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.
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?
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.
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, 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.
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.
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.
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.
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.
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.