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Last updated: 25 Aug, 2021  

Entrepreneur.9.Thmb.jpg From Trust Deficits to Trust Deposits

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Samir Sathe | 24 Aug, 2021

"I do not trust our people to deliver their best", "I do not trust my customers to pay us on time". Or "I do not trust our government to make judicious use of our tax money".

The sales leader grumbles that his boss never trusts him with any task, and the operations leader complains about not trusting his suppliers consistently.

Sounds familiar?

We have a trust deficit in businesses, between the public and governments, between countries, between any personal relationships with varying degrees.

Oxytocin is responsible for generating an emotion of ‘trust’. This is a chemical that increases bonding, love and trust. The absence of it increases anxiety and distrust. Business leaders, employees, governments are suffering from the lowest levels of oxytocin in their brains.


The unfavourable external situation often surges trust deficits. E.g. in COVID, the basic assumptions of operating businesses turned upside down. It put to question the predictability and reliability of conducting businesses, which spiked anxiety, which caused trust deficit. Empirical evidence suggests that both of these emotions are significantly correlated.

The rate of failures, closures of businesses, and struggle that entrepreneurs went through has put into question their capabilities, eroding self-worth, leading to a bigger crisis of self-doubt. Self-doubt is one of the most dangerous emotions that destroys confidence, with one beginning to mistrust oneself. Today, a significant proportion of micro and small entrepreneurs are suffering from it. Alas, there is no measurement of the damage, and the real magnitude is unknown.

Leaders, managers and employees alike often have a fear of failure. Fear of poor performance or drive for excellence in cultures where high performance is valued often results in micromanagement by managers and leaders, which signals the emotion of mistrust among employees. This is compounded if the leaders are narcissists and have a command and control style of operations. This trust deficit could be catastrophic and mostly manifests in poor employee engagement and retention, leading to talent flight and risk to business continuity.

Mistrust begets mistrust. The unfortunate part is that the trust deficit often leads to scrutiny. The rapid progress made by technology has enabled organisations to face the subject of data-led decisions. The interest, investment and impact of this subject has catapulted in the last ten years. While data-led decisions are becoming the mantra of many organisations, and rightly so, the insistence on data as verification for everything one needs to know has innocuously also resulted in mistrust amongst managers, leaders and employees. One would notice it in performance evaluation sessions between the managers and employees. Employees need empowerment; managers need to verify the trust they have placed in the employees, clearly damaging the trust and relationships.

In critical situations like health, security, verification becomes important. However, in any business, relationships matter. Trust dislikes verification. Verification is needed to know whether the emotion of trust is translated into behaviours and reality. Funnily, businesses insist that relationships and trust in businesses are critical components to their success and, on the other hand, make investments in systems that verify the same trust that damages the trust.

From Deficit to Deposit

There are three principles that matter.

Firstly, the agreement between two individuals that they are committed to transacting with each other if they treat emotion of trust as the starting point unless proved otherwise. The mistake most professionals may make is to start with the assumption of mistrust unless proved otherwise. Of course, in critical situations, it is the opposite.

Secondly, a commitment to each other that they would not transact if they do not agree to trust each other. I have seen in most situations, two people transact and grumble about the mistrust between them, spending enormous resources to prove trust. That’s does not make sense.

Thirdly, a demonstration of behaviour that builds trust. It is not enough to carry the emotions in mind; it is important to behave accordingly. If one is not authentic in one’s behaviours, these terms remain intellectual, providing little help to enterprises.

** Samir Sathe is Executive Vice President, Wadhwani Advantage at Wadhwani Foundation

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