Trust is society’s most fragile asset, according to author and global authority on the sharing economy, Rachel Botsman MAICD – and rebuilding trust is not a given.
It’s a familiar refrain. A bank or insurance company publicly pledges to “rebuild trust” after another executive pay or consumer scandal, while promising to do better in the future. But you can’t rebuild something you probably didn’t have a lot of in the first place, says Rachel Botsman MAICD, a specialist in the impact of digital technology and collaboration.
“What’s happening now is an erosion of confidence in the financial system, not just the banks,” says Botsman. Her book Who Can You Trust? explores the implications of rapidly transforming attitudes in a social and consumer environment where we are more likely to trust our peers than big business.
“When a CBA says, ‘we are going to rebuild trust’, it’s very difficult to do. The three main reasons are a lack of accountability, the sense that the rich and powerful get to play by different rules, and that only one person went to jail after the GFC, which doesn’t feel fair. This inversion of influence means it’s easier and more likely for people to trust their networks.”
The question, particularly for organisations in sectors where trust has already eroded, is should you even try to rebuild? “If the system is broken, is it time to rebuild financial systems around people?”
This means understanding a new dynamic, something Botsman dubs “distributed trust”. Instead of putting our faith in institutions, media or power figures, it’s about relying on your network and their recommendations.
PUTTING PEOPLE FIRST
Trustworthiness is made up of four traits: competence, reliability, integrity and benevolence (the belief that an individual or institution has your best interests at heart). As distributed trust gains momentum, there’s a chance to build systems that put people first in ways that are more transparent, inclusive and accountable.
It’s rare for traditional organisations to have a head of trust, she says, but Uber and Airbnb do. “The effective leaders in this space don’t talk about trust, they tie it to something they’re doing. In Airbnb, it’s about security and risk for when things go wrong. In product organisations, it’s ‘what’s the experience for the customer if we say we deliver, but we don’t?’”
When trust is lost, a company has to exhibit humility, be unafraid to give a genuine apology, acknowledge mistakes, and demonstrate a clear willingness to fix what is wrong.
A FUNDAMENTAL LINK
Trust is fundamental to the dynamics between boards and senior management. Robust and confident relationships where uncertainty is acceptable help directors and executives face challenges and develop trust.
“The obvious sign of a trust problem between board and management is how senior management responds when disaster strikes. The worst thing boards can do is to take a different stance to the CEO. Or claim ignorance, which looks incompetent.”
Getting that balance right is about ensuring trusted and robust relationships between board and executive ranks. Meanwhile, the nature of governance bodies is also transforming.
“All those trusted intermediaries are part of the world of institutional trust now being questioned. As the cost of trust plummets because of new technology, the third parties paid to facilitate our trust – agents, referees, watchdogs or custodians – will increasingly have to prove their value.”
Many in authority hope that they can go back to how things were, but Botsman remains optimistic. “You get organisations where the CEO really gets it. Not that trust has disappeared, but that it’s changed form and there’s a completely different reality”.
What is trust?
Trustworthiness is made up of four main traits: competence, reliability, integrity and benevolence (the belief that an institution has your best interests at heart). Reputation is a measure of trustworthiness.
Why does it matter?
Trust is a cornerstone of relationships and with it comes risk and uncertainty. Trust becomes a bridge between the known and the unknown. Trust emerged with institutional trust, such as governments and charities, but is now shifting to machines.
We trust too easily, putting faith into automated algorithms without realising they are a fundamentally human process.
Organisations are high-trust cultures, but as our society shifts, we move away from trusting organisations to becoming more transparent. When transparency does occur, what are the consequences for a business? Lack of confdence in systems and organisations is a virus that can spread rapidly. Trust quickly ends up being misplaced and we’re constantly asking who do we trust? When an institution that once had our trust no longer does, it quickly starts to crumble. Research says we’ll actually trust a stranger on a bus over an expert. Trust is the engine of healthy change and without it we are stuck.
How is trust rebuilt?
Don’t rebuild; find trustworthy people and systems. Boards will ask: Who looks after the trust in a company? Governance is risk and authority.
Trust is the most precious social asset and there is no one person responsible. They don’t know where trust, or mistrust, lies in the company.
Should boards do a trust audit?
I’m not a fan of the word “audit”. If we’re assessing the issues of trust in a company, we need an aligned defnition and an end goal, and to assess how this will play out in each team within the company, for example comms, finance or HR.
Where do you start?
Firstly, ask what is the biggest trust issue and why? These issues will be like the tip of an iceberg; once we address them we’ll uncover the real issues. Identifying the source of trust and mistrust will be an uncomfortable conversation.
For online companies like Airbnb and eBay, trust is the very foundation of their business.
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