The moment has been coming for some time. Transactions are great. We long for relationships.
Digital transformation atomised much of our economic exchange. With global markets on global platforms, it became easy to ignore relationships and focus on the transaction. Outsourcing, fragile transactional supply chains, gig economy exploitation, and more atomisation of our work and markets followed.
As we start to consider the impact of the last two years of major global shocks, its not so clear that the low cost transaction route is always the best outcome. Transactions are fine if you are trading commodities of know quantity at a moment and are done. Despite our best efforts we can’t reduce every interaction to a point in time transaction. Risks are more flexibly and sustainably managed in relationships.
Supply chains are chains. They are formed of relationships in many cases. The value of optimising businesses for real-time just-in-time work means that the transactions flow in chains of relationships need to be finely tuned to perform. Disruption of those relationships because of a pandemic, Brexit or other trade wars, a shortage of drivers, weather or fire emergencies can cause massive business disruption. The global automobile industry is disrupted because we are lacking enough chips and chip manufacturing is not an on and off again supply of a commodity.
If your model is trustless, transactional and about self-interest, you can mimic features of relationship. However, you won’t create the value of enduring relationships. Users will be left to craft their own connections in and around your platform. On reason blockchain won’t ever fully replace the world of contracts is most contracts are relationships and not transactions. The clauses work to shape some but not all of the risk allocation. It is too costly, too time-consuming and usually nearly impossible to specify everything. The parts that aren’t self-executing are managed by trust and relationships.
We are also seeing a great deal of questioning of the transactional approach to these markets. In Melbourne, restaurant entrepreneurs got together to launch Providoor to strike a more equitable relationship with the delivery services that are trying to reshape fine food. Local bookstores, small scale craft providers and other specialist practitioners are pushing hard to build their customer relationships when the big and the bold and the extractive look as bland and as out of touch as ever. Many of the entrepreneurs in healthcare consistently fail because they try to turn specialist relationships of service into transactions that neither side of their platform value.
Relationships take investment, but they also deliver exceptional returns from trust, from alignment and from mutual interest. A win-win repeated over time will always outperform a single moment of extraction. Relationships are two-way experiences where we need to show as much care for the interest of others as we do for our own. No matter how hard transaction platforms work to imitate relationships they won’t deliver that enduring two-way engagement.
If we have learned anything from the last 24 months, it should be that we can’t win alone and that others in our lives and our community matter too.