Saturday, October 18, 2008

Creating trust in government is more than “cleaning house”

Prime Minister Stephen Harper has made it his first priority.

In a poll released just after the election in January, Canadian voters said it was more important than reducing the GST.

But the Conservatives’ proposed “Federal Accountability Act” is deeply flawed. If Harper wants to restore the public’s trust in government, he and his “brainstrust” need to learn more about what “trust” really means. The accountability proposals they released during the election campaign show too much reliance on making rules protecting against a loss of trust – and not enough on establishing trust in the first place.

Experts who have studied trust as an important element in business and society contend that you cannot defend against a loss of trust unless trust already exists. Creating sustained trust – in government, commerce or our private lives – requires a balance of two approaches: both building trust and creating mechanisms to ensure that trust will not be abused.

It’s just like driving a car. If you drive at a standard speed and brake gradually, you’ll boost your gas mileage. But unless you refill the tank, you’ll still run out of gas.

If Harper wants to restore trust in government, he’ll have to fill the tank first.

I began studying trust a few years ago while working at IBM to develop more secure computer applications. I believe that trust in our institutions – politicians, professions, brands – is eroding just about everywhere. So what, I wondered, creates the condition of trust, and what breaks it down?

Even as business suffered a spate of Enron-type fiascos, I discovered that trust is not a vague abstraction. It’s a specific result of the knowledge we have in a person or institution. And the conditions for its presence (or absence) can be explicitly measured – and influenced.

To measure the presence of such conditions for trust, I developed a “trust enablement” framework that analyzes the extent to which sufficient trust is likely to exist in any sort of relationship – supply chains, marketplaces, corporate governance or government. It looks at trust creation from two perspectives: establishing trust and ensuring trust (protecting against its loss).

Based on my model, Harper’s Accountability Act falls short. While it outlines many reasonable proposals for curbing abuses on Parliament Hill, it devotes insufficient attention to building up trust in the first place.

The FAA – a concise, readable manifesto you can find at www.conservative.ca (click on Policy, and then on Accountability) – offers 12 areas in which Harper promises change. Each of those areas, which range from “ending the influence of money in politics” to “ensuring truth in budgeting,” offers several proposals for change.

The act offers 54 proposals in all. According to my analysis, two-thirds of them relate to defending against the loss of trust. Only one-third speak to establishing trust first.

The three initiatives Harper cites under the heading “Ban secret donations to political candidates,” are good examples:

• Prohibit nominated candidates or MPs seeking re-election from accepting large personal gifts.

• Ban the use of trust funds to finance candidates’ campaigns.

• Require that all MPs report the existence of any trust funds or secret accounts, and that such accounts be wound up.

The first two initiatives serve to ensure trust, while only the last one establishes trust (marginally).

Harper’s act may generate useful rules for prescribing behavior and spotting problems – but it will not generate the renewed trust the Conservatives hope for. There is not enough effort devoted to topping up the tank.

“Accountability” is only part of building trust. It does nothing to boost our knowledge of other parties and their behaviour, past and present.

For instance, the FAA contains no proposals for boosting public confidence in our elected representatives, our civil servants, or the electoral process. Statistics show that fewer Canadians bother to vote in federal elections – yet no one, from Parliament to Elections Canada, is taking responsibility for rebuilding public trust.

Can it be done? Look at eBay. In just 10 years, the auction giant has built one of the world’s most trusted marketplaces – on the Internet, of all places.

eBay succeeded because it establishes trust as well as ensures it. To prevent loss of trust, for instance, it created its own dispute-resolution service and a “SafeHarbor” investigations team that tries to resolve cases of inappropriate trading behavior. It also offers fraud protection services and sophisticated security technologies.

To establish trust, eBay goes much further. “Feedback Forums” let users identify reliable buyers and sellers. eBay offers product authentication, grading and appraisals to build buyers’ confidence. And it is now identifying the customers who supply the most reliable feedback, as an additional source of peace of mind.

The result: eBay has created trust not just in its rules, but also throughout its community. And that’s why the company now boasts a $64-billion (U.S.) market cap.

How can politicians address our federal trust deficit? The key is knowledge. We need to know more about our representatives and senior civil servants, and how they behave. Solutions may involve creating more accessible MP bios and voting records, or more third-party evaluations of their performance.

Taking one example, Harper’s plan to “End the influence of money in politics” relies mainly on limiting and banning donations – measures that ensure trust. To establish trust, Harper could create an independent Donations Collection Office that collects, records and redistributes funds to all parties, or establish a Political Procurement Office to monitor all purchases, volunteer activities and in-kind donations.

The solutions can be many, and ingenious – if we understand that trust isn't just about rules and penalties, but about identifying and valuing past, present and future behaviour.

The Tories’ proposed act is a good start. But accountability alone does not build trust.

* Alex Todd is founder and CEO of Trust Enabling Strategies, a Toronto-based consulting firm helps organizations achieve their business goals by optimizing the trust of their stakeholders.