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september 2006 55
oughly half of all managers
don’t trust their leaders. That’s
what I found when I recently surveyed
450 executives of 30 companies from
around the world. Results from a Golin-
Harris survey of Americans back in 2002
were similarly bleak: 69% of respon-
dents agreed with the statement “I just
don’t know who to trust anymore.” In
that same year the University of Chi-
cago surveyed 800 Americans and dis-
covered that more than four out of five
had “only some” or “hardly any” confi-
dence in the people running major cor-
porations. Granted, trusting corporate
leaders in the abstract is different from
trusting your own CEO, and some com-
panies and executives are almost uni-
versally considered trustworthy; but the
general trend is troubling.
It’s troubling because a distrustful en-
vironment leads to expensive and some-
times terminal problems. We hardly
need reminding of the recent wave of
scandals that shattered the public’s faith
in corporate leaders. And although
you’ll never see a financial statement
with a line item labeled “distrust,” the
WorldCom fiasco underscores just how
expensive broken trust can be. When I
teach executive seminars on trust, I ask
participants to describe how a working
environment feels when it is charac-
terized by low levels of trust. The most
frequent responses include “stressful,”
“threatening,”“divisive,”“unproductive,”
and “tense.” When asked how a high-
trust work environment feels, the partic-
ipants most frequently say “fun,” “sup-
portive,”“motivating,”“productive,”and
“comfortable.” Clearly, companies that
foster a trusting culture will have a com-
petitive advantage in the war for talent:
Who would choose to stay in a stressful,
divisive atmosphere if offered a produc-
tive, supportive one?
The Decision to Trust
by Robert F. Hurley
A new model explains the
mental calculations people
make before choosing to
trust someone.
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M A N A G I N G Y O U R S E L F
It is crucial, then, for managers to de-
velop a better understanding of trust
and of how to manage it. I define trust as
confident reliance on someone when you
are in a position of vulnerability. Given
the pace of change in organizations
today – mergers, downsizing, new busi-
ness models, globalization–it is not sur-
prising that trust is an issue. Fortunately,
50 years of research in social psychology
has shown that trust isn’t magically cre-
ated. In fact, it’s not even that mysteri-
ous. When people choose to trust, they
have gone through a decision-making
process – one involving factors that can
be identified, analyzed, and influenced.
This article presents a model that
sheds light on how the decision to trust
is made. (We will ignore the extremes of
complete trust based on blind faith and
total distrust based on paranoia, and
focus instead on the familiar situation
in which uncertainty, possible damage,
and multiple other reasons to trust or
distrust are combined.) By understand-
ing the mental calculations behind the
decision whether or not to trust, manag-
ers can create an environment in which
trust flourishes.
A Model for Trust
Building on the social psychologist Mor-
ton Deutsch’s research on trust, suspi-
cion, and the resolution of conflict, and
on my own experience over the past 15
years consulting with organizations and
executives on trust, I developed a model
that can be used to predict whether an
individual will choose to trust or dis-
trust another in a given situation. (See
the exhibit “To Trust or Not to Trust?”)
I have tested this model, which identi-
fies ten factors at play in the decision-
making process, with hundreds of top
executives. Using it, they were able to
identify relationships that would bene-
fit from greater trust and to diagnose
the root causes of distrust. Armed with
that knowledge, they took concrete
steps that made it easier for others to
place confidence in them.
Decision-maker factors. The first
three factors concern the decision
maker himself: the “truster.” These fac-
tors often have little to do with the per-
son asking for trust: the “trustee.” They
are the result of a complex mix of per-
sonality, culture, and experience.
Risk tolerance. Some people are natu-
ral risk takers; others are innately cau-
tious. How tolerant people are of risk
has a big impact on their willingness to
trust – regardless of who the trustee is.
Risk seekers don’t spend much time cal-
culating what might go wrong in a given
situation; in the absence of any glaring
problems, they tend to have faith that
things will work out. Risk avoiders, how-
ever, often need to feel in control be-
fore they place their trust in someone,
and are reluctant to act without ap-
proval. Not only do they not trust oth-
ers, they don’t even trust themselves.
