The role of trust in the Social Enterprise

[Note: This is the sixth in a series of posts about the Social Enterprise and the Big Shift. The first post provided an introduction and overall context; the second looked specifically at collaboration, working together; the third looked at optimising performance, enjoying work, working more effectively. The fourth, Doing By Learning, looked at how work gets done in the enterprise, and provided the context in which such flows should be seen. The fifth delved into the subject of flows in detail, and introduced the concept of enterprise social objects. This post looks at such objects in detail. In my next post I will look at filtering and curation. The last three posts (in the series of ten) will then look at innovation, motivation and radical transformation.]

Jonathan Sacks has an interesting article in the Times today, headlined It Is The End of a Dangerous Experiment; sadly, it’s paywalled. Written in the wake of the LIBOR scandal, Sacks emphasises the importance of morality in markets, a reminder that ethics cannot be legislated for, that a shared moral code is needed. He reminds us of the inherent weakness in the Invisible Hand proposed by Adam Smith by making reference to Von Neumann, game theory and the Prisoner’s Dilemma. As he puts it “Two or more rational agents, each acting in their own self-interest, will produce an outcome that is bad for both, individually and collectively“, something the Invisible Hand theory does not allow for.

Sacks makes a critical point about market economies: they can be risk-based or trust-based. Regulatory frameworks work well in risk-based markets, but not in trust-based markets. What he said reminded me of a recent speech by Andrew Haldane, Executive Director, Financial Stability, at the Bank of England, headlined Tails of the Unexpected. The original paper, written by Haldane along with his colleague Benjamin Nelson, is available for download using that link. Haldane makes a similar point about risk and uncertainty, how many of the processes prevalent in the financial sector are based on assumptions of normal distribution in modelling risk, rather than using assumptions of fat-tailed distributions in conditions of uncertainty. When I read the Sacks article, my immediate temptation was to mash the two together, to describe the market as being risk-based or uncertainty-based, leading to the assertion that risk-based markets work well under strong regulation, but uncertainty-based markets need something more, something based on a shared moral code.


We live in uncertain times. We have always lived in uncertain times. And we will continue to live in uncertain times. One of the key theses of the Big Shift is that as digital infrastructures permeate all over the world, and as public policy shifts towards greater mobility of resources, the speed of change increases as does the level of uncertainty. The need to move from stocks to flows, from experience curves to collaboration curves, from past actions to continued learning, all this is predicated on the growing level of uncertainty within global markets.

Uncertainty-based markets require an underpinning of trust in order to function effectively.

I’ve said before that trust is hard to legislate for: it’s also hard to automate. Unlike regulation: rules can be automated. [An aside. I’m reminded of Sugata Mitra’s wonderful pronouncement on teachers: A teacher that can be replaced by a computer should be replaced by a computer. Rules can be replaced by systems. Trust cannot.]

Trust is necessary for the efficient functioning of organisms in conditions of uncertainty. During the late 1980s and early 1990s, I spent some time reading up on “incomplete contracts” in the context of firm theory. While I came across a number of papers on the subject at the time, the one that stood out for me was Erik Brynjolfsson’s December 1991 paper An Incomplete Contracts Theory of Information, Technology and Organisation. It allowed me to conceive of information assets differently; it made me think harder about the impact of designing information assets to be shareable, “flexible”; and it made me ponder over the consequences of having information assets controlled centrally. [An aside: Not surprisingly, that interest in firm-theory-meets-incomplete-contracts resulted in my meeting Erik a few years later, and, serendipitously, was given a further boost when I had the opportunity to spend time with Tom Malone soon after he’d written The Future of Work. Tom came to see me in hospital in San Francisco last week: Tom, if you’re reading this, much thanks.]

[While on the subject of hospitals — you may have noticed I’d gone quiet here for a while. It was because I’d somehow contracted a serious infection that needed urgent treatment in hospital, spent nearly a fortnight in hospital, and I’m still recovering. Many of you found ways of letting me know you cared, and I am immensely grateful for that. My colleagues were brilliant, they kept me in high spirits during what was a very painful and worrying episode in my life. Colleagues from my childhood, my early years and my more recent past also showed up, amazingly. Particular thanks also go out to Sheldon Renan, coming all the way from Portland, and to John Hagel and John Seely Brown, who found time to have a wonderful dinner with me the day before I was admitted to hospital. They helped provide grist to my mill as I lay supine for too long.]

