Governing trustflow and multiplying value of human systems LO30642

From: chris macrae (
Date: 10/04/03

Here is an update on some perspectives of the book I am working on which
Richard was kind enough to feature in a file at the start of the year

[Host's Note: I think Chris was referring to (his msg LO29754) (a document)


Two things have had rather particular influences on me recently:

 1) Spending a weekend recently listening to crisis conflict testimonies
from almost every corner of the globe between cultures in deep conflict or
where human rights seem to be far from reconciled

 2) Having read through the 10 megabyte report on the NASA culture, it's
quite appalling really that such a big organisation failed over time to
permit resolve the conflict of its one soft goal (safety) versus its only
two other major goals : costs and schedules (productivity)

I feel more strongly than ever that system experts should say to large
organisations : if you do not have a governance system auditing emerging
conflicts with as much employee attention as the numbers, you basically
have no behavioural structure for any long-term goal be this safety if
that's your major value, or some other vision if that's where your unique
vision is intended to lead people's trust in why you have a licence to

Here are 2 pictures which may help to remind anyone interested on
parameters we suggest as minimal for coordinating human systems.

I am aware that contextualisation and editing some of the language to
terms more commonly used where you are is always necessary ; if you see
enough in what I'm talking about to want to do that, contact me at
I can't see why it should take more than about 4 email exchanges to get
any systems thinker mapping a context whose trust-flow that matters most
to them

Along with visual structures, you need to choose some beliefs to make the
case for auditing organisations as human relationship infrastructures. I
love to swap beliefs people find work for them. Here are some

PRINCIPLES OF TRUST-FLOW - version cm/oct 2003

Hi-trust organisations are those that are structured so that each
stakeholder win-wins from the demands of each other

Trust is the 'quality' variable of relationships and human systems. Its
governance is the way to govern intangibles and to determine what is
happening next to their valuation ( systemically growing or

In service, knowledge and networked economies, the health of
organisations depends more on trust-flow than cash-flow. Running out of
cash-flow is risky but may be refinanced, whereas running out of
trust-flow is fatal.

Trust-flow is highly interconnecting and this means it obeys different
mathematical operands from the separable ones assumed by current
accounting of tangibles and cash. The primary differences are
multiplication not addition, compound maths over time not linear
extrapolation, and interaction of flows across boundaries with other
systems not traditional 'ring fencing'. Much of this mathematics can be
summarised in very simple terms: it turns out that Andersen was wholly
wrong to believe that billion dollars of business stakeholder value and
zero social value computed to :
billions + 0= billions,
the true intangibles maths of relationships is represented by
billions * 0= 0

Trust and intangibles require open collaboration strategies, whereas the
competitive assumption of tangible governance is the opposite. It is now
a more important leadership competence to know how to contextually
benchmark and map out an assessment of trust-flow as a systemic whole,
than to devise those part-wise metrics which tangible accountants use
because these are erroneously assuming value has no human interactions.

The first law of human system dynamics is that a perfect system design
will continuously degrade without proactive governance. This means that
emerging causes of distrust need to be detected by everyone involved and
it is at emergence that system resolution is most economic as well as
socially productive. Reasons why conflicts will emerge naturally range
from changes in environment, stakeholder learning and interactions,
human relationship pressures as well as all the natural ways in which
people in a living system vary far more than the lifeless objects that
tangibles are assumed to be. Transparency of knowledge management and
organisation-wide participation in living the brand identity can also be
seen to be a critical enablers of most living systems.

Trust is the most central of human values and emotional intelligences,
and often co-creates them. For example, the way people laugh is
physiologically dependent on hi-trust existing between them.

If unnatural levels of distrust are permitted to compound, they start
multiplying rapidly and it as this stage that whole human systems start
to become ungovernable. The first years of the 21st Century have already
provided us with a databank of hundreds of worldwide cases of
multibillion dollar intangible systems sinking beyond this stage of
distrust. The dynamics are such that one stakeholder will be the first
to lose all trust in the organisation, and at the stage that this zero
valuation is made it multiplies across the valuations of all
stakeholders reducing the whole organisation to a state of zero worth.
Even this is an unreal legalised abstraction since the compound impacts
across other interconnecting human systems is likely to be hugely value
destroying too and wherever owners have not been licensed to enjoy a
form of limited liability, the costs which they will incur may literally
know no borders.

The social-economic implications of the latter 'system of system'
dynamic should now be reappraised wherever international policy is
developed, because currently it is often entirely innocent people who
have to pick up the waves of value destruction that the disappearance of
a multi-billion dollar intangible system sets in motion. This is
probably where deep democratic dialogues should urgently begin if humans
are to enjoy a networked world and make globalisation a fair exchange
for everyone (starting with positive humanitarian discrimination for
those in most desperate everyday needs). This community invitation may
make a value hypothesis on the extraordinary nature of convergent
changes associated with the revolution of a networking world. Your
informed judgement may boil down to whether you concur with the system
theory future predictions that have been made by senior policy
institutions since the 1980s -eg "in 2005, the gap in incomes and
expectations between rich and poor nations was recognised to be man's
most dangerous problem", Norman Macrae, The Economist, 1984.

Sincerely, chris macrae, London,
Open Sourcing Trust Flow Mapping for Human System Valuation


"chris macrae" <>

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