Research by the organizational anthro-
pologist Geert Hofstede suggests that
at some level, culture influences risk tol-
erance. The Japanese, for instance, tend
to have a lower tolerance for risk than
Americans.
Level of adjustment. Psychologists have
shown that individuals vary widely in
how well adjusted they are. Like risk tol-
erance, this aspect of personality affects
the amount of time people need to
build trust. Well-adjusted people are
comfortable with themselves and see
the world as a generally benign place.
Their high levels of confidence often
make them quick to trust, because they
believe that nothing bad will happen
to them. People who are poorly ad-
justed, by contrast, tend to see many
threats in the world, and so they carry
more anxiety into every situation. These
people take longer to get to a position
of comfort and trust, regardless of the
trustee.
For example, Bill, a senior vice presi-
dent at a major financial services firm,
was a poorly adjusted person who al-
ways operated in “high alert” mode. He
micromanaged his direct reports, even
his most talented ones, because he
couldn’t feel secure unless he was per-
sonally involved in the details. His in-
ability to delegate had little to do with
the trustees and everything to do with
his own nature; he regularly chose sus-
picion over trust because he saw even
the slightest mistake as a potential
threat to his reputation.
Relative power. Relative power is an-
other important factor in the decision
to trust. If the truster is in a position of
authority, he is more likely to trust, be-
cause he can sanction a person who vi-
olates his trust. But if the truster has lit-
tle authority, and thus no recourse, he is
more vulnerable and so will be less com-
fortable trusting. For instance, a CEO
who delegates a task to one of her vice
presidents is primarily concerned with
that person’s competence. She can be
reasonably confident that the VP will
try to serve her interests, because if he
doesn’t, he may face unpleasant reper-
cussions. The vice president, however,
has little power to reward or sanction
the CEO. Therefore, his choice to trust
the CEO is less automatic; he must con-
sider such things as her intentions and
her integrity.
Situational factors. The remaining
seven factors concern aspects of a partic-
ular situation and of the relationship
between the parties. These are the fac-
tors that a trustee can most effectively
address in order to gain the confidence
of trusters.
56 harvard business review | hbr.org
M A N A G I N G Y O U R S E L F • The Decision to Trust
Robert F.Hurley (Rohurley@fordham.edu)
is a professor of management at Fordham
University in New York.
Companies that foster a trusting culture will have
an advantage in the war for talent: Who would
choose to stay in a stressful, divisive atmosphere
if offered a productive, supportive one?
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Security. Earlier we dealt with risk tol-
erance as a personality factor in the
truster. Here we look at the opposite of
risk–security–as it relates to a given sit-
uation. Clearly, not all risks are equal.
An employee who in good times trusts
that his supervisor will approve the
funding for his attendance at an expen-
sive training program might be very sus-
picious of that same supervisor when
the company is making layoffs. A gen-
eral rule to remember: The higher the
stakes, the less likely people are to trust.
If the answer to the question “What’s
the worst that could happen?”isn’t that
scary, it’s easier to be trustful. We have
a crisis of trust today in part because
virtually nobody’s job is truly secure,
whereas just a generation ago, most peo-
ple could count on staying with one
company throughout their careers.
Number of similarities. At heart we are
still quite tribal, which is why people
tend to more easily trust those who ap-
pear similar to themselves. Similarities
may include common values (such as a
strong work ethic), membership in a de-
fined group (such as the manufacturing
department, or a local church, or even
a gender), and shared personality traits
(extroversion, for instance, or ambition).
In deciding how much to trust some-
one, people often begin by tallying up
their similarities and differences.
Imagine that you are looking to hire
a consultant for a strategy assignment.
The first candidate walks into your of-
fice wearing a robe; he speaks with an
accent and has a degree from a univer-
sity you’ve never heard of. When you
meet the second candidate, she is
dressed very much like you and speaks
as you do. You learn that she also at-
tended your alma mater. Most people
would feel more comfortable hiring
the second candidate, rationalizing that
she could be counted on to act as they
would in a given situation.
