How to Judge Trustworthiness if You are a Small Business

Estimated reading time – 12 minutes

Is your startup or small business dependent on trusted relationships of customers, partners, and suppliers?

What significance has trust played in the development of your business?

How often have you encountered betrayal of trust from the very peers you entrusted?

How often has the investor given an affirmative message and then withdrawn from the decision at the last moment? Did this happen with customers as well?

What is your trustworthiness?

Trust is one of the biggest leadership challenges today for organizations of all sizes. Lack of resources makes a small business inherently vulnerable, therein trust sets the foundation of a small business. Many a times we make trust decisions within seconds of meeting a person. But trust is not always a matter of emotional connect, it is full proof when it has a rational component in it. How to Judge on trustworthiness if you are a small business? This depends on your own perception of trust and how you decide on that trust (the process). Without looking at the dictionary, my definition of trust in business is simple – somebody who is reliable, dependable, and conveys the trust by his actions. This doesn’t mean that the person will be successful in all his/her endevours, but he becomes trustworthy through his/her reliable, dependable, and consistent actions. All said and done, we are all humans, hence it is best not to judge somebody based on a single event. Herein lies the process. Why apply a process to an emotional element of trust? If you do not have a process of trust, you are bound to get disappointed on multiple occasions with deep disappointments. If you have a process of trust that doesn’t necessarily set you to be a perfect business man or woman devoid of mistrust, but it saves your precious time from figuring out your disappointments.

So how (essentially the process) do we trust anybody in the business ecosystem? Essentially I use the following scenarios to make a judgement on trustworthiness.

                           Look for small but extremely important cues

I had once gone for a dinner meeting with 2 potential business partners. The objective of the meeting was to have a transparent discussion around what the partnership would entail. In the middle of the meeting two of them (the decision makers) left for a discussion amongst themselves. This was supposed to be a venture we were supposed to do together for a greater good. What inference will you get from this behavior? Does the trust exist or would you trust these partners? With benefits of doubt, I inferred from this small but important cue that the trust is yet to exist. If it had existed the discussion would have happened right in front of us –whether concerns or no concerns. In few cultures this is a common practice, but these behaviours in general do not trigger trust.

Recommendation: It is recommended to be vigilant on small cues, as they present the opportunity to you as a founder or as a senior management personnel to decide on whom to trust and when to trust, or visualize if the trust is yet to come.

                        People whose words and behavior don’t match

Have you come across employees, or suppliers, or partners who convey well intentions but don’t do? Then there are vendors who will promise a moon but deliver little. Actions surely speak for themselves about a person’s trustworthiness specially if these are matters of high consequences. I personally take this seriously so have problems with people who do not complete their verbal commitments through actions(actions of high consequences). We are all busy and should offer the benefit of doubt to the target person, if he or she has failed to act on what has been conveyed. But this should be not be a consistent pattern where reliability and dependability is lost.

Imagine that you get in touch with an Angel investor for your next round of funding. Conversation starts followed by a presentation session with you. You also show him the customer validated prototype. He gets excited about the business. You convey to him that at this point you would need 200K$ to mature the product and get to the other customers. He says- “That amount is fine and I would like to invest”. The investor also talks to one of your lead customers to get real market feedback. He conveyed to you that he was satisfied with the customer input. You follow up with him but your emails remain unanswered. At this point the investor ‘disappears’ without giving a specific reason. You are flabbergasted and beyond words. Would you trust a dime this investor a second time? This happens and not a rare case. It is difficult to guage what turned him off, but since all the aspects of an early stage business had been diligently verified, his ‘disappearance’ without a feedback is untrustworthy behavior.

Recommendation: Anybody in your business ecosystem whose behaviour and actions are not congruent with what they say, is not trustworthy. It is as simple as this. If the matter is not of high consequence, you may want to try keeping the relation warm as a benefit of doubt for a second opportunity to come. I personally will not persist with the person for a 3rd time.

                              People who are blunt and seemingly arrogant

These are people who are blunt but seemingly arrogant. Being arrogant and seemingly arrogant are not the same. I had interactions with potential investors who after having understood the business said a NO. I had also experience with customers who said right at the start of a conversation, they are not looking for anything similar to what we are offering. I find these people in business a lot more trustworthy than the ‘beating around the bush’ types. They save your valuable time and resources, rather then dragging their feet. They seem arrogant because of their directness, but in business calling a spade a spade is far better approach than pussyfooting. Essentially these customers or investors are not saying no to us personally but no to our business plan, products, market segment, or because of specific circumstances they are in. They may say a yes after couple of months, when circumstances change or we have a better proposition and offer them a compelling reason to buy.