Though some of you may dismiss it as “pop”, I liked the simple message in Patrick Lencioni’s Five Dysfunctions of a Team. An absence of trust leads to a fear of conflict which in turn reduces commitment, which makes for an environment where people avoid accountability and thereby leads to poor execution.

Teams, like firms and markets, thrive on trust.

The Social Enterprise is about raising performance levels in uncertain environments. Which makes trust a must. But trust cannot be legislated or mandated. How then are we to engender trust?

Society has had mechanisms for engendering trust for aeons. Some of these are based on transparency, openness and the power of inspection. Look at me, my hands are empty, I bear no weapons — the origins of the handshake. Some of these are based instead on “trusted domains” doing the introducing — as in the passport — Her Britannic Majesty’s Secretary of State Requests and requires in the Name of Her Majesty all those whom it may concern to allow the bearer to pass freely without let or hindrance, and to afford the bearer such assistance and protection as may be necessary. Yet others used badges of achievement or honour — as in the coats of armour or the diplomas of the medical and legal professions.

But all these were structured and explicit means of engendering trust. I think people are a whole lot more complicated than that, and that we all have a slew of tacit ways of giving and receiving trust. And my hunch is that Social Objects have key roles to play in this regard. [For more on the theory of Social Objects, you may want to refer to these three posts. ]

When you trust someone, you make yourself vulnerable. This is true whether the you in question is a person, a firm, a market, humanity. By making yourself vulnerable, you engender trust. Vulnerability is the essence of trust.

One of the ways you make yourself vulnerable is by sharing. I make myself vulnerable when I share my thoughts here; over the years, people have written some fairly disturbing comments publicly as well as privately. If I wasn’t prepared to be vulnerable, I shouldn’t have chosen to share my thoughts like this.

The act of sharing helps build trust. When you get together with your friends and you discuss the books you read, the films you saw, the meals you ate, the places you visited, the things you experienced, you’re sharing. The topics you speak about are social objects, things you have in common, things that encourage commentary and opinion to be expressed freely and openly. And after a while, the “social object” isn’t the important thing, what matters is the relationship that forms as a result of the comments, the advice, the observations.

What’s actually happening is that you’re building strong bonds as a result of the things you have in common, bonds that help you stay committed and loyal to each other when faced with things you don’t have in common, where you don’t see eye to eye. To me the interactions are tacit ways of establishing and building trust.

At work, these social objects take on different guises. They’re not just films and restaurants and holidays and TV shows and concerts any more; they’re documents and spreadsheets and presentations and photographs and videos. As people work together, they share these objects, build communities around them, grow the moss of commentary around the rolling stone of the object. In some ways I am reminded of Erik Brynjolfsson’s “information assets”, which can be designed for central control or for sharing: a decision that affects, deeply, the sense of ownership that workers experience, which then informs their later actions and behaviour, influences whether they act as “owners” or not.

Knowledge work involves the use of many digital information assets. Some of them are very structured and architected and form part of workflow, with formal steps and approval processes. For sure these are enterprise objects and they form a critical part of workflow. But they’re not social objects, and I’m not talking about workflow.

I’m talking about posting a draft for a talk and saying hey guys, could you tell me what you think of this? does it work for you? how can I improve it? I’m talking about reading a medical report and saying I really don’t like the look of this, there’s something not quite right about it, my sixth sense is on overdrive and I need your help. I’m talking about looking at a customer complaint and saying you know what, I think we’re barking up the wrong tree, I think this is not a router problem, it’s a credit problem, that’s why we’re not solving it. I’m talking about oops, I’ve got an unexpected opportunity to pitch to the ceo of an aerospace company about what we can do for them. but it’s in fifteen minutes. does anyone know of any work we’ve done in that sector? and when you get five different responses with attachments I’m talking about the comments that let you choose which one is best.

