From enforcing ownership to managing trust
Think of the time and effort companies put into protecting their knowledge, products and services. Patents, intellectual property (IP), contracts, legal teams, etc. Imagine what could happen if companies put as much effort into managing trust. I believe that managing trust can get you just as far as – and in some cases even further than – managing ownership.
In the course of my career, I have seen many business contracts. They typically go into great detail about what falls within the terms of the agreement and what will happen if either party fails to adhere to them. One could say they are all about enforcement and have little to do with trust.
A paradigm shift in business
But business is changing. Number 17 on the list of UN sustainable development goals states: “A successful sustainable development agenda requires […] inclusive partnerships built upon principles and values, a shared vision, and shared goals that place people and the planet at the centre, [and] are needed at the global, regional, national and local level.” In this statement, the UN clearly emphasises principles and values, not ownership.
Also the European Commission, on page 6 of one of its policy booklet on digital transformation of regions and cities (pdf, 3MB), unambiguously mentions “collaborations based on mutual trust” to be a vital element for future success. Pricewaterhouse Coopers (PwC) takes this a step further in an article on trust. PwC reports that trust can be a powerful asset that allows companies to perform better, overcome stakeholder scepticism, get ahead of any crises and most importantly, be true to itself. Literally calling for “trust to be restored to the heart of the business world.”
“Mutual collaboration based on trust”, highlighted as key enabler for future partnerships in the EU policy booklet “Cities and Regions as Launchpads for Digital Transformation”.
Trust in collaboration
While business agreements based on trust seem like a good idea, and before giving examples on how you can create them, it might be good to dive a little bit deeper into the matter first. Arteconomy, a Belgian non for profit working on the intersection of the industrial and cultural sector, defined two modalities of collaboration. Based on over 30 years of experience, they observed and analysed the individual frameworks with which collaboration partners are sitting at the table. Resulting in two categories: one based on polarization and one based on connection. In the polarization modality, the attitude towards collaboration is more one-sided and based on the interests of the initiator.
However, in the connection modality, the collaboration is based on a more empathic attitude and its goals and outcomes are shared. Also, it puts an equal emphasis on the relationship (the context) as on the product (the content) of the collaboration.
Schematic illustration of two collaboration modalities. The left column based on ‘ownership’ and the right column based on ‘trust’ (Source and ©Arteconomy.be)
You can see the two types of collaboration in the diagram above, and entire papers could be written about it. For this discussion, I just want to highlight two aspects.
First, note the sixth line being the opposing values of ‘have and posses’ and ‘share and maintain’. A perfect illustration on how managing ownership becomes subordinate in a more trust-based collaboration context.
The second thing I want to point out, is that – as also concluded by Arteconomy – for a successful collaboration, one should ideally be capable of manoeuvring between these two modalities. As partnerships are more likely to succeed between parties operating within similar modalities. For example: if you are on the right side, assuming you collaborate for mutual benefit, you might get very disappointed when you find out your counterpart is not. Alternatively, if you know that your collaboration partner is on the left side, you can adjust your own modality and operate in a stricter setting than you normally would (e.g. negotiating higher fees, etc.).
Based on the paradigm shift I described earlier, I believe that we are moving from the polarization to the connection modality, but these things take time and are not as easy as one might think. I dare for example to challenge PwC, and a lot of corporates moving into the domain of social entrepreneurship, whether they are really describing a future in which we will be more on the connection side of things, or rather where we will cleverly cherry-pick the elements that feel most valuable to achieve our polarization-based intentions? Time will tell, and I give everyone with good intentions the benefit of the doubt.
Trust in practice
So, what could a trust-based contract look like? Baltan Laboratories, a cultural organisation in Eindhoven (the Netherlands), has for several years worked with a very simple contract for its collaborations with private partners. The standard version of its contract is just a one-page document which basically states that the parties agree to collaborate until they agree to no longer collaborate. And that the terms of the agreement are based on the following core values:
- Reciprocity – outcome of the collaborations should always be a win-win for all parties
- Trust – no ‘ownership-based’ legal contracts needed unless necessary for very good reasons
- Empathy – always open to the point-of-view of the other parties
- Equality – contribution of a partner is what counts, not its size
- Acknowledgement – give credit to the other parties for their contributions
While Baltan goes a long way in managing trust with its contract, I must admit that when I was working for them, I was initially rather cautious about putting it on the table. Many of the companies we worked with were used to more standard enforcement type of contracts. However, I found that even in those organisations and sectors that were more on the polarization side of the Arteconomy diagram, the attitude of the person with whom you were negotiating showed to be more important than the corporate or sectorial culture. So far, my experience learns that in every sector and every company, it is still possible to find people who were willing to participate in an agreement based on trust.
A prime example of what I consider a trust-based legal framework is the Creative Commons Licence. It provides a set of standard tools about how a piece of content can be used and shared. It does not require negotiations and formal contracts. Each piece of content is put out into the public with a label referring to its own licence agreement and the owner trusts that people and organisations will use it accordingly.
I assume that this is the most elaborate framework for trust. But why is it not more widely used? I wonder if perhaps it is because it was developed by the creative industry and not (yet) known in other sectors? For those not yet familiar with Creative Commons, I strongly recommend watching the documentary about one of its creators: The Internet’s Own Boy: The Story Of Aaron Swartz by Brian Knappenberger. It is probably the most impactful documentary I have had the opportunity to watch over the past years and has generously been made available under de Creative Commons license CC BY-NC-SA 4.0.
Is trust the way forward?
Is trust the way forward? I certainly agree that in a lot of scenario’s you need ownership-based contracts. If you want someone to execute a clearly defined task or deliver a specific product, you’d better have your terms of agreement well defined and covered. But I would argue that in more experimental and collaborative environments, where the outcomes of certain projects and efforts are less predictable, ownership-based contracts can be a burden rather than a virtue. We have all seen the IP battles between major companies. I personally wonder where the value is in those.
Also, I have witnessed first-hand that brilliant researchers and engineers are being blocked from collaborating with third parties due to internal legal procedures. Rather than jumping into a promising collaboration with motivated others, they either step back from their ideas (which means a potential innovation is killed or at least the company is not involved), or they pursue their project below the radar of their internal supervisors and legal department (which is also a pity for the company not knowing what its employees are up to and missing the opportunity to witness them working on the projects for which they are inherently motivated).
Wouldn’t in these cases a different type of contract be better? One that is based on trust rather than enforcement. After all, if two companies are working together, surely it is because they believe that there is a benefit to the collaboration. I believe that in environments tuned towards innovation and co-creation, managing trust can get further than managing ownership.
When talking to Prof. Lizzie Jackson about this, she already pointed me towards Factory Records: a notorious record label from Manchester (U.K.) that flourished in the eighties and was known for not having contracts with their artists. While this might have been at the basis of their success, it was also the reason why London Records bailed out of a potential rescue scenario when the label was struggling.