Friday, April 06, 2018

Trust and Transformative Technologies

In a paper “Cultural Relations Theory” (Danbry and Philips) we describe an evolution of PR in which big data extracted from online and social media interaction provides the resource to identify cultures large and small.

In doing so we challenge the historic approaches to public relations in its use of broad and hard-edged segmentation of people and institutions (e.g. ‘market segments’, ‘publics,’ ‘stakeholders’ organisations etc). In the Culture Relations Theory, we posit that modern technologies detect and process micro values to expose inter-culture nuance which is now a potential tool for relationship management. Organisational values and the penumbra of, to a greater or lesser degree, associated cultural values, we postulate, describe and proscribe the culture of the organisation. The time, location, person, technology, channel, content, interaction and many more attributes of modern communication has become the raw material of values to be mined and forged into cultural models describing elements in relationships. Many such values explicitly or implicitly represent trust.

A large part of relationship building and management involves trust as an intangible asset.

The nature of trust among the elements of the ‘Cultural Relations Theory is discussed in this paper.

The question is, whether this theory and these new technologies have a role to play in isolating the elements of trust in an attempt to be able to identify levers of management that aid development of commercially valuable ‘trust’.

In this post, I postulate that this is a distinct possibility.

I examine the nature of trust; its value, and explore recent commentary; the available resources to identify trust and examine potential tools that can now be deployed to aid management.

There are a number of definitions of trust. The Wikiwand definition is a good start (see below) and the Merriam Webster dictionary offers this definition:

Assured reliance on the character, ability, strength, or truth of someone or something: one in which confidence is placed

  • Dependence on something future or contingent: hope
  • Reliance on future payment for property (such as merchandise) delivered: credit
  • A property interest held by one person for the benefit of another
  • A combination of firms or corporations formed by a legal agreement; especially: one that reduces or threatens to reduce competition
  • Care, custody (the child committed to her trust)
  • A charge or duty imposed in faith or confidence or as a condition of some relationship
  • Something committed or entrusted to one to be used or cared for in the interest of another
As will be shown, the range of elements that offer common or interactive values can be used for modelling each of these definitions of trust. However, in this post I will tend to explore the first two as being most immediately relevant to the practice of PR.

Trust is a key and fundamental part of being a balanced human being.

According to Erik Erikson, we all encounter a certain crisis that contributes to our psychosocial growth at each of his stages of psychosocial development. Trust, he says is an early essential in psychological developments (see below).

The first stage of the Erikson stages starts from infant to about 18 months. At this stage, infants must learn how to trust others, particularly those who care for their basic needs. They should feel that they are being cared for and that all their needs are met.

Small babies are new to this world and may view the outside world as threatening. Depending on how they are treated by people around them, the sense of threat can be replaced by trust. When this happens, they gain a sense of security and begin to learn to trust people around them.

The first and most important people to teach an infant about trust are usually the parents. Parents are expected to take good care of their children and attend to their needs. For example, “the parents of a baby provide it with food, shelter, sustenance and make him feel very comfortable and secure.“

Trust is analysed at an interpersonal level by academics like Jeffrey A Simpson4 and Julian B Rotter (see below). They discuss the positive and potential negative consequences of being high or low in interpersonal trust in current social life, particularly in interacting with ordinary people.

A summary and analysis of previous investigations led Rotter to the following conclusions: “People who trust more are less likely to lie and are possibly less likely to cheat or steal. They are more likely to give others a second chance and to respect the rights of others. The high truster is less likely to be unhappy, conflicted, or maladjusted, and is liked more and sought out as a friend more often, by both low-trusting and high-trusting others.” When gullibility is defined as naiveté or foolishness and trust is defined as believing others in the absence of clear-cut reasons to disbelieve, then it can be shown over a series of studies that high trusters are not more gullible than low trusters6.

Research by Garske (referenced below), indicated ‘convergent and discriminant validation for the generalized expectancy construct of trust; interpersonal trust tended to be related with personality traits that suggested a social orientation and adaptive functioning’.

Trust was also viewed as bearing a relationship with concrete thinking and conformity. Correlations between the factors of the Interpersonal Trust Scale (Political Trust, Paternal Trust, and Trust of Strangers) were similar to the above correlations but less substantial. The total trust score appeared to be a better predictor of personality than any of its factor scores.” (referenced below)

In short, trust is a fundamental human driver. It is a contract between persons and or institutions in which the one undertakes to warrant values and capabilities to a given and transparent extent.