That’s partly why companies with a
strong unifying culture enjoy higher lev-
els of trust–particularly if their cultural
values include candor, integrity, and
fair process – than companies without
one. A good example of this is QuikTrip,
a convenience store chain with more
than 7,000 employees, which has been
named to Fortune’s 100 Best Companies
to Work For in each of the past four
years. One of the company’s bedrock
values is do the right thing–for the em-
ployee and for the customer. This mean-
ingful and relevant shared value serves
as a foundation for an exceptionally
strong culture of trust. On the flip side,
a lack of similarities and shared values
explains why, in many organizations,
the workaholic manager is suspicious
of his family-oriented employee, or the
entrepreneurial field sales group and
september 2006 57
The Decision to Trust • M A N A G I N G Y O U R S E L F
the control-oriented headquarters never
get along: It’s more difficult to trust peo-
ple who seem different.
Alignment of interests. Before a person
places her trust in someone else, she
carefully weighs the question “How
likely is this person to serve my inter-
ests?” When people’s interests are com-
pletely aligned, trust is a reasonable re-
sponse. (Because both the patient and
the surgeon, for instance, benefit from a
successful operation, the patient doesn’t
need to question the surgeon’s motives.)
A fairly unsophisticated leader will as-
sume that everyone in the organization
has the same interests. But in reality
people have both common and unique
interests. A good leader will turn criti-
cal success factors for the company into
common interests that are clear and
superordinate.
Consider compensation policies.
We’ve all heard of companies that have
massive layoffs, drive their stock prices
up, and reward their CEOs with hand-
some bonuses– in the same year. It’s no
wonder that so many employees dis-
trust management. Whole Foods Mar-
ket, by contrast, has a policy stating that
the CEO cannot make more than 14
times the average employee’s salary;
in 2005 CEO John Mackey forfeited
a bonus of $46,000. That policy helps
demonstrate to workers that the CEO is
serving the best interests of the com-
pany, not only his own. Aligned interests
lead to trust; misaligned interests lead
to suspicion.
This factor also operates on a more
macro-organizational level. In “Fair Pro-
cess: Managing in the Knowledge Econ-
omy”(HBR July–August 1997), W. Chan
Kim and Renée Mauborgne described
how a transparent, rigorous process for
decision making leads to higher levels of
organizational trust. Opaque decision-
making processes, which may appear to
serve special interests whether they do
or not, breed distrust.
Benevolent concern. Trust is an issue
not because people are evil but because
they are often self-centered. We’ve all
known a manager whom employees
don’t trust because they don’t believe
he will fight for them. In other words, he
has never demonstrated a greater con-
cern for others’ interests than for his
own. The manager who demonstrates
benevolent concern–who shows his em-
ployees that he will put himself at risk
for them – engenders not only trust but
also loyalty and commitment.
Aaron Feuerstein, the former CEO of
Malden Mills, represents an extreme
example of benevolent concern. In 1995
a fire destroyed his textile mill in
Lawrence, Massachusetts, which had
employed some 3,200 people. He could
have taken the insurance money and
moved his manufacturing overseas.
Then 70, he could have retired. Instead
Feuerstein promised his workers that he
would rebuild the mill and save their
jobs, and he kept them on the payroll.
Feuerstein’s benevolent concern for his
employees, despite the cost to himself,
gained their trust. Unfortunately, it lost
the trust of his banks, which probably
would have preferred that more benev-
olent concern be directed toward them.
The resulting debt eventually forced the
company to file for bankruptcy protec-
tion. This points to a real challenge in
managing trust: how to balance multi-
ple and sometimes competing interests.
Capability. Similarities, aligned inter-
ests, and benevolent concern have little
meaning if the trustee is incompetent.
(If you’re going to have surgery, you’re
probably more concerned about your
surgeon’s technical skills than about
58 harvard business review | hbr.org
M A N A G I N G Y O U R S E L F • The Decision to Trust
To Trust or Not to Trust?
