Table of contents for 17. March 2025 in I by IMD

Imagine these three scenarios: you’re about to sign the most expensive contract of your life with a general contractor to build your new home – your main point of contact for the next 18 months. You’re selecting a four-week language course abroad for your teenage daughter. You need to schedule a long-postponed surgery and sign the admission forms. What these decisions have in common is the uncertainty surrounding the process and its outcome. Now, picture each scenario in a situation where you cannot trust the contractor, the language school, or the surgeon. How does that make you feel? Conversely, how would you feel if you had complete trust in them? Just imagining these contrasts likely triggers an emotional reaction – because trust is everywhere and matters deeply. Without trust, cooperation…

In a volatile world where trust has become both an asset and a liability for business leaders, the 2025 Edelman Trust Barometer paints a sobering picture: trust in institutions has not grown despite political changes and economic shifts. Instead, we face a “Crisis of Grievance” – a widespread sense that the actions of business and government are hurting us, serving a select few in a system that favors the rich, and where the rich are getting richer. This sense of grievance against business, government, and the rich is held by 61% of the public. Grievance comes at a cost. The more aggrieved we are, the more likely we will show a zero-sum mindset: the feeling that what helps people who don’t share our politics comes at a personal cost. Leadership…

In contrast to debunking, pre-bunking is gaining prominence in the academic world as a way to pre-emptively build resilience against anticipated exposure to misinformation. This approach is usually grounded in inoculation theory – a medical immunization analogy that argues it is possible to build psychological resistance against unwanted persuasion attempts, much like medical inoculations build physiological resistance against pathogens. Psychological inoculation treatments contain two core components: a forewarning that induces a perceived threat of an impending attack on one’s attitudes and exposure to a weakened (micro)dose of misinformation that contains a pre-emptive refutation (or pre-bunk) of the anticipated misleading arguments or persuasion techniques.…

I by IMD: What has caused today’s crisis of trust? RT: There have been many crises of trust in the past, so this is not unprecedented. However, the way it's playing out is new. Globalization means that, as an individual, you need to trust many more companies, institutions, and people than you did before because your contacts with the outside world are multiplied and spread geographically and culturally wider. You have to trust things you have never seen and may only have a very abstract idea about. That is a characteristic of the 20th century and the beginning of the 21st century. There is an increasing number of institutional bodies we need to trust to go about our daily lives – institutions we cannot fully understand. There is a backlash…

When you hear the word trust, what springs to mind? Perhaps you think about your direct reports. Maybe you think about your effectiveness as a leader: the relational dynamics you model and how you empower your team to build trust so they can contribute, share, experiment, grow, and speak up whenever necessary. How do you think about trust in the context of leading upwards? If you are a senior leader reporting to a top executive, the C-suite, or a board, do you feel you have the agency to voice your opinion, raise an objection, share an idea, or even ask a question? Or are there times when you feel unsure or even fearful about making yourself heard? The challenge Creating the circumstances that empower you to proactively engage with the…

With increasing legislation mandating board diversity, such as quotas, organizations are under pressure to appoint more women to their boards. Rather than viewing this as just a compliance requirement, boards and organizations should recognize it as an opportunity to gain a competitive advantage. Adding a woman to a traditionally male-dominated board should not merely fulfill diversity objectives; it should result in better decision-making and performance. Anyone who has served on a board can tell you that the appointment of a new member can significantly shift board dynamics, potentially posing a challenge to existing trust and relationships. As someone who has often been the only woman on the board, I can attest to the unique challenges and rewards of navigating those dynamics. But, as the founder of The Boardroom, the first…

Trust isn’t just a leadership buzzword – it’s everything. It fuels relationships, powers performance, and creates cultures where people and businesses thrive. Yet today, we are living in a crisis of trust. According to the 2025 Edelman Trust Barometer: • 61% of people globally believe institutions serve the few, not the many. • Trust in government and media is plummeting, and even business – the most trusted institution – is slipping. • Trust in employers has fallen from 78% in 2018 to 73% today. The biggest takeaway? Trust isn’t built by institutions – it’s built by people. The leaders who understand this will be the ones shaping the future. People don’t work for companies – they work for leaders they trust. But that trust is being tested like never before.…

