Wednesday, May 16, 2018

New INC Magazine blog post by Kaplan Institute Executive Director Howard Tullman


Who Do You Trust?
We're willing to allow strangers to drive our children, to sleep in our spare rooms, and sell us--even sight unseen-- products from all over the world. In a society now completely lacking in it, trust has become a defining characteristic for business. Where does your company stand?


Executive Director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology @tullman



If you had to pick the largest single change in the day-to-day social and psychological beliefs and behaviors that we adults exhibit (never mind the kids) because of specific changes brought about by digital and social tools and technologies, what would you choose?

Would you say that it was the advent of the “gig” economy? The fact that millions of people now have a completely different, and in most cases, we are sadly learning, a far less satisfactory relationship to the work they find and do every day. They live fragmented and piecemeal lives in every way.  They lack the comfort, security and predictability of those old, staid, stable and often boring jobs - and most would say that they’d gladly return to them if only those jobs still existed. But, as the Boss says in My Hometown: “Foreman says these jobs are going boys and they ain’t coming back,” which translates to more and more “freelancers” (more than 50% of U.S. workers by 2020) whose employment choices are far from free. It reminds me of one of the best Kris Kristofferson lines ever from Me and Bobby McGee: “Freedom’s just another word for nothin’ left to lose.” I’d put the gig scam along with all the functionally-indentured freelancers in the top 5 of the biggest changes, but not at the head of the list.

Maybe you’re taken by the explosive growth of the “sharing” economy even if - most of the time - it’s really a one-way street that has little or nothing to do with true sharing. This is just a slightly nicer way of saying “I’m selling you something”. When I first started talking about these questions, I called this type of transactional model the “surplus economy,” not the sharing economy. Because what we were seeing was the development, in many industry sectors and marketplaces, of low- or no-cost aggregation platforms that permit consumers to sell or trade - not share - their excess capacity. This capacity can be space, expertise, talent, labor, a car or a whatever. The platform connects them to a wide and broadly distributed audience without the need to incur the traditional marketing and sales costs associated with reaching those “customers” in order to market their spare or incremental services and resources. As far as I could see, this type of activity had very little to do with sharing as it was commonly understood, but the name has persisted.

Communes are actually about sharing certain resources and “barter” more properly describes the exchange between peers of various services and benefits; the car share (and bike and scooter) services that we can’t seem to live without today - especially Uber and Lyft -- don’t actually share much of anything. They just take our money, “share” as little as humanly possible with the poor suckers who are driving day and night to make ends meet, and pretend that they’re not killing the fluid flow of traffic in every major city in the world.  At least Airbnb can make a slightly better argument that you’re “sharing” that extra empty bedroom for a fee with some stranger you don’t know from Adam.

And, of course, it’s the very idea of not knowing your boarder “from Adam” that’s the best answer to my question. Because, as Billy Joel is fond of saying: “it’s always been a matter of trust.” The very nature of new technologies and tech-enabled services and solutions is that they are often abruptly presented to us (others sneak up on us more incrementally like AI-enabled services) and we slowly move along a fairly consistent path that starts with resistance to any change (inertia) and initial distrust and then moves to a level of experimentation and grudging acceptance, and ultimately there is serious adoption, regular reliance and actual psychological dependence. For better or worse. And, if we’re honest, we’d all admit that we’re just a little bit afraid of being so dependent on these technologies and knowing, at the same time, that we can’t entirely control them.

If you don’t think you’re constantly caught somewhere in this vicious and virtuous cycle, try losing your phone for a few hours or having your internet connection go down for an evening and see how quickly the fear sets in and the withdrawal symptoms begin. Some of these interactions are even more invasive; they go from being a job or an obligation - a duty, if you will - to an integral part of our days and something we look forward to and desire. On Amazon, reordering the dog food is a job, but scoping out the flash sales and time-sensitive offers is all about greed and desire. But I digress.

The biggest, boldest, and at once the most pervasive and inexplicable change in our lives in the last decade has been the emergence of the “trust economy.” We not only let strangers sleep in our bedrooms, we put our kids in cars with drivers whose training and credentials are mostly a mystery - whose principal qualification is showing up on time. And we buy goods and services from sellers worldwide without a moment’s hesitation. Why? Because we trust the technology and the system. We trust the “reviews,” which we think are objective evaluations from the crowd.  But, when you think about it, the “plumbing” and infrastructure aside, both the gig economy and the sharing economy couldn’t and wouldn’t exist without the development of the trust economy. Trust is fundamental to the way the web works.

But there’s a real problem. The cruel irony and the disconnect is that at the very same time that the trust economy continues to expand, our trust in each other - in the people we deal with daily - is plummeting.  We trust the rideshare guys more by far (over twice as much) as we trust our neighbors. I’m not just talking about lying politicians and crooked government employees. I’m talking about our friends, neighbors and co-workers. The surveys are consistent and depressing and they don’t lie. The results really suck, and they’re all headed in the wrong direction. Today only 31% of us think that most people can be trusted.
Is there anything any of us can do to stem the tide of distrust? Is there anything encouraging in the latest findings? Well, as it happens, consumers these days actually do believe in the business community. Not necessarily in the old guys (brands are dying left and right because they didn’t live up to their promises), but we love the new kids in town (Facebook excepted, perhaps) and we see the possibility that they might get it right.

There’s a reason that Amazon’s become the most trusted brand in America for anyone not named Trump. Jeff delivers. Actions and results matter if you’re trying to restore people’s confidence and their belief that it’s even possible to get really big without getting bad. The lesson is very clear. It’s up to us to make it real - to spend less time and money on marketing and manipulation and social media - and much more on taking care of our customers and taking care of business.

Being trusted is a lot harder to accomplish than being loved.