Trust is in crisis. It’s time for action.

“Trust is in crisis around the world. The general population’s trust in all four key institutions — business, government, NGOs, and media — has declined: To rebuild trust and restore faith in the system, institutions must step outside of their traditional roles and work toward a new, more integrated operating model that puts people — and the addressing of their fears — at the center of everything they do.”

This quote, which comes from the 2017 Edelman Global Study, should be of major concern to each of us, whether as citizens or employees. Trust lies at the heart of economic progress and human welfare. And we all have a role in restoring it.

Given the theme of this blog site, my focus will be on the contribution of contract and commercial management. These are fields that could be making a positive difference.

First, let’s think about commercial policies and practices. These reflect the over-arching organizational or industry culture and the extent to which honesty and respect are inherent values. They include things like the way we define, measure and reward success. For example, when we use power to impose unfair terms or to drive unrealistic prices. Or when we fail to reward customer loyalty by offering them the best deal. Or when we deliberately withhold data that leads our counter-party to make poor decisions. Or when we fail to take responsibility for a performance issue that was clearly our fault.

And then let’s think about contracts themselves and the overall contracting process. To what extent do we draft and negotiate agreements that are by design fair and balanced? What efforts do we make to ensure that the terms we put forward are understood by the counter-party? Do we view our agreements as a framework for mutual success, or as a weapon to be used when there is disagreement?

To quote again from Edelman: “With the fall of trust, the majority of respondents now lack full belief that the overall system is working for them. In this climate, people’s societal and economic concerns, including globalization, the pace of innovation and eroding social values, turn into fears, spurring the rise of populist actions now playing out in several Western-style democracies”. This decline can only be averted if we make changes in the way we operate. If each of us waits for someone else to make the first move, we are consigning ourselves to continued decline.

That is why IACCM is so vehement in its calls for change. The commercial community should be at the forefront in considering the negative impacts that will arise from declining trust and take a position of leadership in proposing solutions. Many of us know what needs to be done. It is time to take responsibility.