Trust Enabling Strategies - Trust Enablement

Trust Enablement™

Page Contents:

Introduction to Trust Enablement™
Trust Enablement™ Code of Practice
Elements of Trust Enablement™
Trust Enablement™ compared with Risk Management
Guiding Principles for Trust Enablement™
Benefits of Trust Enablement™
Uses for Trust Enablement™
Stakeholder Engagement

Introduction to Trust Enablement™ (see FAQ) (Top)

Our strategic approach for building stakeholder trust and confidence is called Trust Enablement™. We use our Trust Enablement™ Framework to identify and define the business conditions that directly contribute to establishing a required level of trust or protecting from a loss or deficiency of trust.

Trust Enablement™ is a new term to most readers that warrants a brief positioning within the context of a typical business. Trust Enablement™ is closely related to Risk Management. In theory, they would simply be the opposing sides of the same coin and would simply exist as two different views of the same problem, with different approaches that ultimately arrive at identical solutions. However, this is not the case. Risk Management and Trust Enablement™ approaches to addressing the same problem result in significantly different solutions. In reality, Risk Management and Trust Enablement™ are more akin to female and male genders, or negative and positive magnetic polarities, or even the Yin & Yang energies in traditional Chinese medicine. Logic suggests that it is equally natural for businesses to also function on the basis of opposing but interdependent forces that create a dynamic equilibrium.

Risk Management has many characteristics of a defensive posture, while Trust Enablement™ tends to be more offensive and is therefore particularly relevant for growth-oriented companies. In essence, where Risk Management is all about protecting what you have, Trust Enablement™ is all about getting what you want by, in effect, proactively managing the risks of the relying party (or customer). In fact, analogous to the Japanese marshal art known as Aikido that focuses on using the opponents own energy to gain control of them, Trust Enablement™ can be highly effective in redirecting the defensive Risk Management posture of customers in ways that accelerate their purchase decision and enhance their perceived value of the transaction.

Trust Enablement™ is therefore a proactive, strategic approach to designing business processes that give stakeholders the confidence they need to take consequential actions, such as committing to a significant purchase or adapting to new business conditions. (Top).

Trust Enablement™ Code of Practice (Top)

The Trust Enablement™ Code of Practice provides a guideline to best practices for Trust Enabling™ information and processes that thereby allows relying stakeholders to attain required levels of acceptable uncertainty (see definition for acceptable uncertainty).

Trust Enablement is a:

Foundation code of practice that comprises principles and a set of process standards;
Framework for developing processes that engage stakeholders, focused on the quality of information (see definition for information quality) being relied upon by stakeholders;
A methodology where the emphasis is very much on process and not simply on the report; and
Management guide, and deals with an examination of the non-technical issues relating to engaging stakeholders by building and maintaining trust in information they rely on, addressing matters such as stakeholder engagement, quality of information, uncertainty, sources of trust, organizational and process integrity, and trust management. (Top)

Elements of Trust Enablement™ (Top)

Trust Enablement™ Framework for ORGANIZATIONAL CREDIBILITY
TRUST ENABLEMENT™	FOR	STAKEHOLDER ENGAGEMENT
Authoritative Sources	for	Awareness
Experiential Sources	for	Acceptance
Risk Transfer	for	Action
Ability	for	Value
Motivation	for	Commitment
STAKEHOLDER CONFIDENCE	FOR	BUSINESS LEADERSHIP

The Code of Practice addresses elements of Trust Enablement™ (Authoritative and Experiential Sources of Trust, Ability, Motivation, Risk Transfer and Managed Trust) required for attaining and maintaining levels of trust:

