Maybe there is no more trust in business?

by .

“You may not like what I am about to say, but I’m not sure it is important that society has trust in business. It’s important we have trust in one another, and that we understand the nature of trust and trustworthiness. But I think the search for more trust in business is actually a meaningless aim.”

Podcast, article and Storify from a talk given by Robert Phillips at an event hosted by ICAEW’s Corporate Governance Group. The event took place under the title Rebuilding Trust in Business on Tuesday 20 June 2017.


Podcast recorded prior to the event with Lord Daniel Finkelstein, OBE, Associate Editor of The Times; Trevor Phillips OBE, President of the Partnership Council, John Lewis Partnership, and Angela Knight, Chair of Office of Tax Simplification.


Below article adapted from Robert’s opening speech.

(1) The search for “more trust” is a meaningless aim

I’ve been researching & writing about “trust” for over a decade, including a stint contributing to the Edelman Trust Barometer.

For as long as I can remember, politicians and business leaders have fretted about “re-building” trust. I interviewed over 200 of them for my book, Trust Me, PR is Dead. Sometimes they mean it. Sometimes they don’t. But they always feel compelled to talk about it. That’s why I have often said that the crisis of trust is a crisis of leadership.

Talking about trust has become a national syndrome – like business Tourette’s. It’s a huge problem. CEOs, like politicians, continue to treat trust as a message. Trust isn’t a message. It’s an outcome. It’s what you do, not what you say, that counts. Actions speak louder than words.

Put simply, if you want to be more trusted, try behaving well (or at least better), rather than just talking about it. Endless talk has driven any real meaning from the “t-word”. We end up seeking “more trust” because that’s what business school orthodoxy and social convention dictates. We are conditioned to think that a world without public trust must be dystopian, febrile and dangerous.

But why would we want to build more trust with people who we have never historically trusted anyway?Politicians, lawyers, journalists, PR people famously suffer relatively low trust levels. CEOs likewise. The 2017 Trust Barometer shows just 37% people trust CEOs. This compares with 60% who trust people like themselves. And why do we continue to chase institutional trust, when we could concentrate on building networks of trust between real people, addressing critical issues?

Why should we seek more trust in business?


(2) Post Truth and Peak Bullshit

Three books have just been published on “post truth”, a subject I warned about in 2012. It was, I wrote then, “time to call bullshit on the bullshit industry of spin”. Evan Davis, Matthew D’Ancona and James Ball now agree, also declaring “peak bullshit”. It’s interesting they’re all journalists. They are commenting on a malaise to which the media happily contributed. We need look no further than “Enemies of the People”. Or the endless drip, drip, drip of anti-European and anti-immigration stories that culminated in the Brexit vote. The media is culpable in eroding public trust.

“Post truth” is not new, though it has recently adopted more aggressive symptoms. Politicians have always lied to voters – or at least been economic with the actuality. Business leaders have frequently misled workers, customers and shareholders. The critical point is this: truth and trust are two sides of the same coin. We will never re-build trust if we don’t learn to speak the truth. The media has a real responsibility to break, rather than accelerate, this downward spiral. Some media owners – Facebook and Google included – need to hold a mirror to themselves. They are currently net contributors to the trust deficit.


(3) Agitation, change & danger

Trust is no longer strong, stable or certain. It is fragile, fractured by technology, the collapse of hierarchies, the rise of networks and individual empowerment – distorted further by the post-truth environment. Trust has to be hard-fought, hard-earned and hard-won, every day. This isn’t going to change. There’s no return to the nostalgia of “old” trust. We need to live with this permanent fragility. I think we’re better off embracing, even celebrating, the new demands of transparency and accountability that this brings.

The 19th century political scientist Alexis de Tocqueville wrote: “to live in freedom, one must grow used to a life full of agitation, change and danger”. This is our world. We need to think differently.


(4) Trustworthiness, not Trust

Ten years of thinking differently has led me to focus not on trust but on trustworthiness instead. Trustworthiness – according to philosopher Onora O’Neill – is based on three principles: honesty, competence and reliability. Any leader – or any organisation – that is not honest, competent or reliable is simply not trustworthy.

The General Election campaign underlined this point. Neither leader nor either party would pass the honesty/ competence/ reliability test with flying colours, would they? So why should we trust them? Not because they told us to with their big posters and robotic soundbites.

Messaging “trust” really is not the answer. In business, why should we trust Volkswagen when it knowingly misled the world on emissions data? Why would we want to re-build trust with them?

Or Thomas Cook, who refused (until forced) to apologise or pay compensation after two young children died at one of their properties? Or Sports Direct or Amazon, who treat people as little more than bad robots? Or Barclays Bank facing criminal proceedings, old and new? These organisations – through the way they behave – erode trust. They are not alone.

Our right to withhold trust from the likes of VW, Thomas Cook, Sports Direct or Barclays is legitimate and powerful. It speaks to the new accountability of business to citizens and society. New models can be built on this basis.


(5) The abstraction of corporations

Researching Trust Me, PR is Dead, I came across a FTSE 100 CEO who opened every Board meeting with the same question: “who do we fuck today?” Thinking like this was probably the genesis of the 2008 crisis and the final breaking point for the public’s trust in business. But there’s a bigger issue still.

