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How this CEO learned to think of employee betrayal as just one cost of doing business, and why he hasn't changed his approach.

A few years ago, one of my top performers proposed attending a conference held by a rival company. Despite the cost and logistical complications, I trusted his intentions and approved his request. After the conference, when he resigned to join the competitor, I paid for his betrayal in what I came to think of as a tax on my trust. This metaphorical “trust tax” is the price we occasionally pay for investing confidence in people who prove not to have deserved it.

I believe it’s a tax worth paying. On an individual level, trust opens doors to new experiences, deepens connections and accelerates personal growth, and as a leader, maintaining my faith in the inherent goodness of most people enables me to approach situations with optimism and empathy. As with most taxes, the trick is maximizing your gains while reducing your costs.

Trust is Profitable

I first experienced the benefits of a trust-first environment when I played baseball at Arizona State, where not every practice or training session was supervised. The coaches trusted us to hold ourselves and each other accountable to the work ethic and standards Jim Brock had instilled in the Sun Devil program decades ago. This is the kind of high-trust, high-accountability culture that most leaders want to create. They know that when standards, trust, and accountability are high, performance, productivity, and engagement increase.

Taking a deliberately trust-first stance within an organization can return incredible rewards. It allows leaders to implement strategies like Google’s 20% time—a policy that encourages employees to spend almost a quarter of their work hours pursuing projects of their choosing. The company trusts its people to use that time wisely and in ways that benefit the company, even if their immediate utility isn’t apparent. Gmail and Google News are only two of the most high-profile outcomes.

At Learnit, we’ve built trust into our teaching methodology. From our often employer-mandated software productivity training to our personal development and leadership programs, our instruction is predicated on trusting participants’ curiosity and intelligence. �鶹������ý get occasional pushback from clients accustomed to “gotcha” methods of mandated engagement, but experience has taught us that it’s not only unnecessary, it’s counterproductive and insulting. Interesting and well-presented programs hold people’s attention, and our optimistic assumptions increase retention and drive behavior change.

Earning Trust

How likely are you to trust someone who tells you, “Don’t worry, you can trust me!” If you’re anything like me, you’ll be immediately suspicious. The language of trust is spoken in action, not words. It isn’t something you can ask for on faith or demand as a right of your position. To be trusted, you must prove you’re both trusting of others and worthy of their trust.

Gaining the trust of your team hinges on your actions. To build personal credibility with your teams, embody self-respect, integrity, and authenticity, and avoid the pitfall of overpromising and underdelivering. By consistently acting honestly and transparently, you lay a robust foundation for trust, promoting a positive work culture driven by reciprocal respect and openness.

A leader who is both trusting and trustworthy initiates a trust cascade. When you embody these traits, you open the door for others to follow. Model trust by believing your teams can do great work and accord them the independence to prove you right. This seeds an environment of empowerment and growth, making people feel valued and motivated to perform their best. Their increased reliability increases your trust in them. Of course, this virtuous circle won’t eliminate breaches of trust, and how you handle such inevitable disappointments can encourage your team to maintain their trust first-attitude or destroy it.

Reducing Your Trust Tax Burden

I was initially disheartened when one of my top performers left to join a competitor he’d met on my nickel, but I chose to learn from the experience and move on. Rather than letting it teach me to distrust my instructors or to prevent them from attending conferences and interacting with competitors, I calculated the tax on my trust based on the smallest possible increment: the one person who had betrayed it. I didn’t generalize from one person’s betrayal and resolve never to trust again. Instead, I let it be what it was—one person’s actions. I won’t easily trust that individual again, but I won’t let what he did make me distrustful.

Qualify Trust

The old Russian proverb “trust but verify” entered the American lexicon when one of Ronald Reagan’s advisors introduced it to him. The then-president used it to brilliant effect, turning his opponents’ folk wisdom into an argument for his proposed nuclear disarmament treaty. To me, “trust but verify” is a great starting point for reducing the price of the trust tax, but it’s not the whole story.

Game theory supplies a valuable addition. It recommends a “tit-for-tat” approach to trust. For example, in the prisoner’s dilemma game, the best strategy is to trust first. In the absence of prior contradictory evidence, believe a person is telling the truth. Then in every subsequent interaction, do whatever they did in your previous encounter. If they’ve burned you 10 times but were honest in your most recent exchange, you should trust them in the next. If they were honest 10 times but lied in your last interaction, don’t trust them this time.

The appeal of this approach is that it forces you to update your view of your counterpart. Rather than a rigid and unforgiving stance that refuses to trust anyone who has once betrayed you, you protect yourself while remaining open to new information and possibilities.

Reframe the Tax as an Investment

Another way to reduce your trust tax is to mentally recategorize it as an investment in people. Shaka Senghor, a convicted murderer and author of Writing My Wrongs: Life, Death, and Redemption in an American Prison, makes a compelling example. While in prison paying his debt to society, Senghor encountered a few people who recognized his potential and chose to put their faith in him. He seized the opportunity, turned his life around, and became a compelling advocate for education, personal development, and criminal justice reform.

Considering his past, putting faith in Senghor could have been seen as risky, but for the people who did (and for many others), the return on that trust has far exceeded the investment.

Turn the Tax into a Teacher

When we uphold trust as the cornerstone of our leadership, we set a positive tone for growth and integrity. When that trust goes unrewarded, it’s disappointing, but it’s also an opportunity to model the meta-skill of getting good value from bad outcomes. Joe Montana summarizes it well: “�鶹������ý’re all going to make mistakes, so the biggest thing is how you recover from that mistake. What do you do? Do you put so much pressure on yourself that you compound it and make it worse? Take a step back and consider, ‘What did I do? What caused that?'”

Getting good value from bad outcomes requires a two-step cognitive reappraisal. First, check in with your feelings and label them. Then analyze the situation and reframe it. In my example, I trusted, felt betrayed, and initially wanted to protect myself from feeling that way again by lowering the trust I gave team members. But I analyzed the situation—I had only been disappointed in one individual in one instance. There was no pattern of betrayal. I reframed the cost as a trust tax, evaluated it against the benefits of trust and the price of cynicism, and concluded it was a price I was willing to pay.

Courageous leadership extends this ability to turn such taxes into teachers. Openly discussing a trust breach with your team, analyzing its root causes, and implementing preventive measures fosters a culture of continuous learning and development. Through such experiences, you and your team members gain valuable insights that can be applied to future situations, strengthening the foundation of trust even further.

Learning to Trust

If you are predisposed not to trust, leading trust-first may require a mindset shift. That’s difficult personal work, but two techniques can help: humanizing the other person and redefining yourself.

Trusting people is only possible if we see them as individuals. If you’re suspicious of a person, get to know them before acting on your distrust. This is particularly crucial if you lead diverse teams of people from different backgrounds. Getting to know people as individuals makes trust easier.

Changing how you define yourself is even more challenging, but a slight shift in a leader’s self-conception can profoundly impact their team. To program yourself to be more trusting, tell yourself, “I am someone who assumes the best of others and always starts by trusting first.” Repeat this phrase to yourself. Let it challenge your behavior. If you subsequently behave with suspicion and mistrust, cognitive dissonance—the tension between what you’re telling yourself and seeing in your actions—will guide you into a more trusting attitude.

Because it is not free, choosing to trust demonstrates your personal strength and faith in the goodness of others. So, let’s champion trust and willingly pay its taxes. The rewards are well worth the cost.