I’m talking about ways of sharing, of collaborating around information assets, ways that tacitly engender trust.

They involve social objects. But the objects aren’t important per se, what matters is the quality of the interactions that ensue as a result.

Hagel, Seely Brown and Davison speak of participants, interactions and environment as the key components of creation spaces. These participants need to trust each other. The environment helps them deal with explicit ways of building trust. You need the interactions in order to deal with the tacit ways of building trust.

When trust is formalised and structured and regulated it can be gamed. Identities can be victims of theft, so to say. [Although every time I hear that phrase, I am reminded of Mitchell and Webb’s wonderful skit on Identity Theft, a must-listen.

More and more, what we need is a more personal experience of trust, one that is tacit, one that is based on interactions and experience. But this is hard to scale. Unless we learn more about the value of digital social objects, information assets, in this context.



23 thoughts on “The role of trust in the Social Enterprise”

  1. JP – You don’t use this term in this post, but is there a link between your discussion of trust in organisations, Brynjolfsson’s ideas on information as an asset and the concept of social capital? BTW thanks for the link Brynjolfsson’s paper, which I hadn’t seen before.

  2. I’m glad to read your voice again. I knew you were sick, but felt it would be awkward to ask what was wrong. Sounds like it was fairly serious. But I am glad you are better. I missed seeing you when I was in London.

    I am a firm believer in trust networks and operate exclusively in them. Social media has enlarged them for me and made more social business possible.

  3. JP – brilliant post, I look forward to following your links, too. Get well soon. Medical things rarely welcome, especially surprises. Glad to hear you’re okay.

    Maybe a useful extension to your risk-based vs. uncertainty-based is thinking in terms of market maturity. New markets are replete with unknowns because participants don’t know the ins and outs yet. Trust is the original risk mitigation. Since social technologies are expanding types of communication channels and volume, they increase market dynamism and volatility. They create new markets. Hence more uncertainty. A greater need for trust. Along with this (I’ve been peripherally involved with standards bodies), regulation requires prolonged collaboration among arch rivals, which aren’t incented to collaborate until enough of them give up on dominating the market outright and agree to compromise. They usually exist in markets of a certain maturity.

    I’ll hazard that regulation is inherently more impersonal than trust. Aren’t they kind of mutually exclusive? Look at markets like China vs. the U.S. Europe used to do business in a handshake and have comparatively undeveloped legal systems; it was like that when I lived in Italy in the 70s. That’s trust.

    CSRA’s work in social business strategy is fascinating and valuable, but in many ways I prefer the “execution” piece, which is where the trust and collaboration issues play out in real time and make or break social business initiatives. I love your insight on the role of social objects and look forward to quoting you. I have seen this in client work constantly, that the importance of artifacts is to spark interactions, which is where the real trust and relationship action is. This had led me to argue for years that, regarding social technologies, “the conversation is the content.” So many “brands” haven’t left the 20th century yet, they push “content” to social “channels.” Their attitude is wrong. This miss the boat.

    People make magic when they trust. [Talk about the “multiplier”!] They also inspire and can influence larger groups. That’s one thing about the “social enterprise”; using [transparent] social technologies, we can model social behaviors like risk taking, open vulnerability, exploration/discovery and trusting, thereby inspiring the larger group to trust more. CSRA pursues this explicitly on many engagements; we’ve found that trust can scale, quite beautifully.

    Thanks again for a rare post.

    BTW, I’m sure you know Robin Dunbar, but you may find valuable my review of one of his books valuable; it reveals what I coined as “Human OS,” front and center, and gets deeper into sociality and trust.

  4. Glad you are getting better and good to see the 6th post here. I think Trust is the most important part – that and the handshake, the gentlemans’ agreement, like in the old days. We need more common sense, and less regulatory interference to build the social enterprises of the new world. I agree with Christopher, ‘People make magic when they trust.’

