Financial Times – Something for the Weekend

Why do we choose to trust some people but not others? Placing trust in someone, often in business after only a cursory meeting, has far-reaching implications. A business deal going sour could be down to misplaced trust, but on the other hand a successful business proposition may well depend on two chief executives who barely know each other, but are confident that they can trust each other in a business deal.

Intrigued by what makes individuals place trust in each other, two academics at the Kellogg School of Management at Northwestern University, have examined what causes someone to trust another – even when they barely know them.

Keith Murnighan, a professor of management and organisations and doctoral student Li Huang, ran a series of experiments using subliminal cues – such as the name of a close friend – to create feelings of trust.

Volunteers were asked for the names of those people they trusted and these names were then flashed subliminally so that the volunteers were unaware that they had seen the names. They were then told they could send money to an anonymous stranger, who might then send them money back.

The pair discovered that those who had been flashed the names of good friends, people they trusted, were more likely to send larger sums of money to strangers and also believed that the money would be returned to them.

“We found we could stimulate feelings of trust for a stranger without people even realising,” says Prof Murnighan.

The findings have wider implications as the study suggests that an individual’s decision to trust another can begin before they are consciously aware, “before there is time to evaluate or verify other information, like an individual’s reputation,” says Prof Murnighan.

Although such behaviour can improve social interactions, it can also increase an individual’s vulnerability to subliminal cues. Prof Murnighan says if for example he is talking to someone he knows is a big fan of Elvis, he could drop the singer’s name into the conversation to stimulate more trust. “There is clearly a risk of manipulation, “ he says.

The full research “A trusted name, why we trust people we do not know” can be read at Kellogg Insight.

● Why do talented leaders at the peak of their career lose their way? Harvard Business School professor of management practice Bill George cites several recent examples, such as Dominique Strauss-Kahn, former head of the International Monetary Fund who has been charged with sexual assault and the former chief executive of Hewlett-Packard Mark Hurd who was found to have violated the company’s code of conduct.

Prof George says that before assuming a leadership role an individual should ask themselves why they wish to lead. If the answers are “power, prestige and money, leaders are at risk of relying on external gratification for fulfilment. When leaders focus on external gratification rather than internal satisfaction he adds, this can lead to them losing their grounding, which can in turn have consequences such as being unable to engage in honest dialogue and surrounding themselves with sycophants.

Prof George describes such leaders as losing their moral compass. Other aspects of leadership that can also cause leaders to lose sight of their moral bearings, include the stress and loneliness of leadership. In turn leaders then find that they are incapable of facing reality and their professional and personal lives become out of balance.

To avoid such pitfalls adds Prof George, leaders should spend time on personal development.

The full paper Why leaders lose their way was published earlier this month at Harvard Business School Working Knowledge.

This article was originially posted in the Financial Times