February 2, 2021

The Trust Equation

The Trust Equation

The Trust Equation

February 2, 2021
February 2, 2021

The Trust Equation

The Trust Equation

One of the biggest mistakes we can make as leaders is to put our full trust in anything but God. Only God has perfect integrity.

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Who do you trust and why do you trust them? How do you build trust with others? And, most importantly, how do you rebuild trust when it is broken? Trust is essential for all relationships, families, teams, and organizations. Without trust leaders cannot be effective. 

Here's what a few notable leaders have said about trust: 

  • "Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.” - Stephen Covey
  • "Trust is like the air we breathe - when it's present, nobody really notices. When it's absent, everyone notices." - Warren Buffett
  • “The best way to find out if you can trust somebody is to trust them.” - Ernest Hemingway
  • “A team is not a group of people that work together. A team is a group of people that trust each other.” - Simon Sinek
  • Trust in the LORD with all your heart and lean not on your own understanding - Proverbs 3:5 

Just last week a successful new company lost trust with its stakeholders. In Inc.com's recent blog, Robinhood Destroyed Its Brand in Less than a Day, tech writer Jason Aten reminds readers that "trust is your most valuable asset.”

Trust Is An Equation

Have you ever thought about trust as an equation? Just over 20 years ago I had the pleasure of working on a potential startup with Jagdish Sheth, a professor of marketing at Emory University’s business school. Jag is a renowned educator and co-author of the book Clients for Life. In that book, Jag gives a formula for trust that I've used throughout my career. 

Trust equals integrity, multiplied by competence, divided by risk. “Your clients’ perception of each factor in the equation will raise or lower the trust they place in you,” he says.

Let’s put the recent failure of the Robinhood company through this formula. The article in Inc stated that, “Robinhood's brand was built on the promise that it was ‘on a mission to democratize finance for all.’ It's right there on the website. You can see, then, why it might be a problem when the app then stopped its users from trading certain stocks. The big guys, with their access to brokers at hedge funds and trading firms, could still carry on with business as usual. It was the ‘little guy,’ that was getting shut down.” So, how did this happen? The risk was certainly great but did the company fail in integrity or in competency? Did they violate their purpose or values?

The Chief Executive, Vlad Tenev, offered this as an explanation, “The request was around $3 billion, which is, you know, about an order of magnitude more than what it is typically.” He said this in an interview alongside Tesla CEO, Elon Musk, as reported in the Wall Street Journal. He is saying that it’s a competency issue and is asking customers and stakeholders to trust him. 

It’s much easier to gain trust back over competency failures than it is integrity failures.

The Difference Between Integrity and Competency

Integrity is being honest about what you are doing and having the character to admit mistakes. Competency is being good at what you are doing. Competency and wisdom develop with experience. There are plenty of trustworthy people who make mistakes. For example, I trust the integrity of all of my children equally, but if I need something important and difficult done, I will likely ask the child who has shown the best ability to do the task at hand. 

This equation is equally important when someone has failed you and you're not sure whether you can trust them again. Most of the time you will pause to consider if the person is being honest. Did they recognize their mistake, or admit it after you have made it clear? 

When a person owns their failures they are demonstrating integrity. This allows you to trust them with things they've proven they can do. Don’t quit trusting someone because they are not good at a specific part of leadership. Help them identify their specific problem and offer them help. 

Each of us can build trust by having the integrity to do what is right, the honesty to admit mistakes, and the discipline to learn from mistakes while developing new competencies. The most important competency may be the realization that each of us makes mistakes every day. For that reason, we want to clothe ourselves with humility (1 Peter 5:5) and extend grace to others by forgiving them (Matthew 18:21-35).  

The Only One You Can Fully Trust  

One of the biggest mistakes we can make as leaders is to put our full trust in anything but God. Only God has perfect integrity. He is perfectly Holy (Leviticus 19:2). His power and competencies are beyond what our hearts and minds can fathom. “As the heavens are higher than the earth, so are my ways higher than your ways and my thoughts than your thoughts” (Isaiah 55:9). 

Unmatched Integrity

God is love (1 John 4:8) and He can be fully trusted. “Trust in him at all times, you people; pour out your hearts to him, for God is our refuge” (Psalm 62:8). God conquers all our fears (Isaiah 41:10). He demonstrates His love and integrity by loving us before we loved Him. “God shows his love for us in that while we were still sinners, Christ died for us” (Romans 5:8).

God is not concerned with value reciprocity or our competencies. His power and competence are made perfect in our weakness. The more you trust him and lean on him the more you realize that God will meet all your needs "according to the riches of his glory in Christ Jesus” (Philippians 4:19).

Unmatched Power And Competence 

There is nothing on earth that has been made that God did not make (John 1:3-4). He reigns over all creation and circumstances (Matthew 10:29). He is the source of all of our wisdom (Proverbs 9:10) and gifts of competence (1 Corinthians 12:1-11). He breaks the power of sin (Romans 8:1-4). Now, the one with all power and authority — Jesus — promises to be with us until the end of the age as we trust Him and teach others about Him (Matthew 28:20).

Risk - What Is Your Tolerance?

Risk tolerance is the ability to psychologically endure the potential of losing on an investment. For how long of a period do you consider the investment of your life to be worth? Is your concern for today, tomorrow, the next 10-20 years, or for eternity (billions of years). Those who don’t put their trust in God will be eternally separated from God. The Bible tells us that in that place — apart from God — there will be weeping and gnashing of teeth (Luke 13:28). Put your full trust in Jesus today and He will eternally lead you along the path of righteousness (Psalm 23:3).

