New Female EU Prosecutor: “I Know There Are no Clean Countries”

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Sven Lilienström, founder of the Faces of Democracy initiative, spoke with Laura Codruța Kövesi (48) about democracy, the newly established European Public Prosecutor’s Office (EPPO), and her fight against corruption, bribery, and money laundering in the EU member states.

Romanian-born Laura Codruța Kövesi was previously the head of the National Anticorruption Directorate in her country. The EPPO is the first supranational public prosecutor’s office in the world with the capacity to conduct cross-border investigations. The independent body was set up to prosecute and bring to justice offenses affecting the financial interests of the European Union, such as certain forms of subsidy fraud, corruption, and cross-border VAT fraud.

Ms. Kövesi, you are the head of the newly established European Public Prosecutors Office (EPPO). How significant are democracy and democratic values to you personally?

I grew up in a communist regime and I have still very vivid memories of what life was like. And then I was lucky enough to be part of the long transformation process of Romania into a democratic society, of which the accession to the European Union was one of the culminating points.

This is why for me democracy is not an abstract definition that I could have learned in school, together with a set of values upon which it is founded. It is a praxis, an engagement. I have a personal experience with how fragile and precious this way of organizing human society is, how hard we need to work to preserve it. So, to answer your question: to me, democracy is fundamental, just as the air I breathe.

The EPPO is the first supranational public prosecutor’s office in the world. When you took office, you spoke of a “historic moment.” Why does Europe need its own public prosecutor’s office, and how will its citizens benefit from it?

For the first time, a European Union body will investigate, prosecute and bring to trial criminal offenses. There is no precedent for this. No one but the EPPO can prosecute fraud against the EU budget committed after 1 June 2021 in the 22 participating Member States.

The establishment of the EPPO has many wide-ranging implications. For instance, I have no doubt that it will trigger further harmonization in the field of criminal law, which is at the core of national sovereignty.

From a citizen’s perspective, the EPPO is a concrete answer to an old grievance: by opening the borders, we have not only allowed people and companies to thrive, we have unfortunately also allowed criminal organizations to develop their operations and grow. The EPPO is the first adjustment we need to do in this respect.

We want to make the EPPO a center of excellence for the confiscation of criminal assets. I am convinced that the EPPO will be a game changer in the fight against cross-border VAT fraud.

Beyond its contribution to increasing the general feeling of security, the EPPO is the first really sharp tool to defend the rule of law in the EU. By applying the very simple principle of equality before the law, the EPPO will play a crucial role in making the trust of the European citizens in the Union stronger than ever.

Until 2018, you were the head of the National Anticorruption Directorate (DNA) in Romania. How exactly do you intend to fight corruption, bribery, and money laundering in the EU member states?

First, it needs to be well understood that the competence of the EPPO is limited to corruption, bribery, and money laundering in the participating Member States when affecting the financial interests of the European Union only! Furthermore, we have a complex structure and have to operate as a single office in 22 different judicial systems, according to 22 different criminal laws and criminal procedural laws. This to say that we have huge challenges ahead of us.

My experience as a prosecutor can be boiled down to a few simple principles: work hard, never give up, and always abide by the law. Only by working professionally, being consequent and by respecting the law all the time, you can gain and keep the trust of the citizens. I will follow these principles in my role as European Chief Prosecutor. The good thing is that, in fact, you are never alone. At the EPPO, just as at the DNA, I have a good and motivated team of courageous prosecutors.

At least some of the population wishes for more isolation and national autonomy. What do you say to people who maintain that prosecutorial investigations are the core of national autonomy?

Yes, they are. But we need to evolve if we want to be credible and efficient. Read the reports from Europol, talk to the practitioners about the practical difficulties they encounter in the fight against cross-border crime in general, and economic and financial criminality in particular.

What good does it make to keep these powers at national level when criminal organizations have reached turnovers comparable to those of the biggest global corporations? The truth is that we are badly behind the curve. Now we can either try to catch up or continue to pretend there is no problem.

Hungary, Poland, Denmark, Sweden, and Ireland form a group of countries that refuse to cooperate with the EU’s public prosecutor’s office. Is the EPPO in reality merely a “toothless tiger”?

This is not accurate. These Member States did not join the enhanced cooperation establishing the EPPO, so they are not part of EPPO. This does not mean that they refuse to cooperate with the EPPO.

We will work very closely with their respective national prosecution services. We are in touch with all of them and have, for example, already concluded a working arrangement with the Office of the Prosecutor General in Hungary. We can still investigate citizens and companies from those countries if they have committed crimes in a Member State that does participate in the enhanced cooperation of EPPO.

