Trust as ‘social currency’

Working on the cusp of regulation, investment and strategy, I often think about the role of trust in the information flows that inform investment decisions. How does an investor know for certain the trajectory of regulation in a sector except for the trustworthiness of the sources of such information? How do regulators determine when to allow industry to self-regulate and when to regulate, except by relying on data collected from disparate sources?

Trust is a non-negotiable essential in business. The post linked here refers to web-based business-to-consumer interactions. But as social currency, Trust is the most significant in interactions amongst organisations, customers, employees and regulatory bodies.

Definitions

Wikipedia defines social currency as “information shared which encourages further social encounters“. Social currency is different from social capital which refers to “connections within and between social networks and individuals“.

Social currency – some characteristics

a) No distinction between ‘physical’ and ‘virtual’ worlds

Social currency should be, and frequently is, freely transferable between diverse networks, just as some relationships move freely between the physical and the virtual worlds. None has primacy over the other. In practice, this means that your dinner party circuit is as important a social network as your LinkedIn network, your School alumni network as significant as your Facebook friends.

b) No distinction between ‘individuals’ and ‘corporate entities’

Both ‘individuals’ and ‘corporate entities’, such as companies or charities, require and use social currency, to advance their social and professional aims.

c) No distinction between validity of negative or positive normative labels

‘Positive’ or ‘negative’ labels are normative judgements applied by an observer, not the inherent qualities of the entities being observed or the information being shared. A negative meme or information module is as valid as a positive one e.g. Peter McCarthy as a reliable shorthand for suspicion of certain political ideologies is as valid as Gregory Peck’s portrayals of reliable, all-round good eggs.

However in high value interactions, a greater emphasis is placed on positive associations than negative ones.

Determining the value of Trust as social currency

The ‘value’ of a currency is determined by several factors including the economic and political situation in a country, natural and human resources, and political and economic leadership. These factors shape buyer perceptions, hence the value of the currency. Similarly several factors serve as the ‘signals’ of the value of social currency.

a) Verifiable Identity and antecedents

Would you come to a dinner party or a networking event wearing a mask to hide your identity? It is likely your answer is ‘No’. So, why be anonymous or pseudonymous in social networks, except for fear of persecution?

V for Vendetta (c) Warner Brothers

V for Vendetta (c) Warner Brothers

In meaningful interactions, it is difficult to build trust with an anonymous or pseudonymous person. A verifiable identity allows antecedent checks, establishing a person or a corporation’s ‘social capital’, prior performance and hence trustworthiness.

Small businesses sometimes suffer from shortage of ‘verifiability’ or ‘longevity checks’ but it can be managed. For instance, a small on-line start-up, such as Moo.com, may have a solid product offering but may find customers unwilling to give it their credit card information; the use of a trusted brand such as Paypal, may help them tide over this difficulty.

On a related note, you can see my LinkedIn profile here.

b) Consistency

Consistency is a complex construct. It is a function of presence, positioning, and quality of public contributions whether professional or social. Consistency builds comfort, confidence and trust. e.g. I am known to deliver consistently high-quality assessments of emerging technologies, with their technological, commercial and regulatory futures. It is a tough standard to deliver. But it comforts my clients and they keep returning to me for further help.

There are, however, limits to consistency. It is not an excuse for poor standards or unimaginativeness. Each of my projects requires me to ask new, different questions because sometimes the old questions are irrelevant. That is not about consistency, that is about relevance.

Consistency (c) www.winkk.com/2008/03/04/darts-board/

Consistency, said Oscar Wilde, is “the last refuge of the unimaginative“. Cited out of context, this sounds like a criticism of my point. But, in the article titled “The Relation of Dress to Art” in the Pall Mall Gazette in 1885, Wilde continued to write, “but have we not all seen, and most of us admired, a picture from his hand of exquisite English girls strolling by an opal sea in the fantastic dresses of Japan? Has not Tite Street been thrilled with the tidings that the models of Chelsea were posing to the master, in peplums, for pastels? Whatever comes from Mr Whistler’s brush is far too perfect in its loveliness to stand or fall by any intellectual dogmas on art, even by his own: for Beauty is justified of all her children, and cares nothing for explanations: but it is impossible to look through any collection of modern pictures in London, from Burlington House to the Grosvenor Gallery, without feeling that the professional model is ruining painting and reducing it to a condition of mere pose and pastiche “.

In other words, Wilde never meant to criticise consistency as abominable, except where it becomes its own end and loses the plot altogether.

c) Reliability

This is as simple as asking ‘Does the person deliver what s/he professes to?‘ and getting an affirmative answer with the qualifier ‘repeatedly so‘. The world’s longest lasting and best recalled brands strive to pass this test. It makes them trustworthy and in many cases, aspirational.

For instance, Patek Philippe stands for precision engineering, exquisite design and extraordinary longevity. Why else would anyone agree to spend several thousands of pounds on their watches? The value keeps going up, the older and rarer the watch.

