A New Year’s resolution for companies: tackling the crisis of confidence

The increase in digitalization will deepen our dependence on the integrity of companies over the next decade, just as our confidence in them diminishes.

It’s easy to classify it as a Facebook privacy issue or an Amazon.com market dominance issue or a problem that Google will do everything we think for us. This logic argues that if we only got better regulations or broke these giants, our confidence could be renewed.

But this thinking ignores the fact that the crisis of confidence belongs to all of corporate America. It didn’t start when Steve Jobs spawned the iPhone or Mark Zuckerberg created Facebook.

It has been simmering for decades.

The Gallup organization has been surveying people for years about the trust of institutions, with its often-cited data to show that we have an inordinate view of the media, politicians, or clergy. The latest survey indicates that there has been a slight improvement over the last decade, but large companies continue to track the presidency, banks, criminal justice and the church when it comes to credibility.

“Trust is more important than ever for long-term business success and sustainability,” Gallup said in a recent report on corporate reputation. “More than ever, integrity is the ultimate attribute of the brand.”

The Corporate America brand, however, has been tainted by past crises, in particular the Enron and WorldCom accounting scandals and the 2008 financial crisis, Gallup found. New laws and practices (such as widespread recruitment of general risk agents) are often applauded as solutions after a problem, but they do not offer a long-term solution or predict how an opioid crisis or a move will increase. Metoo a whole new set of challenges.

Distrust worsens as people feel increasingly powerless in dealing with large companies. A survey conducted this year by the Pew Research Center found that 81% of U.S. adult respondents said they have very little control over the data companies collect and that the risks of delivering information outweigh the benefits. Pew found that about a quarter of U.S. users deleted Facebook after its privacy scandal arose, for example.

Concern about data usage is just one factor that fuels mistrust. Look at the crisis unfolding in Boeing Co.

for an example of another reason, the business has problems.

Seen for a long time as robust and reliable, the now humble aerospace giant cannot convince regulators, airlines and passengers that one of its battlehorse aircraft, the 737 MAX, is safe to fly. Because? Partly because the company pulled MAX service out of two major crashes and hundreds of fatalities. Only after strong public pressure, including an intense reaction on social media, did the company take action.

What did the company know? When did you find out? How can I trust him to make the right decisions in the future? These puzzles will not keep us from many other Boeing aircraft, but they do provide forage for skeptical investors, employees, and suppliers who seem to constantly question the motives of companies.

Slow decision-making and the struggle to find solutions cost Boeing CEO Dennis Muilenburg the job. The aircraft engineer was sacked on Monday, becoming the latest CEO disaster in a year that left many more leaders out than usual. Shares rose immediately thereafter.

Boeing’s new CEO, David Calhoun, is known as an investment artist who now has to figure out how to get the public to trust a complex technology that underpins Boeing’s key product.

Deanna Mulligan, CEO of Guardian Life Insurance, says the crisis of confidence could affect old-school analog companies as strongly as digital ones. After all, most companies try to use digitization, data, and automation to better serve customers or speed up operations. This blurs the definition of what a technology company is.

“Confidence is certainly eroding,” he told me recently. This is largely due to what people see on their news channels. Current policy is infinitely divisive and companies do not offer a clear alternative. Rarely does a day go by without hearing about a company or its leader embroiled in controversy.

“All of these things are like an Internet parade,” Ms. Mulligan said. “It will inevitably happen to companies and brands.” Even in the heavily regulated insurance industry, where there are strict rules to protect privacy, everyone needs to be reminded, from agents calling on policyholders to IT workers in the back office, “trust is ingrained to everything we do ”.

Some companies have even hired executives whose only job is to worry about trust. Airbnb, which shares houses, hired a former FBI deputy director earlier this year as a trusted chief officer. He left shortly after joining Airbnb, so the San Francisco company was promoted to the former chief of staff of former U.S. Attorney General Eric Holder as a trusted vice president.

Airbnb’s anxiety about trust is understandable. Chris Lehane, Airbnb’s head of policy, said the company oversees the stays of millions of guests in thousands of cities on a given night. The company amends policies to address concerns about payment security, surveillance of unauthorized homeowners, or response to major disturbances.

Still, Airbnb faces serious questions about the security and quality of its short-term rental platform following a deadly shooting earlier this year at a California home and a media report revealed a scam related to company ads.

Unfortunately, there is no application, policy, or executive that can immediately erase the stories of skepticism they evoke.

Write to John D. Stoll at [email protected]