Continued Discussion on Thrust Presentations -- June 4, 2003, 9:25 a.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 ).

Trust, predictability

• Online ticket price, 15 pounds for ticket, 15 pounds transparent as ticket broker.
• Is predictability enough?
• What is the truth?  It can be a contradiction with trust.

Business system:  who will control the sharing of value?

• Things don't work that way.
• Transparency
• Some in built in deceit.

Software companies in India

• Costs are low, and they ask a hefty premium, they'll make a good profit.

Selling, from a company you don't know: reputation

• Ordering from Amazon

Male approach to relationships versus female approach?

Do we believe in alliances?

• Do we want to believe in alliances?
• Can related this to raising children.  Have to trust them.
• Governance versus management.
• Governance allows for something to grow.
• When we try to manage alliances, we get expectations of outcomes.
• Don't know if believe in management of alliances, believe more in governance of alliances

Annaleena's presentation on spin-off firms.

• In U.S., kill it; in Finland, spin it off.
• Mother-daughter relations:
• When the venture stayed connected, the worse the daughter did.

Trust kids:

• Trust kids to make own decisions
• Similar in organizations, need to create that context
• Deal with value, assumptions, soft pieces
• Governance as when you can't management

Relationship management, on the transactional end:  taking care of whether the customer delivers, or not.

• Nurturing for growth, can't control it.
• Can create the foundations
• How do you inform the decisions?

When people say you can't governance, they often mean command-and-control

• We're discussing governance that isn't command and control.

Governance in an inter-organizational level:  trust is probably the wrong word

• Trust at an individual level.
• At an inter-organization level, there are rules and goals
• Little to do with trust
• "Fast trust":  think it's wrong

For different types of relationships, need different types of governance

Disagree:  even though inter-organizational agreement, there are still people involved

• At the personal level, it's dangerous for the company, as executives can leave and take their relationships with them.

Trust in people versus trust in other ways

Child beating the parent in every sport, which means that he's better

• In companies, this isn't the case.
• If you're Nokia, and have a venture, the parent still have all of the resources

Alliance as better than the separate parts?

Often two executives with personal trust, but then they don't give the organization enough directions:  hoping, which is not a strategy

Assymetric relationships:  e.g. outsourcing innovation to small companies that are more innovative.

Diagram:  Networked production creation

• Is the network for the three years the same?
• System or network?  Centrality
• Reducing cost by 5% within organization is not as effective as reducing cost by 5% in the customer's business
• Governance as roundtables:  checks business assumptions, which is all that can done because these are early-stage investments.

Lessons from biological systems

• Diagram could have been one of skins cells
• Maybe governance isn't so linear:  boxes and lines

Two sides

• Paternalist:  build a structure
• Feminine perspective:  let them grow, and then push them from the nest

Contract as a governance instrument

• Mostly working without the contract, but sometimes need to check financial details

Science as leap of faith