The four ringfencing methods offer unique advantages best suited to different strategic goals and organizational contexts. But how to choose? Here’s a guide on when to use each: Quadrant 1: Ringfence ESG-heavy assets in a separate unit This approach is suitable for a company that wants to maintain ownership and sustainability responsibility of high-impact assets but seeks focus and agility without major restructuring. It is ideal for companies with stable, cash-generative ESG-heavy units and a need to balance legacy operations with growth in sustainable segments. Quadrant 2: Sell and lease back ESG-heavy assets This method best suits companies seeking lower complexity when unlocking capital and reducing sustainability responsibility while retaining operational control over high-impact assets. As it reduces direct ESG accountability by transferring ownership to the buyer, this solution comes…

The economic vibrancy of Silicon Valley has inspired generations of local economic developers seeking to copy its recipe for success. The once-sleepy suburban “valley of heart’s delight” was transformed into the center of the global tech economy, with perhaps the highest concentration of wealth in human history. Any geographic feature can be drafted into this effort to replicate this transformation: Silicon Slopes (Utah), Glen (Scotland), Prairie (across the US), Gulch (California), and more. All are premised on the idea that clustered, high-growth entrepreneurship, typically funded by venture capital, is the shining path to a richer future and a more secure tax base. These efforts almost inevitably fail. Few have attracted vast pools of venture capital, and none have matched the Silicon Valley model's exuberant success: the San Francisco Bay area…

Here are some news stories about tech giant Meta from the past few years. December 2022: Meta pays $725m, without admitting liability, to settle a lawsuit over claims it allowed Cambridge Analytica, a political consulting firm, and others to access the data of up to 87 million users. May 2023: the EU fines Meta €1.2bn for privacy violations. July 2024: Meta agrees to pay the state of Texas $1.4bn after allegations that it used millions of people’s biometric data without consent. How badly did these events affect Meta’s performance? At the end of 2024, it announced revenues up 22% and net income up 59%, and it said that the number of people using its services, which include Facebook, Instagram, and WhatsApp, rose 5% in December to 3.35 billion daily. So,…

Trust is declining dramatically worldwide. The 2025 Edelman Trust Barometer reveals a widespread lack of trust in institutions, organizations, and their leaders. This trust deficit manifests as disengaged employees, skeptical customers, and underperforming teams. What can leaders do to turn this around? Trust is hard to build and easy to destroy. It is the invisible thread that binds teams together. Trusting someone is an act of will, a leap into uncertainty, which is why it often feels risky. This is particularly the case at work, where relationships take on a different dynamic than in our personal lives. However, the result is what makes the bond of trust and its possibilities so powerful. To reap these rewards, leaders must understand the emotional foundations of trust and work hard to cultivate and…

The double shock of the COVID-19 pandemic and Russia’s invasion of Ukraine, followed by a seemingly fundamental geopolitical realignment, has coincided with an unprecedented crisis of public trust. People fear for their livelihoods, worry about new technologies, and suspect their leaders – in government, media, and business – are lying to them. They believe “the system” is fundamentally broken. Societies have become polarized and mistrustful. Think of the heated debates over vaccines and climate change. Public expectations are often conflicted and poorly informed. For instance, some assume that a major problem like decarbonization can be instantly solved, while others dispute whether any action is needed. Disinformation campaigns aimed directly at companies cloud the public discourse. Even routine business decisions – such as choosing a supplier or drafting a corporate training…

Although an oversimplification, examining how AI is used in China and the West through the lens of George Orwell, Aldous Huxley, and Neil Postman is illuminating. In China, AI’s encroachment into public and private life increasingly resembles Orwell’s 1984, reflecting a government-driven expansion of surveillance and control. In the West, AI’s profit-driven design seems to fulfill Huxley’s Brave New World prophecy, offering relentless streams of attention-grabbing content that threaten to trivialize civic discourse. Adding a further dimension is Postman’s warning, articulated in Amusing Ourselves to Death, that the medium by which we consume information shapes not only our habits but our modes of thinking. While it may appear that China and the West diverge sharply, the signs are that these models are converging, combining the most troubling features of both…