  5. JP, good to see you back from hospital and thx or this brilliant post that resonated very strong with me. I am sure you are aware of the work we’re doing on the digital asset grid, which clearly is about creating trust in a grid of growing complexity and uncertainty. The complexity is caused by the sheer explosion of data (aka information assets) and the explosion of nodes of all types (humans, circles, organizations, clouds, devices, etc…). How to create trust and governance (not necessarily regulation) is key in such – dare i say – “ecosystems”. Re Trust, i was recently very inspired by Mike Neuenschwander (ex Burton, now Oracle), who gave me this refreshing (at least for me, as the thinking is 10 years old or more) that trust is at the level of the relationship. For ex, me and my wife are happily married for almost 20 years: it is not because we have a string identity such as the Belgian ID card, that this creates trust. No, trust was created over the years in the relationship, knowing how the other functions, reacts, is consistent, etc. I found it a great idea if one could create a trust-score at the level of the relationship between 2 or more nodes in a grid. Again, fascinating post, and i will dive in the rich collection of links you provided. Warm regards, Petervan

  6. The problem is in what you touch on briefly at the end; even social objects can be “gamed.” The concept of the “persona” applies here. I can project a persona through social sharing, and that could be very far from “me.” As a very poor example, Google thinks I am a young male on the basis of many of my interests.

  7. @Francine, as Dunbar repeatedly references in Gossip, Grooming, *all* social actions can and will be gamed under certain circumstances.. it’s in primates’ genes. Another great reference is Robert Wright’s The Moral Animal, esp. the explanation of reciprocal altruism. It’s among these links.

  8. An excellent post as always! The importance of trust is one that cannot be over-estimated, especially in times of growing uncertainty, as you suggest.

    One key element that I have noted is that the basis of trust tends to shift in uncertain times. In stable times, trust can often be established through credentials – what schools or training programs did you attend and complete? In a world where stocks of knowledge acquired through such experiences depreciates at an increasing rate, the value of credentials in building trust diminishes.

    The focus for trust shifts to a question about the person – is this someone that I can count on to stay the course when the completely unexpected strikes? In this context, social software platforms can be especially powerful, if they encourage people to share more of who they are and what their current interests and passions are. It becomes increasingly important to know the person holistically rather than getting a partial, carefully compartmentalized view. The old view that we can and should build a high wall separating our professional and personal lives needs to be challenged.

  9. Reading this, I found myself wondering what insights your recent hospital stay added to your thoughts about trust? There are few places in which our vulnerability is more obvious, and the subtle signals of trustworthiness clearer and more crucial, than in hospitals. There (at least for me in two fairly recent hospital experiences) the institutionalized, stock-of-knowledge-defined professionalism that used to be the foundation of trust, is experientially trumped by the deeper sense of Care that others conveyed. The trust that emerges from experiencing that Care through a look or touch is much more powerful than knowing that Dr. Aloof is triple Board Certified. This, I think, speaks to John Hagel’s insight about trust being a holistic phenomenon. Trust is not achieved intellectually. It is experienced emotionally. Deeply connected, transcendent, personal and professional congruencies are much more likely to engender trust than the accomplishments of a high IQ. This is why filling an organization with as many IQ points as you can buy doesn’t add up to creating a trusting culture.

  10. Stocks to Flows:-) Sounds like the Big Shift to me, John. But I agree with you. In the society we live in now, trust is established by authenticity, dependability, and willingness to give or contribute beyond what is asked. The best and worst of people comes out on social media platforms.

    This raises, for me anyway, the question of identity. There are strong arguments for anonymous comments, but how can you build trust if you don’t have a context for a comment, an identity that can be used as a kind of character reference? That may be Mark Zuckerberg’s biggest contribution–making people use their real names.

