Most of us grew up with our parents telling us not to get into strangers’ cars. Today, we regularly open ridesharing apps on our phones and willingly ask strangers to drive us places. Ridesharing apps can track where we are during our ride, who our driver is, and even allow us to send our route and estimated time of arrival to friends. This interaction—which essentially amounts to hitchhiking—is made possible because technology facilitated instantaneous trust building within a transaction where we never thought building trust was possible. Technology has shifted our attitudes and approach to interacting with strangers so dramatically that it is likely that ridesharing services are now safer than getting in a taxi.
Ride-sharing services aren’t the only trust-based services we use regularly. At a personal level, and at a business level, the economy is increasingly service-based. It is likely that your company has leveraged dozens of services firms (advertising firm, consulting firm, staffing agency, event marketing agency, etc). While technology has facilitated quick trust building for consumer services, it has yet to do so effectively for business services.
“Trust until” is often too risky
In the world where third-party business services are paramount, building trust is absolutely necessary. Often, your most important client relationship is the CIO. The role of the CIO and technology leaders has changed considerably with the introduction of XaaS service models where CIOs often operate largely as facilitators between the business and service providers who deliver mission critical applications. Therefore the number of relationships facilitated by the CIO is increasing and the speed at which trust is established needs to be swift and can be broken even faster. Your clients will engage you based on the trust you instil. Furthermore, the more risk there is in what your client is seeking to engage you for requires that they have a higher degree of trust in you in addition to the services you provide.
In the ridesharing scenario, we trust the driver before getting into the car because Uber has vetted the driver and other riders have provided reviews of their experience. In the business world, there is no such transparency in terms of vetting and reviews, and therefore, organisations are unfortunately too often operating in a “trust until” environment, where they are left to trust a service provider until that provider proves untrustworthy.
Unfortunately, operating entirely within a “trust until” environment is risky for your client. If someone within an organisation is betting their career, customers, or the company on the service provider relationship with a potentially risky outcome, then you must be able to build trust in client services as is done in consumer services. While the role of leaders like CIOs has traditionally been to facilitate technological changes, their influence on other facets of the business is growing. How can you, as a service provider, deliver on a trust-based relationship where sometimes it’s necessary to build that trust almost overnight?
Options to reduce risk
If you agree that a higher level of trust is required in business services today and there is a need to do it faster, then how do you reduce the risk of proceeding forward with a business service when there is a trust gap? Delivering business services is often more complex than consumer services and carries a greater degree of risk than ordering a ride on a mobile application. Depending on the risk and complexity required to deliver the outcome your client is seeking, a correspondingly greater degree of trust is needed.
There are several options to address the risk versus trust tradeoff. One option is to go to a big brand service provider, such as Accenture. The trust in this instance is already inherent in the brand and the reputation of the firm. While there may be a sense of lowered risk, it is also often the most expensive. For small companies, this option is often unaffordable.
If the option of a trusted brand is untenable, then perhaps consider leveraging a referral from someone else whom you already trust. However, wherein the consumer world we have the benefit of crowdsourced reviews from sites like Yelp, in the corporate world no effective analogous platform exists. Furthermore, relying exclusively on referrals limits options solely to one’s own network. In this case, trust would be based on the trust you have in the individual making the referral.
If you come up empty in your referral network, you might consider one of the online marketplaces like Upwork. While online marketplaces do have the benefit of provider ratings, the challenge with these marketplaces is the ratings are provided by people you don’t know.
If a marketplace does not result in the type or quality of provider an organisation needs, it may be necessary to consider contract incentives with an unknown service provider that provides risk protection to fill the trust gap. Contract incentives directly impact profit, inversely for cost overruns, and motivate service providers to deliver quality work on agreed upon timelines.
New technologies will deliver trust at speed for business services
At this point we have established the importance and necessity of trust in the service-level economy. We’ve identified several mechanisms to fill trust gaps in business relationships. Technology is now beginning to play a bigger role in trust building for business relationships and will accelerate the development of trust-based quality business relationships. To play their role in facilitating trust, CIOs must be adept in leveraging technology-enabled services delivery models that allow their businesses to rapidly build enduring relationships.
For these new technologies to be effective in establishing trust for complex services that may have a high degree of risk, they must enable a primary as well as a secondary service provider rating system. The primary rating system is the performance of the provider themselves and the secondary system is a rating on the reliability and credibility of the referring source.
The technology platforms must be transparent in their primary ratings system. In the consumer world, these types of transparent primary ratings system exist as evidenced by user ratings on Uber or UpWork or Airbnb. However, in the business world, ratings must go one step further: One person may rate a service provider highly, whereas the next potential client for that service provider may not share the same values, rendering the rating much less relevant.
The secondary rating element of any trust-building platform must allow firms to get closer to organisations with similar values who have also hired the same services provider. Technology leaders must ensure the tools they implement facilitate secondary connections, much the same way LinkedIn does, so that organisations are able to make decisions based on the ratings of other organisations with similar aims. It behooves decision makers to find platforms with these requisite layers of vetting so that they may find trust on both important fronts and reduce the risk inherent in the service-level economy.
Trust allows organisations to thrive
Business relationships with consumers have evolved quickly to incorporate trust-building mechanisms facilitated by technology. Business-to-business relationships have lagged behind these evolutions, a lag which will impede businesses from successfully competing in today’s fast-moving economy. Business leaders — increasingly those with technology-oriented roles — must focus on establishing trust mechanisms facilitated by new technologies which leverage primary and secondary rating systems in their relationships with other businesses.
Quickly establishing trust has two principal benefits. First, services organisations will be better equipped to make informed decisions at speed. Second, it significantly reduces risk and increases the likelihood of successful business outcomes. A failure to establish trusting relationships will make it difficult for organisations to grow and thrive in the service-level economy.
Ray Grainger, Founder and CEO, Mavenlink