Many of us confuse seemingly arrogant customers with bad behavior. However bad behavior is one of the several outcomes of (real) arrogance.

Recommendation: These category of persons in your business ecosystem tend to be trustworthy, because they are seemingly arrogant but tend to have congruence between their words and actions. If their feedback is no, that means you need to determine which facets of business needs to be improved to turn that into yes and when is a good time to regain confidence.

                                        People who are non-committal

They are difficult to judge whether investor, customer, supplier, an employee, or a business partner. They provide silent messages and indirect answers which will be difficult to decode, unless your human skills are at peak state. They will not be specific most of the times. Their answers will be anything like – “ Ok, we will consider for xx month later”(you were looking to close the deal now), “The exchange rate has affected us badly, can we reduce our investment amount? (you were certain about their committed amount), “But this is not an equity investment only a loan” (you made it clear early on you were looking for a loan). Essentially they give a gentle nod at your initial conversations but not specific about a commitment. While there are techniques to convert their non-commitments, but most of the times it will be a waste of your valuable time as a small business. These persons may not be necessarily always untrustworthy (by their actions), but their communications do not convey trustworthiness. The best practice is to be gently specific with them to understand their underlying commitments.

Recommendation: The best form of communication is to be specific with them as much as possible. Your communication style has to be gentle yet specific without sounding arrogant. Like in prior case, you need to determine which facets of business needs to be improved to turn their non-committal silent messages into yes. Example communication - 

Investor: “But this is not an equity investment only a loan” (you made it clear early on you were looking for a loan) 

You: “ We are offering the following Benefits to the investor in lieu of a loan. The loan amount is xx amount at xx returns to the investor over a term of xx, convertible to shares at a discount of xx. Attached is a terms sheet guidance for your kind consideration.”

If there is still no answer or commitment from the investor, drop the discussion then and there and move to the next opportunity without wasting your time.

                                          You are yet to build trust 

Most important of all I or you as a founder, CEO, or business owner of a small business need to be trustworthy, before we expect trust from the ecosystem. Just like charity begins at home, trust begins with ourselves. It might be there is a lack of trustworthiness within us, which transpires to customers, employees, or investors behaving in a certain way. If we can correct ourselves chances are that the ecosystem will be more generous to us. I personally strive to convert my commitments into actions, which has led to good amount of trustworthiness from my relationship ecosystem. There is always room for improvement though. My experience says, customers tend to trust us more when we are dependable, reliable, and do what we convey – very simple but we tend to overlook.

Another facet which is critical about creating trustworthiness is – focusing on other’s wants. Most of us start a customer conversation with our point of view, our story, our products, our services, our wants. Please understand we human beings are interested in solving our problems and our wants first. The same goes for a customer. If you focus on understanding the human being behind the customer and the customer’s wants, then tailor that to your wants there is always a win – win, a synergy where world is not a zero sum game. Most important your effort should not come across as a manipulation but a sincere effort to understand other’s perspective first before making noise about what we want.

This is a simple email reply that I once received from a super wealthy individual investor (name undisclosed) when he confirmed funding in our family business. “ We are based on friendship and trust.” This is what I and you should strive for.

Recommendation: Next time you are meeting with somebody new in your business ecosystem, try to find out ways you can offer help (without being intrusive) addressing his or her pressing issues. Essentially in this way you are giving first (and may be giving more) than taking first. Giving first in simple ways like making recommendations or making introductions or offering independent views on his or her pressing challenges are good ways to start building trust. Don’t always go to a meeting to fulfill your own agenda, understand customer’s perspective and look for ways where there is a win-win. Above all, be sincere in your efforts.

I have summarized what I recommended above in a simple table, although a word of caution – decoding human relationships and trust matters are not always a ‘one formula works all’ approach. Your external environment is not a ‘pigeonhole’. Situation or context is definitely important. The table is just a guidance from my experience so far, and I am learning this every day too. 

Remember our goal is not to be obsessive about trust, but make intelligent judgments about trustworthiness and improve our own trustworthiness.

Good luck! 

You can also read the article on LinkedHive? https://www.linkedhive.com, where it was first published. If you like it, you may want to share it to help us reach out to those it will benefit.