It’s all based on trust. Many have heard this truth before. However, despite its fundamental and critical importance, trust has not been researched and written about very often in the past, and it is not formally taught in business schools. Yet all business depends on trust. It is an essential condition for doing business, and for anything else that involves reliance on others. Once a trust is broken, it can be very hard to win back. But what is trust, and what are the elements that create trust?

In their book, The Power of Trust, Sandra J. Sucher and Shalene Gupta propose a definition of trust, and explore the foundations of trust. They propose a “trust model” of four elements to help organizations “understand what trust is, how it works, and what they can do to fold it into their thinking from everyday decisions to long term strategies.” ¹ Their book is a remarkable achievement. According to Sucher (lead author), The Power of Trust has been a work in progress for more than twenty years while teaching at the Harvard Business School. The Power of Trust is a must read for everyone in business. I would argue that it is just as relevant for everyday life.

Definitions of trust

Trust is a rather difficult concept to clearly define. The Collins dictionary gives examples of the meaning of trust. For instance, if you trust someone, you believe that they are truthful, honest, sincere, reliable, and that they will not take advantage of you, or deliberately do anything that can harm you.² Merriam-Webster gives similar examples in terms of reliance on the truthfulness or accuracy of something, and the placement of confidence in someone.³ Trust is therefore a belief and a reliance on the integrity of someone or something, with an underlying vulnerability or exposure.

According to Sucher and Gupta: “To trust fundamentally means to make yourself vulnerable to the actions of others. We trust because we believe that they will do right by us. When we choose to trust someone, we willingly give them power over us, trusting that they will not abuse this power. Trust is a special form of dependence, and it is predicated on the idea that we can be more than disappointed: we can be betrayed.” ⁴ A crucial aspect of trust is “a willingness to make yourself vulnerable to the intentions and actions of others” usually in the hope of something in return.⁵

Characteristics of trust

Sucher and Gupta outline four characteristics or concepts that explain the context of trust, and the misconceptions that people have about trust. They can be summarized as follows: ⁶

• Trust is a relationship – Trust involves a trusted party and a trusting party. Recognizing that trust is a relationship helps realize that it is something concrete and real that can be actioned.

• Trust is built from the inside out – To establish trust with external stakeholders, it needs to be first created with employees, and with strategies, processes and methods that are sound.

• Regaining trust is possible but difficult – Most people think that a lost trust can never be regained. But the reality is more complex. Trust can be rebuilt with time and sustained effort.

• Trust creates new opportunities – There lies the power of trust. It is an essential condition for doing business. But it also creates an infinite number of possibilities with extraordinary results.

Elements of trust

Based on her research, Sandra J. Sucher has identified four elements that create trust: competence, motives, means and impact (Figure 1). She refers to these elements as the “trust framework.” Each element is a driver of trust, and the elements complement one another to create trust.

According to Sucher and Gupta, the four elements can explain why your company may (or may not) be trusted.⁷ Although the authors refer to companies in their definitions and explanations, the elements of trust are in fact applicable to any other type of organization, including government entities and not-for-profits. Every organization has a mission or mandate, and is dependent on trust for carrying it out. The four elements of trust can be described as follows: ⁸

COMPETENCE – Competence is the knowledge and skills that an organization demonstrates based on its ability to innovate, operate, produce and deliver products and services. Competence is also demonstrated by the ability to respond and adapt to external conditions. It is the foundation of trust. Without competence, an organization cannot successfully develop the other elements of trust.

MOTIVES – Motives are the intentions that an organization has beyond achieving its mission or mandate, and making money in the case of private sector organizations. People care about why organizations are acting the way they do, and whose interests they are serving. Organizations are expected to carry out their mission or mandate without causing harm to stakeholders.

MEANS – Means are the decisions, ways and methods that an organization uses to carry out its mission or mandate, and to achieve its vision, goals, strategies, objectives, etc. Organizations are trusted when they treat stakeholders with respect, and set “rules of engagement” that are fair and not deceptive or fraudulent. As the old saying goes: the end does not justify the means.

IMPACT – Impact is the end result of organizational decisions and actions. It is perhaps the most important element of trust, especially from an outsider perspective. People immediately wonder about competence, motives and means whenever there is a negative impact to them or to others. Trust is broken when decisions and actions have negative implications and outcomes.

Benefits of trust

Organizations cannot operate without a minimum amount of trust from all of their key stakeholders. But getting by on a just a minimal amount of trust will just as likely result in a minimal amount of success compared to the full potential of an organization. According to Sucher and Gupta: “overall, the business world has done a terrible job of understanding the importance of trust.” ⁹ There is undoubtedly a lot of work to do when it comes to gaining trust. It’s a never ending quest.

Trust creates value, and a lack of trust destroys value. In their book, Sucher and Gupta outline countless examples of companies that have built or lost trust, with spectacular results in both cases. Research indicates that the most trustworthy companies are 2.5 times more likely to outperform market indexes such as the S&P500.¹⁰ Similar findings are evident at the macroeconomic level. Countries with low levels of trust are typically caught in a poverty trap.¹¹ An economy cannot grow and create wealth to its full potential unless there is trust among participants.

Levels of trust

Levels of trust in organizations have increased in the past ten years as measured by the Edelman Trust Barometer (Figure 2). The negative effects of the 2008-09 financial crisis have dissipated, and the lax monetary and fiscal policies that followed may have created a false sense of trust. However, one of the main driving force behind rising levels of trust is certainly the focus on environmental, social and governance (ESG) concerns. The global cooperation that lead to research and response to the pandemic (including financial assistance by governments) is perhaps another factor.

Despite their upward trend, these numbers reveal that the glass is only half-full when it comes to leveraging the power of trust. The Edelman Trust Barometer considers that levels below 60% are worrisome.¹² What gets measured [usually] gets done. Setting targets for organizational trust across stakeholder groups, and measuring levels of trust are good places to start. Finding out why levels of trust are what they are, and developing strategies to build trust by leveraging each element of the trust framework are the ways to go. Unlocking the power of trust is the big reward.

Listen to Sandra J. Sucher on The Power of Trust in this McKinsey video:

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1. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (Public Affairs, Hachette Book Group, New York, 2021), p.7.
2. Based on definitions of trust available from the Collins online dictionary.
3. Based on definitions of trust available from the Merriam-Webster online dictionary.
4. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), p.17.
5. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), p.2.
6. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), pp. 18-22.
7. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), p. 25.
8. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), pp. 25-27.
9. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), p.8.
10. Stephen M. R. Covey and Douglas R. Conant, “The Connection Between Employee Trust and Financial Performance” (Harvard Business Review, July 2016).
11. Sandra J. Sucher and Shalene Gupta, The Power of Trust, (…), p.22.
12. The Edelman Trust Barometer reports levels of 60% or more as “trust,” levels between 50% and 60% as “neutral,” and levels below 50% as “distrust.” (Refer to https://www.edelman.com/ for information on the Edelman Trust Barometer).