The Currency of Trust

If it is so important, how did we lose it?

The Loss of Trust

I’ve been thinking about trust for a long time. When you open a consultancy without ever being a consultant or running a business, trust matters. Even more so, when your perspective runs counter to standard business school orthodoxy, trust matters. You learn that relationships matter more than social compliance. As a result, you become sensitive to the issues of trust.

Two and a half years ago I had a conversation about trust and its relation to corruption with a group of business leaders in Nairobi, Kenya. The result was a short book called Where Did Trust Go?: Restoring Authority and Accountability in Organizations.

The question of trust came up in a conversation a couple of months ago. Afterward, I sat up in the middle of the night thinking about all the places where trust is essential. Almost everything we do and every interaction we have, whether with a person or an institution, is based on either the presumption of trust or, sadly, our cynicism about it.

I can’t tell you how many people for whom I have done work on nothing more than a handshake. We trust each other to be persons of our word. This is the most basic and essential way we understand trust. It is a bond between people that transcends everything. But it is much more than that.

I went looking for public surveys about trust. I wish I hadn’t.

Trust in institutions, all institutions, regardless of the field, is declining.

Trust in leaders is declining.

People expect leaders, especially political leaders to lie, to be untrustworthy.

Even when they tell the truth, people don’t believe them.

I take this as an indictment of all of us who do leadership development. Our influence is negligible compared to the influence of money and power. We live in a time when virtuous leadership is an oxymoron.

As I write this post, a few days before the mid-term elections, we see accusations being made by political parties about whether a person is an “election denier.” It seems that both political parties have participated in this crude attempt to sway voter opinion. As an apolitical, non-partisan voter, it tells me that there is reason to question the integrity of our election system. I am not an election denier. I am an election cynic. I am because there is too much money, power, and the course of empire at stake for the political system to leave it to chance that the people will elect responsible leadership.

The loss of trust in society is real. It means two things.

Trust is central to everything.

Leaders and institutions are eroding the ground of trust because they see it to their advantage.

I think they are mistaken.

The Twitter Free Speech Axis

Elon Musk’s recent purchase of Twitter highlights the place of trust in society. He tells us that he wants to restore the freedom of speech to the platform. Prior to his purchase, Twitter was known for its canceling and censoring of people that they either disagreed with or felt were trafficking in misinformation. He recently fired several thousand employees who have been said to be censors. He did it unceremoniously by email. If the email came to your work address, you remained employed. If it came to your personal address, you were no longer with the company.

I heard that many of those staff have been actively persuading some of Twitter’s advertisers to pull their ads from the social media platform. I also heard that Musk has now said that he may return the favor by revealing those advertisers as opposed to free speech. For the former Twitter and now for the Musk-own Twitter, your politics carries an accountability cost it would seem.

In the end, will Elon Musk create a Twitter that we can all trust? I don’t know.

Let us understand what is happening.

There is a loss of trust in institutions in society.

It is not the only issue.

There is also a loss of trust BY those same institutions and their leaders in us the people who make up the society where they operate their businesses and institutions.

We are their customers, patients, and constituents. They do not believe that we can act responsibly as citizens. It is the only thing, from my observations, that explains why we the people of this world were treated as persons lacking in common sense, community concern, and personal integrity.

It is why my social media involvement is less now than it has ever been. I have no interaction on Twitter, less and less on Facebook, and only occasionally on LinkedIn and Instagram. I have said to people when we talk about social media that it would not surprise me that someday I am canceled for no other reason than that I am not a political partisan parroting the authorized narrative.

This is why it is important to understand why trust matters.

A Universal, All-Encompassing Condition of Everything

Everything we do is based on trust. Everything.

Our money is solely based on trust.

It is not based on anything but our willingness to believe that it is trustworthy. We trust national governments and global reserve banks to protect national currencies from inflation and devaluation. We are currently in an inflation rise unlike anything in the last 40 years. I remember those days when good jobs were hard to find. Trust is an economic issue of the first order. We learned this during the Great Recession a decade and a half ago. Our grandparents or great-grandparents learned this during the Great Depression a century ago.  

Our personal and business interactions are all based on trust.

All our contracts, mortgages, insurance policies, and the legal system operates upon the presumption of trust. We trust that our contract partner is not scamming us. We trust our bank and our real estate agent that the adjustable-rate mortgage that they advocate for will not ultimately bankrupt us. We trust that our insurance company will pay claims on our policy. We trust that the legal system equally applies to everyone.

When we marry, we trust that our spouse will be faithful to us.

We trust that they will respect us, want the best for us, and, ultimately, want to spend the rest of our lives with us, whether “in richer or poorer, in sickness or health, till death do us part.” We trust our parents, our children, our coworkers, and our neighbors.

We are predisposed to trust people.

