What is trust? The dictionary defines trust as “a firm belief in the reliability, truth or ability of someone or something.” Although, do we have a “firm belief”? How often do you stop to think about the people or organisations you trust? When was the last time you asked why you trust or do not trust the things and organisations you do? ?
We find ourselves in a new era where we are redefining what and who we trust.
This is the age of false news, misleading advertising, click-bait headlines and retouched imagery – all of which erodes our trust in information. Conversely, we live in the era of the “sharing economy”, where we allow strangers into our home through Airbnb, get into unmarked cars with Uber and now, with Amazon Key, are poised to let strangers enter our house to make deliveries. Do we firmly believe in the integrity of Airbnb, Uber and Amazon? Rachel Botsman gives a fantastic TED talk on this notion as she talks about using the power of technology to build trust between strangers. She says: “It’s about empowering people to make meaningful connections, connections that are enabling us to rediscover a humanness that we’ve lost somewhere along the way, by engaging in marketplaces like Airbnb, like Kickstarter, like Etsy, that are built on personal relationships versus empty transactions”.
There is no simple answer to that question because the concept of trust is complicated.
We must keep the complexity of trust in mind even as we embrace technology such as blockchain that purports to increase trust and transparency.
People’s initial level of trust varies. However, most people are inclined to trust until something happens to shake that trust. Once a person’s trust is shaken, no matter how much of an aberration the event was, winning back that person’s trust is often a futile battle. I think it goes without saying, that we trust our own experience and emotions far more than others. This can be both a good thing and a bad thing because we end up giving our trust and loyalty to people who don’t deserve it. It is a delicate balance and while technology can help, it will never be the whole picture.
Let’s talk about blockchain – does it call for, or eliminate, the need to ‘trust’?
On the technology front, at its most basic, Blockchain is a distributed digital ledger that records transactions with copies shared amongst multiple unrelated parties. Entries cannot be deleted or amended only added to. The “trust” in the Blockchain comes from its immutability and it is this trust that confers much of the value associated with bitcoins.
Blockchains are the “it” technology of today and, while they have great potential, they are also overhyped, overfunded and NOT the panacea to all our issues with trust. However, what Blockchains can do is help: help reduce bureaucracy, much of which is put in place to make sure we can trust one another; help reduce the time needed to build trust and help verify new vendors, as well as increase confidence in the transaction history we have with existing vendors.
The pitfall is in thinking Blockchains create a trust or allow us to conduct business without trust. Most would argue that Blockchains neither create nor supersede trust but merely ask you to trust in the technology.
Thus, the question becomes, do you trust Blockchain?
Procurement professionals must answer that question.
Especially given that many organisations are looking the blockchain as the technology through which to establish their reputation. For example, the Japanese government is reportedly looking to integrate Blockchains into the bidding process for government contracts. So, it would be a mistake to dismiss Blockchains as a fad, as many of us are inclined to do (because of their association with bitcoins). Whilst there are drones of people who believe bitcoins and other digital currencies will disappear; even if that proves true, the demise of cryptocurrencies will not necessarily mean the demise of the blockchain based trust systems.
As custodians of ‘the purse strings’ our job is to analyse, prove it and only then…trust it.
Given the trust that is endowed upon us (as meek Procurement Professionals!) by our employers – it holds that they trust us to analyse markets and these types of technologies as a non-negotiable business priority. It is our job to analyze, diagnose and recommend. We must think about analytics as a strategic way to bridge the gap between decision-makers. Subjective decision-making is being replaced by objective, data-driven analysis that allow procurement to better serve their organisations, drive cost efficiencies and manage risks. Before you can judge if the blockchain is the trust system of your organisation’s future, you need to trust that you understand the full scope and limitations. Let’s discuss how analysis can better be used to your advantage, to build knowledge – to make the unknown, known – and to deliver trusted recommendations to your organisation.