Why Trust Becomes a Differentiator for Relationship-Based Companies

A former colleague recently reminded me of something I wrote years ago about relationship-based companies. At the time, I thought it was an interesting observation.

I hadn’t thought about it in many years.  

I originally wrote it in the context of “Team of Teams” (General McChrystal) and the shift to product orientated operating models. I asked myself, is it still relevant today especially with the rise of generative and agentic AI?

Yes, as AI is eroding trust in what we see and rely on, it makes relationship-based companies more valuable than ever.

Early in my career, I operated in environments where everything was clear and structured. Processes were documented. Org charts mattered. Roles were well-defined. Andersen Consulting (now Accenture) had ~20% annual turnover while I was there. That reality drove clarity. Everything had to be documented, structured, and transferable. The system depended on it.

Then I joined an organization that felt completely different.

There wasn’t always a clean playbook. You couldn’t just read your way into understanding how things worked. It took months, sometimes longer, to really get your footing. People didn’t point you to a process; they pointed you to a person.

I remember thinking: this doesn’t feel very modern.

Over time, I realized I had it wrong.

What I was experiencing wasn’t a lack of structure. It was a different kind of structure, one built on relationships, shared experience, and accumulated trust. People knew who to go to, not because of a box on an org chart, but because they understood how work actually got done. Context moved through conversations. Reputation mattered, and it followed you across teams. The longer you stayed, the more effective you became, not just because of knowledge, but because of trust.

Relationship-Based vs. Transaction-Oriented Companies (5 Clear Signals)

Signal	Relationship-Based Company	Transaction-Oriented Company
Average Tenure	Many years; institutional knowledge compounds	2–5 years typical; knowledge resets frequently
How Work Gets Done	Through trusted relationships and informal networks	Through roles, processes, and structured handoffs
Breadth of Experience	People move across roles and understand how the whole system works	People stay in narrow roles, then leave for a new company to advance
Understanding of People	Deep knowledge of colleagues’ strengths, weaknesses, and working styles	Surface-level understanding; teams re-form too often to build depth
Primary Orientation	Decisions favor long-term company success and relationship equity	Decisions often optimize for role success, promotion, or near-term gains

This is a spectrum, not Boolean. Many organizations, even different levels within the same company, operate across both models. For example, when I was at Accenture, early-career roles often functioned in a more transaction-oriented way, while senior leaders rely heavily on long-standing relationships, shared history, and accumulated trust.

Trust as the invisible infrastructure.

That’s the part I think we’ve underestimated.

Because when you step back, trust functions a lot like a system interface. In technology, we rely on APIs because we trust the contract. We don’t need to relearn everything each time, we know how things connect and what to expect even as systems evolve.

In high-functioning organizations, trust plays a similar role. It becomes the “human API” that allows teams to move quickly across boundaries without friction.

And that’s where this connects to AI.

AI is compressing the advantage of many things we used to rely on; access to information, standardized processes, even elements of execution. It’s getting easier to produce, analyze, and automate.

What isn’t getting automated is trust.

Or judgment shaped by shared experience.

Or the ability to align quickly around a goal when things are ambiguous.

As those become more important, organizations that already operate with high levels of trust start to look structurally advantaged. You see a version of this in the military, which is why the “team of teams” concept works so well there. The mission is bigger than the individual, and trust isn’t optional. It is what made me think originally about trust in corporation and adopting "team of teams".

In most corporations, the incentives are different. Many people are motivated by compensation, progression, and personal opportunity. That’s not wrong, it’s just reality.

But it does make true trust harder to build. And that’s where relationship-based organizations stand out, not because they solve for human nature, but because they create the conditions where trust can compound over time.

People move across teams. They build context. They learn each other’s strengths and motivations. Over the years, the organization becomes faster, not slower, because coordination costs drop and mission and direction aren’t repeatedly reset with each wave of churn.

I’ve seen situations where teams with strong relationships aligned in hours, while equally capable teams without that trust took weeks.

That said, this only works under a condition that’s often misunderstood.

Trust does not replace discipline.

The best organizations I’ve seen still have clarity. They still have standards. They still measure performance, just like a great sports team knows exactly how it’s performing.

Without that, relationship-based environments can drift into politics or lack of accountability. With it, they become incredibly effective.

One area where I think many companies fall short is hiring for trust.

We talk about it constantly. Leaders like Simon Sinek often point out that teams will choose someone they trust over someone who is simply more competent. But when you look at how hiring actually happens, it doesn’t always reflect that priority.

We say trust matters, but we don’t often operationalize it in hiring.

Reference checks are often treated as a formality. They’re outsourced, rushed, or handled by people who don’t have the context to really evaluate what matters. Meanwhile, we have more tools than ever; networks, platforms like LinkedIn, shared connections, to understand how someone actually shows up over time. And yet, we don’t consistently use them to assess trust in a meaningful way.

There’s also an irony here.

In today’s world, relationships are often more important than ever in getting a job.

That can feel uncomfortable, like the system isn’t entirely merit-based. But it’s also pointing to something deeper: people are trying to reduce risk. And trust is one of the strongest signals we have.

The problem is when that becomes purely transactional. Where short-term connections replace long-term relationships built through shared experience.

My Bias.

I should be transparent about my own bias.

I spent about 15 years at each of two organizations, close to 30 years in total, which shapes how I think about this.

I’ve seen what happens when relationships compound over time and how much faster and more effectively teams can operate because of it. I’ve also seen more transactional environments, where people move quickly between roles and companies. There are advantages to that model, but it’s harder to build the kind of deep trust that enables a true team-of-teams dynamic.

Job mobility isn’t inherently a negative. But I do think there’s something to be said for having at least one experience where you stay long enough to see how trust and effectiveness build over time.

The Real Shift.

So when I look at the current moment, with all the focus on AI, automation, and new operating models, I keep coming back to something fairly simple.

The bottleneck is shifting.

Not to technology.

To how effectively people work together.

The organizations that win won’t just be the most advanced technically. They’ll be the ones where trust is high, standards are clear, and people understand not just what to do but who they can rely on to get it done.

In that kind of environment, relationship-based organizations don’t feel outdated.

They feel like they were built for what’s coming next.

PS: General McChrystal's new book "On Character: Choices that Define a Life", check it out

PSS: The Erosion of Trust is wide spread and goes far beyond what Relationship-based Companies can manage but that is a much much bigger topic.