  11. More relevant thoughts from JP that go to the core of our society today. I come from the era of “my word is my bond”. However trust over the past decades has eroded and so opportunities for exploitation of self interest have emerged. Leadership has been poor with politicians fiddling expenses, not pay tax and being “too close” to the media sending out the wrong message of every man for himself! The Bankers likewise have added to the society woes the common theme is short term thinking with a command and control management style that is driven by destructive targets. But maybe this all brings a “tipping point” for a social change in the enterprise that looks to harness people’s natural instinct to do a good job. I watch with great interest the “Undercover Boss” and this program just gives the evidence (if needed) that more empowerment for people can improve enterprises. It is a management who need to change as I referred to in a previous post. Measurement is essential not just for management but to allow people to see that their contribution is meaningful.
    There is little doubt IT as it has evolved has contributed to this lack of trust as systems evolved where people came second to the system and any “empowerment” was self generated with no measurement allowing the unscrupulous to flourish and the majority to be directed with little room for initiative. Craig le Muir wrote a very interesting blog He sees a new generation of processes designed from the outside in will replace the heavy packaged apps designed from the inside out that drive customer interaction today. This is where I see the opportunity will exist to see what JP calls social objects where collaboration across functions can be facilitated at the point of making decisions with the attributes described by JP as collaborative flows.
    However read this before we get too excited If the 50 clicks on SAP and the work around can be replaced by intuitive collaboration flows with good leadership the benefits could be significant?

  12. JP, the fluid, deeply insightful way you’re writing about the information-social environment and the social enterprise reminds me of the amazing series of books by architect Christopher Alexander, The Nature of Order:

  13. JP, I felt compelled to respond to Lord Sachs after reading this on the issue of ethics in economics which has been a consuming interest for the last decade or so. It has to do with social enterprise too, not The Social Enterprise but business with a primary social objective.

    “The anti-values of greed, individualism and exclusion should be replaced by solidarity, common good and inclusion. The objective of our economic and social activity should not be the limitless, endless, mindless accumulation of wealth in a profit-centred economy but rather a people-centred economy that guarantees human needs, human rights, and human security, as well as conserves life on earth. These should be universal values that underpin our ethical and moral responsibility.”

    – Miguel D’Escoto Brockmann, the President of the United Nations General Assembly in 2009

  14. “By making yourself vulnerable, you engender trust. Vulnerability is the essence of trust.”

    I find this notion of a state of vulnerability as a necessary facet of trust very interesting in the light of how sharing occurs in social networks today.
    This is just a bit of brainstorming on that thought:

    For one to feel vulnerable, they first need to feel a stake in it; consider it important; consider it on some measure of value in their own view.
    They need to consider that it ties to their identity or that people will at some level associate them with it that (e.g., “I heard it from ____”). Depending
    on how much they know the identity of the original author versus the person sharing it, the associated identity may get remembered differently,
    per the end-receiver’s view.

    Consider the trivial effort it takes to share in many such public social systems today, to the point of one-click behavior. For many it becomes as trivial to
    reshare it under their identity and many consider it low-risk. There is little feeling of vulnerability or accountability — “It’s what someone else said/posted”.
    One could argue that social networks today encourage less vulnerability and in turn create less trust.

    That, or vulnerability itself is considered a lower significance at the risk of being irrelevant in the masses of public audience.

    This I think is a population size problem, and problem with having power laws for network significance. In general, the more influential one is in the network
    (high trust), the more people tend to listen to them, and the harder it is for newer potential influencers to disrupt the status quo. You get the “long tail”
    effect with a tiny group of top influencers that then to perpetuate their leadership position and a large population of others at the mid and lower
    ends of the curve looking to stand out.

    Their options: share a-plenty. They may trade vulnerability (reputation-risk) simply for visibility, by pushing and sharing more messages without worrying
    about the quality. Yet sometimes that simply works as memes catch on.

    One key point is the “public” aspect of this. When the conversation is on a smaller group or audience level, there would seem to be more at stake.
    The networks are smaller, so you don’t get to “hide” in the masses; your identity and reputation in that group is more directly known and impacted by
    your actions of sharing. Vulnerability becomes a more important factor here.

    In summary, there may be different rules to vulnerability as a factor of trust in small versus large audiences.


  15. Some weeks ago, A network called GroAction offered me an interview on the subject of ‘Changing Capitalism to Serve People and Planet’ where I was asked for 3 things I’d advise young people starting in social enterprise. They were these.

    Place compassion and integrity ahead of celebrity.
    Offer trust even after it proves misplaced.
    Walk more than talk.

