The Importance of Trust in the Web 2.0 Economy [HD BizBlog 1.2]

After posting my “audition” at Slacker Manager yesterday, I had an interesting conversation with Dave Seah about the concept of trust and how it underscores every part of the marketplace.

Seah’s first comment addressed the ideas of loyalty and culture:

Trust has always been the currency of the world…it’s what underlies actual money, and it’s what allows Organizationally speaking, I think the various types of corporate structures have minted their own bank notes for trust: in the hierarchy, the implicit promise is that if you do your job, you will be rewarded and taken care of. This has broken down as people realize that the companies themselves do not have the same loyalty to them as they expect from their employees. And thus, that particular type of trust has become devalued within the organization itself and becomes worthless.

Culture is an interesting way of describing “shared goals and values, and methods for achieving them”, which is how I think of it. Culture is then a generator of trust.

~Dave Seah

I heartily agree with this idea. It is the breakdown of trust (between employer & employee, between buyers & sellers, between consumers & marketers) that has jeopordized so many companies and led to the proliferation of social networking websites where consumers can post their own quality statements on products and services that they have used.

I would submit that “trust” is becoming more important, especially interpersonal trust and intra-community trust. Both of which are gaining ground where institutional and governmental trust are declining. The whole idea of Web 2.0 is that conversations are growing, and while a market may cover the globe, its members are connected more closely than ever. And they are relying on each other for trusted information and evaluations of products and services, rather than the Marketing and PR companies that dominated the late 20th-century marketplace.

As you mentioned, companies no longer trust or show loyalty to their employees, so new conversations are taking place, new cultures are being developed.

~ Stephen

Seah had an excellent response to this, which I shall quote in full, as it addresses all of these concepts:

On “trust” becoming important, I would agree. I think it’s always been important in general, but trust itself as distinguishable ingredient in our transactions is relatively new. Institutional Trust has been failing, at least here in the USA, since Nixon, when we lost faith in government.

And in the post-bubble, post-Enron era, more and more people are starting to realize that they just don’t trust organizations for the sake that they’re organizations. Before people would presume that trust was an inherent part of the makeup of any institution or government agency at the very core, but now people are starting to recognize that it’s really people you meet that matter.

I saw a recent episode of House where a girl said that our lives are defined by the people who happen to be in the room with us. Culture I think is part of the shared value and vision. I think Community is also part of it…not exactly the same as culture, though they are intertwined. What it comes down to is that people are looking for “good people” they can trust to be authentic and straight with them.

The new heroes are not the ones that have been erected by institutional forces, but ones that have the semblance of democracy (American Idol, in a perverse way) or are ordinary people who have started to speak what they think is the truth. Truth is the foundation of trust, and in the media world today it’s difficult to find.

~ Dave Seah

This is precisely what I was aiming at! Seah’s statement that “…it’s really people you meet that matter…” is at the heart of the concept of the Web 2.0 culture that is flourishing in today’s economy. The question is, will business get the message?

Seah goes on to describe a five-point evolution of this process:

1. Trust has always been part of any successful social endeavor.
2. Our naïve trust in organizations and what they say has been eroded over the past 30-40 years because what they have stood for and said was good for Americans has proven to be a façade built from special interests.People have had to adapt by separating trust from authority and success, whereas before trust was automatic.
3. Trust is the “gut check” that people are now applying to their daily interactions, and they are growing increasingly canny. Kids today, for example, are incredibly media-savvy compared to their grandparents. The emphasis has shifted from “I trust that company” to “I trust what that person is saying is true”.
4. The next stage of actualization would be, “I trust that person to do what he says” followed by “I have seen what he said and did, and it was good.”
5. Companies that reach to consumers have had to adopt this model, an interesting combination of business brand and public relations work.

Culture serves as a beacon to more easily find a certain type of trust and compatible mindset. The social need to flock together, however, is what Community is all about. Culture is the surface expression of values, and community is the underlying sense of belonging. That’s my hypothesis, anyway.

What do you think about the changes in the influence of Culture and Community? Where will it go next? Let’s carry on the discussion.

Original post here: Stephen

24 July 2007 | Cluetrain, Community, Culture, Trust, Web 2.0 | Comments