Patek Philippe print ad

Patek Philippe print ad

d) Peer recognition

Peer recognition is not the same as ‘reputation’, although the two however are not entirely disconnected from each other. Reputation may even be an well-managed, artificial construct resulting from a person’s own efforts related to managed PR. Peer recognition is a usually unvarnished opinion from a person’s or a firm’s peers, who may not necessarily gain anything from saying nice things about this person or firm but they say them anyway. That is a hallmark of trustworthiness. You can read the views of some of my past and present peers here.

e) Value of the network

This may remind some of ‘social capital’ (see above) but value is not simply about the ‘number of contacts’. The value of the network is the ‘power’ resident in the network, however big or small the network may be.

The value of the network may come from one or more of its many inherent qualities – power of individual nodes, influence, diversity of skills, specialised expertise etc. Indeed some of my most powerful contacts are not on any public networks at all! Exclusivity of access to a high value node can make one’s network very valuable.

How does a network’s value relate to trust? Well, in my experience, the world’s smartest and most successful people are careful networkers. They nurture relationships with other smart and promising professionals. A high value network is therefore a signal of a higher order of trustworthiness of the person, who has access to that network.

Neurons (c) IBM Labs

Neurons (c) IBM Labs

f) Individuality and collaborative consciousness

This is the trickiest marker of a person’s trustworthiness.

Individuals, as we all understand, have identifiable and unique properties. However their ability to function as a collective, collaborative identity signifies their ability to recognise a greater vision or cause, and subsume their identities to it. This ability, on Maslow’s hierarchy, is more valuable than someone who wishes always to march to his own drumbeat. In other words, sometimes the individual is not bigger than her network and a person who recognises the value of collaboration enjoys greater peer recognition and greater trustworthiness.

All Blacks perform the Haka (c) BBC News

So, well, that is my view of trust as social currency. What are your views? Do you think ‘trust’ is a social currency? What signals do you see and use to judge a person’s trustworthiness? What else can we add here? What other social currencies can you think of? Do share your views below.

If you wish to discuss the concept of social currency or social networks, and how they can work for your business, please do get in touch here.

Related readings:

It’s when you deliver that counts

Trust in the Internet God, but…

Chris Brogan asks if companies will value your personal networks. My answer – Yes! But only if you are trustworthy yourself.

John Hagel on The Trust Paradox.

7 thoughts on “Trust as ‘social currency’

  1. Hi
    Social currency-point taken.

    On Verifiable Identity and antecedents:
    Why are there anonymous bloggers? and Pseudonyms on twitter?
    If SM is a place to socialize, why would people hide identities?
    Is it that they want to have a separate online and offline personality?
    Similarly with anonymous bloggers? If they are anonymous/with pseudonyms why would they interact with others whose antecedents can be traced?

    Consistency:
    You referring to the quality of conversations/writings/comments or the “net worth” of the peer group?

    Reliability matters, agreed.

    Peer recognition and Value of the network:
    I know instances when many people start following me when some “big guy” sends me an @ reply on twitter.
    It is the same be it on FB,blogrolls etc.Right?

    Collaboration is what I love in SM.
    People are ready to collaborate, even more than offline media, why??

    Do people active on SM, try to maintain a different offline and online peer group that has a very small intersection? Are they fine with this intersection getting bigger?

    -Nikhil

  2. In no particular order (and in rather loosely strung sentences):

    currency as (as money) the means of trading and assigning shareable value to things – and essentially building a stash of this stuff so you can use it for “trading” in socially valuable elements – e.g. time. So it should imply that social currency has a metric and you can “accumulate” and “spend” it.

    which then suggests, is there a time value of social currency? Is today’s social currency worth intrinsically more than tomorrow’s?

    Also, if there is a currency, is there a “market” for social good and services?

    The Keynesian approach of linking goods and money markets allowed people to combine these 2 from a policy and a economic standpont. Could there be a similar way for linking social with real markets? Leading to “equilibrium conditions” for social markets?

    We already have APML – Attention Profile Markup Language and the notion of value for the time you spend on a site. Alternatively, if 10K people come to my website, for 5 mins each, i can get ad revenues worth (say) $ 50K. This would mean that linearly (which is not correct) each person per day per minute has a value of $1. So you have a direct value of time.

    So if my social currency can get you to spend 10 mins on a site on my recommendation, that links the money value of your time to my social currency??

    On a separate note, there are other reasons for creating identities online:

    Not just fear of persecution for what people do online, but also a) fear of other recrimination or embarrassment for just being there “what??? you go to chat rooms??? loser!!” b) escapism – i.e. gamers c) more complex psycho social phenomena such as a need for an alter ego…

    cheers!
    V.

  3. yes it is.. i’d take it further and ask whether it is the only one? drawing a parallel with another currency- money, do you think there will only be one currency and everything else becomes a manifestation of that, with some kind of exchange rate that will make sense of the system? or will different rules apply, like a currency thats not related to money? (that seems far fetched now) also, how does the transferability work (to the real world?) ..time is a good converter (as ved has suggested)

    and like i said on twitter, pseudonyms actually work quite fine, from my experience…you dont have to have all the baggage of reality accompanying you.. remember the discussion we had on real introvert and web extrovert? but yes, it does have to be consistent..

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