The actual power of the EPPO has to be measured against its action in the participating Member States. I am sure you will soon see that we are anything but a “toothless tiger.”

In your inaugural speech, you also stressed that fraud with public funds is “a serious threat to democracy.” Where exactly do you believe the danger lies, and do you think it is underestimated?

White collar crimes are under-reported, underestimated, often even tolerated, to the benefit of organized criminal organizations that aspire to subvert and replace legitimate authorities. In certain circumstances, these organizations do not shy away from resorting to extreme violence. It is not by coincidence that, when giving solemn in front of the European Court of Justice, I had invited representatives of the families of Daphne Caruana Galizia, Jan Kuciak and Martina Kusnirova. What these journalists were uncovering is the aspiration of fraudsters to capture the State. Once the State is captured, its institutions stop working for the common good, and democracy is subverted. This threat is very real, and very common.

I think it is underestimated because in most of the cases, it is not obviously violent. And also, because, culturally, we have grown accustomed to be more tolerant with corruption.

Before starting our operations, we did a survey among the participating EU Member States about the number of investigations within our scope of competence they have conducted in the last four years. In some countries there are hundreds, even thousands. In other countries, there are close to none. That makes me wonder about the priority given to this fight. Because I know that there are no clean countries.

What do you like to do most of all in your leisure time, and what objectives have you set yourself for the next years – professionally and privately?

Professionally, I have to admit that my current job is the most challenging I had so far. I want to put all my professional experience and energy in a successful mandate as European Chief Prosecutor: to win the trust of the citizens proving that EPPO is an independent, strong, and efficient institution and that the law is equal for everybody.

For my private life, I would like to spend more time with my family.

7 Leadership Strategies I Used to Build a $30 Million Tattoo Brand

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What led a rock star and a corporate manager to disrupt the tattoo industry and become brand renegades? A steadfast vision, some bravado, a cocktail of caution and cleverness, and finally, hard work — plenty of it.  

A lot of people in business shy away from that word: disruption. But to be a brand renegade you have to take standard views of your business or industry and disrupt them to create a new brand identity. It means refusing to be swayed by critics, stepping out of your comfort zone, acting without fear, taking calculated risks, and having a passion for your industry. 

In just over a decade, we’ve established six luxury locations of Club Tattoo in two states and manage more than 100 staff members. We not only reinvented the industry, but we redefined what it meant. Taking something that was thought of as dark, dirty, and disreputable and bringing it into the mainstream, rebranding it as cool and desirable, wasn’t easy or straightforward, yet that’s what we did.  

Surviving the Odds 

We built a $30 million tattoo and piercing empire, not only as business colleagues but also as life partners and parents. We survived where businesses and partnerships often fail. It’s estimated that 78 percent of small businesses fail within the first five years, and 50 percent of marriages within that same timeframe. And, depending on which study you’re reading, 25-70 percent of business partnerships also fail. It’d be misleading to say we beat the odds by the grace of some miracle; that would undermine our hard work and struggle. There were a lot of days that weren’t pretty, days that were hard or downright sucked. With our unique perspectives, passions, interests, and temperaments, we mustered the will to power through.  

We had a bold vision yet experienced a lot of pushback. People told us that we’d never make a profit. They said that something that’s never been done couldn’t work and that a tattoo business couldn’t compete with more respected industries. But we suspected there was a void to be filled for experience-based shopping in the immediate market. Las Vegas had the luxury shops but not the immersive experiences that would attract a lot of people. We saw a need for something that didn’t exist and created that space.  

In 2009, we opened after many hurdles inside the Miracle Mile Shops at Planet Hollywood. Immediately, there was high demand and a long line of people eager to get tattoos and piercings. The location was so successful that we couldn’t keep up with the demand and nearly lost everything before we could become established.  

To overcome these initial challenges, we worked long, grueling hours, multiplied our staff, became well-versed in the differences in laws and code requirements in Nevada, and relied on professional advice while adjusting that wisdom to represent and fit our business model. Expanding our location also ushered in profound success. If we hadn’t acted quickly at the beginning, we wouldn’t have saved our business. If we hadn’t done things in our own way, we would have missed these incredible opportunities on our terms.  

Our Story Can be Told Through Our Failures as Much as Our Success  

As it often happens with profound and immediate success, we also failed — a lot. There were times when our decisions had positive results and times where they cost us millions. 

But oftentimes, deciding to take action is better than not having done it at all and then learning from the experience. Through our failures, we always learned valuable lessons about ourselves and our business.  

