10 Oct The importance of trust.
Last week our Gravity Nordic team attended the Nordic Business Forum 2017 conference in Helsinki, where world-class speakers like Sir Richard Branson, Nick Vujicic, Patrick Lencioni and Stéphane Garelli shared their views on responsibility, purpose or leadership. However, for me, the most inspiring insights were presented by Rachel Botsman who talked about trust in the digital age and how trust has evolved towards a model where trust is distributed across different users and parties. Here are few thoughts on how ecosystems and the distributed trust can unlock new value and underused assets in the business-to-business context.
Never trust the stranger.
In a collaborative economy where technology, new business models, and digital platforms enable organisations to scale their businesses with the help of partner networks and users, trust has become one of the key factors for success. During the past four and odd years Rachel Botsman, an Oxford University lecturer and one of the leading experts on collaboration and trust in the digital age, has examined over 500 startups and organisations on how they have built trust and designed business around collaboration.
During her presentation, Botsman masterfully pointed out how trust has moved first from local to institutional, and now towards a distributed model. In this distributed model peer reviews and ratings have often become more trustworthy and powerful attributes and currencies than institution’s or organisation’s own assessments. Botsman highlighted an example where a consumer without a required credit information was able to get a loan just because of her Airbnb rating.
“Trust is like energy. It hasn’t disappeared, it has shifted to a new form. Humanity started with local trust – the immediate members of our community. Institutions came to prominence when society expanded. Distributed trust in ideas, platforms, and individuals who use them is the third distinct chapter of trust.” – Rachel Botsman
According to her research, there are few reasons for this trust shift. Whilst the trust towards traditional institutions like the church, government, and large organisations has been declining, and environmental pressures and economic realities have had an influence, the biggest accelerator for change – and people’s behaviours – has been technical innovation through collaborative peer-to-peer services like Uber, Airbnb and BlaBlaCar. And this evolution has been quite fast.
Remember how unimaginable it was just five years ago to give your house keys to total strangers for a long weekend? Possibly you were frightened that these visitors would go through your family photos, host wild parties and annoy your neighbours, evaluate your taste and intellectuality by browsing your bookshelf and sleep in your bed. Naked. These kind of biases are totally normal as most of us have been brought up not to trust strangers, and especially not to let them enter the most sacred place on earth. Home.
Strangers to unlock new value.
These stranger-danger biases apply to businesses too. Today, testimonials, references, and word-of-mouth recommendations are essential before decision-makers in organisations even consider new alliances with other companies. Although it is apparent that collaborative economy and successful partnerships create massive efficiencies and can unlock the value of underused or unknown assets, many business leaders aren’t actively looking to change how they operate.
Often decision makers analyse that a risk to trust smaller or foreign organisations or an innovative company that work with unusual business models is too high. Sometimes these business leaders don’t even know these potential and beneficial partners exist. Or alternatively, have time to find those. As most of the collaborative platforms are currently built to cater consumer needs, I believe there’s a tremendous potential to develop successful, trustworthy and scalable ecosystems for B2B purposes that help organisations find valuable partners.
“The first wave of technological disruption gave birth to the collaborative economy. Companies focused on extracting new value from existing assets – empty seats in cars, empty bedrooms. To utilize this value, new marketplaces needed to be created.” – Rachel Botsman
For me, one of the most inspiring frameworks that Botsman presented at Nordic Business Forum 2017 is called the Trust Stack. It provides a perfect skeleton to highlight how organisations can move towards more beneficial, collaborative models and ecosystem thinking. With the original Botsman Trust Stack and the modified model below, users and companies typically need to trust three things before they are willing to change their behaviour:
In the first bottom layer, organisations and their decision-makers need to trust the idea of doing things differently and realise that business benefits can be gained by changing the current way of working. Once the idea seems safe pursuing, organisations need to trust the ecosystem and its potential moderators. Finally, once there’s trust in the first two layers, organisations need to trust the partners who can provide new, unique skill sets, expertise and capabilities.
I’m confident that these new collaborative ecosystems, especially when curated and controlled by a moderator that holds companies together like glue, can connect organisations to new trustworthy and beneficial partners across the globe. This will help organisations to unlock new social, economic and environmental value that they often haven’t fully realised. In Asia, this potential has been identified years ago; pioneers like Ali Baba, DHGate, and HKTDC have created their businesses by connecting hundreds of thousands of manufacturers with business customers. Another interesting example is photo- and video-editing app VSCO, which aims to open up its community of photographers and videographers to brands looking for customized content.
When can European organisations customise new products or services similarly within their continent or skyrocket their sales through 3rd party sales channels and networks?
Earlier this week, I was thrilled to see Finnair spreading their blue wings towards ecosystem thinking with their latest collaboration with Bókun, which aims to accelerate growth and digitalisation of Finland’s travel industry through Bókun’s Tourism Reselling Platform. I hope Finnair’s example will encourage other Scandinavian organisations to trust ecosystems and start new, beneficial partnerships.
“The further development of our travel-related ecosystem is an important focus area for us. We want to make the unique Finnish travel experiences more easily and effectively available for our international customer base” – Katri Harra-Salonen, Chief Digital Officer for Finnair
Jani Modig is a partner and CXO at Gravity Nordic.
He’s currently leading Gravity Nordic’s Tekes funded digital innovation and ecosystem project, that looks to connect creative marketers and producers.