World Economic Forum author Rachel Botsman offered great insights 3 years ago in her article, “Who can you trust?”
“Trust, the glue that holds society together, has shifted from institutional trust to a new form of distributed trust. Instead of flowing upwards to institutions, experts, authorities and regulators, it now flows horizontally to peers, friends, colleagues and fellow users…We have entered an age where individuals can have more sway than traditional institutions, and customers are not just meek consumers but social influencers who define brands. And because trust is moving into the hands of the many, there will be more of it around.”
Just think of the power of strangers trusting each other in the online rating and review systems that are integral to many companies depending on customer trust such as TripAdvisor, Amazon, Airbnb and online retailers.
Loss of trust in institutions
Insights into trust are especially topical now as we are living in a time of uncertainty when businesses depend more than ever on the degree of trust in their relationships with others. This takes place against the striking backdrop of the coronavirus pandemic around the world. (More about the coronavirus in other articles.) Overall, people’s lack of trust in institutions continues a trend from previous years, as revealed by the 2020 survey data in the image below. For instance, the 2020 Edelman Trust Barometer international survey of 34,000 people in 28 countries found a global sense of income inequality. The survey found the “mass population” showed significantly less trust (14 points less) in the four main institutions of government, business, media and NGOs than the “informed public” did.
In its 2020 Trust Barometer survey, Edelman states that “trust [in institutions] is built on competence and ethics,” and asked participants to evaluate each of 40 companies across four trust sub-dimensions – ability, integrity, dependability and purpose: “Ability defined the competence dimension while integrity, dependability and purpose were rolled up to define the ethics dimension.” There was no explanation as to why institutional trust was reduced to the two dimensions of competence and ethics. It raises the question why other variables like transparency were not included.
Due to the COVID-19 pandemic, Edelman conducted a follow-up survey internationally with the aim of finding out how people’s trust has evolved in response to the pandemic. This survey’s findings, published in May 2020, were announced relatively early in the development of the pandemic, and so Edelman’s survey showed “A record rise in trust; trust index at an all-time high.”
However, the world has continued to be ravaged by this infectious disease since the start of 2020, second destructive waves have taken human life in many countries. The resulting restrictions have continued to cause major economic destruction, and it is likely that many people are now less trusting of the four institutions nominated by Edelman – government, business, NGOs and media.
Anyhow, the Spring Update page shows very clearly that most people (two-thirds of people) around the world thought government’s highest priority should be saving as many lives as possible, rather than prioritize jobs and their economy.
In reviewing the results of the survey, Edelman consultants made the following points:
- Tangible action is needed to preserve trust in the four institutions for the long-term.
- Business and government must collaborate on solutions.
- Business must live up to its multi-stakeholder promise.
- CEOs must demonstrate public leadership.
- The return to work is the test for trust.
Time will determine how these points play out.