The crisis the world is suffering through now is a failure of leadership. The leaders of the world are in Davos. If the world is watching what happens here this week, it will be to hear solutions and see responsibility and accountability. I’d say that’s not off to a great start, at least on the latter.
This morning, I started my Davos week with talk of trust. The Edelman Trust Barometer presentation revealed plummeting trust in financial, government, and journalistic institutions: 62% of adults in 20 countries trust companies less than they did a year ago. Trust in government is even lower.
Nonetheless, the first trend I spot here: the rise of government. News reports have been saying that this will be a dialed-down Davos, but I don’t see that; it’s the same Davos with the same pastries and parties. The change I do sense is less of a presence and apparent swagger from business and more from government. “Power has shifted from Wall Street to Pennsylvania Avenue,” said a speaker at the Edelman event.
The other obvious trend is America to the woodshed. “America is the new Europe,” Richard Edelman said. In a decade of the survey, they have never seen such a precipitous drop in trust in one category: American business, falling from 58% to 38% in a year, now stands equivalent to France and Germany and under the UK. The least-trusted industries in the U.S.: no surprise — automotive and banking.
In most markets, trust in business remains higher than trust in government, “which is not a good thing for either,” Edelman says. Asked who can fix the economy and prices, government is now clearly the preferred leader, the survey says. The percent who agree that government should impose “stricter regulations and greater control over business across all industry sectors:” 61% in the U.S. up to 84% in France (65% worldwide). The percent who trust business less: 62% worldwide, ranging from 77% in the U.S. down to 49% in India.
The survey reveals a new world spit: optimists in China (where trust in business rose from 54% to 71% in a year), Brazil, India, Indonesia, pessimists in the US, Europe. “The United States picture is really bleak. I can’t put a better face on it,” Edelman said.
Edelman advised companies to make change and not wait for regulation, to recognize mutual social responsibility, and to show “shared sacrifice…. This is not the French Revolution yet but it is certainly not the roaring 2000s,” he said.
His advice on communication: “It can no longer be Moses from the mountaintop.” You have to inform your employees and enable them to blog, for they’ll talk anyway. Communication moves from messaging to informing the conversation, he said. If one can trust companies — only 29% do. Government is worse; only 27% trust what they say.
Lionel Barber, editor of the Financial Times, began the session saying that trust is an issue for the press as well. Edelman found that trust in business magazines and analysts fell from 57% to 44% and from 56% to 47% respectively. Trust in TV news is down from 49% to 36% and in newspaper coverage from 47% to 34%. Stop on that: Two thirds of people don’t trust newspaper articles.
After all this talk about trust, though, breakfast ended up serving spin. An executive of AIG (NYSE:AIG) split a very long hair, drawing a distinction between distrust over morals and distrust over competence and he argued that our issue now is the latter. An executive at another company said trust fell from a record high to a record low and he wondered whether business had simply oversold itself. Then there was much discussion of a new concept (or new buzzphrase): “private sector diplomacy.” Isn’t that a fancy way to say PR?
Later: A video of Richard Edelman after the session on trust: