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A couple of months ago I underwent fairly major surgery. I had come to know the surgeon through a couple of consultations, and immediately before the surgery the anesthesiologist came to introduce herself to me and we talked about the surgery. Walking into the operating room I became aware that there were nine other medical specialists, each of whom was focussed on their specific role. They were all there for me. As I accepted the anesthetic infusion, I gave my trust to these professionals. Their knowledge of medicine and the procedure that I was to undergo was considerable. Theirs was asymmetric, subject-specific knowledge—it far exceeded my knowledge, and I was in their hands.
Thoughts of that experience returned to me today as I read two news stories of insider trading. In one case it was a securities lawyer involved in an initial public offering, in the other it was a portfolio manager about the make on a significant trade on behalf of the beneficiaries of the portfolio. In each case, these individuals took advantage of non-public information to make trades in their own accounts in advance of the information in their possession becoming broadly known in the marketplace. To add to the egregiousness of their action, both of these individuals were in fiduciary roles—such roles becoming the source of their non-public information.
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Is there a thin end to this wedge? Think of an organization that you know quite well. How does that organization treat people that it is letting go? How does it recognize and respond to gender and ethnic diversity? How does it respond to client and staff concerns? Perhaps most fundamentally, how are its compensation plans structured? Do reward mechanisms value collaboration or internal competition? Do these same organizations use the word ‘trust’ in their lexicon, internally and externally?
I would go further to say that trust is a major driver of productivity—perhaps the most critical driver of productivity. Trust is passed on, just as mistrust is passed on. The struggle for power over another, rather that the desire to nurture another, is rooted in the culture of the organization, and trust, or the lack trust, is the driver of culture.