For some reason, we trust people on social media more than we trust the people with whom we have a direct relationship. Even when all evidence points towards the abuse of trust, we are still surprised when people and institutions are proven to be untrustworthy, exploitative, and predatory. It is for this reason, as I wrote about in Networks of Relationships in Transition, that we need networks of both strong and weak ties, of people close and distant. We need depth and breadth in our relationships and access to information and perspective about the world.

We trust that the manufacturer of our car, our washing machine, our computer, our heating system, or the pacemaker in our chest, made a quality, durable product.

We trust that they didn’t cut corners to create a product of built-in obsolescence that requires replacement rather than repair.

Every time we board an airplane, we trust the manufacturer, the competency of the pilot and crew, the air traffic controllers, and the passengers inside the plane that we will land safely at the end of our journey.

We trust the media that they will not lie to us.

Trust in media has fallen dramatically as alternative sources of information have grown. We can fact-check the fact-checkers to see if they are truthful or simply selling a political narrative.

We trust our politicians and government workers that they represent our values and the best interest of our communities and the nation.

We don’t expect them to become fantastically wealthy as a public servant.

We trust that every business, community organization, religious institution, healthcare organization, local government agency, and every credentialed professional service person is honest and competent.

It is here that we learn who to trust within our circle of close associates.

Trust is the glue that holds society together. Without trust, every institution begins to fall apart. I believe this is one of the paths toward what is called societal collapse.

Respect – The Foundation of Trust

Trust is the product of respect between people.

It is based on a belief in clear, specific, core values.

Without respect for one’s self and for others, there is no integrity.

There is only the “other” who is either one to exploit for gain or to destroy as a threat from the “negative other”.

Our lives are a representation of the values that matter to us.  Our life should consistently embody those values in action and the impact that our lives create.

Over the years, the beginning step for establishing a relationship I found to be establishing respect. Not just my respect for the other person, but self-respect. Not self-respect as a sophisticated form of narcissism. But self-respect where the integrity of my values and actions are congruent.  Respect gives trust real substance.

Adam Smith, known for his manifesto on capitalism called The Wealth of Nations, also gave us A Theory of Moral Sentiments, first published in 1759. The language is rather archaic, but the message is clear about the importance of respect.

“We desire both to be respectable and to be respected. We dread both to be contemptible and to be condemned. But, upon coming into the world, we soon find that wisdom and virtue are by no means the sole objects of respect; nor vice and folly, of contempt. We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent. To deserve, to acquire, and to enjoy the respect and admiration of mankind, are the great objects of ambition and emulation. “

The WE is not just you and me, but each person who potentially could be a part of our network. With respect, trust can be established. Once trust is established we can restore the connection between authority and accountability.

Understanding the Modern Currency of Trust

Trust. It is a simple word. It is an abstraction. As a word, it represents a cultural reference point for modern society. It allows us to make distinctions between socialist collectivism and capitalist individualism. It is more than the combination of the two into what we now know as liberal economics or "state-sponsored capitalism” as I have come to describe it.

In the modern understanding of the idea, trust is a social contract between global and national institutions and people. They hold the peace and prosperity of the world in trust for the whole world. You can see this in the assumption by wealthy elites that they have the mandate to dictate how we each should live. When they say, “You’ll own nothing and be happy,” they see that as how they hold the world in trust for the planet.

Trust in this sense is not relational or horizontal. It is all direct upwards. In many ways, this is like a Ponzi scheme.

We the people are promised health, prosperity, or peace, and

what we get from our trust are pandemics, recessions, and war.

The missing element here is respect. There is none in this socio-political-economic arrangement. It violates the priority of efficiency to raise questions of respect and trust. It is better just to run the world as we choose. It is just good business in a very restricted sense.

When Authority and Accountability are Severed, Trust is Lost

Trust and respect carry a sentimental and a metaphysical meaning. They are the product of a structure of relationships and institutions where authority is respected and accountability matters.  In my short book, Where Did Trust Go?, I wrote.

“Authority is how we grant leaders the right to make decisions and take action on behalf of constituents of the organization or community. We speak of them being authentic or having authenticity. When we do, we honor who they are and their achievements. We also recognize that their leadership represents a pattern of belief and practice that their constituents share.” …

Authority is granted in two ways. One based upon the design and purpose of the organization. The other is by the trust that constituents grant to the organization and its leaders.

For an institution or an organization to have authority, it requires mutual respect that is essential to the meaningful relationships between authority and accountability.

We are used to seeing authority as a representation of respect. But when it is separated from accountability, authority loses its credibility. Trust is then lost. I believe this is what we have been witnessing for several decades. The debates between the left and right are intramural ones. They are not external to the institutions. By this I mean that whether the left or the right “win” doesn’t really matter because we end up with some version of the crises that we are witnessing now.

