EDITOR: | May 2nd, 2017 | 2 Comments

Twenty first century trust

| May 02, 2017 | 2 Comments
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I get asked why I put so much effort into the column I write about graphene and other topics. Part of the answer is that I trained as a scientist and I find this stuff fascinating, I also like to do as professional a job as I can. Another part of the answer is that I’m hardwired to take complicated ideas and make them clear for non-experts. I choose to work with InvestorIntel (and they also choose to work with me) because the leadership cares about these things too and we actively support one another. As a result I trust InvestorIntel; we share the same values.

This notion of trust does not seem to be held by everyone. The Edelman trust barometer shows that trust is in crisis around the world. A Gallup poll shows the decline in trust of the American public in the mass media over the past fifteen years. Trust in many other organisations, business and government follows similar downward trends.

Chart showing the decline in trust of the American public in mass media 1997 to 2016

So what? Well, it turns out that trust is getting noticed as an increasingly important part of our digital world. I recently met one of the UK’s top digital strategists, Nigel Cliffe of the Value Exchange. Nigel’s passion is helping businesses be more successful by navigating our ever-changing digital world. He has realised that to effectively use the latest technology means rediscovering some very human skills, namely establishing relationships and building trust.

How is trust built in our digital world?

Nigel recommends three steps:

  • First get really clear why you are doing this. These few things become the pillars of your digital strategy that inform everything you do.
  • Then select your digital platform(s) of choice. Website, Linkedin, Youtube, Twitter etc.
  • Then use these technology platforms to share content 
and demonstrate knowledge.

Do all this consistently and
 you will build and maintain a trusted network. Long-term success follows from clients engaging with you rather than you having to chase them.

Dear InvestorIntel reader, at this point you may be thinking ‘That sounds good, but I don’t really believe the link between trust and success – where is the hard evidence that this link works?’

Proving the link between trust and success

One of my fellow editors, Dr. Luc C. Duchesne, developed a fascinating view on the importance of trust in the investment market, well worth a read. He identified a takeaway lesson for investors is to seek out trustworthy companies. Track records of achievements are by their nature in the past (a lag indicator) Trustworthiness is a predictor of future success (a lead indicator)

Don’t believe me? Well, a study of 111 financing relationships in Germany found that the higher the level of trust between individuals, of venture capital (VC) firms and entrepreneurs of the portfolio companies, the more successful the business investment in three year’s time.

Graphic showing the importance of trust between investors and portfolio companies predicts investment success in three years into the future

The authors of the study found that the reason trust works is because the really important things in financing relationships can often not be written in to any contract. We live in a Volatile, Uncertain, Complex and Ambiguous (VUCA) world. Trust in relationships is a vital element of managing the risk of investment decisions. Put another way: stuff happens, deal with it – together.

The way I have experienced InvestorIntel dealing with all this is that they trust my fellow editors and me and give us freedom to create real, credible content. The leadership of the organisation complements this by being entrepreneurial and enthusiastic. I find this combination enlightening and refreshing. I trust you do too.


Editor:

Adrian Nixon is a Senior Editor at InvestorIntel. He began his career as a scientist and is a Chartered Chemist and Member of the Royal ... <Read more about Adrian Nixon>


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Comments

  • Karla Robertson

    Brilliant article, Adrian. And this discussion about trust is not given the weight it should in hiring decisions, promotion decisions and in business decisions as well…with dire consequences for not doing so. This also ties into the focus of human interaction and how we connect with each other. Where should business discussions begin? How do we build those foundations of trust upon which future and sustainable success is dependent? Trust allows us to withstand the rigors of the VUCA world, as you mentioned, TOGETHER so that we can emerge potentially wounded but victorious. Trust allows and instills a certain resiliency in relationships both business and personal because as we well know, things will go pear-shaped at some point. You need people you trust to work with you to course-correct and come out wiser for it. This is not taught in MBA school…sadly.

    May 2, 2017 - 5:45 PM

  • adrian nixon

    Hi Karla, Glad you liked the article and took time to message us. Yes I agree that trust isn’t given the weight it should be. I think part of this is because it is hard to capture and measure. We know it when we experience it. But that experience also takes time to build up. In our fast moving world we expect everything to be available instantly. Trust is a slow but powerful thing in a fast and superficial world. In my strategic planning work I’ve met some impressive people managing portfolios measured in billions of dollars. It is interesting that many of these really successful people have the saying “Slow down to go faster” Adrian

    May 2, 2017 - 5:57 PM

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