. You’d probably instead prefer him to be competent in what he is doing. Ability and non-malicious intentions are establishing factors. Besides that, consistent behavior, and personal integrity count.

Correct: It is enough to act competently, non-maliciously, consistently, and with integrity

#6 It takes a long time to gain the trust of people

Partially wrong. We are inclined to trust other people by nature. We are hard-wired for trust, and sometimes a feeling of trust can arise in seconds if the mentioned personal traits (competence, non-maliciousness, consistent behavior, and personal integrity) are perceived. By the way, the more human-like a company behaves, the easier it will be to trigger trust.

Correct: Trust can develop instantly if you give it a chance

#7 Without trust, every company loses its business foundation

Largely correct. Except for very few. Human brains are flexible and adapt to situations. In a situation without an alternative — or where an existing option would be unacceptable — we need to find a psychological equilibrium anyway. For instance, if a company behaves in a grossly untrustworthy manner, but we rely on their service because no one else offers it (in such a quality), we can hardly stand mistrust for long. That is why we adapt our attitude—against all reason— towards trust. That is why companies like Facebook and WhatsApp so far didn’t lose millions of customers despite many privacy violations. There is no alternative. But beware: as soon as a better service appears one day, users will change their attitude easily.

Perfectly correct: Without trust, every company loses its business foundation as long as the company does not occupy a monopoly position