Monday 28 April 2014

30. A stop to this blog

The next series on this blog would have been on innovation in networks. But the number of readers is small and decreasing, and continuation on this basis is hardly worth while. Therefore, I am stopping this blog until further notice. If readership increases substantially I will pick it up again. I thank the few readers I had for their interest.

Best wishes,

Bart Nooteboom

Monday 21 April 2014


29. Roles of a go-between

 Since the art of trust is difficult, it may help to employ the services of a go-between with the appropriate knowledge, skills, experience, wisdom and trustworthiness. It can play a variety of roles. Some of them are more technical and others more relational. I will not mention all roles because some of them require too technical an explanation.  

 On the technical side:

 First, help to cross what I called cognitive distance: help partners to understand each other, technically, concerning the content of collaboration, in purpose, methods and means. For this, the go-between must have the required specialist technical knowledge.

Second, help to judge the partner’s potential and its economic value, in view of possible alternatives, and its reliability in competence.  

Third, provide an assessment of the fields of force facing both parties: risks and opportunities involved in the networks to which they belong, and other strategic risks and opportunities. A risk in a network is, for example, that trust in the partner may not suffice if some third party, a competitor perhaps, may take over the partner.

On the relational side:

Fourth, help mutual understanding of ideas, intuitions, attitudes, habits, positions, cultures and skills of collaboration. Look also at the levels on which trust is needed, and how they are connected: personal (who are we dealing with), organizational (how are they supported by their organization) and environmental (what are the outside pressures of competition, politics and the economy).

Fifth, the go-between can adopt a more or less formal role in arbitration or mediation, to prevent conflicts from arising or escalating to a legal conflict.

Sixth, perhaps the most important but also most difficult, help in the difficult process of building trust, preventing its undue collapse, and, if possible, to repair broken trust. This includes many of the features discussed in previous items in this blog. Help to practise openness, give benefit of the doubt when something goes wrong, help to empathise by understanding the partner’s situation and the circumstances and pressures he faces. Eliminate undue suspicions; help to deal with uncertainty concerning the causes of disappointments (the causal ambiguity I mentioned before). See to it that no unrealistic expectations are raised whose disappointment may destroy trust. Help to explore the limits of trustworthiness and the need for control. Keep an eye on imbalances of dependence, and try to compensate for them.

Seventh, not the least important, help to disentangle, with minimum damage and acrimony, relationships that have become irreparably damaged or where mutual benefit has dwindled, to adapt to changing conditions.    

These roles all require their specific knowledge, skills and experience, and they all require reliability in competence, and trustworthiness in the form of fair dealing. Some roles may be combined in a single go-between, but it would be difficult to combine them all.

Candidates for a go-between are various. There is certainly a market for it, for commercially operating go-betweens, but there would have to be a safeguard for competence and integrity, as with doctors and notaries. Banks, notaries, accountants, consultants, academics, and government agencies might all qualify, in one role or another.

Monday 14 April 2014


28. Psychology of trust

As I argue in my philosophy blog (http://philosophyonthemove.blogspot.nl), people have an instinct for self-interest and survival as well as an instinct for altruism, at least within the groups to which one feels oneself to belong. According to work in social psychology this is reflected in two opposing mind frames that people have, a frame of defence and mistrust, in protecting one’s interests (self-interest) and a frame of trust, in solidarity with the group (altruism).

A mind frame operates as a mental framework in which observation, sense making and interpretation take place, plus a repertoire of responses. This may be compared with my earlier analysis of scripts (in item 13 of this blog): what is observed is fitted into scripts and that triggers response, again according to scripts. In the defensive frame one will be inclined to scrutinize observed conduct for signs of danger and threat, taking untrustworthiness as the default: one mistrusts until contrary evidence arises. In the solidarity frame one will take trustworthiness as the default.

The default of trust rather than distrust is to be recommended. With mistrust, the trustee has to prove trustworthiness and that is as impossible as proving that a theory is true. And distrust blocks the opportunity for a relationship to develop and demonstrate trustworthiness. With trust as the default, when adverse conduct is experienced one can narrow the room for trust and tighten controls.

The main point now is that one cannot be in two frames at the same time, but the other frame hovers in the background. Being in one frame one may switch to the other, depending on evidence, experience and emotions. The more robust a frame is, the less easily one will switch. When one feels threatened the solidarity frame may switch into the protective frame, and once that happens the reverse switch tends to be difficult. There is a saying that ‘trust comes on foot and departs on horseback’. The solidarity frame often is less robust than the protective frame.

The adoption of one frame or another depends on relational signalling: one treats observed conduct as a signal that indicates the frame the other person is in. That observation is fitted into scripts corresponding with the present frame. The trustee should be aware that what he/she does or says has that effect, and when being in the solidarity frame he/she should prevent doubt and ambiguity. Having received an e-mail message one should always respond to it, lest the sender wonders whether the massage was received and is getting attention, or the receiver is not interested.

