Trust in the Collaboration Economy

The Kellogg School of Management devoted its Fall 2012 alumni magazine issue to “The Collaboration Economy” and the school’s commitment to thought leadership within it.

Kellogg has LONG been identified with a collaborative approach to the teaching and learning of management skills, so this is an obvious fit. As a loyal alumna who has been part of that economy for the last decade or so, I am pleased to see this focus. I’ve met Sally Blount, Kellogg’s new dean, and think highly of her – she’s very sharp, a dynamic speaker, and seems to have her mind around an extremely dynamic environment. So I was disappointed to see that in her article describing Kellogg’s focus on aligning with and driving the collaboration economy, that she repeats the notion popularized by our least critical technology enthusiasts — that trust is something that is somehow embedded within collaborative technology. As a professional in this field, I have sad experience with the powerlessness of collaborative technology to build trust where trust is not already part of the culture of the humans using it to work together.

She writes:

The Collaboration Economy is also rooted in an emerging human culture of access, openness and trust. When people enter the digital world through their computers, smartphones and other devices, they ask questions, share information, and reach agreements with a fluidity seldom seen before in human history

A new global culture is emerging that transcends national, ethnic, and organizational boundaries – the old institutions that used to develop and regulate our shared, taken-for-ranted rules for interaction. It is a culture that assumes 24/7 electronic access—for emailing tweeting, posting, and texting.

This new culture is particularly powerful in the norms of trust that it engenders. Markets require trust to operate effectively, and the old rules of building trust over long periods of time have softened. Over the Internet, parties with limited histories of personal interaction readily connect, communicate, and take risks together.

Perhaps one of the earliest and best examples of this phenomenon is the “open source movement,” founded in 1998 by a group of free software advocates. Through that movement, the Linux operating system was created and is now widely adopted by corporate computing managers as a hig-performance, lower-cost alternative to propriety software from Microsoft, Sun, and others.

Kellogg is where I learned about how fundamental trust is to the efficient functioning of markets – it’s where we explored what happens in the Real World when the “perfect information” assumed by economists isn’t available, and people have to make leaps of faith.

I would argue that what the technology can do in the facilitation of building trusting relationship is not much in its role in facilitating the meeting of people who might find something they can do together. It’s that it makes transparent the reputations of these people. It’s nice to be able to ask questions and share information – what’s even better is that if the information is incorrect, or incomplete, it’s possible to find out quickly and adjust one’s level of trust. What made, and makes Linux such a success is the alignment of the contributors (everyone is in it to make better-working software) and the transparency inherent in software – if your code isn’t very good, people find out right away, and maybe fix what didn’t work so well, and possibly avoid your contributions in the future.

It seems to me that technology can indeed quicken the pace of our experiments with trust, teaching us faster who can be relied upon to follow through and who cannot. It makes it possible, in some situations, to take smaller risks to begin with – when I break a project up into phases, I can judge my collaborators’ performance on phase I before committing to phase II. It is also driving a cultural change in which we have started to expect a higher level of accountability when things go wrong—when the project plan for our joint venture is readable to the entire team, it’s quite clear who it is who is missing their dates!

In the end, though, the path to success in the collaborative economy for any organization is the development of a track record of excellent performance. Technology gives our markets many new windows for observing us, so we need to shine more brightly than before.

Valerie Bock
KGSM ‘82