The Authoritative and Experiential Sources of Trust are the only two ways to Establish Trust;
1. Authoritative Sources of Trust allow relying parties to quickly establish a level of trust and confidence - fast trust;
2. Experiential Sources of Trust allow the relying party to attain higher levels of trust and confidence - high trust
Aggregation from multiple Sources of Trust (Authoritative and/or Experiential), even sources that are marginally trusted, contributes to establishing higher levels of trust in relying on information;
Ability, Motivation and Risk Transfer serve to Ensure Trust - protect relying parties from a loss or deficiency of trust;
1. Ability describes the value one is able to deliver - shorter term protection;
2. Motivation defines the inherent rules of the "game" in the business relationship - longer term protection;
3. Risk Transfer allows the relying party to engage in business activity in the absence of trust - immediate protection; and
Managed Trust allows relying parties to continue to attain required levels of acceptable uncertainty with changing business conditions. (Top)

Trust Enablement compared with Risk Management

We call our competency Trust Enablement™. You may prefer to think of it as Reverse Risk Management™ or even Reciprocal Risk Management (a higher standard).

In theory, Trust Enablement™ and Risk Management should be opposite sides of the same coin that simply represent different approaches to accomplishing the same thing - namely reducing and mitigating the impact of uncertainty. However we have found big differences between the two disciplines, despite recent initiatives by the Risk Management community to broaden the meaning of "risk" to embrace the uncertainty of both negative and positive outcomes. Unfortunately, these efforts are being inhibited by a practitioner culture that is inherently blind to optimism and opportunity development.

Think of Risk Management as the discipline used to protect what you have and Trust Enablement™ as the discipline used get what you want. Most organizations need both in varying degrees. Whereas industry leaders may emphasize Risk Management, challengers are more likely to lean toward Trust Enablement™ as an enterprise-wide strategic imperative. [discuss]

Here are some key differentiating characteristics:

1. Offensive vs. Defensive

There are many significant differences between Trust Enablement™ and Risk Management. The overriding and most fundamental difference however, is that Risk Management is all about protecting what you have, which makes it a defensive approach.

Trust Enablement™, in contrast, is all about proactively addressing uncertainty as an inhibitor to business opportunity and therefore allows organizations to assume an offensive posture. This has enormous implications for organizational effectiveness - because you can't win with defense alone.

2. Optimistic vs. Pessimistic Approach to Uncertainty

Traditional Risk Management, although it recognizes the possibility of a positive outcome, is primarily focused on protecting organizations from loss. Its culture is therefore generally pessimistic.

Trust Enablement™ (or Reverse Risk Management), on the other hand seeks to reduce the uncertainties of stakeholders in order to gain their support with achieving its business objectives. It therefore breeds a culture of opportunity and optimism.

3. Stakeholders vs. Organization Oriented

Trust Enablement™ (or Reveres Risk Management) manages the risks of the organizations' stakeholders in order to engage them in productive business activities. Trust Enablement therefore builds stakeholder confidence by establishing and ensuring trust in the information and business processes they rely on to support the organization's business.

This contrasts with traditional Risk Management, which is primarily organization oriented and seeks to identify and treat the risks being faced by the organization itself.

Another way to look at it is: If "A relies on B for C", our Trust Enablement™ process naturally begins with A, whereas traditional Risk Management leaps directly to C.

4. Active vs. Passive

Trust Enablement™ (or Reverse Risk Management) seeks to engage stakeholders by responding in specific ways that support the organization's business objectives. It's success is measured by the volume, velocity and value of business transactions. Since the objective is to maximize the business performance with every stakeholder interaction, its ROI is easy to measure.

Traditional Risk Management lives in a world of what might happen. It's objective is to minimize the impact of uncertainties. Its ROI is therefore difficult to measure.

5. Trust vs. Control Oriented

Trust Enablement™ (or Reverse Risk Management) is founded on the principle that trust is always the desired objective, which is moderated by practical needs for control. By analogy, maximum trust looks like children playing in a meadow. Maximum control, by contrast, looks like Alcatraz. The same analogy can be made for leadership vs. management, where the former is based on trust and the latter on control.

Traditional Risk Management solutions are primarily control oriented.

6. Bonus: The "Golden Rule" Oriented

The Golden Rule is an ethical standard that is endorsed by most world religions. It reads "Treat others as you would like to be treated".

