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Framing the Trust Paradox A couple of weeks ago at a gathering in Paris sponsored by the Orange Institute, I explored a paradox that is central to the challenges and opportunities we face as individuals and institutions in the Big Shift.  I call it the Trust Paradox.

REX is the Relationship Economy eXpedition. The next social and industrial order has more to do with abundance and trust than with scarcity and stickiness. The key assets are trusted relationships. Here we'll build key elements of the Relationship Economy, playing out what it means for business, culture, society, governance, education and more, because its effects will be far-reaching.

Furthermore, we've found that contrary to what many CEOs assume, leadership is not really about delegating tasks and monitoring results; it is about imbuing the entire workforce with a sense of responsibility for the business. This applies mainly to knowledge organizations, but even production-oriented companies can benefit from having employees who feel more empowered and engaged.

If abdication of authority is to yield value for the corporation, however, individuals must be self-motivated. CSC Germany does this by allowing employees to work on the one of five topics that best utilizes their talents and excites their interest. This involves joining a topic community, such as the one focusing on strategy and innovation. Issues are discussed in these groups until all participants come to an agreement, and leadership within the groups shifts frequently, settling on individuals who have the most competence in the areas of focus and are accepted by others as leaders.

We call such practices "mutualism." It involves measuring workers not against revenue or other numerical goals, which we have observed to be ineffective as motivational tools, but against qualitative values such as trust, responsibility, and innovation. And it implies that leaders don't dictate vision or strategy; instead, they enable employees to create a common vision through, for example, off-sites for discussion of strategic issues and regular feedback and education. Hitting numerical goals has been the natural outcome.

Relaxation of control can benefit any knowledge company, but particularly in certain circumstances: when the organization begins to miss opportunities because it can't understand or respond to market demands; when work is impaired because employees feel excessively pressured and harbor dissatisfaction; and when crises imperil the business. Then mutualism is the best way to unleash the power of employees' creativity.

We call such practices "mutualism." It involves measuring workers not against revenue or other numerical goals, which we have observed to be ineffective as motivational tools, but against qualitative values such as trust, responsibility, and innovation. And it implies that leaders don't dictate vision or strategy; instead, they enable employees to create a common vision through, for example, off-sites for discussion of strategic issues and regular feedback and education. Hitting numerical goals has been the natural outcome.

* Networks provide the underlying structure to a massive part of life and the universe * That network structure applies on many levels, including our brains, the internet (and the collective intelligence it is catalyzing), applications, organizations, and business ecosystems * We can usefully think of these networks as sometimes literally coming to life * The key factors that enable networks at the societal and organizational levels to come to life are Connectivity, Standards, Integration, and Structure * Organizations need to be balanced between structure and chaos to create the conditions for agility, responsiveness, and success * Business ecosystems are central to value creation today, yet require rich flows of information that are predicated on trust and effective strategies for spanning organizational boundaries * Applications are themselves networks, coming to life through modularity, distributed architecture and development, and integration with human processes, thus supporting the living networks of organizations and business ecosystems

Listen up, budding Masters of the Universe about to start boot-camp week at business school (and sign away $100,000 over two years). For all the wonderful instruction at places like Harvard, Wharton and my alma mater, the Stern School of Business at NYU, remember that making money involves so much more than columns in a spreadsheet and the ever shifting assumptions behind them. Keep in mind:

1. If it ain't broke, still fix it. One of the hardest decisions business owners have to make is turning their backs on cash when it's flowing. But that's exactly what you must have the courage to do at times to protect your franchise.

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2. Unless you end up at Goldman Sachs, forget what you learned about finance. "In a 12-year finance career with large respected companies," says one of my former classmates, who is finance chief for the unit of a large manufacturing firm, "I can count on two hands the number of IRR [internal rate of return], DCF [discounted cash flow] and NPV [net present value] analyses I have completed." He adds: "A career in corporate finance is nothing like what is taught in school. The job is largely to be the conscience of the business--expecting and demanding explanation for decisions and [being] well versed in most topics."

3. Take your financial models with a boulder of salt. "Too often people in business rely upon a model demonstrating projections out 15 to 30 years," says another biz-school mate, now a health care consultant. Really? In school we worked in more modest 3- to 5-year increments, with an understanding that anything beyond that was magical thinking. "Believe it or not," he went on, "I have seen some done out that far for deals [acquisitions] and often for public-private partnerships."

4. Overpromise and try to deliver. Underpromising and overdelivering may work on conference calls with Wall Stree

We are all leaders. We must keep one another informed in real time. We trust living systems to self-organize. Read this book if you want to know what's going on. Ironically, these are not really Thompson's rules; they are Mother Nature's.

The biggest challenge businesses today face is unlearning what was successful in the industrial age and learning how to prosper in the network era.

It found that 43% of those surveyed described their company's culture as based on command-and-control, top-down management or leadership by coercion-what Mr Seidman calls "blind obedience". The largest category, 54%, saw their employer's culture as top-down, but with skilled leadership, lots of rules and a mix of carrots and sticks, which Mr Seidman calls "informed acquiescence". Only 3% fell into the category of "self-governance", in which everyone is guided by a "set of core principles and values that inspire everyone to align around a company's mission". The study found evidence that such differences matter. Nearly half of those in blind-obedience companies said they had observed unethical behaviour in the previous year, compared with around a quarter in the other sorts of firm. Yet only a quarter of those in the blind-obedience firms said they were likely to blow the whistle, compared with over 90% in self-governing firms. Lack of trust may inhibit innovation, too. More than 90% of employees in self-governing firms, and two-thirds in the informed-acquiescence category, agreed that "good ideas are readily adopted by my company". At blind-obedience firms, fewer than one in five did.

Gratton outlines five forces that will shape the future pattern of work: Technology (think 5 billion people, digitized knowledge, ubiquitous cloud). Globalisation (think continued bubbles and crashes, a regional underclass, the world becoming urban, frugal innovation). Longevity and demography (think Gen Y, increasing longevity, aging boomers growing old poor, global migration). Society (think growing distrust of institutions, the decline of happiness, rearranged families) Energy resources (think rising energy prices, environmental catastrophes displacing people, a culture of sustainability emerging).

Innovation opportunity: Turn products into services   How can your products be turned into services, and your services re-thought to make them even more comprehensive? This growing area offers many opportunities for innovation, says Jeffrey Baumgartner.   Bridging the innovation planning gap   Open innovation: How to develop a successful technology licensing program   In innovation, the simple trumps the complex

Warren Bennis, video 4:18