Trust CAN Possibly Be Good

This is the eighth in my series of Suit Yourself essays.

Frankly, I don’t understand why trust is so hard for people to come by. The cost-benefit analysis of distrust is not compelling.

Consider the following parable. You can spend your whole life sure that someone is going to steal your wallet and approach every encounter with misgiving, frame every relationship with suspicion, and protect the wallet as a paramount priority. People won’t respond well to this, so you’ll have incurred enormous cost and missed lots of opportunities even if you do manage to hang on to the wallet.

Alternatively, you can recognize that wallet theft is a possibility and take sensible precautions, but still approach encounters and frame relationships with trust instead of suspicion. People will respond very well to this, and you’ll still likely hang on to the wallet. Even if it gets stolen, don’t the cost and aggravation of dealing with that specific instance pale in comparison to the cost and aggravation of constantly worrying and suspecting everyone?

Why not trustingly expect the best? Why not presume other people are kind, capable and not out to get you – or at least give them the benefit of the doubt? Why not trust in your own instincts, and your right and responsibility to set your own priorities? Why not trust that sensible investments will pay off, and that the more you do to help make an organization great, the better off the organization, you, and everybody else involved? Why not believe that you get what you give and be generous? Why not face life optimistically?

Trust is inextricably woven together with optimism and generosity. To trust, you have to believe, or at least be willing to adopt as a guiding principle for your behavior, that there is plenty for everyone, that it’s possible (with effort) for everyone to win, and that it’s worth it to give others the gifts of your confidence and support.

I don’t find this an especially impractical or far-fetched choice of guiding principle. Is it really Pollyanna-ish or, worse, foolish a lá Candide to choose to approach the world, other people and your work environment expecting the best? Isn’t it instead brutish or monstrous to choose the contrary approach?

It’s a difficult, dangerous world, and it clearly doesn’t pay to be foolish or incautious. (If you leave that wallet out on the sidewalk while you mow the lawn, it will surely disappear.) It is not, however, naïve or foolhardy to be trusting. Good sense does not mandate distrust. Shaped by prudence and experience, trust will take you a lot farther than distrust.

It may simply be human nature to be exquisitely wary of bad things and to give them more weight and perhaps more credence than good things. But should we be over-weighting the bad, under-weighting the good, and behaving accordingly? I think not. I’m more inclined to think that too often we have rash reactions to how bad the bad would be if it occurred, without appropriately diluting that badness with the improbability of its occurrence.

There’s a concept in the accounting rules under the federal securities laws that’s helpful here. (Really!) Financial Accounting Standards Board Statement No. 5, boiled down, says that a company must accrue via a charge to income and also disclose a loss contingency if the amount of loss can be reasonably estimated and it is probable that the loss has been incurred. Even a very bad possibility need not be accrued for and disclosed if it is a remote eventuality.

For example, it’s certainly within the realm of possibility that a company’s factory will be struck by lightning or by an errant chunk of space garbage hurtling to earth. Were this to occur, the damage might well be catastrophic. Whether that damage is capable of reasonable estimation or not is disputable, but we can all agree that the magnitude would be big. Should this be accrued for and disclosed? No – because its likelihood of occurring is remote. A disclosure document full of truly remote risks like that would be impossible to complete thoroughly and it would be of very little use to the investing reader.

Similarly, approaching the world with distrust is a response to fear and perceived danger that is outsized relative to the actual likelihood of trouble. As we think about our experiences and plans, I think we overweight bad things without factoring in their relative likeliness. We assess the badness and give it the weight it would have for us if the bad thing actually occurred today. We don’t discount the badness by a realistic assessment of likelihood or timing. So when we do our cost-benefit analysis, we haven’t factored in all the costs correctly.

If someone were to decide to protect his wallet by staying home – doors and windows locked, scary dogs patrolling the perimeter – we would all agree that he had gone too far, that his protection was not in alignment with his risk. Well, I think the cost of distrust is also excessive relative to the risk that people or situations might be disappointing or treacherous or in some other way fall short of what we would like them to be.

In his book The Art of Possibility, Benjamin Zander suggests the concept of "giving people an A." I like this a lot. It has been my experience that extraordinarily good things happen when you approach situations and start relationships by presuming the best and giving generously of your confidence and support.

Of course, this is a rebuttable presumption (as we lawyers would say); there are certainly situations and people who, given the early A, will ultimately demonstrate that they deserve a lesser grade. So what? If that happens, the presumption is rebutted and you can deal with the malefactor appropriately, just as you'd replace the credit cards, etc. if the wallet got stolen.