Trust Enablement™ (or Reverse Risk Management) manages the risks of an organization's stakeholders similarly to the way it would manage its own risks.

By contrast, traditional Risk Management is primarily concerned with its own risks, not fully aware that its performance is entirely dependent on its various stakeholders' willingness to give it their business. This is analogous to cold medication that treats the symptoms rather than the disease itself.

However, the reader should note that Trust Enablement™ is not an ethical standard and does not even require ethics to form part of the solution (although it is a best practice). (Top)

Guiding Principles for Trust Enablement™ (Top)

Guiding principles identify characteristics of a quality process. These principles can be used in designing and managing an organization's Trust Enabling™ policies, standards and processes, and may also be used in assessing the quality of its process.

Trust Enablement™ allows parties to make a judgment about relying on information to take consequential action;

Trust Enablement™ facilitates both the provision (sharing) and acceptance of information;

It is possible to trust information regardless of the level of trust one has in the source of the information;

Absolute trust exists only in theory, not in practice;

Trust is attained when actions are taken as a result of attaining the required level of acceptable uncertainty;

Trust Enablement™ is the product of applying the Trust Enablement™ Code of Practice to satisfy Trust Establishing, Trust Ensuring and Trust Management objectives;

Maximum trust requires minimal control. Conversely, maximum control is required in the absence of trust;

Trust promotes the sharing, acceptance and generally the flow of information, while control inhibits it;

All else being equal, trust is always preferred over control, but some level of control is usually required to achieve Trust Enablement™ objectives;

A best practice for Trust Enablement™ is to address all aspects of the Trust Enablement™ Code of Practice in a balanced manner; and

A well-executed Trust Enablement™ strategy can increase the volume, velocity and value of business transactions by enhancing and accelerating stakeholder engagement. (Top)

Benefits of Trust Enablement™ (Top)

The Trust Enablement™ Code of Practice:

Is focused on improving the overall performance of adopting organizations by accelerating the volume, velocity and value of business transactions. It therefore supports improvements in financial performance and the long-term value of the organization to its stakeholders. It does this by supporting improvements in the sharing and acceptance of information being used by its stakeholder to contribute to the organization's objectives;
Provides as strategic approach to addressing stakeholder trust, as a principal success factor for the organization;
Empowers an organization to explicitly designing systems that satisfy specific trust objectives and integrate them into existing business processes;
Allows organizations to guide organizational trust objectives with one, high-level and comprehensive approach that satisfies reliance issues by all stakeholders;
Defines a unifying system that both provides context and comprehensiveness to common trust enhancement approaches that may already be in place;
Encourages innovation around key quality principles and stimulates innovation above an agreed quality floor, rather than encouraging the development of a more rigid compliance-oriented culture. It therefore offers guidelines and voluntary directions for improving reliance on information;
Provides a high level, general description of the areas considered important when maximizing the effectiveness of information use by an organization's stakeholders;
Supports an organization's strategic management and operations, by assisting it to:
1. Align its systems and activities with its vision, mission and values;
2. Learn about the impacts of its systems and activities, including stakeholder perceptions of these impacts;
3. Serve as a part of a framework for internal control to enable the organization to identify, evaluate and better manage the uncertainty arising from its impacts on and relationships with its stakeholders;
4. Meet the legitimate interest of stakeholders in information about the impact of the organization's activities and its decision-making processes;
5. Build competitive advantage through the projection of a defined stance on trustworthiness.
Designed to encompass the needs and requirements of adopters from all types of organization. These include:
1. Large and small organizations;
2. Single site organizations, and multi-site, multinational organizations;
3. Public, private and nonprofit organizations; and
4. Economic communities from business exchanges to municipalities and other economic union. (Top)

Uses for Trust Enablement™ (Top)

Appropriately applied, the Trust Enablement™ Code of Practices is useful as a high-level overview of trust and confidence topics that can help senior management to understand the basic issues involved in each of the topic areas. It also serves as a practical guideline for developing effective trust management policies and practices, intended to achieve confidence in inter-organizational dealings and as such can be used in two ways:

As a common currency to underpin the quality of specialized trust augmentation standards, existing and emergent; and
As a stand-alone system and process for managing and communicating stakeholder trust and engagement initiatives.

