Studies show that it is easier to trust during good economic times but much harder during difficult times. Today’s economy exposes low trust which also makes it all the more valuable. It is no small coincidence that the “Credit Crisis” disclosed a “Trust Crisis.” In fact, the English root for ‘credit’ is credo, the Latin for ‘I believe.’ In ancient times, credit was a matter of trust and trustworthiness. It was tethered to a moral and sacred canopy or code. Ethics (defined standard) were clearer and morality (lived standard) was easier to observe. Identifying the hypocrites was less complicated. It was easier to see those who lacked integrity, those whose ethics and morality were not aligned.
Do you remember the good old days? You know what I mean; we all have (or have heard) stories of when we used to be able to leave our cars unlocked or our houses for that matter. Now our neighborhoods include vast “virtual” online communities. When I receive a request to join a network in a professional online community, I find myself asking whether I should associate myself with someone I don’t know very well regardless of their title or relationship with a mutual friend. Would I have acted that way thirty years ago if the technology had been available?
There is a saying that “You don’t know who is swimming naked until the tide goes out.” While this saying is focused on the financial world of leverage, it is applicable in general as well. The basic premise is that in bad times you find out who was over-leveraged or poorly managed. The same can be said when determining who you can trust and who you cannot. We are seeing a lot of naked people with this recession … Stanford, Madoff, some of the major investment banks, and the list keeps growing.
It’s clear why we want and need to trust. We connect and lead fuller lives as we trust others. With less trust, our lives are diminished and smaller. But we need to know that we won’t be taken advantage of. Trusting requires us to know people will act in a manner that is consistent with an explicit and implicit promise. That is true whether it’s trusting in our currency, our institutions, or our neighbor.
All this begs the question: How do we make sure we are not taken advantage of? Do we apply the adage: “Fool me once, shame on you; fool me twice, shame on me?” I don’t think so given that once could cost me millions of dollars. Uncritical acceptance of others is neither noble nor wise. There is no simple answer here and the issues become even more complex as we move from the individual to the organization to the institution. I suggest we start by checking ourselves. Before I blame the transgressor I could ask, “Were there certain motives, beliefs, or desires that allowed me to be taken advantage of?” For instance, what led people to the unrealistically consistent returns of Bernie Madoff or to the unrealistically high CD rates at Stanford Financial? Was it low risk and high returns? Was it the belief that there is a black box formula unknown to others? Was there some greed involved or overreliance on acceptance? Protecting ourselves begins with understanding what we believe and what we are looking for.
When you trust people, you have confidence in them — in their character and in their competency and both are vital. Character includes integrity, motive and intent. Competence includes capabilities, skills, results and track record. As the world becomes more complex, the ability to create and validate both character and competency will become increasingly important. The more important the decision is to our personal welfare, the more important it will be to first check our own principles and beliefs and then the character and competency of the individuals we might trust. Having realistic goals, vetted motives and the right relationships will help us to develop and maintain balance between trusting and verifying. There is no greater compliment one can give, and no greater responsibility that can be bestowed than the gift of trust.