Overall Trust in Businesses Is at Record Lows. Can Blockchain Help to Bring it Back?
According to the Principal Leader of Deloitte's global Enterprise Trust Practice Michael Bondar, businesses are facing an unprecedented erosion of trust when it comes to their stakeholders (customers, employees, stockholders, etc.). The problem, according to Bondar, exists across the board and impacted businesses of all sizes in all industries. During this interview with Blockchain Journal editor-in-chief David Berlind, Bondar said that in healthcare, only 23 percent of clinicians trust their leadership and it's even worse for nurses (15 percent). In the technology space, only 40 percent of consumers trust tech companies to maintain and safeguard their data.
Whereas trust was once a basic cost of entry into any market, trust has reached such record lows that, for those organizations that figure out how to engender it, it could actually turn into a competitive advantage. Bondar emphasized the importance of taking proactive action before trust issues turn into crisis situations for organizations.
What does any of this have to do with blockchain? Referring to the centralized nature of the finance and banking industries and how often the organizations "in charge" have violated the trust of their stakeholders, Bondar noted that blockchain was literally born out of a lack of trust and that distributed ledger technology is a "trust machine." However, recent events have proven that the blockchain industry itself is not immune to the same trust issues that confront other industries. Similar to his recommendations for all industries, he notes that it's time for some new approaches to blockchain industry leadership and structure.
By David BerlindPublished:April 1, 2023
David Berlind: I'm David Berlind with the Blockchain Journal podcast. I'm coming to you from the DC Blockchain Summit 2023 in Washington, DC. And standing with me is Michael Bondar. He's the principal enterprise trust leader at Deloitte. Michael, I just saw you speak on stage and you had some really interesting advice, I think, for enterprises when it comes to how trust is perceived out there of all the different organizations with their customers, with their other stakeholders. And then also, you talked a little bit about a framework for improving that, or at least measuring it, KPIs and so on. So I'll start off. Tell me what it is that somebody who is the leader of the trust practice at Deloitte does?
Michael Bondar: Well, first of all, thanks for having me. Appreciate it. First and foremost, we wanted to define this topic, and you saw the framing, that was about contextualizing what it really means. So we went, talked to academics, business leaders, industry leaders, and we identified the areas that are most impactful to earning trust. That was part one. That is not a one-time event. It's keeping the pulse on evolving expectations. So that framework is a living breathing thing. The second part is helping our clients make sense of this topic, helping them contextualize it for their organization, and then evaluate levels of trust with their various stakeholders. That's our mission and my mission to help our clients define, evaluate, and act on the topic irrespective of the size of the organization or which industry they're part of.
Berlind: You seem to at least indicate that there's a trust problem out there in general. Can you characterize that?
Bondar: We see pretty consistent fractures or a decline in trust. And that is not particular to just this industry, we see that consistently. In healthcare, as an example, only 23% of clinicians trust their leadership. That number goes down to 15% for nurses. In technology, only 40% of consumers trust tech companies to maintain and safeguard their data. So we're talking about a low level of trust across the world. So that decline is consistently seen and will only continue unless companies take proactive action and not wait for a crisis to really emerge.
Berlind: You talk about proactive action, and in your talk, you identified I think it was 18 areas that enterprises could focus on. You mentioned it's important. You can't tackle them all at once, so to prioritize, but maybe if you could just highlight some of the top areas, maybe the top three or five that you see across enterprises. They say, "Okay, these are the ones we have to focus on first before we get to the rest."
Bondar: Yeah and not to deprioritize any one of them. There are a bit different weights, let's just say, depending on the sector and the industry. But things like cyber, data integrity, and protection, those are relevant in any sector, any industry. Things around conduct, financial crime, top of mind again, regardless of where you are, who you are. Things on workforce experience and customer experience, very relevant in today. Digital engagement has become a topic du jour, again, across all industries and sectors. The key is to prioritize as you mentioned. It's very difficult to tackle all of those 18 simultaneously. So figuring out what's most impactful to your organization, most meaningful to your stakeholders, that's a big part of this exercise.
Berlind: Sure. And you also talked about KPIs like how do you measure this stuff? So where does that come from?
Bondar: When we think about things that are most important to companies, unless there's a number next to it, it sort of falls by the wayside. So we've ensured that this topic is no longer amorphous or nebulous, it becomes real. And putting numbers around it, defining and measuring the external perspectives, internal views, quantifying those, creates a way to engage in a topic more meaningfully. Those numbers and then compare to the industry benchmarks or leading indicators. And that's the next sort of evolution of this, where you allow yourself to see where the gaps are, where you're leading, or what you should tackle. And unless there are numbers of measurement, it's not going to be of relevancy through the leadership team.
Berlind: Well, let's say I find some gaps. Let's say I come up with some metrics to measure those gaps, how do I cross the chasm? Because clearly, we're in a place where I think you're indicating there's a significant breach of trust pretty much across everything. Most of the positive trust measurements you cited were in the 20 percentile, that's not very good. So how do you cross the chasm, get to 60% or something above 50%?
Bondar: Well, it begins... Trust is built from within. So you start within, you take... You identify those gaps, and then you repair those. So let's just say data integrity and protection. Take appropriate measures to safeguard the data. Make the technologies you're employing visible to the outside world. We're implementing these techniques, these capabilities, to safeguard your data, Mr. Consumer, Mrs. Consumer, that's part one. Second, ensure that these capabilities are highly effective and are seen by your employees, as well as the outside world, as having that right intent. Not a check the box exercise, but we're meaningfully engaging in this. And that not only not just pertains to data protection, but areas like ESG, like diversity, equity and inclusion, workforce experience, that matters across your stakeholder set. So taking real action, pragmatic action, making it transparent and visible, that's the matter of repairing and taking proactive action.
Berlind: Now, interestingly enough, the whole time we were talking here, you didn't once mention blockchain. And of course, Deloitte's here at the DC Blockchain Summit. I believe you're the biggest sponsor too. What is the intersection of trust and blockchain?
Bondar: I mean, blockchain is a trust machine. This entire industry, this sector was born due to a lack of trust in the financial services industry. And as we consider this intersection, we find ourselves once again in a state of very low trust, not just in FSI more broadly, but specifically in this sector. We all know it's kind of a string of events that led to this state of low trust within blockchain. These companies are moving so fast and furious that trust has taken a backseat. And the reality is they cannot, we cannot afford for it to be in the backseat. And so here, it's even a more pressing matter for leaders to really embrace this topic, put appropriate leadership positions in place and structures in place to really advance it with the various stakeholders.
Berlind: Okay. So I'm assuming that Deloitte helps a lot of organizations get through this whole process, because there's probably a lot of enterprises that don't even know how to start or where to start. They can come and listen to your talk, but then they'll go back and be like, okay, now what do I do?
Berlind: So is that what you do for your clients?
Bondar: That's exactly what we do. And most organizations, this is not their core competency. They are not in a defined and measure trust business, and they shouldn't be, right? They may need some additional help. So it begins with what does it mean for your company? Who do you have to earn trust with? What are their expectations? Quantify all that and let's move forward. But all the measurement and definition, that's not going to solve it. It's about repairing that trust, rebuilding that trust, and taking steps to earn it before that crisis strikes. We talk about trust equity. We see consistently companies that engage on this topic proactively create that layer of resilience that protects them against that crisis. And it becomes a blip on their radar versus a catastrophe when it does occur.
Berlind: All right. Well, Michael Bondar the lead of the enterprise trust practice at Deloitte. Thank you very much for joining us on the Blockchain Journal Podcast.
Bondar: Thank you so much for having me. Appreciate it.