Stakeholders, including civil society organizations and direct stakeholders (internal and external to the organization), can use the Trust Enablement™ Code of Practice to assess and comment on the quality of an adopter's approach to building stakeholder trust, including social and ethical accounting, auditing and reporting.

Service providers can use the Trust Enablement™ Code of Practice as a benchmark against which to develop and provide services, and as a means of acquiring competencies and communicating them to potential clients.

Standards developers can use the Trust Enablement™ Code of Practice as a reference point for their specialized standard, and for communicating the underlying qualities of their standard.

The following is not a complete list, but illustrates the possible applications of the Trust Enablement™ Code of Practice to the benefit of an organization and its stakeholders. (Top)

Stakeholder Engagement (Top)

Engagement with stakeholders is at the heart of the Trust Enablement™ Code of Practice. Engagement is not about organizations abdicating responsibilities for their activities, but rather using leadership to build relationships with stakeholders, and hence improving accountability and performance.

The Trust Enablement™ Code of Practice can play a key role in building an organization's relationships with its external stakeholders. Consumers, suppliers and wider society are able to see how an organization's behaviour matches their aspirations, and are better positioned to articulate their opinions. An organization, in turn, will have more sensitive and accurate information on which to base decisions, and a climate of increased trust in which to implement them.

Stakeholder engagement guidelines can begin to explain how organizations and stakeholders ensure quality in the consultation and dialogue that takes place between them (see Appendix).

Partnership (Top)
The Trust Enablement™ Code of Practice can support the deepening of value-based relations along an organization's supply chain and in other partnership processes. Its adoption represents a commitment by an organization to working together with partners to achieve genuine and standardized good practice in relationships.

Investors and Donors (Top)
The Trust Enablement™ Code of Practice can play a critical role in satisfying the increasingly complex demands for information from investors and donors. For most investors and donors, clear and verifiable information about various aspects of performance and stakeholder perceptions and expectations provides a valuable reference point for assessing the quality of management and the market positioning of an organization.

In addition, the significant growth of 'ethical funds' is generating information requirements that The Trust Enablement™ Code of Practice can assist a company in providing, in a cost-effective manner.

Quality management (Top)
By measuring, communicating and obtaining feedback on its performance an organization can be better placed to understand and respond to the needs and aspirations of its stakeholders, and to manage these alongside (and as part of) its objectives and targets.

Risk management (Top)
The Trust Enablement™ Code of Practice can be integral to a framework for internal control to enable an organization to identify, evaluate and better manage the risks arising from its impacts on and relationships with its stakeholders. These may include risks to reputation and brand, and from customer and employee liability suits.

Measurement (Top)
The Trust Enablement™ Code of Practice outlines a process by which key performance indicators are substantiated by an organization through engagement with its stakeholders. The organization and its stakeholders collaborate toward making performance indicators relevant, complete, timely, accurate and credible.

Recruitment and retention of employees (Top)
By clarifying its values and reporting on its performance, as well as by applying good practices for building trust in the suitability of candidates an organization can improve the recruitment of high quality employees. The loyalty of existing employees and the quality of new recruits will also be supported by evidence of its commitment to building a better organization and by the development of programs to improve training and others aspects of employee welfare. The corollary of this improved loyalty to the organization is increased productivity.

Governance (Top)
The Trust Enablement™ Code of Practice can play a key role in supporting an organization's governance. It feeds into the organization's control process by which it ensures the alignment of its values and strategy with its behaviour and the outcomes of its activities.

Government and regulatory relations (Top)
The adoption of the Trust Enablement™ Code of Practice can play a part in encouraging governments to acknowledge the self-regulating processes that organizations are following to build stakeholder trust and confidence in their accountability and improve performance. As a reflection of foundational best practice, the Trust Enablement™ Code of Practice may also help to ensure that any future regulation in the field is effective. (Top)