Trusting Relationships

In their 2005 book John Seely Brown and John Hagel III advise that The Only Sustainable Edge for a business is to accelerate and leverage distinctive capabilities and knowledge.They advise each business to work closely with others in networks of companies that have diverse, complementary capabilities, and to build long-term reciprocal, trust-based relationships through shared meaning.

Brown and Hagel’s book is the first place we have seen articulated so many of the objectives our company is working to achieve.

Long-term reciprocal, trust-based relationships are the fundamental common denominator.

And Building shared meaning is, in my judgment, the single most critical specific action that Brown and Hagel prescribe for building those relationships. Long-term reciprocal, trust-based relationships simply cannot survive unless all participants understand each term in precisely the same way. During my career as a business attorney, lack of shared meaning caused by far the most disastrous disputes and uncertainties my clients ever faced.

In fact, our Intentional Software™implements much of Brown and Hagel’s advice by representing precise, unambiguous, shared meanings that are recorded in one internally-consistent data structure from which applications are generated, modified, maintained and regenerated by computer. This data constitutes an understandable “IP Bank” repository of learning and knowledge for reuse throughout the life of an enterprise.

Implementing reciprocal, positive forward looking incentives is the primary action Brown and Hagel prescribe for building trust quickly in any network of enterprises. They explain why the opportunity to build mutual capabilities that result in more aggregate value for all participants is a very powerful incentive to help build trust in the near term. Each participant thus has an incentive to contribute its distinctive, specialized yet complementary capabilities and knowledge because it can reasonably expect to accelerate and leverage its own capability building, learning and innovation through reciprocal contributions by others in the network. These positive incentives are contrasted against negative incentives that often cause disputes in typical partnerships that simply agree to divide a fixed set of resources among the partners.

Clearly specifying performance metrics for each participant is also prescribed by Brown and Hagel to reduce misunderstandings and mistrust and to define reciprocal expectations. Each participant thus retains control over its own actions and ability to perform, rather than being constrained to perform specified activities. Critical uncertainties are identified, and plans are made to deal with them. Tight performance feedback loops, and event notification and rapid exception resolution procedures are employed to help refine performances and to serve as safety nets. Steps are also taken to minimize a participant’s feeling that it is locked into a relationship with no fallbacks.

When we formed our company in 2002, we defined our fundamental objectives in words very similar to Brown and Hagel’s. And since then we have in fact been working “to accelerate and leverage distinctive capabilities and knowledge by working closely with others in networks of companies that have diverse, complementary capabilities, and by building long-term reciprocal, trust-based relationships through shared meaning”. No doubt that is why Brown and Hagel’s 2005 book fascinates us so much.

Fundamentally we work hard to reduce uncertainties and to build foundations for long-term relationships. Our litmus tests are to verify that all participants communicate their own intentions openly and clearly, and to structure each business relationship affirmatively to implement the intentions of all participants (not just our own). We seek to align the interests and incentives of all participants equitably in form and substance, measured by objective standards.

To the same ends we are keeping our company as innovative, efficient, persistent, opportunistic and evolutionary as possible. We love bright, enthusiastic, imaginative, risk taking, fun loving, trusted individuals who enjoy working together.

Our company’s business is accelerating innovation for business. Intentional Software is our means.