Trust – The Most Important Thing?

It’s easy to complicate business and investing. Fundamentally however, at the foundation of any successful long-term business is trust. Regardless of your business, if a customer does not trust the product, service or brand, your business will suffer. If your employees, investors, lenders, suppliers, etc. do not trust management or the organization, your business will suffer. While this seems obvious, it is regrettably not the foundation of how many people make business decisions, hiring decisions, partnering decisions, nor how they organize their day-to-day priorities.

For this post, I’m focusing on getting business done between individuals/your partners. Having spent several decades now in the financial services world as an investor and advisor to primarily small businesses, I have grown more skeptical, less trusting, and more appreciative of how important trust is. At its core, building trust is pretty simple. Do what you say you are going to do (be accountable), do not betray confidences, and communicate openly, transparently and often. In building a long deep relationship, there is obviously much more – active listening, looking out for your Partner(s), being vulnerable, etc. but first you have to seek to build and maintain trust.

There is an good YouTube audio of Warren Buffett and Charlie Munger answering a question about how to know who to trust. They acknowledge how important trust is, yet they say they’ve been lucky. What comes through is that they are masters of assessing people quickly. Listening, watching body language, how someone answers questions, what they laugh at, etc. And they estimate their batting average is really high. But in the trenches of building a career, these can be hard lessons to learn. If you are raised a trusting individual – you may find this even more difficult. I know I have.

My approach has always been to trust until given a reason not to. And yes, I have been burned. Badly. Maybe it’s simply poor judgement, or bad luck, or 20+ years in financial services surrounded by a certain type of person. Regardless, I continue to try to learn and improve. To watch how to pick up signals. To work on listening – all forms. How does someone negotiate? How do they treat those who work for them? The simple “how do they treat the waiter”? In the end, trust must be earned and built up over time. And even in those circumstances, people can and will surprise you, disappoint you.

So what can you do? In the end, trust but verify is likely the best counsel. And verify constantly. Pay attention – close attention – and actively listen. Not just to spoken words, but how they write, text, treat others, behave in a meeting when no one is watching, etc. Ultimately, working closely with someone on a difficult situation is a great way to see what they are made of. But be warned – you will get burned. And the old adage of picking yourself up, dusting yourself off, and seeing what there is to learn is likely the best you can do. That, and making sure you don’t behave the same way toward others.