Make This Networking Mistake And Lose Big Time

“Nobody deceives me!” you may boast, proud of being so prudent.
I’ve got some bad news for you:
If you are not deceived regularly, then you are not extending enough trust.
Unless you experience the occasional deception, you are not optimizing your relationship building process; you are losing valuable opportunities to connect with people who might enrich your career… and your life.
Provision For Bad Debts
Every company makes a provision for bad debts. Ever wondered why?
A company could restrict credit to insure that all its debtors pay back; in the extreme, they could decide to operate on a cash-only basis. That would certainly take care of any concerns about bad debt. So why don’t they do it?
Because it is not profitable.
The company doesn’t know in advance which customers will pay it back and which will not. When it extends credit, it is gambling on probabilities.
There are two types of errors the company can make: Type 1 is to give credit to a customer that does not pay back. Let us call this a “false positive,” meaning that the company’s assessment was positive when it should have been negative. Type 2 is to deny credit to a customer that would pay back. Let us call this a “false negative,” meaning that the company’s assessment is negative when it should have been positive.
One can only reduce the probability of type 1 errors by increasing the probability of type 2 errors, and vice versa.
A company can reduce the probability of accepting credit applications from the “wrong” customers (type 1) by tightening credit standards. Excluding these unprofitable customers is a benefit. But the problem is that tighter credit standards mean a higher probability of rejecting credit applications from the “right” customers (type 2). Excluding these profitable customers is costly.
A profit-maximizing company will choose credit standards that optimize the combination of type 1 benefits—fewer bad loans—and type 2 losses—fewer good customers. Except under extreme conditions, this optimization will accept some bad loans for the sake of a larger customer base.
Provision For Bad Dudes
Put yourself in the place of the company above, and put your relationships in the place of the customers. The currency is trust and the profits are the support you receive from allies and friends.
You could restrict your trust to insure that none of your relationships deceives you; in the extreme, you could even decide to not trust anybody. That would take care of any concerns about being deceived. So why shouldn’t you do it?
Because it is not profitable.
You don’t know in advance which people will honor your trust and which will not. When you extend trust, you are gambling on probabilities.
There are two types of errors you can make: Type 1 is to trust somebody that will deceive you. This is a “false positive.” Type 2 is to not trust somebody that will not deceive you. This is a “false negative.”
Remember: You can only reduce the probability of type 1 errors by increasing the probability of type 2 errors, and vice versa.
You can reduce the probability of trusting a “wrong” person (type 1) by tightening your standards. Excluding these bad people from your circle of trust is a benefit. But tighter standards mean a higher probability of rejecting a “right” person (type 2). Excluding these good people from your circle of trust is a cost.
A life-maximizing strategy will select standards that optimize the combination of type 1 benefits—fewer deceptions—and type 2 losses—fewer trusting relationships. Except under extreme conditions, this optimization will accept some deception for the sake of a larger network of trust.
This is why I said at the outset that if you are not deceived occasionally, you are not extending enough trust. And this is why you might consider making a mental allowance for “bad dudes.”
It Sucks To Be Me
When I am betrayed, I feel terrible. I know that to connect with people I must take risks, and that occasionally I will be betrayed. But when it happens, it really, really sucks. I am not just a rational being; my emotional side abhors the pain. In such moments I am tempted to withdraw, to limit my trust in anyone who might hurt me.
I have a mantra for such moments: What feels good is not always good; and what is good does not always feel good.
It feels bad to be deceived, but I know that it is good—in small doses. The occasional dose of bad feelings is the price I pay for the loving relationships that bless my life.
And when I look back at my career, I see that all my professional success, my financial position, and my dear friends, are now the means to set up an even higher allowance for bad dudes, which then enables me to have an even larger network of trust.
Readers: How much risk of betrayal are you willing to take for the sake of trust? Write a comment below and let us know.
Fred Kofman, PhD. in Economics, is Professor of Leadership and Coaching at the Conscious Business Centerof the University Francisco Marroquín anda faculty member of Lean In. He is the author of Conscious Business, How to Build Value Through Values (also available as an audio program).
Image: Alex_F/Shutterstock.com

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