The end result is the same where authority is claimed and accountability is seen to be a threat to the system at large. It means that those in authority cannot be held accountable for their actions. Again from Where Has Trust Gone?.

The relationship between authority and accountability operates across a spectrum. At one extreme, we speak of a leader or a government becoming authoritarian. This means he or she holds absolute control over the people without the people having any say-so. Where authority is lost, and accountability is missing, we have anarchy, without structure or order. …

If we believe that the connection between authority and accountability matters, then restoring that relationship must begin by restoring the foundation of organizations and society. Establishing a clear set of values is that foundation. If you are asking why, you may be thinking that values serve some instrumental purpose. That would be the mechanistic mindset speaking. Instead, values serve to inform the purpose and meaning of every aspect of an organization.

As my Circle of Impact model developed as a practical guide to leadership, I realized that relationships, one of the three dimensions of leadership, were based on respect between people.

This insight was confirmed in a conversation that I had with a gentleman who leads a support team for a group of software engineers. I asked him, "Do the engineers respect the work that your team provides them?” With a startled look on his face, he said, “No. They don’t!”

The lack of respect and the severing of accountability from authority lays the groundwork for the loss of trust.

A New Currency of Trust is Emerging.

I had this in mind when I developed the Two Global Forces framework.

There is a global force of centralized institutions of governance and finance, and, a global force of decentralized networks of relationships.

Trust in the former is eroding quickly as the strategic use of viral pandemics, serial economic recessions, and countless proxy wars, possibly leading to a thermonuclear world war becomes clear. These are no accidents of history. But centralized institutions operate as if they are responding to other people’s actions. To see this is to understand how so much of our work is a simulated reality. It is authoritarianism without accountability.

There is an assumption of inevitability in the way these events are discussed. However, I don’t believe it is a given reality that any plan or intention will succeed. When I first saw the emergence of the second global force, the force of decentralized networks of relationships, I realized that it not only was emerging but had always been there. Even in times of great totalitarian regimes, people in the context of their relationships found ways to adapt.

It is too political to call this resistance against tyranny. It is rather how people cope in times of distress. They simplify. They gather closer together with their families. They check on their neighbors to see if they are okay. They go on living with an eye to what is going on behind them so that they are prepared for any contingency.

At the heart of this adaptability is trust. The word that came to me as I was writing this post was “self-reliance.” I thought of Ralph Waldo Emerson who wrote an essay called Self-Reliance. He wrote.

“What I must do, is all that concerns me, not what the people think. This rule, equally arduous in actual and in intellectual life, may serve for the whole distinction between greatness and meanness. It is the harder, because you will always find those who think they know what is your duty better than you know it. It is easy in the world to live after the world's opinion; it is easy in solitude to live after our own; but the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude.”

“There is a time in every man's education when he arrives at the conviction that envy is ignorance; that imitation is suicide; that he must take himself for better, for worse, as his portion; that though the wide universe is full of good, no kernel of nourishing corn can come to him but through his toil bestowed on that plot of ground which is given to him to till. The power which resides in him is new in nature, and none but he knows what that is which he can do, nor does he know until he has tried.”

“Nothing is at last sacred but the integrity of your own mind.“

“Whoso would be a man, must be a nonconformist.”

I believe that this mindset is one-half of the authority/accountability relation. This is about the authority that we adopt to live our lives.

When we decide to not live according to the tyranny of the crowd,

we are choosing to think for ourselves,

to speak from the integrity of our own experience,

and to willingly and freely establish relationships of respect and trust with anyone regardless of who they may be.

With personal authority, we can then claim the responsibility to live without fear of judgment. To live in this way is to be able to trust ourselves.

The other half of this trust equation is that we can establish the accountability that we need to live a life of self-reliance. With accountability, we gain interdependency with our network of relationships.

When we trust the other person, we are saying you can trust me.

Trust Leads to Greater Decentralization With a Focus on Local Communities

I believe we are in the early stages of seeing how our world decentralizes toward local communities being the center of our lives. Here we are in direct relationships with people. We have direct experience with people where respect and trust can be realized in a whole and complete way.

Where does this transition take us? By focusing on the immediate context of our local community, we will learn how to adapt in a deteriorating world context. There is a growing opportunity to deepen the respect and trust level of our relationships.

Building Respect and Trust Right Here

We can even establish relationships of respect and trust here in social media world. We can learn how to step out of the shadows of our closest circle of relationships to begin to grow local networks that can create an impact that makes a difference that matters. Substack has a new feature of a chat site. We can chat there.

However, more valuable may be what I am offering for paid subscribers. I am launching a monthly Zoom call to talk about whatever you are interested in. In addition, I’m going to do a group coaching call, where I’ll use my Impact Day process, based on the Circle of Impact model of leadership, to walk you through a process of clarification and decision-making. This process teaches you to coach yourself so that you can coach others on your teams or in your families.

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