Ultimately, we were secure in conducting business, treating our employees well, and caring for customers. While Club Tattoo didn’t approach things conventionally, we were true to our vision and brand throughout, and that’s invaluable. 

Living and breathing the renegade lifestyle is for the brave, innovative, and unique. To be a brand renegade also means that you: 

1. Take action. Brand renegades are essentially action takers, shaking things up as they are and imagining and creating what’s possible.  

2. Remain driven by passion, not approval. Being passionate about the work, not seeking approval, or paying attention to needless criticism are essential qualities.  

3. Accept advice. Disregarding naysayers isn’t the same as discounting expert advice. The latter should always be considered, even if you have to reformat that wisdom to fit your business model and needs.  

4. Take calculated risks. As a renegade, you take ownership of your actions and take responsibility when you’re wrong. You have the knowledge and toolkit to make affordable mistakes and take calculated risks.  

5. Transcend norms. Seeing the big picture yet acting with immediacy, understanding your product or service, and transcending business norms and expectations will contribute to achieving success on your own terms.  

6. Follow your instincts. We could have listened to all the critics who said our dream wasn’t obtainable, but instead, we followed our instincts.  

7. Act on your dreams. Envisioning a future that others are unable to see is the hallmark of a true visionary and renegade. But to get there, you must step outside your comfort zone and not be unafraid to act. If mistakes are made, wallowing in regret and self-pity is never the solution. Learning from failures as much as successes provided the foundation to create something extraordinary, changing the tattooing and piercing industry as we know it.  

It’s Been a Tough Year: How to Deal With Traumatized Employees

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If your employees are behaving in new and disturbing ways, it might not be stress; it may be trauma. And if so, we can’t expect employees to learn to cope or get over it. Here’s why leaders need to know the difference.

There are many reasons your employees might be suffering the effects of trauma. For the past year, of course, their lives have been disrupted by a pandemic and that has been plenty traumatizing. But even if that feels like old news, there are lots of other potential trauma inducers. Looming layoffs. The death of a coworker. A sexual harassment accusation. A major restructuring.

You get the point.

Trauma can be extremely destructive, not just to individuals but to entire organizations. If the crisis is not “named and claimed” as trauma and managed effectively, it’s sure to linger on in the form of chronic stress and anxiety. And left unspoken and unaddressed, blame, shame, and guilt often permeate the culture of the organization and erode its ability to thrive in the future. 

Only by naming, claiming, and framing trauma can we help people start to heal—and heal the organization along with them.

When people are traumatized, they experience the fight/flight/freeze survival response where they feel fear, uncertainty, and panic. Employees (and yes, leaders too) may exhibit these predictable behaviors:

  • Acting angry, aggressive, or “difficult”
  • Resisting change at all costs
  • Rigidly clinging to their “competence zones” and failing to learn new skills
  • Turning to self-destructive behaviors like substance abuse, avoidance behaviors, or overworking
  • Insisting they are “fine” when something is clearly wrong

If your employees are displaying these symptoms of trauma, it is important to recognize the warning signs ASAP. Here’s why:

It signals that someone needs help. Anyone struggling with trauma needs and deserves support and understanding. It’s the leader’s responsibility to intervene and get them the help they need.

It helps you realize people are not resisting change or resisting you. Instead, you understand that they’re holding onto ways of doing things that no longer work as an act of self-preservation. You will realize they’re not trying to be difficult. Rather, they are acting out of fear and uncertainty. When you know people are doing the best they can in bad circumstances, that can quickly defuse your feeling negatively toward them.

…which keeps you from judging or punishing them. Without recognizing trauma for what it is, you may write off unsavory behavior as “Sam’s just crazy” or “Bob has lost his mind.” Or worse, you may let go of a perfectly good employee who simply needs a little support and understanding.

…which allows you to respond in a way that helps employees heal rather than escalating conflicts. Calling out or scolding an employee for normal trauma responses only leads to further resistance and escalation (perhaps on both your parts). Recognizing trauma for what it is helps you circumnavigate this trap and get on a better path, quicker.

…which, in turn strengthens your relationship. All of this can rapidly deescalate conflicts between you and them. Furthermore, when they feel more understood than criticized, they have less need to be self-protective, guarded toward you, and reactive against you. When their defensiveness turns to appreciation for your understanding and compassion, that can make them want to cooperate with you instead of pushing back.

