Design for Trust

I want to give a shout-out to Adrian Cockcroft and Simon Wardley, fellow speakers at a recent event in Rotterdam, for introducing me to a key distinction for social networks of all kinds, namely high-trust networks versus low-trust networks. 

 There is a role for each, so the critical things to understand are which one is fit for your purpose, what you can expect from it, and just as importantly, what you cannot. Here’s how I see it playing out in several contexts important to me.

High-Trust Networks

High-trust networks assume the best and give people lots of leeway to find their own way to a good outcome. Individuals are aligned on vision and values although they may disagree (even forcefully) on methods and metrics. They are self-governed by mutual respect and a shared commitment to do the right thing. They have few rules, and no particular procedure is sacrosanct. The goal instead is to let talent self-organize to achieve shared purposes efficiently and effectively.

Team Formation and Management

Teams to be effective and efficient must be high-trust networks. The key role of the team leader in this context is to create and maintain psychological safety for all the participants. How you do this depends on what kind of culture you are operating in—each culture has different norms for what is OK and not OK—but within those norms, you have to be authentic and consistent. When behavior breaks the norms, the team leader has to come to the defense of the threatened individual and to exert discipline at the source of the threat. This is what maintains a core culture of trust.

Low-Trust Networks

Low-trust networks are designed to let unaligned parties interoperate under a common set of rules. They are virtually ubiquitous in public services and government and common to virtually all regulated processes, even those that are pursuing popular social initiatives with highly motivated participants. Their goals include preventing corruption, securing minority rights, restricting out-of-band investments, and the like. Within a business context, low-trust networks are most visibly present in inter-company relationships, specifically around contracts, but they also can play a role in intra-company processes where the various participants are not well aligned, perhaps for reasons of geography, culture, competition for scarce resources, compensation incentives, or the like.

Cross-Functional Interactions

These come in two types—situations where you can create a high-trust network across the functional boundary, and cases where you can’t. With the former, you can just manage them as an extension of your own high-trust-network team, provided you and the other teams’ leaders stay in close communication and watch out for everyone’s psychological safety. For situations where this is not in the cards, you must pursue a low-trust network instead. This means setting up a governance mechanism that monitors resource allocation and distribution carefully and holds resourced entities accountable to specific outcomes with objective metrics. 

OK, so what?

Two things jump out at me. The first is on the public sector side. Most liberal social programs—the kind that people like me love to support—actually under-deliver, not because they were ill conceived but because they cry out for a high-trust network to operationalize themselves but are bound to low-trust network governance mechanisms by legislation. The result is too much red tape, too expensive a bureaucracy, too much latency, and too little impact. That is why private sector initiatives consistently outperform public sector ones. The problem with these, on the other hand, is just the opposite. When they tend to drift off course, there is no governance mechanism to hold them accountable, whether to misappropriation of resources, inattention to minority interests, or the like. That said, well-governed private sector initiatives have a huge advantage over well-funded public sector initiatives for all the reasons noted above.

The other thing that jumps out at me is how the proper mix of high-trust and low-trust networks can accelerate innovation, particularly in large mature enterprises. These entities allocate resources via a low-trust-network process called the annual budgeting cycle. The underlying assumption here is that everyone is asking for more than they really need, and that only by playing things out in a zero-sum-game scenario can one approximate a just distribution of scarce resources. That works OK for mature businesses investing in sustaining innovations where the risks are relatively low. It does not work at all for investing in disruptive innovation, which is why most companies hive off a bit of resources for skunk works projects that are off the beaten path. These projects are local high-trust networks. The problem is that they are not trusted by the enterprise at large. So when it comes time to scale them, the corporate antibodies come out in full force. In particular they use the low-trust-network budget process to curtail the expansion of the new upstart, resulting in multiple failed attempts to get anything really new to scale. 

So what can we do?

The goal is not that we should make everything into a high-trust network. Not only is that impossible, it is not even desirable. Yes, you can innovate faster, but you can also go off the rails at high speed as well. But what we can do instead is design interoperating connections between high-trust and low-trust networks that allow each to perform their role while hampering the other as little as possible. And we can recognize show-stoppers from the beginning when the plan calls for a network to perform in a way that is contrary to its core design.

That’s what I think. What do you think?

_________________________________________________________________________

Geoffrey Moore | Zone to Win | Geoffrey Moore Twitter | Geoffrey Moore YouTube