The Challenge for Contemporary Leaders is to Restore Trust and Faith in Institutions

Loss of Trust and Faith and the Rise of Populists

Public trust and faith in institutions is at an all time low. Starting with the Global Financial Crisis of 2008 in the United States and then the Sovereign Debt Crisis in Europe in 2009, including the Brexit vote in the United Kingdom, and the election of President Trump as well as numerous populist leaders worldwide, the voters everywhere want an end to the status quo and to believe in their leaders and institutions.

In other words, once these crises struck, the average person on the street started losing faith and trust in bankers, governments, regulators, businesses, and leaders as they felt that the leaders were more interested in serving themselves rather than the voters and hence, they started gravitating towards populists who offered a way out, however specious and tenuous it was.

To take examples, the Brexit Vote was widely seen as a vote against the establishment as was the election of President Trump. Closer home, the Indian Prime Minister, Narendra Modi, stormed to power on the back of his campaign promise of Acche Din, or Good Times, around the corner after decades of what the voters perceived as misrule and widespread dissatisfaction with the status quo.

Need for a New Narrative Instead of Broken Promises and Failed Leaders

Having said that, it is another case that these leaders were unable to deliver much after the initial euphoria and as surveys by reputed publications indicate, the faith, and trust of the people in institutions is declining and decreasing by the day.

Thus, there is a need for a new narrative and a new story from the leaders, whether they head corporates and businesses or whether they lead nations and states. Indeed, most experts agree that people do not trust businesses either especially in the wake of several scandals that have rocked the corporate sector in recent years.

What is more worrying is that even respected and reputable corporates are falling prey to unethical and questionable conduct as can be seen in the way businesses such as the TATA Group and Infosys have had to deal with a series of highly public quarrels related to corporate governance.

Indeed, when aspiring professionals and working ones as well see that their leaders are bending the rules for personal gains, they are tempted to do likewise leading to a vicious cycle of behavior that erodes trust and faith in the institutions. As the saying goes, as is the King, So are the People, and hence, there is a responsibility on the part of the leaders to spin a new narrative and to make people believe in institutions again.

The Fallacy of Believing in Messianic Leaders

At the same time, when we talk about new narratives and a new direction, we do not mean that a Messianic figure must emerge and lead the people towards redemption. Indeed, as the examples of leaders quoted earlier indicate, once voters entrust such leaders with all their hopes and aspirations, they burden them with unrealistic expectations which can only increase the pressure on such leaders with the outcomes often not matching the expectations.

Thus, while we certainly do not need Messianic leaders, we definitely need leaders who can at least Walk the Talk and be nuts and bolts in their execution. In other words, what leaders need to do to restore trust in institutions is that they must articulate a Vision and actualize a Mission so that their actions match their rhetoric and their behavior is in consonance with their words.

Some Contemporary Leaders who are Attempting Change

For instance, several young and Generation X (those in their late 30s and 40s now) leaders such as Emmanuel Macron of France and Justin Trudeau of Canada are exactly doing this when they promise their citizens of a better tomorrow and then go about implementing such promises in a realistic and time bound manner.

Indeed, most contemporary experts believe that the new generation of leaders who are emerging worldwide are more practical and transactional in their approach and at the same time, are also known for high sounding vision and flowing rhetoric.

Thus, their contention is that these leaders must be a given a chance to restore the legitimacy of institutions and to repair the broken trust and faith in institutions. Indeed, once people lose faith in democracy and capitalism, there would be anarchy as the rules based and liberal minded system that has been in place since the end of the Second World War breaks down leading to chaos all round.

This is what is happening in some Western and Asian countries where people fed up with the status quo and what they perceive as institutions that do not serve their interests, and only the interests of the elites, are taking to the streets and engaging in violent and destructive behavior which ultimately threatens the survival of the entire system itself.

The Way Ahead

Therefore, what we need are leaders who can start with a top down articulation of vision and then follow it up with a bottom up mission that embraces everyone in an all inclusive manner. For long, institutions have served the interests of the Top 1% alone and this is causing much stress and strain on the system as can be seen from the discussion so far.

While some of the suggestions in this article might seem unrealistic and too ideal, readers would no doubt agree with our description of what happens when such suggestions are not implemented as well as the examples of leaders who are actualizing change are concerned.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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