It's also been my experience that, when given an A, the vast majority of people will do their utmost to live up to it. They will flourish. Thanks to the glow from your confidence and support, they will relax and spend more time using their brains and innovating, less time worrying about making mistakes or failing - a great personal benefit to them, to you, and to the organizations you're all part of.

If you choose to trust and look for the good in people, things and places, you'll have a much better shot at upside and you'll also - in a nice side benefit - reduce the downside. If you seek only to protect against the downside, you'll have virtually no shot at upside and, still worse, I believe you'll trigger the unhappy and perverse result of more downside.

Distrust doesn't feel good, it isn't practical and, in general, you also really do get what you give. Pessimism and stinginess are demeaning and will be met in kind. Optimism and generosity are enriching and will also be met in kind. You are more likely to have a positive experience if you approach an organization positively.

People will react better if you presume they are excellent, trustworthy, and capable, and then treat them accordingly. Think of yourself as the treat-ee rather than the treat-er and you'll know this is true.

Using the FASB #5 framework, the cost-benefit analysis clearly favors approaching people with trust rather than distrust. The costs of distrust are not only probable, they're certain, and their magnitude is huge. The benefits of distrust are more remote than probable and they can't reasonably be estimated. It's the opposite with trust: the benefits are huge and certain, while the costs are speculative at best. Trust is the right choice, the sensible choice. Why is it the choice that too rarely gets made?

One reason is zero sum game thinking. If I believe that good things of whatever stripe (happiness, money, power, keeping my wallet, whatever) are limited in quantity, then obtaining them requires me to make sure others don't obtain them first - and also to assume that others are trying to keep them away from me. If instead, I believe that good things are abundant, I am free to seek them for myself without at the same time having to distrust, and frustrate the efforts of, others.

The behavioral style permitted by believing in abundance will not only make me easier to get along with, but it will also focus my efforts and thereby improve my chances of obtaining what I'm looking for. For these reasons, it would seem to make sense to overcome zero-sum-game thinking by believing in abundance. Is it reasonable to believe in abundance?

It's certainly possible to approach the scarcity vs. abundance question as if the answer were a matter of weighing all the evidence and then reaching a well- supported conclusion. This, however, stacks the deck and misses the point.

For one thing, bad things stand out in our minds and we overweight them. This over-weighting is compounded by our tendency to underweight good things. The stolen wallet is never forgotten and will weigh heavily on the decision scales, but the retained wallet will not likely be given equal weight on the good side. To us, the retained wallet is just counted as a given, but not allotted the weight it deserves as the absence of theft.

For another thing, I also suspect that the whole approach of weighing evidence as a prerequisite to believing in abundance tends to assume the worst and, thus, to make the worst outcome more likely. In an objective world, "prove it" would mean just that. In our world, I suspect it more often means "I doubt it, but could be convinced otherwise." Looking for proof that it's reasonable to believe in abundance stacks the deck negatively.

For a third thing, in my opinion, it's altogether invalid to approach the abundance vs. scarcity question as if it were one capable of solution via measurement of evidence. I don't think abundance vs. scarcity is a matter of objective reality at all. Instead, I think it's a choice that each of us gets to make as we decide how we want to think and behave. How does one choose to believe in abundance? To borrow a famous advertising slogan, one just does it. Please read on for an argument in favor of making this leap of faith.

Another reason trust isn't always the choice we make to guide our behavior might be the innate dislike we all have of appearing to be stupid or naïve. Somehow, it doesn't seem as embarrassing to be proven wrong by having underestimated than by having overestimated. Expecting the worst and hoping for a pleasant surprise somehow seems more realistic (and mature) to many people than expecting the best and risking an unpleasant surprise.

This is amazing, really. It is counterproductive to approach situations expecting the worst, and it is demeaning to approach people that way. If you believe, as I do, that a positive, optimistic approach increases the likelihood of a successful outcome (regardless of what or whom is being approached), then someone who chooses distrust as his approach is perversely diminishing or even eliminating his chances of getting what he wants.

Are we so sure that things can't possibly be good that we're willing to assess those costs as worth it? If so, you really have to wonder why we bother at all. As a cushion against appearing to have been stupid of naïve, the costs of distrust are excessive and unjustifiable.

