Trust Inc.

Stuart Crainer reports from the first International Rendanheyi Model Forum in Qingdao, China.

Trust looks like being one of the big business ideas of our times.  Rachel Botsman, one of the champions of the sharing economy, examines the concept of trust in her new book. And it is at the heart of discussions on the future shape of organizations. Last week, I spent a morning in Qingdao, China listening to entrepreneurs and executives from the Chinese company Haier discussing creating an “ecosystem of trust”.

Haier is turning itself into a sprawling network of entangled businesses.  It doesn’t like to be described as an incubator, even though that is what it appears to be to the uninitiated outsider.  It prefers the term “growth accelerator”.

In practice, Haier gives funding, resources and encouragement to business ideas and their creators from within the company’s employees.  The trust element is high.  The system itself appears ambiguous, but happily so, in a very Chinese way.  It is difficult to see when the corporate apron strings are cut and how long they might be.  Haier retains small stakes in some of the spun off companies.

The trust element is enormous. It is unclear whether the objective is to grow Haier’s business or to spawn start-ups to create further growth in the Chinese economy. The assumption is that what is good for Haier is good for the companies which it nurtures and vice versa.

To Western eyes, the vagueness is disturbing.  Interestingly, in assessing the different companies which it has taken over in recent years, Haier CEO Zhang Ruimin praised the team ethos of the Japanese company Sanyo.  When it came to the company’s most dramatic purchase that of GE Appliances in the United States he cited the “contractual spirit” of the Americans.  Herein might lie the answer to the riddle of trust.  In the Western world, business has become transactional, focused on screwing the final dollar out of a deal, nailing every detail down in a contract.  Left to multiply, many of these elements go to create the managerial bureaucracy bemoaned by Gary Hamel and others.  They create a low trust environment.

Trust is the antidote to bureaucracy. Try it.

Stuart Crainer is co-founder of Thinkers50.