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The Trust Equation

Trust relationships are vital to the way we do business today. In fact, the level of trust present in business relationships, whether internally with employees and colleagues or externally with clients and partners, is one of the most significant determinants of success.

The challenge is developing a conceptual framework for and an analytical way of evaluating and understanding trust. Without the proper context for evaluating trust, there’s no action one can take to improve trustworthiness.

In 2000 and 2006 respectively, Charles H. Green co-wrote two books, The Trusted Advisor and Trust-Based Selling. Both books describe the “Trust Equation” in detail. It is a trust model that Charles H. Green has developed over many years.

The Trust Equation is now the cornerstone of coaching practice ― a deconstructive, analytical model of trustworthiness that can be easily understood and used to help both you and your organisation.

The Trust Equation

When we think of trust and what it means, we quickly realise that it encompasses many things. We use the word “trust” to:

  • interpret what people say;
  • describe behaviours;
  • decide if we feel comfortable sharing information;
  • indicate whether we think other people have our interests at heart.

The Four Variables

The Trust Equation uses four objective variables to measure trustworthiness. These four variables are best described as credibility, reliability, intimacy, and self-orientation. We combine these variables into an equation called the Trust Quotient. The Trust Quotient is a number―like your IQ or EQ―that benchmarks your trustworthiness against the four variables.

Let’s dig into each variable a bit more:

  • Credibility has to do with the words we speak. It is demonstrated when we say something like, “I can trust what she says about intellectual property; she is very credible on the subject.”
  • Reliability has to do with actions. It is demonstrated when we say something like, “If he says he will deliver the product tomorrow, I trust that he will do so because he is dependable.”
  • Intimacy refers to the safety or security that we feel when entrusting someone with something. It is demonstrated when we say something like, “I can trust her with that information; she has never violated my confidentiality before, and she would never embarrass me.”
  • Self-orientation refers to a person’s focus―in particular, whether the person’s focus is primarily on him- or herself, or on the other person. It is in evidence when we say something like, “I cannot trust him on this deal―I do not think he cares enough about me, he is just focused on what he gets out of it.” Alternatively, perhaps more commonly, “I do not trust him―I think he is too concerned about how he looks in this situation, so he is not paying attention.”

The Trust Equation has one variable in the denominator and three in the numerator.

Increasing the value of the factors in the numerator increases the trust level. Increasing the amount of the denominator―self-orientation―decreases the trust level.

Self-orientation, the sole denominator, is the most critical variable in the Trust Equation. The formula was deliberately developed this way. A seller with low self-orientation is free to focus on the customer entirely and honestly―not for his own sake, but for the sake of the customer. Such a focus is rare among salespeople (or people in general, for that matter).

The truth about selling is that you succeed more at sales when you stop trying to sell. When all you focus on is helping prospective clients, they trust you more and buy more from you as well.

It is All About People

The Trust Equation covers the most common instances of trust that we encounter in everyday business interactions. What’s important to remember is that these instances are almost entirely personal, not institutional. People rarely give their trust to institutions; they only trust other people.

While companies are often described as credible and reliable (the first two components of the Trust Equation), it is really the people within the companies who make those companies what they are. Moreover, two of the equations components, intimacy and self-orientation, are almost entirely about people.

Overall, trust in business and sales requires good “scores” on all four variables in the Trust Equation. That means high credibility, reliability and intimacy, and low self-orientation.

Living the four variables in the Trust Equation is the best way to increase your trustworthiness. The Trust Equation provides a scientific, analytical, and actionable framework by which to help organisations and individuals improve their businesses and lives.

How can the trust equation help in your organisation?

The trust equation is one of the cornerstones of coaching practices, if you want help applying it you your organisation, get in touch to find out how we can help.