One of the curiosities of management speak is the pervasiveness of war terminology and the language of violence. I’ve assembled some examples in the mock monologue – some of the most common phrases we hear and use daily like knotweed, strangling authenticity and meaning. It’s something we all do. Being aware of it is the first step toward communicating more effectively. Ask yourself, what do these phrases mean? How often do you use or hear them? Is this what you really want to say? How many are synonymous with war or violence? What impact do you think that has on us? How could you say the same things in a more human and relatable way? ‘We’ve been on the front lines for this client for a long time. They were…

1. How can we ensure that women are considered for the top jobs? a. Through a positive selection process that excludes men. b. By using external auditors. c. By relaxing the job spec. 2. How can we tackle unfair biases that may prevent women from being promoted? a. Through focusing solely on unconscious bias training. b. By blaming people for behavior that shows unfair bias. c. By using metrics to analyze the stats regarding promotion and adapting processes accordingly. 3. Women already occupy many senior management roles in our company. How can we help them progress to boards? a. Look for board candidates with non-traditional backgrounds. b. Provide financial education and training for women. c. Create greater psychological safety for male senior management. 4. Our leadership has good intentions. How can we motivate them to do…

As a leader, becoming an activist role model is crucial in persuading dissidents and doubters to join you on the DE&I journey. Here’s how to do it well: 1. Lead by example and publicly commit to DE&I goals. Demonstrate inclusive behavior in all your interactions. Leaders who embody DE&I principles set a powerful example for others to follow. Clearly communicate the company’s DE&I objectives, showing commitment to diversity, equity, and inclusion. This transparency inspires trust and accountability. 2. Amplify marginalized voices. Use your platform to elevate voices that are often unheard. Promote their perspectives, ideas, and achievements within and outside the organization. 3. Engage in continuous learning. Commit to ongoing education on DE&I issues. Leaders who stay informed can better address challenges and inspire others to do the same. 4. Make DE&I a…

Julie Linn Teigland is a business leader, innovator, and advocate for women’s inclusion. A Managing Partner at EY, she is responsible for 160,000 knowledge workers across Europe, the Middle East, India, and Africa. In 2021, she was named among Fortune magazine’s Most Powerful Women (International). We met for an in-depth conversation at her company’s London HQ overlooking the Thames. Howard Yu: I’m fascinated by your journey. Looking at your career path, you never lost your real passion. Julie Teigland: No, I haven’t. I’m still passionate. By the time leaders reach your level, they can often be cynical. That’s what I see – deep cynicism among top leaders. Why is there widespread cynicism in the corporate world? You’re right. A lot of people turn cynical, dangerously so. Cynicism creeps into upper…

1. What is your personal motto? If I don’t like it, I change it. If I can’t change it, I accept it. 2. Name three traits that make a great business leader. Authenticity, endurance, and empathy. 3. What experience has had the greatest influence on your leadership style? In 2003, I presented my manager with a potential but unbelievably bold solution to a problem. She said: “If you are convinced about it, trust yourself and let’s go for it.” That we did, and we won the case. 4. How do you balance your well-being and personal life with leadership? My job has always been an integral part of my life, just like my family. All relationships, including the one with myself, need attention. What is crucial is quality, not quantity,…

Misinformation constitutes any information that is either false or misleading in some way. Disinformation is a subset of misinformation with some psychological intent to deceive or harm others. It can be difficult to disentangle the two, as malicious intent can be difficult to prove. Misinformation often leverages a grain of truth or a real societal event but then distorts the context or the implications, and it can be difficult to identify. While flat earth theories and reptile politicians feel obvious, they make up a fairly small percentage of the news or content people consume daily. Biased or partisan content can masquerade as facts and can originate even in the most credible source unless they assiduously and routinely prioritize transparent fact-checking – and correcting, where necessary.…