It helps you recognize trauma in yourself. For example, maybe you are lashing out at a colleague. Or maybe you have the urge to retreat to your office and hide. When you know why you are feeling the way you are, you can take a step back, assess, and shift your behavior to a more appropriate one.

It enables you to teach others why they feel the way they feel. Once people become aware of how they show up when they are afraid or insecure, they can start facing and changing undesired behaviors.

Ultimately, you are able to get the focus off of people’s “bad behavior.” This frees you up to start making healthy and productive changes that make life better for everyone. It is amazing how much leaders can accomplish when they do not constantly have to address “problem” employees.

Most importantly, recognizing trauma helps you intervene in time to stop tensions before they boil over. We already know panic is contagious. The sooner you recognize and address trauma, the better off everyone will be.

“When we recognize trauma as something entirely different from stress, it allows us to move away from typical coping skills and resilience-building and address the real problem,” says Dr. Goulston. “This minimizes the time people spend suffering and helps everyone move forward in a productive way.”

Don’t Fear Career Coaching, Your Employees Will Still Love You

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Career coaching scares most leaders. It conjures up images of employees flowing out the doors to the competition. This is flawed thinking. Your employees care about their careers. The fact that they are already working for you does not diminish the profound level of concern talent has about growing, learning, and succeeding.

As you read this, you face a talent shortage and high turnover. People are quitting their jobs at a historically unprecedented rate. Additionally, 60% of middle-income Americans are considering making a career change (source: Harris Poll-Fast Company Magazine). This tsunami of movement in the labor market requires a savvy leadership response. One that is:

  • Highly personalized and customized to each individual employee.
  • Brave and transparent, giving employees honest, ongoing feedback.
  • Utilizes a career assessment that allows employees to author their future.
  • Bases the career coaching process on a transitional model that guides healthy career development.
  • Allows employees to grow at an accelerated rate if they have met their goals and earned the right to advance (regardless of their age or years of experience).
  • Coaches’ employees out of the organization if their talent and dreams will flourish elsewhere.

Unfortunately, there are some obstacles you will face if you move in this direction. Here are a few:

Hurdle One: Fear they Will Leave

For years and years, managers have focused on performance in the service of the organizational mission. They avoid discussing careers or career development because, as I said before, they think career coaching will lead to unwanted turnover.

Research consistently finds that employees are vested in staying and succeeding in your organization. They leave because their needs are not getting met, or your competition is doing a better job attracting talent. There are a few random job hoppers out there but, for the most part, your talent does not want to leave. Focus on giving them more reasons to stay.

Hurdle Two: Internal Competition

How many of your managers and supervisors truly want their employees to shine and reach their full potential? If you are honest, it’s a short list. No matter how much leadership training and business coaching you have offered, leaders use their power to propel their own career forward. They do not see their people as the first priority. Rewarding your leaders for amazing career development, and giving them career development tools, will begin to shift this toxic dynamic.

Hurdle Three: Retribution or Career Damage

Talent does not tell you the truth about their career-related concerns or aspirations because the price paid can be devastating. If they open up to their boss about their career dreams, they might be blocked or punished for wanting too much or not falling in line with productivity goals. If they go to Human Resources, they might be labeled as a trouble-maker.

Making it safe to be honest is hard. Your top management team will need to model the way, demonstrating (in a very public way) that individual career development matters. Decisions made to support talent growth at the senior level will give your workforce the confidence to tell the truth about their goals.

Hurdle Four: Old-School Recruiting

If your recruiting team fills orders with little management involvement or attention to longer-term organizational objectives, you are falling behind. Explore establishing a talent acquisition partnering program. Integrate career coaching questions in the interviewing process to determine how well the candidate knows themselves and how well they fit into the strategic objectives for the position. Make everyone in your organization part of the hiring team to bring on the very best people you can find.

The final step is consistency. Just bringing up the career conversation once or twice a year will not protect you from a talent drain. All managers and supervisors at every level should be trained to deliver career coaching, or contracted career coaches need to be made available. This highly personalized strategy will make your organization stand out as the employer of choice who goes the extra mile for their people.

Air Pollution Costs Each American $2,500 a Year in Healthcare – Study

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Air pollution also contributes to 107,000 premature deaths per year in the United States, a report finds.

Air pollution from fossil fuels costs each American an average of $2,500 a year in extra medical bills, researchers have said, as climate change hurts both health and finances.

The national pricetag was put at more than $820 billion a year, with air pollution contributing to an estimated 107,000 premature deaths annually, said the Natural Resources Defense Council (NRDC), an environmental advocacy group,

“The science is clear: the dangerous effects of climate change – and their profound costs to our health and our pocketbooks – will worsen each year we fail to curb the pollution,” said the NRDC’s Vijay Limaye.