I'd like to offer a different way to look at being wrong, one that doesn't diminish the ability to choose trust over distrust. Being wrong doesn't have to be a cause for scorn. Unless your goal is to appear to be infallible or all-knowing or need-free (in which cases you might want to reconsider working - or living - with other people), being wrong is simply an opportunity to learn, to expand your perspective, to try again. I'm wrong about something at least ten times a day, but this doesn't cause me to throw in the towel. Instead, it spurs me to learn more, to think harder, to try a different approach.

Have you ever been in a meeting where something like a new product or expansion into a new market is being explored and you realize that you're simply not understanding the rationale? Everyone else in the room seems to be nodding or at least not furrowing their brows, but you're listening carefully and you just don't get it. Then, you formulate your question, find an opening and ask it. Your question is answered and things become clearer. After the meeting, another participant approaches you (you know how this goes, too: the person seemed more or less indifferent as your question was answered in the meeting, but then sidles up to you later in the hall or the bathroom) and tells you he is really glad you asked the question, then confides that he had the same question, but didn't want to ask it for fear of looking stupid.

Here's the key question: doesn't it make sense to risk looking stupid in order to become smarter? It seems completely backwards to me to prioritize looking knowledgeable over being knowledgeable. If you know you're listening carefully and you did read the materials and, really, you're not dim-witted as a matter of fact, then why keep silent when you have a question, thus choosing for yourself the appearance of knowledge over its far superior alternative, the actuality of knowledge?

The only way to make the kind of intelligent contribution that justifies your participation in the meeting in the first place is to expose and address your need for explanation, clarification and knowledge. If it's so important to be seen as understanding something, is it not then, ipso facto, even more important to actually understand it? The answer is a resounding yes if your goal is, as it should be, something other than simply looking the part.

The best protection against being unmasked as an imposter is not to be an imposter. You need to be more concerned with actualities than appearances where your own performance and growth are concerned. This is not to say that appearances are unimportant, but only that how you appear is more properly viewed as the byproduct of what you are than as a goal in and of itself.

You may be thinking at this point that all this trust business would be fine and dandy if the point were to bring about a kinder, gentler world, but that it's not so compelling in a business world where the goal is success. I beg to differ.

Let's use the classic analogy: a sports team. In team sports, the goal could not more clearly be one of winning (including beating the other team). To be successful, a team must win far more consistently than it loses. Think of your favorite great sports team, then think about the principles of trust.

Teams that win consistently do so not by pessimism, not by overweighting the negative, not by zero sum game thinking, and not by prioritizing the appearance of talent over the actuality of talent. Great winning teams consist of talented, capable, passionate people in each position - people who believe in and expect victory game after game, who have confidence in themselves and confidence in one another, who trust in teamwork over individual effort, and who seek to learn and improve no matter what.

These principles are equally true in individual sports: the superb tennis player must trust coaches, racquet and other equipment makers, sports physiologists, groundskeepers, and, even in the absence of teammates, a whole host of other supporting players.

A team will not win if the shortstop doesn't trust the second baseman and so is constantly trying to play second base too. A hitter too afraid of exposing her weaknesses to take batting practice or seek coaching won't improve, and her team will suffer (as long as it suffers having her as a member). The tennis player so distrustful of others that he insists on designing and manufacturing his own racquet won't spend enough time practicing and playing tennis to become great.

It is not possible to compete, let alone to succeed, without availing oneself of the contributions of others. To do that effectively, one must choose to trust.

Work is similarly a group activity that requires availing oneself of the contributions of others. Whether you view your work as a team sport or an individual sport is up to you. In either case, you have to count on others, and you'll improve your odds of success significantly (and also reduce your downside risk) if you choose trust as your approach.

When my kids were little, they watched a cartoon show on television that featured a gloomy dinosaur who said at least once in each episode "This can't possibly be good!" (How great is it, for purposes of this essay, that it was a dinosaur?) Sometimes the dinosaur was right, sometimes he was wrong, but his actual experience had no discernible impact on his attitude. He didn't understand that his negative outlook was both wrong as a matter of his own experience and also actually helping to create the very results he feared. Our dinosaur didn't believe that you get what you give or that life is what you make of it.

Of course there's also luck - good and bad. We can't control that, but we can absolutely influence outcomes. Why contribute to negative spirals? Our odds are better all-around if we do what we can to operate on the upside, thus by happy circumstance helping to nudge situations and people in positive directions.

It's not more realistic or more adult or more sensible to assume the worst - it's just more common. But common sense demands trust.