Loss of Confidence
[The reader will see differences in this ‘first run series’ (one of five), than the articles that follow. We have chosen to maintain them because the content is still relevant, despite some links degrading and the level of acumen contained within…]
Trust in institutions fades as new trust model rises
Today’s Wall Street Journal article Crisis of Globalization Lies Behind Deutsche Bank’s Troubles presents a core key weak flank of most, if not all, institutions (commercial, military, religious, political, academic, and more) found in the world today. While expressed in many different ways (social license, confidence, respect, integrity, and more) it boils down to one simple word: trustworthiness.
“What lies at the heart of Deutsche’s troubles is the market’s loss of confidence in its business model:”
Need another real-world, historical example of how broadly loss of confidence has spread among institutions globally? Simply Google “[insert name of institution] + trustworthy”. Or take this shortcut to this timeless example from Psychology Today Magazine’s The Catholic Church, Toyota, Trust, and Fear.
“Both of these major global institutions ignored the important role that trust plays in the psychology of our perceptions of risk. And they’re continuing to ignore the importance of trust, even as they claim to want to rebuild it, in the inadequate way they are responding to the mess they’ve made. They’re apologizing, but they are not backing up their mea culpas with sufficient action. Because trust has such a powerful influence on our perception of risk, words alone will not be enough”
For decades institutions big and small, far and wide, have considered trust, a major power flow that shapes power bases, a normal part of their institution’s reality. Over time, as the generations of men and women who took the initial actions needed to earn the trust of others and transferred that trust to the command and control institutions of the last century, trust in institutions has faded.
Gone are the days where institutions receive up front, benefit of the doubt. With trust, as with so much of human affairs:
- as long as you have it, it is no big deal » loose it and it becomes everything
- the decay ∞ collapse cycle, while slow at first, scales so subtly and smoothly, few see the collapse coming. Fewer still know what to do when it does happen. Most contribute to the decay. (See “Both leaders…” quote below…)
- regardless of the environment, political, commercial, religious, local, global, big power bases, or little, the conditions of trustworthiness never changes. The context of trust endures all kinds of human affairs models. Today’s highly regressive, distrusting societies spreading throughout the globe are no exception.
These facts have not yet caught up with many whose focus lays more with their own institution’s internal power base conflicts, than the external forces eroding their institution’s trustworthiness. Inside many of today’s institution’s it is not fashionable to discuss external realities that challenge the institution’s command and control world view. Too many have a personal stake at risk to ‘rock the boat’. (retirement plans, second homes, children’s college tuition fees, and more)
As if somehow their institutional power base is unique enough to be immune from the gale force winds of change. But as is often the case in any human affairs model, what we think we hide from others is often in plain view for all to see.
Here’s how this ancient cycle of outside forces, forcing change on institution’s internal operations (“outside ∞ in”) phenomena plays out in the above Psychology Today article:
“Both leaders [Catholic Church & Toyota] recognized that trust has been damaged. But apologies won’t be enough to rebuild it because of the serious way trust was damaged in the first place. It wasn’t the sexual abuse of children by clergy that damaged trust in the Catholic church. It wasn’t Toyota’s faulty cars either. Both organizations had a problem, and to protect themselves, they hid it. They put themselves first, and the safety of their parishioners or customers second.”
In our view, the institutions learning how trustworthiness is an external power flow that is managed entirely different than their current power base’s narrowly contrived risk management and assessment systems include:
- Banking: Clawbacks,
- Meal Delivery Services: The Not-So-Wholesome Reality Behind The Making of Your Meal Kit
- Wireless carriers: Sprint’s recent series of advertisements
- Religion: Catholic Church
- Journalism: No, the New York Times won’t get in trouble for publishing trump’s taxes
In other words, in this day where the Internet of Things (think sensors and other physical devices) is fast becoming the Internet of Everything (think human affairs and more), the biggest threat to many institution’s power base is not another thing (platform, app, intellectual property, building) or something you can touch. The biggest threat facing most institutions today, much like the wind, you can’t see it, but you can feel it and see it’s effect on things, is the lack of trustworthiness.
Or as the above Psychology Today article put it:
“Until they demonstrate with tangible evidence a new attitude that truly puts the safety of the customer or parishioner above the self-interest of the organization, neither Toyota nor the Church can hope to restore the trust of customers or parishioners whose safety was so selfishly discounted.”