It is a socially shared phenomenon.

Trust can be developed at a point in time where there is rudimentary mutual recognition.

It is a key component of relationships.

Trust can be a one, or two-way exchange or formed via a cultural network. It is expressed by people and cultures in tokens mutually acknowledged with one or more other cultures. Such tokens can be both tangible and intangible. Personal cultures of trusting people has some very significant benefits.

This means that there is no possibility of relationships being formed without at least some element of positive or negative trust (tokens) between the parties.

There is an element of timeliness in trust. It can form, change and develop between parties over time. It is to a greater or lesser degree, durable.

The extent to which there is greater or lesser trust as between one organisation and another, or expressed another way, between one cultura end another is also an element in the trust equation.

Finally, the extent to which tokens are acceptable, namely, are regarded as positive, negative or emotionally empathetic as part of the culture of the organisation is important.

Thus, trust is the key element of relationships. It is at the core of all Public Relations.

The extent to which trust is valuable will, no doubt, affect how much the PR industry invests in its management.

There are many current case studies where we see the evaporation of trust in corporate values in corporately cataclysmic terms. Facebook, Oxfam, Grenfell Tower and Bell Pottinger are cases where trust in values, competencies and culture have contributed to loss of confidence, disastrous financial performance and thereby survival.

Trust is an element of corporate survival. It forms the basis upon which organisations can trade. It has wide implications.

The Edelman ‘Trust Barometer’, said to be representative of 84% of the global population, posits that “As we begin 2018, we find the world in a new phase in the loss of trust: the unwillingness to believe information, even from those closest to us. The loss of confidence in information channels and sources is the fourth wave of the trust tsunami. The moorings of institutions have already been dangerously undermined by the three previous waves: fear of job loss due to globalization and automation; the Great Recession, which created a crisis of confidence in traditional authority figures and institutions while undermining the middle class; and the effects of massive global migration. Now, in this fourth wave, we have a world without common facts and objective truth, weakening trust even as the global economy recovers.”

News and sources of information are key drivers in trust as both the Edelman and Ipsos Mori Veracity Index (see below) surveys show.

Trust has a role in macro relationships across the globe.

The cost of developing a trusting relationship can be high. Creating a contract between a new supplier and an organization will involve the cost of references and data exchange an much more. Second time round, these costs are much reduced and over a long period of time may virtually vanish. Such relationships are lubricated by implied trust.

The World Economic Forum notes the massive and cost implications of the failure of trust:


“If a contract fails to allocate responsibilities adequately, incentives to breach obligations and create disputes can arise. Increasingly, larger capital projects and a lack of trust between parties are leading to ever more complex contracts that are hard to understand".

It would seem from the above that identifying the elements of trust is a big job and sorting out all the elements to provide a practical management structure is hard.”

Global accountants Price Waterhouse Coopers note:

“Trust is even more important where you rely upon others to keep your promises. Specialisation, offshoring, outsourcing and cost cutting – this is the reality of business and your reliance on third parties will only grow. A complex portfolio of relationships needs to work effectively to deliver the promises you make to all your stakeholders.”12

How, for example, can the PR practitioners identify the extent to which one organisation is more trustworthy than others? How can we change levels of trust between cultures?

The extent to which an organisation’s cultural values are stable or are warranted internally or by external agents are elements of trust.

There is a legal twist:

Although good faith clauses can be automatically implied in, for example, employment contracts or contracts of a fiduciary nature, or by statute, it is different for commercial agreements. The position is somewhat different. The courts have found that although a duty of good faith is implied by law in relation to, for example, contracts of employment, the general rule in commercial contracts was that if parties wished to impose a duty, they must do so expressly. The Court considered the case stronger still for saying that if the parties wished to produce the result that each of them has the right to terminate the contract in the event that they lost trust and confidence in the other, even when the other party is not in breach of contract and it may be unreasonable, then they should do so expressly. In this case ‘trust’ has to be determined in a legal contract.

In ‘Contract, Governance and Transaction Cost Economics’, Oliver E Williamson puts the case for substituting legal contract for trust13. It is a tough call. Trust is so fundamental to human existence.

There is considerable anecdotal and empirical evidence which identifies the value of trust. But can we find a way for measuring and monitoring trust in its complexity?

In conversation with Dr Jon White he makes the point that data analysis allows more precise prediction, and works through to a more complete picture. However, a point brought home at the 2017 Behavioural Exchange Conference (bx2017.org) was that, unless public relations can work with the possibilities emerging, it's hard to see much future for the practice in providing useful advice.