This analysis further emphasizes the importance of openness discussed in the previous item of this blog. I add here that when one is in the solidarity frame one should make sure that this is reflected in what one says and does: demonstrating commitment, competence, and fair play. It is also important not to create too high expectations that can only lead to the disappointment that may trigger the partner’s switch to the self-interested frame.      
 

Monday 7 April 2014


27. Trust and openness

Trust pricks up its ears when expectations are disappointed. What is going on? The problem is that when expectations are disappointed, the cause is often ambiguous. What went wrong? Was there a misunderstanding in expectations? Was there an accident that was none on the trustee’s fault and prevented him/her from acting as expected? Was his/her competence less than thought? Did he/she not pay attention; was there lack of commitment? Or was he/she deliberately taking opportunistic advantage at the expense of the trustor? This is the causal ambiguity of trust. Often one cannot establish what cause is at work, for lack of information or ability to interpret what happens. Especially the opportunist will claim a mishap for an excuse.

When the trustor is under pressure or lacks self-confidence or is inclined to distrust he/she may jump to the worst conclusion, that of opportunism. If the trustee is in fact reliable, he should therefore when making a mistake or incurring an accident immediately report it, explain what happened, announce his commitment to immediately try to mitigate the problem, and promise that after the crisis he/she will engage in deliberation about how such problems may be prevented in the future.
 
That is trustworthy conduct. In other words, the problem of causal ambiguity yields the need for openness about failures. Secrecy does not pay. The trustor will conclude that the trustee acted opportunistically, because if not, why didn’t he/she come clean earlier, and help to solve the problem?

Take the bankers. Many people say that the bankers should have apologized for the financial crisis. But such apology alone is cheap. One should add what I just indicated: clarification of the causes, attempts to redress the problem, and commitment and deliberation for future prevention. Since the bankers did not do any of that all trust in them was destroyed. The conclusion was that they acted deliberately and opportunistically. 

The reverse side of this coin is that when something goes wrong the trustor should not jump to the conclusion that the trustee is opportunistic, but should extend the benefit of the doubt to the trustee and let him/her explain. Here empathy also comes in: the trustor should put him/herself in the shoes of the trustee, to try and understand what was going on.

There are further arguments for openness for the sake of trust. Not only should the trustee be open about his/her failures, the trustor should also be open to the trustee about his fears concerning the relationship. That gives the trustee the opportunity to try and reduce the risk involved. Secrecy robs the partner of opportunities to help. Good negotiation is not seeking to yield as little information and advantage as possible, as instinct may dictate, but to seek out problems on the part of the partner that carry great weight for him/her, and see if one can prevent or mitigate the problems at comparatively low cost. If the partner does the same, then in this give and take both partners will flourish.   
 

Tuesday 1 April 2014


26. Sources of trust

Trust is emotional, since it is related to vulnerability, risk, fear, and hope. It depends on character. With less self-confidence one feels more vulnerable and less inclined to trust. It depends on experience. Disappointments reduce trust. Trust can also be rational, in an analysis of the motives and conditions for people to be reliable.

Trust depends on conditions. Under threat of survival trust will be less. If there is no alternative for partners, and they ‘are condemned to each other’, there is pressure to make trust work, as among marriage partners, and government departments.   

Rational analysis goes as follows. As indicated in the previous item in this blog it is useful to distinguish between reliance, which includes both control and trust beyond control. Control can be based on formal hierarchy (the trustor is the boss), a contract, dependence of the trustee on the trustor, or the need for the trustee to maintain his/her reputation. In one-sided dependence the most dependent submits to the power of the least dependent, and while this is not necessarily fatal, it is wise to aim at a balance of mutual dependence. 

There is also the possibility of a hostage: the trustor has something of value to the trustee and can threaten to treat it badly unless the trustee acts reliably. In old times that took the form of family or nobility surrendered to the trustor. Nowadays it typically takes the form of information that is sensitive to the trustee, such as knowledge concerning a product or technology. The trustor can threaten to make information public or to pass it on to a competitor of the trustee. Ït is a form of blackmail.

Beyond control, trust can be based on norms, morality or ethics, or on personal empathy or identification, or simply on routine: a relationship has become habitual and the question of reliability no longer comes up. Empathy is the ability to put oneself in the shoes of the partner, to understand his/her position and how he/she thinks. Identification goes further, in feeling a bond, thinking like the other, or making his/her fate part of one’s own. Empathy is needed for trust, but identification may go too far, locking a relationship up.

Trust and control are both complements (they go together) and substitutes (they replace each other). Control can never be complete and where control ends one must surrender to trust. And vice versa: trust can hardly be absolute, trust should not be blind, and where it ends one may want to have some control. But the more trust one has the less control one needs to exert, which gives more room and flexibility for the relationship.

The greater uncertainty is, concerning behaviour and conditions, and the more difficult it is to monitor conduct of the trustee, the more difficult it is to exert control, and the more one needs trust. That is the case, in particular, in innovation. There, one must leave room for the unexpected. And uncertainty limits the scope and force of contracts and monitoring of compliance.