Use the Trust Equation to Make Better Decisions

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Getting anything done between two parties requires trust. Even the simplest matters need it. When evaluating confidence in any relationship it’s helpful to use some simple logic — it’s time to revisit The Trust Equation.

Maybe it’s the engineer in me, or maybe the social biologist. Or perhaps it’s that part of me that wants to use equations to understand human interactions. Whatever it is, I use this formula often and it has a prominent place on my list of important things to keep in mind.

Trust = (Intimacy x Credibility) / Risk

  • Don’t get hung up on numbers. It’s the ratio that’s important. You can fill in the equation with subjective observations like: High/Low or Yes/No.
  • The bigger the deal, the more trust is needed. Basic transactions don’t need so much thought. I buy gas where it’s cheap and convenient. Risk is low and I assume the service station is a credible supplier of petrol.
  • Intimacy is a function of time and space. Being closer and having more frequent interactions brings greater intimacy. Intimacy is generated via personal and in-person interactions.
  • This might be the simplest explanation for what gets lost with remote work and virtual meetings. At the same time, it shouldn’t be assumed that physical proximity automatically generates intimacy. The point is; intimacy is part of the equation and when fostered, improves trust.
  • Credibility is gained by keeping commitments. Even the smallest commitment – like being on time for a meeting – builds credibility. So, credibility is a series of data points connected to commitments. Since it’s data now, one could easily draw a trendline. Interestingly for these calculations, a single data point is a trend – miss one commitment and you’ve lost some credibility. Lose too much, and you can never get it back. When this happens, the players must be swapped-out for any chance of success. A lot of credibility is determined via small interactions – so don’t mess around with this one.
  • Risk is always personal. There is no such thing as organizational risk. People’s sense of personal risk (as opposed to physical) almost always revolves around their perception of how they are or will be viewed by others. The question people ask themselves is: “If this turns out bad, how will I look for me? How will others view me? How will I view myself? And, will this affect my future success?” For humans, negative perceptions, especially from others IS risk.

It’s fairly easy to see how intimacy and credibility offset risk and how balancing these qualities leads to greater levels of trust. The greater the risk, the more intimacy and credibility required. Try it for yourself by applying it to some of the issues you’re dealing with now. The trust equation can help us all navigate relationships, tough decisions and any transaction that requires human-to-human cooperation.