Strengthening the foundations of trust in the digital age
The speed of technological change requires new thinking about how institutions and businesses deliver on trust.
There appears to be an epidemic of distrust that is eating away at the fabric of society. People have lost faith in institutions’ ability to provide reliable public services and in businesses to provide the jobs that put food on the table and allow workers to lead a dignified life. According to the Edelman Trust Barometer, which measures the levels of trust globally, for the past decade, less than half of the world’s population trusts government, business, or even civil society. The surge in inequality, despite economic gains for millions, is one important factor that has left people questioning whether their government or employer has their best interests at heart.
How businesses can deliver on trust in the digital age
The speed of technological change and the unprecedented volume of information available — anytime, anywhere, via smart devices — is exacerbating this phenomenon. Today, information that weakens our faith in society spreads faster than responses to it. This trend will only grow as 5G mobile networks increase the speed and expand the breadth of connectivity.
Few industries are exempt from the scandals that lead to distrust, be they mining and environmental disasters or the manipulation of benchmark interest rates and air pollution tests. People witness the sometimes devastating results of unethical acts perpetrated by institutions and people that were once synonymous with quality and integrity. People are also discovering that the digital platforms and tools that offer the benefits of convenience, connectivity, and greater transparency also present critical problems that were not envisaged, such as data privacy.
To maintain a stable society, it is crucial that institutions win back trust. Politicians and business leaders must make a concerted effort to understand the causes of the current high levels of mistrust so that they can take the appropriate actions to mitigate the effects. In an overarching way, four key factors directly affect trust in today’s digitally interconnected world:
1. Speed. Technology changes so rapidly that it can disadvantage those who can’t keep up, which leads to greater inequality and uncertainty. One simple example is in financial markets: Access to instantaneous investment information favors those with a technology edge — such as high-frequency traders — on what should be a level playing field.
2. Volume. The amount of data and its complexity are confounding ordinary people along with business and political leaders. The uninformed questioning of Facebook founder Mark Zuckerberg by the U.S. Congress and the European Parliament showed how far behind the curve our politicians are in understanding the technology that underlies some of today’s most successful and influential businesses. This reduces the public’s confidence in governments’ ability to safeguard citizens.
3. Unintended consequences. The speed and volume of technology advancement mean people can’t know the effect of new tools until after they have adopted them. For example, researchers are now beginning to assess the impact of smartphones on brain functions. What else might be affected by this essential device?
4. The generation gap. Children have always adapted faster than their elders to new technology. Today, young adults’ deep familiarity with digital tools and platforms gives them advantages in the workplace as technological change makes some tasks redundant.
Until now, government and business have been slow to react to the implications of these changes. They are not, for example, addressing the monumental and costly task of upskilling workers — helping them acquire the skills they need to contribute in a digital world — to avoid losing a generation of employees just as people’s working life expectancy is on the rise.
But with all this change, people undoubtedly face a conundrum. They want predictability in their lives. They want institutions such as the police, tax authorities, and regulators to be stable, and too much technology, introduced too quickly, contributes to a sense of unease and a lack of trust because people can’t keep up. This explains, in part, the rise of populism as people look for simple answers to complex issues.
The first step to rebuilding trust is to be aware that change and complexity are constant and everyone — customers, regulators, employees, and the general public — are potential stakeholders. Businesses, like governments, now operate in a technologically enhanced fishbowl.
The first step to rebuilding trust is to be aware that change and complexity are constant and that everyone – customers, regulators, employees, and the general public – are potential stakeholders.
In all industries, leaders themselves need to evaluate their own technological understanding. The cycles of change are now so short that the time available to adjust and adapt is limited. Leaders will have to make real-time decisions, sometimes without all the facts. They should be careful to avoid the trap of believing they have mastered the problem when instead they have missed something that will make their solution obsolete. They will have to explain what they are doing: how they are keeping personal data safe, how they are working to prevent discrimination in their use of algorithms, and how they are ensuring quality control across the tech supply chain. Governments must play their part too: Regulations need to be fluid, easily amended, and relevant.
Making a business or institution trustworthy is not a onetime initiative that a mission statement can fix. It is something that has to be intentional, embedded, communicated, and continuous to instill a sense that society’s institutions and economic drivers — businesses — can be trusted to deliver for the good of their wider community. This is harder in an age of accelerating technological change, but being aware of the four factors that can undermine trust, communicating where your business sits on the trust curve, and articulating what you are going to do to address the challenge are important first steps.
- Stephanie Hyde is a partner with PwC UK. She is the global clients and industries leader at PricewaterhouseCoopers International Limited.
- Blair Sheppard is the global leader of strategy and leadership for the PwC network of companies. He is also professor emeritus and dean emeritus of Duke University’s Fuqua School of Business. He is based in Durham, N.C.