Monday, February 27, 2012

Cultivating Mutual Trust

A few years ago, Ernst Fehr, a behavioral scientist and professor of Microeconomics and Experimental Economics at the University of Zürich, undertook a very complicated, study of selflessness, selfishness and trust.

Bottom line: the professor and his colleague, Bettina Rockenbach, found that altruism — an unselfish regard for the welfare of others — is a powerful factor in economic transactions. Other studies have found compelling evidence that altruism is a genetic trait.

Theories that elevate the power of self-interest — the “greed is good” approach to doing business — often fail to take into consideration the fact that selfishness can almost completely destroy trust and cooperation. Trust, on the other hand, begets trust.

Stakeholders want to be leveled with. They really want to believe us … and they want us to trust them.

“If you trust people,” says Fehr, “you make them more trustworthy.”

Trust lies at the heart of who we are as human beings. As a species, we’re actually “hard-wired” to form social bonds. It’s partly a matter of neurobiology.

There is a remarkable hormone called oxytocin, which appears to help people build trust and form productive and meaningful relationships, both at a professional and personal level. Too little oxytocin can contribute to social phobia. Too much, and you’re too trusting … you’re an easy mark for the likes of Bernie Madoff.

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