Trust Capital - a theory of business relationship currency
What is trust capital? It is the currency of relationships and works a lot like other types of capital. Diving in...
The trust capital you own (just like most of your assets) is custodied with others. Deposits of trust capital are made during positive interactions with others. Withdrawals, however, happen constantly. Trust capital outflows are the natural state. Trust entropy, if you will.
The size of withdrawals depends heavily on circumstances. Asking someone to look over an email before you send it is a small withdrawal. Asking someone to pull an all-nighter on a project is large.
There are credit markets in trust capital - we call it going out on a limb. We'll take a risk for someone with whom we have no history but who has a high credit score, or a good reputation. We're less willing to take a risk for a low score unless the expected return is high.
So just like with other types of capital, it's easier to ask for a large withdrawal when you have the assets to back it up. Sure, you can use credit, but unless you plan to break off all ties with that person, you're going to have to pay it back to do business again.
Like withdrawals, the size of deposits depends heavily on circumstances. Being a reliable co-worker provides a steady stream of small deposits. Self-sacrifice, protecting your team from negative consequences, fighting for someone else's raise - these generate large deposits.
Different jobs require different levels of trust to function. In software development, for example, the work product is largely objective. Dev managers can operate with a lower level of trust capital because the value of their team's work is immediately verifiable.
Sales requires a great deal of trust transfer. Great, well-known brands make their sales teams' jobs easier because the brand has already made trust deposits with the prospect. In the same way, renewals tend to be lower effort because the trust balance is already high.
OK, some nuance here, but deposit size is also dependent on the medium of transfer - and here's where we get into implications for remote work. A conversation over dinner is a much larger deposit than the same conversation over Zoom. Face to face transactions are more valuable
This raises questions for me on the universal sustainability of remote work. If trust withdrawals are the natural state, & deposits are less valuable when made digitally, then the apparent sustainability of remote work may in fact be just a drawing down on our trust accounts.
What if, after making pledges to go fully remote, divesting their real estate and giving up their leases, companies find months or years from now that their employees' trust accounts are depleted and productivity slows as a result?
Again, I believe a lot of remote work is sustainable based on the trust capital needed for each role, but the broad brushstrokes with which it's being painted as the new way to work for everyone is worrying.
So, managers: 1) What are you doing to constantly replenish trust capital with your team? 2) Are you a high withdrawal or low withdrawal manager? Ask for feedback! 3) Who are you running on credit with on your team?
That's trust capital in a nutshell.
