First of all, I would like to thank everyone who took their time to read, comment & encourage a first timer’s blog. It meant a lot to me. It took a while for me to write another blog although this topic has been on the top of my mind for a while now.
The heading of this topic does warrant an explanation. No, I am not attempting to give you a short cut to earn money & save tax. The “Trust” I am referring to is a “firm belief in reliability, truth or ability of someone”
No matter what strata of the society one may belong or the profession, dealing with people is unavoidable. Unless I am addressing a “monk” checking his smart phone in the solitude of Himalayas. This means that one’s success in personal or professional life would depend on how effectively & sustainably he/she deals with others in society.
Dealing with such relationships in both personal & professional life is a challenge. Beyond anything else, arguably the most valuable currency at one’s disposal is “Trust”. It is this currency that allows for a smooth family life, credit from local “kirana” store or a critical position in your organisation. The basis of this trust could be your honesty, reliability or ability.
Like any other type of currency, trust also relies on reciprocity. It would be unlikely that I may enjoy the trust of someone to whom I haven’t demonstrated my trust.
It would seem logical then that to be successful one must invest trust in others. You reap what you sow.
I quite often see how painfully slow decision making gets when there is lack of trust in the organisation. Managers micro managing & double checking everything that subordinates does or different functions trying to document every interaction on email not only fosters mistrust, but also impacts agility in doing business. This is where start-ups & small organisations score over large organisations with compounding beaurocracy.
Like other mode of investment, trusting also comes with its own risks. Not all your investments would get rewarded. This fact only calls for prudence and not aversion. A savvy investor reaps huge benefits from the “Trust Economy”. The key is to be prudent yet not be disheartened or emotional when some of your investments in trust don’t get you the returns that your expect. All it calls for is a little introspection.
How do we decide on an investment in trust? I believe it depends on three scales: honesty, reliability ability.
For eg:- I may trust my parents to be completely honest with me, however may not trust their ability to perform a complicated task that involves technology. I may trust the ability of my software engineer friend to perform the same task while not relying on him to do it in time. I may believe in my friend’s ability & reliability to help me professionally, however may not trust him to be completely honest with me if he works for competition.
Additionally honesty requires high level of courage & it may not be expected from all, at all times. It’s easy to be honest when conditions are favourable, there is little to lose, no moral dilemma or conflict of interest.
Going by example mentioned above, I can trust my friends & family with certain tasks while not with others based on the scales of honesty, reliability & ability.
We may not be able to apportion full blame on others if we failed to do due diligence before trusting someone with something. This is where financial and “trust” investments are similar. When someone loses all his/her money on bad investments, you don’t blame the markets for it, you blame the person for making bad decisions. On the other hand even some of Warren Buffet’s investments have gone bad.
What probably differentiates a good investor from rest might be the following:
1. The due diligence he/she does before investment
2. An Understanding that despite due diligence not all investments would do well
3. His/her ability to objectively analyse what went right/wrong to learn from every experience
The more you trust others better you get at it. The experience & expertise you build thus enables you to surround yourself with professional/personal friends that you trust & by reciprocity trust you.
When managers starts trusting his/her team, tolerating inadvertent mistakes, When peers respect the each other on their respective functional expertise & don’t feel the need to protect oneself from a future audit observation, productivity improves.
It’s leadership’s responsibility to foster such a trusting environment to make organisations more agile. Agile organisations serve society more efficiently & become relevant.
I leave you with a simple example that gets quoted often on the value of trust in business. Please click the link below:
Looking forward to your comments & suggestions.