Dr Daniel Lim, Data Scientist; Special Assistant to Chief Executive, Government Technology Agency, Singapore showed, at this conference some of the many forms of analysis of big data14 which is part of Culture Relations Theory.

PR is having to recognize that transformative technologies are part of its daily life. The alternative is early retirement.

Once, getting data was hard and expensive. Now, a lot of such data is being given away (I will address this area of the Theory in more detail in the near future).

A simple case is that of Facebook. It provides a range of tools to help people get data. These ‘Big Data’ integrate into all manner of software. Of course, it is dwarfed by similar data available from Google, which is part of a suite of available services not least is speech and text analysis including tone and emotional markers. IBM has other API services which offer free or low-cost access to the information needed. Such mountains of data can use software such as t-SNE for dimensional reduction that is particularly well suited for the visualization of high-dimensional datasets.

Led by authors such as Don Tapscott, the nature of Blockchain as a computer programme that enforces trust is important. The Open University puts is very well:

“Blockchain is most commonly known as the technology underpinning the Bitcoin cryptocurrency. But in recent years the open source code of the Bitcoin blockchain has been taken and extended by many groups to expand its capabilities. Blockchain technology, which can be thought of as a public distributed ledger, promises to revolutionise the financial world. A World Economic Forum survey in 2015 found that those polled believe that there will be a tipping point for the government use of blockchain by 2023. Governments, large banks, software vendors and companies involved in stock exchanges (especially the Nasdaq stock exchange) are investing heavily in the area. For example, the UK Government recently announced that it is investing £10M into blockchain research and Santander have identified 20-25 internal use cases for the technology and predict a reduction of banks’ infrastructure costs by up to £12.8 billion a year22.

The reach of blockchain technology will go beyond the financial sector, however, through the use of ‘smart contracts’ which allow business and legal agreements to be stored and executed online. For example, the startup company Tallysticks aims to use blockchain based smart contracts to automate invoicing.

In October 2015 Visa and DocuSign showcased a proof of concept demonstrating how smart contracts could be used to greatly speed up the processes involved in car rental – rental cars can be driven out of the car park without any need to fill in or sign forms.

The ability to run smart contracts led Forbes to recently run an article comparing the future impact of blockchains to that of the Web and Internet.
We believe the blockchain technology and smart contracts can also be used in education in many interesting and potentially revolutionary scenarios. On the OU website, you can see some of the ways we see the future of education developing using the blockchain and what we are doing to progress towards our vision.“ (http://blockchain.open.ac.uk/)

These forms of transparency, are an extension of early findings first expressed by the CIPR/PRCA Internet Commission in 2000. The, perhaps hapless, public and organisation is ever more porous and transparent and contributes richness and aided by every widening reach, is now subject to many computer programmes acting as agents to transform cultures many of which are extensions to brands.

What is becoming apparent is that many people are examining transparency (and automated radical transparency as exemplified by blockchain technologies) as an alternative to trust. This is a subject that is dealt with in much greater detail as part of the Cultural Relations Theory elsewhere.

We are beginning to find organisation exposing selective information in an effort to replace investment in trust relationships. Progressively, exposure of corporate data driven by porosity and internet-mediated transparency supersedes such data and there are many case studies.

With the capability of the internet to expose values and tokens as data and to explore this content to expose clusters of values. It becomes possible to process such assets.

To be able to identify the clusters of values that add up to trusting relationships is a considerable asset. There is a need for more research but it is possible to speculate that such trust values can be examined and to identify the possible damage loss of trust might emerge.

This is a way that in the near future it will be possible to value trust.

Here we have it, a means by which trust can be measured and used commercially. This will not be a solution to fit all eventualities and in many cases will be completely bespoke. All such research has to conform to good standards of research practice to be valuable and all results need to be, at least, replicable.

Trust is essential and is a basic in PR. It is a well-researched area of humankind. It is commercially important and has considerable commercial value.

The evolution of technologies that can acquire big data; facilities to store and analyse it and software to build trust models for commercial use is now available.

This is an area of fast developments and an opportunity to implement additional research is wide open.



@ David G H Phillips
February 2018




Further reading:

Endnotes

1.  Danbury A and Phillips David GH “Cultural Relations Theory - an evolution powered by Transformative Technologies“ Presented to the 23rd International Conference on Corporate and Marketing Communications Exeter April 2018
2.  http://bit.ly/2HoqqXe