When deciding whether to trust someone, people weigh ten basic factors. Three
relate to the decision maker alone – the “truster”– and seven reflect the specific
situation involving him or her and the person asking for trust – the “trustee.” The
more factors that score on the high end of the scale, the more likely the decision
maker is to choose trust.
Decision-Maker
Factors
Situational
Factors
low high
Choice
How risk-tolerant is the
truster?
How well-adjusted is he
or she?
How much relative power
does he or she have?
How secure do the parties
feel?
How many similarities are
there between them?
How well aligned are the
parties‘ interests?
Does the trustee show
benevolent concern?
Is the trustee capable?
Has the trustee shown
predictability and integrity?
Do the parties have good
communication?
low high
DISTRUST TRUST
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how much the two of you have in com-
mon.) Managers routinely assess capa-
bility when deciding to trust or delegate
authority to those who work for them.
Capability is also relevant at the
group and organizational levels. Share-
holders will be suspicious of a board of
directors that can’t establish reliable
processes for compensating CEOs fairly
and uncovering unethical behavior. A
customer will not trust a firm that has
not demonstrated a consistent ability to
meet his or her needs.
Predictability and integrity. At some
point in the trust decision the truster
asks, “How certain am I of how the
trustee will act?” A trustee whose be-
havior can be reliably predicted will be
seen as more trustworthy. One whose
behavior is erratic will be met with sus-
picion. Here the issue of integrity comes
into play – that is, doing what you say
you will do. Trustees who say one thing
but do another lack integrity. The audio
does not match the video, and we are
confused as to which message to be-
lieve. The result is distrust.
In my executive-coaching work, I
have seen some managers consistently
overpromise but underdeliver. These
people are well-intentioned, and they
care passionately about their work, but
their enthusiasm leads them to promise
things they simply cannot produce. De-
spite their hard work and good inten-
tions, colleagues don’t trust them be-
cause of their poor track records.
Take the case of Bob, the managing
partner of a global consulting firm. Bob
was a creative and strategic thinker who
was well liked by everyone. He had good
intentions and had demonstrated be-
nevolent concern for employees. But the
other partners in the firm did not trust
Bob, because he often failed to deliver
what he had promised when he had
promised it. Despite his good intentions,
people in the firm said that any project
that relied on Bob was in a “danger
zone.” With time and coaching, Bob
learned to delegate more and to live up
to his commitments. But the point here
is that when a person fails to deliver,
he’s not just missing a deadline; he’s
undermining his own trustworthiness.
Level of communication. Because trust
is a relational concept, good communi-
cation is critical. Not surprisingly, open
and honest communication tends to sup-
port the decision to trust, whereas poor
(or no) communication creates suspicion.
Many organizations fall into a down-
ward spiral: Miscommunication causes
employees to feel betrayed, which leads
to a greater breakdown in communica-
tion and, eventually, outright distrust.
Consider how the Catholic Church
handled allegations of sexual abuse by
priests in the Boston area. Cardinal
Bernard Law failed to openly communi-
cate the nature and scope of the allega-
tions. When the details emerged during
legal proceedings, parishioners felt be-
trayed,and trust was destroyed.The word
“cover-up” was frequently used in the
media to describe Law’s response to
the crisis. His lack of candor caused peo-
ple to feel that the truth was being ob-
scured at the expense of the victims.
Around that time I witnessed an ex-
ample of excellent communication
within the same Catholic Church. I sat
with my family one Sunday while, in
an agonizingly uncomfortable homily,
a priest confessed from the altar that he
had had an inappropriate encounter 20
years earlier with a woman employed
by the parish. He acknowledged his mis-
take, talked about how he had dealt
with the issue, and asked for forgiveness.
Over time his parishioners came once
again to regard him as a trusted spiritual
leader. His offense was less serious than
Law’s, but his story shows that honest
communication can go a long way to-
ward building or repairing relationships
and engendering trust. To some degree,
one person’s openness induces openness
in others, and the decision to put faith in
others makes it more likely that they
will reciprocate.
Managing with the Trust
Model
Once these ten factors are understood,
executives can begin managing trust in
their own relationships and within their
organizations.
