Trust and Risk

risk management concept“Trust me boss, I can handle the next Board presentation on the budget for 2014.” Are there two more feared words in the English language for leaders than “trust me”? On one hand, extending trust evokes risk. On the other hand, not trusting damages relationships, sometimes permanently. Handling issues of trust diplomatically can be a daily challenge for harried leaders.

One way to untangle the twists and turns of extending trust is to look at the definition of trust put forth by Charles Feltman in his book I reviewed in my August newsletter. Trust is choosing to risk making something you value vulnerable to another person’s action. Pulling the word risk out of the definition can give a leader the starting point in deciding to extend trust. People who analyze risk for a living will talk about the concept of smart risk. Smart risks marry the degree of risk against the resulting reward and take those risks that can have the highest payoff commensurate to the amount of potential failure. The old investment adage says it nicely: the higher the risk, the higher the reward. Risk adverse leaders who only take small risks can be stuck in slow growth, slow change performance ruts.

Another way to put it, successful leaders do not take risks, they manage risk. In the scenario above, the leader needs to look at the potential risks she would face delegating the Board presentation. This is the part I believe comes naturally when we look at extending trust. But then she needs to look at the payoff for trusting the person. Rewards for extending trust in this instance can range from freeing up time for other, more strategic work, developing talent and exposure in junior staff, recognizing the talents of others, and improving trust levels not only with this one individual but with others who see her extending the trust.

Looks to me like this would be one really smart risk.