Board meeting

Can Digital Businesses Bridge Trust Deficit and Create New Societal Deal?

A report by McKinsey, The Global Forces Inspiring a new Narrative of Progress, outlines the broader awareness and responsibilities that CEOs and executive boards must embrace on their journey towards value ecosystems and horizontal platforms. These models of any-to-any and connected industry platforms are delivering huge efficiency and revenue generation opportunities, but the models are also exposing a huge trust deficit, which business can help address.

The trust deficit relates to the access to and sharing of data within industry platforms that are springing up, such as the Industry 4.0 marketplace. In the Virtual Fort Knox example, suppliers meet in a shared, secure space, and share data to develop new products or services. Current constraints and mistrust around the lack of rules protecting intellectual property are being addressed by initiatives such as Industrial Data Space.

But the McKinsey report highlights another trust deficit on a far larger scale, flowing from the emergence of winners and losers of the new disruptive digital business: it urges business boards to consider the need to strike a new societal deal. “Collaboration between business and government also will be critical to spur middle-class progress and to undertake the economic experiments needed to accelerate growth.”

It highlights that trust has fallen among the threatened middle class, with significant segments within Western democracies blaming their governments for failed policies. Business leaders can, however, help rebuild that trust and, according to the 2015 Edelman Trust Barometer, citizens expect this from them. Employees agreed that an organization can “take specific actions that both increase profits and improve the economic and social conditions in the community where it operates”.

At this point, it’s probably best for me to quote verbatim from the McKinsey report, but it’s a worth a read in its entirety. Plus, BVEx is discussing the ‘how to’ aspects and broader implications of horizontal value networks and ecosystems in this BVEx LinkedIn thread.

“In an interconnected world, companies may also need to explore shared platforms and data sharing about cybersecurity threats across the boundaries of their own businesses and industries. As leaders figure out how to strike the right balance between competing effectively, guarding the corporate ramparts, and cooperating in self-defense, they will be helping to redefine what it means to live together, safely, in our interdependent world.

“Business leaders typically spend about 30 percent of their time on external engagement, but by their own assessment, few do so effectively. For more business leaders to “step up to the plate” and “play a key role in driving solutions”, as Unilever CEO Paul Polman says, they will need to do more to embed society’s concerns in their business priorities, to make external engagement an integral part of their strategy, and to adopt a long-term mind-set.”

Share your views and opinions on this via our LinkedIn Group.

Helen Beckett

Author: Helen Beckett

Helen Beckett is the Community Manager of the Business Value Exchange. She has been a writer and editor for over 20 years and takes a particular interest in the challenges facing the CIO in today’s business climate.