In the world of cryptocurrency speculation, 2018 has hardly been a banner year for bold investors. Bitcoin, Ethereum, and the like have all struggled to maintain their bullish runs of their first excitable years, leaving many investors disappointed, and others severely out of pocket.
Something interesting about blockchain’s ventures into currency — often lost amid the hype and fevered investments — are the questions it raises around one of its key founding principles — trust. Trust is fundamental to any concept of money — whether coins, paper, or numbers on a computer.
Money represents trust in the institutions of finance, governance and commerce, which underpin a currency. And it represents trust between the persons or businesses that are involved in a particular trade.
The idea behind cryptocurrencies was that trust could be placed in the code. You didn’t need to trust an institution or a person, because the system was based on immutable mathematics — always predictable and never-changing. In a sense, it meant you didn’t need to trust the concepts a currency represented, because you knew the system itself was established to function a certain way, without deviation.
Part of the current decline in cryptocurrency prices can certainly be attributed to people speculating on it as an investment. But it is perhaps also down to the fact that interpersonal trust is as important a factor in this area as any other. For example, some people still struggle to see Bitcoin as a true currency because they are put off by high-profile stories of fraud and theft.
Or they might be disinclined to use it because they don’t understand the technology, and they have no more reason to trust the person who wrote the foundational code than they might in a traditional financial institution.
Arguably trust, in all its forms, still revolves as much around the interpersonal as technological. In the workplace this is certainly true. You can have as many high-tech communications tools and data-mining systems as you like, but employee engagement and productivity will still be driven by efforts such as one-on-one interactions with managers, and by a company providing opportunities for a team to interact and socialise.
When you’re talking about an organisation’s leaders, the need for interpersonal trust is even more in evidence. A leader who hides behind the institution they stand for, and never attempts to build trust at a more personal level, will quickly run into some of the issues cryptocurrencies have seen.
People don’t inherently trust leaders simply because they are the top level of a hierarchical organisational system. That position might confer authority; it might demand deference; but it doesn’t imbue trust. Like crypto, simply having a system established doesn’t guarantee there’ll be trust in the people the system involves.
For a business leader, trust is still something that needs to be built — slowly, assuredly, and with many more personal interactions than broad-brush, institution-wide efforts.
Building this trust can take many forms. Some people will trust a leader who takes the time to learn their name. Others will trust a leader when they see they get results. And some will trust a leader because they believe in their persona as a highly-competent, successful person.
I think perhaps the most important element is that a leader follows through on the things they say. They make a statement of intent, and they follow through with at least an attempt to make it happen. Any employee could, if they wanted, chart a clear progression between a CEO’s public pronouncements and the direction the business subsequently took.
In short measure, this shows the leader as someone who makes decisions, follows through, and works to achieve something they believe in. All of which are essential components of building trust in leadership competence.
Blockchain’s utility in the currency space is far from settled, and it will take more than today’s declining prices to decide the conversations it has started around trust. But it is perhaps instructive to look at the continuing relevance of interpersonal trust in organisations around the world, to see a possible way forward for these discussions.
Ahmad Badr is CEO of Knowledge Group.