“To him who is able to keep you from stumbling and to present you before his glorious presence without fault and with great joy the only God our Savior be glory, majesty, power and authority, through Jesus Christ our Lord, before all ages, now and forevermore! Amen.” (Jude 23-25)
Howard Graham
Howard Graham
Executive Director

Who do you trust and why do you trust them? How do you build trust with others? And, most importantly, how do you rebuild trust when it is broken? Trust is essential for all relationships, families, teams, and organizations. Without trust leaders cannot be effective. 

Here's what a few notable leaders have said about trust: 

  • "Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.” - Stephen Covey
  • "Trust is like the air we breathe - when it's present, nobody really notices. When it's absent, everyone notices." - Warren Buffett
  • “The best way to find out if you can trust somebody is to trust them.” - Ernest Hemingway
  • “A team is not a group of people that work together. A team is a group of people that trust each other.” - Simon Sinek
  • Trust in the LORD with all your heart and lean not on your own understanding - Proverbs 3:5 

Just last week a successful new company lost trust with its stakeholders. In Inc.com's recent blog, Robinhood Destroyed Its Brand in Less than a Day, tech writer Jason Aten reminds readers that "trust is your most valuable asset.”

Trust Is An Equation

Have you ever thought about trust as an equation? Just over 20 years ago I had the pleasure of working on a potential startup with Jagdish Sheth, a professor of marketing at Emory University’s business school. Jag is a renowned educator and co-author of the book Clients for Life. In that book, Jag gives a formula for trust that I've used throughout my career. 

Trust equals integrity, multiplied by competence, divided by risk. “Your clients’ perception of each factor in the equation will raise or lower the trust they place in you,” he says.

Let’s put the recent failure of the Robinhood company through this formula. The article in Inc stated that, “Robinhood's brand was built on the promise that it was ‘on a mission to democratize finance for all.’ It's right there on the website. You can see, then, why it might be a problem when the app then stopped its users from trading certain stocks. The big guys, with their access to brokers at hedge funds and trading firms, could still carry on with business as usual. It was the ‘little guy,’ that was getting shut down.” So, how did this happen? The risk was certainly great but did the company fail in integrity or in competency? Did they violate their purpose or values?

The Chief Executive, Vlad Tenev, offered this as an explanation, “The request was around $3 billion, which is, you know, about an order of magnitude more than what it is typically.” He said this in an interview alongside Tesla CEO, Elon Musk, as reported in the Wall Street Journal. He is saying that it’s a competency issue and is asking customers and stakeholders to trust him. 

It’s much easier to gain trust back over competency failures than it is integrity failures.

The Difference Between Integrity and Competency

Integrity is being honest about what you are doing and having the character to admit mistakes. Competency is being good at what you are doing. Competency and wisdom develop with experience. There are plenty of trustworthy people who make mistakes. For example, I trust the integrity of all of my children equally, but if I need something important and difficult done, I will likely ask the child who has shown the best ability to do the task at hand. 

This equation is equally important when someone has failed you and you're not sure whether you can trust them again. Most of the time you will pause to consider if the person is being honest. Did they recognize their mistake, or admit it after you have made it clear? 

When a person owns their failures they are demonstrating integrity. This allows you to trust them with things they've proven they can do. Don’t quit trusting someone because they are not good at a specific part of leadership. Help them identify their specific problem and offer them help. 

Each of us can build trust by having the integrity to do what is right, the honesty to admit mistakes, and the discipline to learn from mistakes while developing new competencies. The most important competency may be the realization that each of us makes mistakes every day. For that reason, we want to clothe ourselves with humility (1 Peter 5:5) and extend grace to others by forgiving them (Matthew 18:21-35).  

The Only One You Can Fully Trust  

One of the biggest mistakes we can make as leaders is to put our full trust in anything but God. Only God has perfect integrity. He is perfectly Holy (Leviticus 19:2). His power and competencies are beyond what our hearts and minds can fathom. “As the heavens are higher than the earth, so are my ways higher than your ways and my thoughts than your thoughts” (Isaiah 55:9). 

Unmatched Integrity

God is love (1 John 4:8) and He can be fully trusted. “Trust in him at all times, you people; pour out your hearts to him, for God is our refuge” (Psalm 62:8). God conquers all our fears (Isaiah 41:10). He demonstrates His love and integrity by loving us before we loved Him. “God shows his love for us in that while we were still sinners, Christ died for us” (Romans 5:8).

God is not concerned with value reciprocity or our competencies. His power and competence are made perfect in our weakness. The more you trust him and lean on him the more you realize that God will meet all your needs "according to the riches of his glory in Christ Jesus” (Philippians 4:19).

Unmatched Power And Competence 

There is nothing on earth that has been made that God did not make (John 1:3-4). He reigns over all creation and circumstances (Matthew 10:29). He is the source of all of our wisdom (Proverbs 9:10) and gifts of competence (1 Corinthians 12:1-11). He breaks the power of sin (Romans 8:1-4). Now, the one with all power and authority — Jesus — promises to be with us until the end of the age as we trust Him and teach others about Him (Matthew 28:20).

Risk - What Is Your Tolerance?

Risk tolerance is the ability to psychologically endure the potential of losing on an investment. For how long of a period do you consider the investment of your life to be worth? Is your concern for today, tomorrow, the next 10-20 years, or for eternity (billions of years). Those who don’t put their trust in God will be eternally separated from God. The Bible tells us that in that place — apart from God — there will be weeping and gnashing of teeth (Luke 13:28). Put your full trust in Jesus today and He will eternally lead you along the path of righteousness (Psalm 23:3).

“To him who is able to keep you from stumbling and to present you before his glorious presence without fault and with great joy the only God our Savior be glory, majesty, power and authority, through Jesus Christ our Lord, before all ages, now and forevermore! Amen.” (Jude 23-25)

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