There is growing unpredictability in everything. In the world, the distrust of politicians to businessmen, businessmen to politicians, and society in relation to both of them is growing. This is disturbing since trust is the fundamental basis of society.
Public distrust of business has become a significant risk, and companies need to be acutely aware of the damage from a lack of trust. CEO's fear that a lack of trust in their companies will have a negative impact.
Recent years have been full of disasters and upheavals.
Edelman's 2021 Trust Barometer reveals growing distrust. However, while society loses trust in the governments, NGOs, and media, there is optimism in business.
Expectations of business have grown because people left without the support of states and social institutions rely on ethical and competent companies. Increased business expectations place new requirements on CEOs: they must focus on social improvement with the same energy that was used to make a profit.
It is important to note that the factors that reduced trust are not limited to the effects of COVID-19 but are related to general trends in the structure of work and organizations.
To create a sustainable system in which people trust each other, leaders need to solve underlying problems.
● Destabilization in many areas of life and at different levels of government.
● Everything is changing very quickly, and society no longer feels social, economic, geopolitical stability.
● Consequences of globalization. The transfer of production to the zone with cheap labor is viewed negatively by ordinary people - the country loses potential jobs; the funds are withdrawn.
● The growth of unemployment, which occurs as a result of optimization of business processes, automation, and robotization of production.
● Widening the gap between rich and poor, washing out the middle class, and deepening social inequality.
● High corruption, bribery, and tax evasion.
● Formalism, bureaucracy in the work of business, lack of sincere interest in the consumer.
● Environmental degradation due to environmental pollution by production.
In part, a business can neutralize these risks by becoming socially oriented. The company must demonstrate that it does not harm society, as well as prove its involvement in solving global social problems. Companies need to invest in joint social projects with the state, participate in charity, and take care of the ecology of the areas where their production operates.
PwC experts recommend strengthening transparency, increasing corporate responsibility, and increasing trust in business within companies among employees.
For generations, trust was personal: people believed only those they knew well. With the onset of
the Industrial Revolution, trust became institutional and focused on government, business, and media. Recently, we have seen a new transformation of this concept. New media -bloggers - are losing trust due to the abundance of native advertising. Society has become more conscientious and trusts competent and ethical experts in their business, who do not hide information and are open to their audience.
The central challenge is to manage trust in today's digital world reliably. Commercial organizations and individuals can no longer defend their interests at the expense of others. It leads to a lack of trust between any business organization. However, the paradox of trust is that by taking steps towards each other, companies increase not only profits but also risks. Openness needs confirmation, and business trust needs technology.
The global trend that will continue to influence business in the next five years is technological progress, and this reveals the topic of
trust in a new context.
Internet shopping has become an ordinary thing, and communications in social networks are often ahead of the media. Buyers shape public opinion, having a direct impact on the credibility of a particular product, service, company, and sometimes even the business as a whole.
If companies do not gain trust in the digital world, they risk losing the market. Until recently, it was an ordinary thing for a business to keep its secrets of production. Now it is becoming increasingly clear that not closeness but openness is a factor in increasing confidence in business as a competitive advantage.
Implementing technology for transparency is a strategic technique that will help businesses eliminate risks. Transparency and traceability are essential. So, for example, sellers can monitor the freshness of the delivered products. And buyers can find out where the goods came from.
Technologies for transparency and trust are combinations of IoT, AI, and Blockchain that will not allow data to be changed or incorrectly recorded. Data is the power of business. Data management can be the key to competitive success.
However, tracking should not turn into surveillance. Surveillance does not work because it approaches the problem from the wrong side. Managers try to eliminate a space where people may be vulnerable. It would be much better to preserve this space but reduce the possibility that people will abuse their opportunities. Companies should use process tracking rather than employee surveillance, use scientific data, and build an independent system with minimal risk.
Users turn into educated and knowledgeable people. Therefore, the importance of the basic elements of trust increases. Among them are honesty and openness, competence and ethics, consistency and accountability. Due to these components, customer loyalty increases, and the relationship between the consumer and the business improves.
Lack of trust prevents businesses from focusing on key issues, as much of management's attention is spent monitoring and responding to the actions of others. The best way to create long-term change is through small, incremental, sustainable steps. For instance, it could be new models of interaction with customers, attracting external suppliers and contractors, new ways of using data sets, accelerating R&D processes, mobility, and much more.
Board members and executives need to be confident in the digital future of their business and properly assess the risks of the new era. It requires new technologies and information.
