Presentation -- Thrust Group A - June 3, 2003, 2:10 p.m.

Symposium: "A New Base for Corporate Relations: From Strategic Deceit to Trustworthy Action", Nokia House, Espoo Finland, Tuesday, June 3, 2003.

This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. These should not be viewed as official transcripts of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. These notes have been contributed by David Ing (daviding@systemicbusiness.org) at the IBM Advanced Business Institute ( http://www.ibm.com/abi ).

[Group A]

• Pertti Aaltonen (presenter)
• Ville Saarikoski
• Juhani Hintikka
• Olli Lötjönen

What could be in the environment that spells for relationships?

• Complex environment
  • Immense number of connections
  • Connections change, of limited durations
  • Rapid
  • Central actor (small world)
• Organizations have become networks
  • Communication technologies
  • Management science
• Top-down structures are not sufficient, most of the time.
  • Need something deeper, relational
  • Maybe self-organization

Impact on organizations - key assumptions

• Humanist approach
  • For order
  • To understand
  • To belong
  • For security
• For organizations
• • Trust as a building block
  • Mutual by asymmetric interests
  • Global networks are a key driver
  • Steering with few rules (no clockwork type of governance)
  • • E.g. the bible, 10 commandments
    • U.S. constitution, 200 words
    • Transfer countries into European Union, 2000 pages:  small rules don't work
• Impact:
• • Difficult to implement formal structures with limited time and resources:  need something beyond protocols, i.e. trust and common values
  • Don't need to build relationships forever, they're meaningful just for some time.
  • Common mission is a building block for rapid incorporation of people without a unifying background or structure
  • We need all of the "processing power" we can get

How do we function and improve with relationships?

• Observations on trust:
• • Hard to build, easy to destroy
  • Learning curve
  • One-time transactions may actually be with people or organizations that have done business over some longer time, maybe a network they don't even think about.
  • Some underlying foundations
• Cultural examples:
• • Finland:
  • • Hardships (common enemy, hunger, cold) require people operate in trust-based networks.
• Japan:
• • Trust is a building block for the economy
• British Empire:
• • Not how it was built up, but how it was taken down, and what happened afterwards.
  • Network not only because British drink gin and tonic, but more common ground
  • Commonwealth:  whole world, influence on the empire of the past
• Trust may be tricky:  e.g. in industry standardization
• • Railway gauges in Europe, Asia
  • • Russia thought that was because big country, needed big railway, important in warfare
    • Can run Istanbul to Paris on the same track
• Not always rationality behind trust and not.

Referring to this morning's talk

• At the innovative end, how you select the same gauge?  It's not that easy.

The power of trusting:

• Preliminary finding in dissertation
• Opinion of a trusted source is a major factor in technology selection
• • May be:
  • Colleague
  • Friend
  • Academic
  • …

Recent research:

• Eisenhard and Tabrizi (1995) product innovation
• Pangankar (2003) biotech
• Gulati & Higgs (2003):  initial public offering
• Social capital

Take home message:

• Can't avoid uncertainty
• Complex systems are manageable with a few simple rules
• Relationships built on trust are a way to manage complexity simply.