Trust and Growth
Trust is more than a risk management discipline: it’s an essential condition for growth
It’s easy to convince a CEO that trust is about managing risk. Odds are you can easily think of a few examples of corporate breaches of trust. Maybe you’ve even experienced one personally. If not, I’d be happy to share a few I’ve lived through. And that’s the point: a breach of trust means you will lose the customers that have been disappointed, but also a good number of their friends.
The bigger and more visible the breach, the more customers you lose. Business schools have taught about Enron, Volkswagen, and Wells Fargo for years, but that hasn’t prevented a new generation of trust failures: financial trust at FTX, safety trust at Boeing, and data trust at 23andMe.
The language that puts trust on the leadership agenda is familiar: crisis, risk, reputation, governance, compliance, repair, digital safety. Each of these disciplines commands resources. Each has a robust body of academic research and management literature. And they’re all about managing the downside or reducing risk.
But what about trust as growth? The kind that shows up in profits?
Why trust as growth is harder to see
With “trust as risk,” the focus is primarily on the organization itself: is it trustworthy? Issues such as governance, readiness, risk management, crisis communication, trust repair, data breach response, corporate misconduct, regulatory trust, post-crisis recovery—all are about studying the organization and its leadership, and all have a robust body of work and best practices.
Growth, however, requires trust across multiple stakeholder groups, and, with each, the desired growth behaviors vary. Consumer trust gets you more loyalty, advocacy, adoption, data sharing. Trust with business customers gets you more retention and pricing power. Employee trust gets you more productivity, retention, performance. The work is scattered across disciplines and stakeholder groups. The literature is not organized around a unified theory of how or why trust drives growth.
This makes it much harder to assign ownership or justify resources. Business likes direct causation. Increase spend, lift awareness. Reduce price, gain share. Improve distribution, expand reach.
But trust does not work that way, because the link between trust and growth is far more elemental: trust is a condition for growth.
Trust as a critical condition for growth
Growth occurs when stakeholders agree to increase their commitment to an organization. Trust is what makes increased commitment possible.
Here’s why trust is essential to growth:
Growth requires that stakeholders act despite uncertainty
Growth means getting people to do something they are not currently doing. You’re asking them to buy a new product, invest capital, join the company, share information or data, adopt a new technology, support a new initiative, enter a partnership, grant regulatory approval, etc. Every one of those actions involves uncertainty. Trust is what allows people to act despite uncertainty.
Growth requires stakeholders take a risk on you.
Customers risk money. Employees risk careers. Investors risk capital. Partners risk reputation. Communities risk disruption. Regulators risk public criticism.
Trust is what allows people to take those risks.
Growth requires stakeholders to repeatedly say “yes” to uncertainty or risk. Trust is what makes those “yes” decisions possible.
6 ways that trust enables growth
Once you understand that trust is necessary for people to act despite uncertainty and risk, it becomes clear that rather than seeing trust as a driver, we should study it as a critical condition for growth. Here’s how the trust works to power growth:
Trust creates permission
Growth is fundamentally a process of asking stakeholders for permission, and trust determines whether permission will be granted. Will your customers give you the license to introduce a new product or upgrade their existing one? Will employees support a transformation? Will investors fund an expansion? Will communities support a new facility? Not if they don’t trust you!
Trust reduces friction
Every growth initiative encounters resistance. Low trust means more due diligence, more oversight, more legal protection, more skepticism, and more monitoring. High trust reduces these frictions. The strategy may be identical, but the higher-trust organization will execute much faster.
Trust increases velocity
Answering fewer questions from skeptical buyers, lawyers, or regulators means faster buy-in, decision-making, and learning, and fewer barriers to growth. Growth compounds through speed, and trust removes the friction that gums things up.
Trust expands relationships
Many growth strategies depend on deepening existing relationships. A first-time buyer may be buying for capabilities. But a second transaction is always a test of trust. Cross-selling, upselling, renewals, partnerships, data sharing—these are all trust-dependent activities.
Trust enables innovation
Innovation always asks stakeholders to take a risk before the results are known. Buying a new brand or adopting a new technology is fundamentally a trust decision, especially for early adopters. When there is no evidence, trust becomes the basis for action.
Trust enables creativity
Creative thinking rarely happens when people feel unsafe. To challenge existing processes or methods, people need to speak up, bring suggestions, and try something new and unproven. Companies have been doing team trust exercises for years: they know that trust is a necessary condition for the playfulness and what-if mindset that sparks fresh insights or solutions.
Cultivating the kind of trust that powers growth is about more than compliance, governance, or security. Those are all important considerations, but they don’t lead to growth. The trust conditions that are elemental to growth will make people feel they are safe—safe enough to take a risk on you and say yes to uncertainty.
Trust is the force that converts uncertainty into commitment. And that’s when growth happens.