Satya Nadella became CEO of Microsoft in 2014, at a time when the company was struggling with internal silos and a rigid, competitive culture. Rather than enforcing top-down control, Nadella prioritized empathy and transparency. He launched open forums where employees at all levels could voice concerns. He shifted Microsoft from a “know-it-all” to a “learn-it-all” culture. This enlightened approach revitalized Microsoft, proving trust can be built through emotional bonding and shared purpose. Indra Nooyi, as CEO of PepsiCo, built trust through emotional engagement with employees. One of her most impactful initiatives was writing personal letters to the parents of 400 top-performing employees, thanking them for raising exceptional individuals. This strengthened loyalty and created a culture of mutual respect. Nooyi’s leadership demonstrated that trust flourishes when employees feel valued not just…

In the time it takes to read this sentence, your brain could have processed yet another visual. The average person is presented with roughly 10,000 images daily, mainly through advertisements, social media, news, product packaging, and websites. Breaking through the visual clutter is a challenge that requires a keen understanding of human attention and the visual landscape we navigate, especially since most of those images are now carried in our pockets. In this saturated environment, the key lies in creating something that grabs the viewer’s attention and holds it. As the Creative Director of TIME, responsible for designing the red-bordered cover of the 100-year-old publication, I spend most of my time staring at a blank white space smaller than a piece of paper. It’s been called the “most important real…

During the Cold War, geopolitics was like checkers with two players and simple rules. The game was so straightforward that almost every match ended in a draw. Some countries stood behind the eastern player, the Soviets, while others supported the western player, led by the US. They were two worlds with their own rules, banking systems, supply chains, and economic philosophies. The Soviet Union’s collapse triggered a new phase of geopolitics that was more like bingo. One main player (the US) called out the numbers while everyone else sat with their bingo cards, trying their best. Some won, others didn’t. Many people didn’t like the game but could do little about it. The US dominated almost every sphere: economic, military, security, intelligence, cultural, and financial. The dollar was the lynchpin…

Aclient said recently with a sigh: “It’s like the world suddenly suspended the rules and went on fast-track.” Since the global “vibe shift” of Donald Trump’s presidency, he noted that his colleagues were moving ever faster: “We feel the swells of geopolitics on the shop floor. We are trying to keep up, but it feels like we are constantly falling behind.” He is not alone. Many professionals and political leaders are experiencing an acceleration in decision-making and power dynamics that seem to dissolve conventional constraints. Leadership behavior is evolving, too. The executives I work with report seeing leaders emulate what they observe in dominant political figures. As one remarked: “We see world leaders behaving as if checks and balances don’t apply to them. It’s infectious and reshapes our ideas of…

The concept of a good bank and a bad bank is about creating focus and clarity in financial strategy. In times of distress, banks with troubled assets often divide themselves into two entities: the “bad bank,” which takes on high-risk, non-performing assets, and the “good bank”, which retains healthy, low-risk assets. This separation allows each entity to focus on its specific goals and challenges. The bad bank has a clear mandate to manage, restructure, or dispose of toxic assets without affecting the operations of the more profitable segments. It becomes a focused unit dedicated to handling risks and maximizing the recovery of value from distressed assets. The good bank can concentrate on its core, stable business operations, free from the burden of problematic assets. This focus enables the good bank…

At this year’s World Economic Forum in Davos, President Volodymyr Zelenskyy of Ukraine delivered a stark reminder: North Korean troops are now fighting in battle closer to Davos than Pyongyang. The message was clear: geopolitical turbulence is accelerating, and the world’s economic and political systems are more interconnected than ever. But the backdrop to this year’s forum was also a deeper crisis: a growing loss of trust in institutions. This was my first time attending the annual meeting of the World Economic Forum, and I now understand why this gathering has become such a fixture on the agendas of so many leaders across sectors. At a time of growing division, the opportunities for leaders to come together, listen to one another, and discuss solutions to global challenges are increasingly scarce.…