To succeed in business, identify who you can trust

Success in business unquestionably requires some willingness to cooperate with and have faith in others. The question is, how much faith and in whom?

Decades of scientific research have shown that people’s accuracy in deciding if another can be trusted tends to be only slightly better than chance. But this is not because trustworthiness is completely unpredictable. It is because the guidelines most of us use to make such predictions are flawed. We place too much emphasis on reputation and perceived confidence, ignoring the fact that human behaviour is always sensitive to context and can often be better assessed by our own intuition.

So when your company’s money and resources are on the line, how can you do a better job of gauging trustworthiness and thereby improve your likelihood of success? This article draws on emerging research to show how trustworthiness works and offers four points to keep in mind the next time you are deciding whether or not to do business with a new partner.

INTEGRITY CAN VARY

Most people use reputation as a proxy for integrity. However, contrary to common belief, integrity is not a stable trait: Someone who has been fair and honest in the past will not necessarily be fair and honest in the future.

To understand why, we need to abandon the notion that people wrestle with “good” and “evil” impulses. Except in cases of serious psychopathology, the mind does not work that way. Rather, it focuses on two types of gains: Short term and long term. And it is the trade-off between them that typically dictates integrity at any given moment. Individuals who break a trust may reap an immediate reward, but they reduce the likelihood of accumulating greater benefits from exchange and cooperation with the same partner in the future. Which outcome is better? It depends on the situation and the parties involved.

Take cheating. Claremont McKenna psychologist Piercarlo Valdesolo and I have conducted many experiments on the topic and one surprising (if disheartening) result we have found, time and again, is that 90 per cent of people — most of whom identify themselves as morally upstanding — will act dishonestly to benefit themselves if they believe they will not get caught. Why? Anonymity means no long-term cost will be exacted.

POWER DOES CORRUPT

Research by Dr Paul Piff, a social psychologist at University of California, Berkeley, suggests that indicators of socio-economic status can predict trustworthiness. It turns out increasing status and power go hand in hand with decreasing honesty and reliability.

A person’s honesty depends on his or her relative feelings of power — or vulnerability — not on how much he or she has in the bank.

When someone has a higher status than you, or even just thinks he does, his mind tells him that you need him more than he needs you. Consequently, he is more likely to satisfy short-term desires and worry less about the long-term consequences of being untrustworthy.

So when deciding whom to trust, you have to consider power differences, including new and temporary ones. If a potential collaborator has just been promoted or has landed a big deal, he might regard some relationships as less important. And although top firms often have great reputations, that does not mean they treat their small clients as well as their larger ones.

CONFIDENCE OFTEN MASKS INCOMPETENCE

Confidence is so alluring that we are often willing to trust anyone who expresses it, especially when money or other resources are at stake. But too often we mistake people’s self-confidence for true ability. What is the best way to assess competence?

Do your homework. Although reputation is not always a good indicator of integrity, it is a solid predictor of competence. That is because capabilities are relatively stable regardless of trade-offs in rewards and thus are not subject to a moral calculus. So when you perceive confidence in a company’s leaders, talk to current and previous employees, suppliers and customers to verify that it is warranted.

TRUSTING YOUR GUT

In a recent experiment with colleagues at Cornell and Massachusetts Institute of Technology, we filmed people having a brief “get to know you” conversation either face-to-face or via online chat just before they played an economic game that pitted self-interest against cooperation.

Although the average level of cooperation was equal in both groups, people’s predictions for how fairly their partners would act when making monetary exchanges were significantly more accurate when they had previously interacted face-to-face. This meant that a trust-relevant signal had to exist.

To find out what it was, we compared sets of non-verbal cues we had collected from the recordings to see which of them predicted untrustworthy behaviour. We found that four of them — leaning away from a partner, crossing one’s arms, hand touching and face touching — were reliable indicators when occurring together. The more frequently an individual expressed all four cues, the more self-interest she showed by refusing to share profits with a partner. And the more times a partner saw her display those cues, the more the partner expected her to cheat.

Most interesting of all, the face-to-face participants had no awareness that they were using the cues to make inferences about trustworthiness; they had developed more accurate intuition without being able to say why.

These findings demonstrate that our minds come with built-in trust detectors. I suggest allowing your mind to arrive undisturbed at a judgment. Of course, you should not blindly trust your intuition. But you should use it as a valuable piece of information. Knowing the right cues to look for will also increase your accuracy, since you will be less influenced by common misperceptions about trust.

Is it better to trust than not? If you know nothing about potential partners’ situations and cannot interact with them face-to-face, the answer is probably yes. Most accepted models suggest that a bias towards trusting is better when you have no information to go on, as the gains from long-standing relationships tend to outweigh one-time losses.

But when you do have a sense of your counterpart’s situation and can connect face-to-face, you should dispel your notions about how trust works and remember these four rules above. © 2014 Harvard Business School Publishing Corp

ABOUT THE AUTHOR:

David DeSteno is a professor of psychology at Northeastern University and the author of The Truth About Trust: How It Determines Success in Life, Love, Learning, and More.