Consider the example of Sue and Joe,
a manager and her direct report in a
september 2006
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Fortune 500 consumer goods company
that was in the midst of a major turn-
around. Sue, a relatively new VP of sales,
wanted to make some aggressive per-
sonnel moves in response to pressure
from her boss to improve performance.
Joe, one of Sue’s employees, was three
years shy of his retirement date. He had
been a loyal employee for 17 years and
had been successful in previous staff
roles. Recently, however, he had taken
on a new job as a line manager in sales
and was not performing well. In fact,
Sue’s boss had suggested that it was
time to move Joe out.
Joe was a confident person (high level
of adjustment), but he knew that he was
in the wrong job and wanted to find a
different way to contribute (high align-
ment of interests with Sue). He was con-
cerned about how candid to be with
Sue, because he was afraid of being ter-
minated (low risk tolerance and low se-
curity). And because Sue was a new VP,
Joe was uncertain whether she was the
decision maker and had any real control
(low predictability and low capability).
As the situation originally stood, Joe
wasn’t inclined to trust his manager;
there were too many risks and uncer-
tainties. The trust model helped Sue
identify what she could do to change
the situation and create a climate of
trust afterward. (See the exhibit “Trust
Intervention: Sue and Joe.”) Sue and I
realized, for instance, that we could do
little to raise Joe’s tolerance for risk. Cau-
tious by nature, he was genuinely – and
quite rightly–fearful of losing his job. So
I encouraged Sue to demonstrate greater
benevolent concern: to have a candid
but supportive conversation with Joe
and give him time to go through a self-
discovery process using an outside con-
sultant. After that process, Joe requested
M A N A G I N G Y O U R S E L F • The Decision to Trust
Joe
Sue and Joe’s
Situation
low high
Trust Intervention: Sue and Joe
Risk Tolerance
Level of Adjustment
Relative Power
Joe’s Job Security
Similarities Between Them
Alignment of Interests
Sue’s Benevolent Concern
Sue’s Capability
Sue’s Predictability and Integrity
Level of Communication
Actions taken by Sue
to gain Joe’s trust
Sue, a VP of sales, needed to make some personnel changes
in her department. Joe, her direct report, wasn’t inclined to
trust Sue, because the company was going through a turn-
around and he feared for his job. Moreover, since she was
relatively new to the company, he couldn’t predict what she
would do or gauge how capable she was. Sue used the trust
model to identify what she could do to change Joe’s feel-
ings. By getting approval from her own boss for alternate
positions for Joe, for instance, she demonstrated capability
in finding solutions. And by empathizing with Joe’s feeling
of insecurity and openly discussing his options with him,
she demonstrated both benevolent concern and increased
communication. The result was that Joe found it easier to
place his faith in Sue.
DISTRUST TRUST
60 harvard business review | hbr.org
a transfer. I also coached Sue to work
with her boss to gain approval for some
alternate options for Joe, thus increasing
her capability and predictability in Joe’s
eyes. In addition, Sue began communi-
cating more frequently and openly to
Joe about his options in the organiza-
tion and was sincerely empathetic about
how this career uncertainty would af-
fect him and his wife – showing still
more benevolent concern. Eventually
Joe was moved into a more suitable po-
sition. He wasn’t shy in sharing his pos-
itive feelings about the whole process
with his former colleagues, who still re-
ported to Sue. As a result, those people
were more apt to place their faith in
her, and trust increased in the depart-
ment even though it was experiencing
major change.
The trust model can also be applied
on a broader, organizational scale. Con-
sider the situation at Texaco in the 1990s.
In 1994 a group of minority employees
filed a racial-discrimination suit against
the oil giant, charging that black em-
ployees were being paid less than white
employees for equal work. Two years
later tensions reached a crisis level when
senior Texaco executives were secretly
recorded denigrating black workers. It’s
safe to say that among black workers,
trust in their company’s executives bot-
tomed out. Then-chairman and CEO
Peter Bijur recognized the graveness of
the situation and knew he needed to act
quickly to repair the broken trust.
