‘Trusted networks’ – hiding places for the fearful?

Since becoming an independent consultant in 2002, I have generated all my business through formal and informal (trusted) network(s). I continually seek to extend and grow those, both to generate business and to learn. The learning emerges when I notice a low trust quotient in a particular relationship, and that is when I get curious. Why do I not trust this person? Do I not like them? Is what I am experiencing here a ‘bad’ fit? Do my values clash with theirs? Is there some unaware projection going on? Or is this person truly the Satan’s Spawn and I should just get out while the going is good before they sprout horns?

An article in the Economist in June 2009, entitled LinkedIn v Freemasons: Joining the club, highlighted the growth of professional networks, ranging from the more established (Freemasonary) to the new arrivals (LinkedIn, Viadeo, Xing). It highlighted how in some countries business is configured by these ‘trust based networks’ to the extent that it is difficult to do business unless you somehow find a way in to the group.

In France, for example, a study published in 2006 by Francis Kramarz and David Thesmar showed that the boards of the biggest companies are dominated by graduates of two elite schools. These organisations are “conservative about whom they do business with”, and the end result being that new businesses often end up struggling to break into the supply chain. The study also showed that the firms in question underperformed compared to others not managed by executives primarily selected through a narrow ‘trusted network’.

The end result, Kramer and Thesmar noted, is that “social networks may strongly affect board composition and… may be detrimental to corporate governance.”

But is this conservatism really nothing more than plain old fear?

Trust: “reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence.”

The preference for people from ‘trusted networks’ smacks of laziness, and I wonder whether what is really behind this inertia to build new relationships is simply plain-old fear. This fear of the unknown, elemental to the human condition, results in ‘better the Devil you know’ trumping the possibility that what is on offer, whilst requiring some additional attention and effort, might offer something equally rich/valuable/profitable/exciting (delete as applicable).

Trust certainly is crucial when it comes to building relationships (and merits the research that it has been the focus of by many academics), whether that be in the context of job interviews, business deals, romance or simply encounters that offer the potential for new friendships. Social networks held up as powerful examples of trust-based relationships configuring business life (Freemasonary and school/university being typical) I suspect say less about the degree to which the members of those groups have a capacity to trust one another, and more about what they fear. For if trust really embraces the notion of integrity, then that cuts right against the lazy preference for the known, or the unconscious fear of the unknown. Too much of what is attributed to the ‘trust-based networks’ seems to be “I know what I like, and I like what I know”.