The traditional concept of “trust” was not designed for the digital age. And organisations and individuals are struggling to adapt both their thinking and their processes.
“It’s all a matter of trust”, sang Billy Joel back in the 1980s. Looking at recent media headlines, it's tempting to think the level of trust in organisations is deteriorating.
A more considered view might be that the traditional concept of “trust” was not designed for the digital age and organisations and individuals are struggling to adapt both their thinking and their processes.
A discussion of the issues surrounding trust was provided in a keynote address to the 2017 Australian Human Resources Institute (AHRI) National Convention, held in Sydney last week.
Loss of trust
Rachel Botsman, a high-profile author and UK academic, said that conventions of how trust was built, managed, lost and repaired in brands, leaders and organisations were being turned on their heads. The actions of many organisations in recent times have caused an erosion of public trust. Prominent examples include banks (allegations of money laundering), car manufacturers (defective airbags and sidestepping emissions regulations), churches (allegations of sexual abuse) and financial services (allegations of dishonest and defective advice to customers).
An erosion of trust in major organisations has caused a loss of trust by the community generally, leading people to question many other things. Arguably it has also contributed to rejections of “the establishment” indicated by unexpected results in various recent political elections.
Despite the above, there is also evidence that people are more willing to trust new types of organisations and service providers. The success of AirBNB, Tinder, Bitcoin, etc and the popularity of social media postings are examples where people are willing to exercise their judgment and place trust in relatively unknown other parties and ideas.
Why is the debate about trust relevant to HR? Firstly because much of HR work involves making judgments about people and things, but also because organisations that are widely trusted are likely to be more successful. Arguably, having a good reputation has never been more important. And the word “trust” seems to be thrown around today more than it has ever been.
Back to basics: what actually is trust?
Botsman provided the following overview of how trust operates. There is a “known state” and an “unknown state”, the latter involving uncertainty. The gap between them is a “risk” and “trust” is the bridge that influences people to move from the known to the unknown. Therefore, trust is having a confident relationship with the unknown and a leap of trust is taking the risk to do something new or different.
Note that “transparency” and “trust” are not the same thing, although the former can influence the latter. “Disruption” is another widely-used word these days, however disruption to an organisation or industry is not caused by changes in technology but by a shift in trust.
From institutional to distributed trust
Botsman said the so-called “crisis of trust” has arisen because the concept of “trust” that applied in the previous century has become redundant due to technology, and a new concept was replacing it. She called this a shift from institutional trust to distributed trust, but claimed that the latter had the capacity to make people smarter about whom and what they trust.
With institutional trust, people relied heavily on symbols to decide whether to trust something or someone. These included brand names, connections to “reputable” organisations such as churches and charities, and perceptions of risk. It can be summarised as being opaque, closed, licensed and anonymised.
In the case of individuals, appearances mattered – for example, wearing glasses or work uniforms tended to improve perceptions of trust. However, these symbols (or stereotypes) could be misleading and dangerous. The reasons why institutional trust has declined in recent years include the following:
- Lack of accountability – even when managers are caught out, they have walked away with large payouts, suggesting that different rules apply to them.
- “Twilight of elites”. People previously relied on the views of academics or other qualified subject matter experts, but their influence has declined and more people now prefer to believe anyone (often unqualified) who will just tell them what they want to hear.
- “Echo chamber effect” of social media. It acts as a filter to increase fears and therefore increase distrust.
With distributed trust, information flows through a wider range of networks and people trust each other directly, whether the other party is a human or a robot. AirBNB is an example of how this works. Botsman argued that the technology basis of distributed trust has the capacity to encourage smarter decisions to be made about trust if it is used properly. It can be summarised as being transparent, inclusive, accountable and personalised, and organisations need to redesign their systems to leverage those virtues.
How distributed trust works in practice
Botsman said that distributed trust has three layers:
- the idea, eg self-driving cars
- the platform, ie the technology that underpins it
- attributes of the individual (or machine)
The idea
If money is the currency of transactions, trust is the currency of interactions. AirBNB, EBay, etc are based around major trust leaps between strangers, and using digital tools for face-to-face interactions.
The platform
Context is critical here. The question to ask is not “who do you trust”, but “who do you trust to do what”. Trust needs to be a flexible concept, not rigid.
Organisations are using artificial intelligence (AI) more extensively, and its capacity to make decisions and recommendations is expanding. In other words, we are outsourcing our capacity to trust to algorithms. However, organisations need to find the right balance between relying on AI and human judgment.
In the case of HR, the decision turns on two issues: whether AI is likely to make better (eg less prejudiced) decisions, and whether using AI can free up HR staff to spend more time on the issues that definitely require human judgments. For example, some large organisations such as the US army are using robots to answer recruitment questions from potential applicants.
The individual
The traits of trustworthiness are:
- Competence – technical skill and proficiency
- Reliability – time, responsiveness, follow-through
- Integrity – do your intentions align with mine?
- Benevolence – how much does the person/organisation care?
Botsman said that people tend to be good at assessing competency and reliability, but not so good with the other two. However, integrity and benevolence relate to why people do things.
Questioning trustworthiness can quickly damage an organisation’s bottom line. Social media, through comments, reviews, blacklists, etc has the capacity to do this quickly and on a very wide scale. As noted above, reputation acts as a “currency”.
Further information about the Convention is available from
AHRI.