Bijur started by hiring outside coun-
sel to investigate the matter; bringing in
a neutral third party alleviated any sus-
picions that conflict of interest would
taint the investigation. He also created
a special board of directors committee,
which was charged with evaluating the
company’s diversity training. That step
demonstrated that Texaco placed a high
value on diversity. New diversity and
sensitivity training led to a corporate
culture built on shared values. Those
who didn’t belong – specifically, the se-
nior executives heard speaking offen-
sively on the tape – were terminated,
suspended, or had their retirement ben-
efits cut off. To make the company’s ac-
tions more predictable for employees, YY
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september 2006
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M A N A G I N G Y O U R S E L F • The Decision to Trust
Bijur hired a respected judge to evaluate
Texaco’s HR policies, and the company
changed those that were deemed unfair
or not transparent. Moreover, senior ex-
ecutives were sent to all company loca-
tions to apologize for the humiliation
to which black workers had been sub-
jected. These meetings not only dem-
onstrated benevolent concern but also
opened up lines of communication be-
tween skeptical employees and top
management.
Collectively, these actions made it eas-
ier for disillusioned workers to place
their faith in the company again. Trust
wasn’t restored overnight – there’s no
quick fix for broken faith–but concerted
efforts to correct the sources of distrust
eventually paid off. In 1999 Bijur re-
ceived an award from a national African-
American group for commitment to di-
versity, and in 2000 Texaco received
praise from SocialFunds.com for being
a “model for challenging corporate
racism.”
Broken trust can be mended over
time if leaders consistently engage in
the right behaviors. The exhibit “Practi-
cal Ways of Managing Trust” identifies
some behaviors that are particularly
effective.
• • •
Trust is a measure of the quality of a re-
lationship – between two people, be-
tween groups of people, or between a
person and an organization. In totally
predictable situations the question of
trust doesn’t arise: When you know ex-
actly what to expect, there’s no need to
make a judgment call. The turbulence of
outsourcing, mergers, downsizing, and
changing business models creates a
breeding ground for distrust.
Leading in such an environment re-
quires acting in ways that provide clear
reasons to decide to trust. There is no re-
turning to the days when organizations
expected–and received–unconditional
loyalty from employees. But by using
this model, you may be able to create a
more dynamic and sustainable founda-
tion for productive relationships.
Reprint R0609B; HBR OnPoint 1056
To order, see page 159.
Practical Ways of Managing Trust
If this factor is low… then you should:
Risk Tolerance Spend more time explaining options and risks.
Evaluate processes and results separately;
recognize excellent work regardless of the
outcome.
Offer some sort of safety net.
Level of Adjustment Be patient; it simply takes longer to build trust
with some individuals.
Try to enhance confidence by recognizing achieve-
ments and by correcting failures through coach-
ing rather than harsh discipline.
Relative Power Provide choices when possible; avoid being
coercive.
Communicate that leadership decisions aren’t
made arbitrarily by explaining how they serve
organizational interests.
Security Find ways to temper the risk inherent in the
situation.
Expect to invest time in raising comfort levels.
Number of Similarities Use the word “we” more and the word “I” less.
Emphasize what you have in common (values,
membership, and so on).
Alignment of Interests Be clear yourself about whose interests you are
serving. Take others’ interests into account and
find a way to accommodate them where possible.
Focus on the overarching strategy, vision, and
goals.
Shape a culture that reinforces doing the right
thing for the enterprise.
Benevolent Concern Take actions that demonstrate a genuine
concern for others.
Serve others’ interests even if, on occasion, you
bear some loss (and find a tasteful way to show
that – by your choice – they gained more than
you did).
Engage in fair process.
Capability Find ways to demonstrate competence in
carrying out the task at hand.
Acknowledge areas of incompetence and compen-
sate by sharing or delegating responsibility.
Predictability and Integrity Underpromise and overdeliver.
If you can’t fulfill your promises, explain why
honestly.
Describe the values that drive your behavior
so that others see consistency rather than
randomness.
Level of Communication Increase the frequency and candor of your
communications.
Build a relationship beyond the constraints of
your respective roles – for example, by going out
to lunch or playing golf.
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