    My comment about trust derives from the real experience of applying radical transparency in our work, which would bring years of defamation and then hijack. It would leave us empty handed after 6 years effort , such that our founder would be unable to fund urgently needed medical treatment and would die.

    Yet, I knew only by offering trust could we expect it to be propagated. The Tao te Ching says that he who does not trust is not trustworthy and the following dramatisation makes the point that doing good depends on trust.

  16. Small talk lubricates trust. It’s why we talk about the weather or sports with strangers — neutral topics that let us begin to disclose something of ourselves (vulnerability). It’s why idle chit-chat online is more than it appears. I started following this blog and when I joined Twitter I started following JP. When I noticed that he and I share an interest in a beloved but defunct rock band, I started chit-chatting with him, the way Deadheads do. Songs, setlists, venues are standard chit-chatty social objects for fans of any band.

    Long ago, the Whole Earth Catalog was produced by people in two buildings, separated by an empty lot. In the empty lot was a volleyball court. Every day before lunch, people played volleyball. Then the landlord built a parking lot where the volleyball court used to be. The people on the production side and the people on the business side began referring to each other as “the other side of the parking lot.” Conviviality deteriorated when the volleyball games stopped. The problem, as noted previously, is how to scale the kind of trust that grows this way. It is only partially transitive. I’m willing to give a friend of JP’s the benefit of the doubt, but that doesn’t mean that JP’s friends’ recommendations carry much weight until I get to know them better. When social media first came along, it was my hope that it could help scale the kind of trust necessary for a group to grow its own social capital. To a degree — to a significant degree — this can be true. But just getting people to communicate online isn’t enough. Facilitating vulnerability, openness, the steps toward trust online is very much an art.

  17. Agree with you there Howard. I think that is the strength of twitter as a medium, its like a permanent volleyball game where you sort the wheat from the chaff. Blogs are found via tweets for serious shots. Friends are made via friends, and eventually met in real life very often. Its a magical world if you make some time for small talk and a quick game in the parking lot.

  18. Trust is a conditional tree taxonomy of topics you can discuss with each person you interact with.

    Small talk allows you to discover and create that mental map of what other people or groups find interesting, uninteresting, inspiring or repulsive. Small talk is making the attempt with the less vulnerable viewpoint on a topic that you can to discover what another person thinks of it.

    Trust is moving up in degrees of vulnerability, and solidifying that mental map of topics you can discuss with people you know

  19. Like others I found this a gem of a post on the fundamentals of org behaviour…it’s not just about soc biz, it’s about what makes people tick, which is why this path has led me to reading about anthropology, social psychology, cognitive science.

    I clipped your post here with some references to similar posts by others on this topic

    Here’s a bit:

    “Once we have a history and have shared personal stories we create a bond. In the future if that person needs help or you see them in a bind, you will make time to help them out…if you come across something you know they would like, you are more prone to share.
    Basically you tend to look out for each other when you have a bond.

    A key point here to nurturing this is by creating situations/events where people can have opportunities to create bonds, as well as providing online environments that do the same”

    Here’s some anecdotes

    Larry Irons has done some research into this, which inspired my gigantic post on organisational wellness

    …it covers sharing personal stories, touch, the limbic brain, oxytocin, etc…paying attention to these things helps create high performance teams due to the focus on individual wellness

    And I just have to share this magic quote from Karen Stephenson:

    “Trust is not unlike the shared electrons that bind benzene…Cursory calculations reveal that ‘matter’ matters little. Rather it is the field of energy that makes brick walls, steel plates and diamonds impenetrable. So it is with culture. Culture is impervious to process changes, change management or reengineering because of its field of energy: the networks of trust. Thus new knowledge will be accepted only if adopted by the networks.”

  20. @johnt I agree, we sometimes forget the fundamentals. However, its the sociotechnical context that makes what is happening different right now when we talk about social business/enterprise. While there were always hints – for example, the way telegraph operators socialised with each other between sending messages – we’ve never had technology like the Internet, mobile computing and social media before.

Let me know what you think

This site uses Akismet to reduce spam. Learn how your comment data is processed.