There is actually no reason to trust institutions. There is no reason to trust “business”Corporations – ‘good’ or ‘bad’ – are not people. They are financial constructs. Abstract vehicles. Why would we want to trust a corporate machine that is usually built more for profit, than for real people or purpose?

Why would we trust any organisation that puts shareholder value before human value? We should certainly never trust a brand or company simply because the brand or company (or its CEO) tells us to do so – and boasts an expensively produced Mission or Values Statement. That’s out-dated, 20th century thinking. It belongs to an extinct era of deference, imposition, PR and control.

As one friend put it to a FTSE 100 CEO: “you may be the Chief Executive, but no one reads your e-mails anyway”. The activist, whistleblowing, transparent world in which we now live has blown apart the last vestiges of control. And, with it, any last pretence of imposing trust.

Management guru Charles Handy writes that 80% of employees are dis-engaged and don’t care. 25% of that 80% would actively sabotage the organisation for which they work. A recent IBM survey confirmed that 60% of cyber attacks came from within the organisation; 75% of these are malicious.

Employee activism is real.

The fourth industrial revolution has made it impossible to re-build trust in second- or third industrial revolution ways. To flourish today, trust needs to be re-built through networks, peers… and real people. New trust models must reflect the world as it is.


(6) Activism & Co-Production; Vulnerability & Dissent

Different working principles are needed in business. I have identified four: activism, co-production, vulnerability and dissent.

These principles represent a total rejection of the exhausted thinking around communications, leadership and trust.

Activism recognises the modern organisation more as a social movement, in which the CEO is the Chief Social Activist, working to address major societal issues: social mobility & inclusion; poverty; climate change; resource scarcity; automation and the role of humans in the workplace, to name a few. These are the challenges where business can lead and make a difference, while still making a fair profit.

CEOs should co-produce strategies and solutions with wise crowds of employees, customers and stakeholders – building a generative dialogue. Hence their organisations become open, adaptive and creative. They think differently about risk and stop trying to control, contain or mitigate it.

CEOs also need to admit they don’t have all the answers and re-learn the ability to say sorry. In this new model, business leaders make themselves as vulnerable to their employees, customers and stakeholders as those constituencies have traditionally been to them.

Dissent is welcome – because no one can learn if they do not listen. People have to be forced out of their boardroom echo chambers. I call this “standing naked”. Jericho’s pioneering work on Responsible Tax with KPMG and the Future of Work is Human project speak to this approach.


(7) What is to be done?

We can start re-building trust by stopping talking about it altogether, instead taking action. Everyone on this panel – and the constituencies they represent – has a part to play. Everyone can Just Do Something. Trevor Phillips will, I’m sure, speak about partnership business models. I’m with him all the way.

Mutuals and partnerships distribute power and voice more evenly and allow trustworthy relationships to develop, internally and externally. This leads to higher levels of engagement, greater customer satisfaction, lower staff churn and more. Those championing new, society-centric business models see dramatic changes in their trust scores.

Unilever famously pitches itself as “the world’s largest NGO”. Dutch nursing co-operative, Buurtzorg, radicalises patient care by managing through flat structures led by frontline healthcare workers. Banks like Handelsbanken and Triodos demonstrate alternatives to the dominant and untrusted global players.

This shift to new models has to be permanent. It’s not a communications challenge – where big businesses hide behind some of the umbrella groups that Angela Knight has previously represented.

Those alliances-of-convenience have tried to re-build trust through conventional lobbying and messaging. I don’t think it has worked.

Finally, ICAEW, when it comes to trust and trustworthiness, compliance is a huge part of the problem – as is the obsession with measurement. Doing what is lawful does not always mean doing what is right. The ICAEW commitment to long-termism and the public good is an important start. In the new world, we need to stop imposing corporate bureaucracy, targets and rules and start co-producing frameworks of human principles – putting the common good of the organisation, its people and society first. We need an honest conversation about ethics and morality in business. Professional bodies can champion this and think in terms of manifestos and accountability, not measurement.


(8) The Courage to Stand Naked

This is a time of great agitation, change and danger – politically and in business. To be trusted in the “new normal” that is the post-truth age, we must stop trying to build trust in the wrong places with the wrong people and the wrong institutions on the wrong issues.

  • Think about trustworthiness instead.
  • Think about new business models.
  • Think about citizens & society-first: put human value before shareholder value.
  • Think about where we can each make a difference.
  • Think about coming together to address to huge societal challenges we all face.
  • Think about accountability, not measurement

A slavish adherence to old models and old thinking will make things worse, not better. It will erode what little trust is still left to cherish. The good news is we can all do something; think and act differently; and build powerful coalitions of change.

Business must stop talking and start doing. Business leaders need to stand naked before those they represent. They must find the moral courage to ditch old ways and lead with a new agenda, focused on people not just profit.

Time is running out.


A Storify of the event is available below


A full overview of the event, including contributions from other speakers, is available here on the ICAEW Corporate Governance site.

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