The Trust Model Is Dead. Now What?

In the late 1990, I developed an institutional trust model for clients involved in online business transactions. These clients staked their livelihoods on the belief that mistrust is a natural human state. That institutional trust model, like all models was false but useful – but only in specific situations. It was based on a hierarchical view of control in which experts tell us who we can trust. The foundation of that trust model was that the authentication of an individual or institution could be verified in the physical world. Information about the trust-worthiness of that entity could flow from that physical  authentication in the form of a rating or score similar to credit scores with the addition of new measures of trustworthiness that go beyond financial stability. The thinking that created this model was not based on natural human behavior, but on our inability to connect, communicate and share information.

Today, that institutional trust model and it’s associated assumptions are being turned upside down by the phenomena of social media on the Internet. Example after example of real work and valuable services and product offered abound.  These services and products are created by people who are operating in the re-emergence of a communal trust culture that is much closer to the way natural personal trust is achieved. What is happening right under our noses is evidence that personal trust is contained in the collective trust of social groups and that its availability need not be limited to the availability of formal leaders and so-called experts.  What is so different in this model? Innovation comes not just from understanding needs and problems in search of solutions, but that when people gather around a topic of real passion and interest, real value can be created that rivals traditional expert-controlled products and services.

In truth, the institutional trust model has always been broken, but we humans, in search of certainty, prefer to believe otherwise. In the world of business-to-business transactions, trust between companies often begins with an identity established by a trusted expert such as a credit agency, i.e., Dunn and Bradstreet. In theory, the authentication expert validates the existence of the business and then purveyors of online trust models such as digital certificates and data mining services provide expert opinions in the form of data encryption, ratings and scores. In truth, physical verification rarely takes place. No one physically visits the business to ensure it exists. The scores and ratings are simply patterns of data transactions analyzed by algorithms based on certain assumptions that may or may not be reliable. And as we’ve seen by our recent global financial melt-downs and high-profile ponzi schemes – such models tend to become self-serving over time.  And while they might protect those currently holding control over others, they are not the only accurate representations of trustworthiness and value.

People across geographic and generational boundaries are overcoming institutional trust limitations as they come together around relevant similarities to provide value in the form of information, services and programs. What are re-emerging in place of hierarchical trust are some very old forms of communal trust. The patterns of the communal trust model became repressed as people became physically separated and communication systems evolved from few-to-few, to one-to-many and one-to-one.

Now as social media allows more people to share more things without expert intervention, the time to evaluate how we develop individual and collective leadership in organizations has come.

The communal model of trust begins with individual internal trust. People who trust themselves tend to be good global citizens.  Collective global governance, in turn, reduces incentives to game a system. This, in turn reinforces the ability to trust the system. The collective trust of people in the system provides a positive self-reinforcing feedback loop.   This sort of feedback can both redirect unintentionally inappropriate behavior and expose those who willingly game the system at the cost of the collective.
The individuals’ ability to trust the collective has lead to some pretty spectacular developments made possible by social media and new financial models in which the cost of sharing is sublimated by the benefits of learning. Wikipedia, Mozilla Firefox, Couch Surfers and a recent software development contest for open government sponsored by the City of Washington DC are all examples of real value being created through a new organizational model that looks much more communal than hierarchical trust.

There is no question that social media are changing social systems and that social systems are changing social media. Since organizations are also social systems it is time to elevate the conversation about social media from water cooler to strategic.

Even with all the training and focus on teamwork and flattened organizations, most modern organizations, profit, not-for-profit and government still operate primarily as leadership hierarchies. Hierarchies, while useful for control, are extremely inefficient for disseminating information and driving innovation to create competitive differentiation. To remain competitive, 21st-century organizations will need to think strategically about not only social media but also the collective knowledge, creativity and good will that is available to them to create value and reduce costs. Social media is much more than a way to market virally.  It is a way to build and develop organizations.  It is now possible to share knowledge across the arbitrary boundaries of org charts and organizational identities and therefore provide an infinite source of knowledge and creativity for organizations willing to learn new ways of working with others.

An excerpt from a video, Us Now, provides some examples of how social media is bringing about change in social systems.

Submitted by: Lucy Garrick

Us Now Excerpt by courtesy of Youtube creative commons