The report used data from several dozen scientific papers to tally the overall cost of a changing climate on U.S. health.

Heat waves, which can trigger strokes and exacerbate cardiovascular problems, cost the country $263 million a year, the report found, with wildfire smoke costing Americans $16 billion annually.

A wildfire in Los Angeles this week has fueled fears that California’s wildfire season is becoming longer. Five of the six largest wildfires in the state’s history occurred last year.

Lyme disease and West Nile virus, more common with rising temperatures, contribute to roughly $2 billion in health costs annually, the report found.

On Tuesday, scientists estimated that Hurricane Sandy, which pummeled New York City and much of the East Coast in 2012, caused $63 billion in property damage, making it one of the most costly storms in U.S. history.

At a virtual conference, Limaye said he hoped to convince lawmakers that climate change was more expensive than inaction.

“We’ve written this report to help policymakers, health professionals…to recognize the profound suffering and expensive health costs that can be avoided by cutting climate pollution,” Limaye said.

“A strong response to climate change is urgent and action is needed now.”

By Matthew Lavietes @mattlavietes; editing by Lyndsay Griffiths

Leadership 2021: “It’s Not Going Away, and We Have to Face That Reality.”

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“It’s not going away, and we have to face that reality.” That’s what the CEO and founder of a high-tech manufacturing startup with 180 employees told the leadership team in early July to convince them of the need to do a strategic pivot to address COVID.

Previously, the startup’s executives took things one step at a time, putting out the various COVID related fires that flared up more and more often: supply chain disruptions; cancelled orders; employees having difficulties with work-from-home setups or needing flex-time to manage kids or elderly relatives.

Seeing more of the broad picture, the CEO realized the company was going in the wrong direction. One of the members of the Board recommended my recently-published book on strategic pivoting to adapt to COVID and plan for the post-pandemic recovery.

After a quick read, the CEO convinced the other leadership team members that the company needed to do a strategic pivot to address COVID. He then had his executive assistant contact me and arrange for a facilitated strategic retreat dedicated to addressing COVID, which became my sixth of nine such engagements thus far. This article summarizes my experiences helping a range of companies — five startups, three established middle-market ones, and a Fortune 300 company business unit — pivot for our new abnormal reality.

Challenging Business Model Assumptions

Invariably, the first step involved reassessing assumptions about the organization’s business model. That meant an initial couple of brief meetings with the leadership team where we discussed the kind of fires they faced recently.

For example, the manufacturing startup faced a new challenge in selling its high-tech products. Known for their high quality, the products were flying off the shelf previously; the company had trouble keeping up with demand.

Now, the startup’s salespeople reported that the decision-making process changed. Accounting put much more pressure on operations managers to prove that the products’ quality brought sufficient ROI. Couldn’t they get by with lower-cost options?

While the manufacturing startup invested in innovation to ensure the quality of its high-tech products, it didn’t have a clear measurement of ROI for the innovation. After all, operations people focused on quality, not ROI. As a result, some of its customers, with apologies, chose to buy lower-cost alternatives.

Other companies faced a range of similar problems in sales and other areas. Often, the news came as a surprise to other leadership team members, even the CEO; all were busy fighting fires in their own areas.

Gathering Internal Information

With more awareness of the business model assumptions challenged by the pandemic, the next step involved gathering internal information for a revised strategy and business model.

Each of the top leaders who led a department and would be present at the strategic retreat gathered feedback from their direct reports on how to revise each department’s goals, structure, and relationship to customers (external or internal) in light of the challenged assumptions in either of three scenarios.

  • In the first scenario, a vaccine with over 90% effectiveness would be found by Spring of 2021, and the pandemic mostly over by Spring of 2022
  • In the second, this vaccine would be found by Spring of 2022, and the pandemic mostly over by Spring of 2023
  • In the third, we would never find a vaccine more effective than 50%, just like we haven’t found a vaccine more effective than that for the flu

Strategy Day

Next, go on to the strategic retreat, which should be a two-day event, with one day for broad strategy and another for operationalizing the strategy.

The high-tech manufacturing startup’s team had to struggle extensively with accepting the reality of changing marketplace demands. Its operations team established a sense of identity and team spirit around innovation as a core value; its marketing and sales made innovation a fundamental element of their pitches. They kept veering away from the reality of the need to shift from innovation to ROI measurement.

The CEO and I kept steering them back. I had to use the full range of my facilitation skills to keep the conversation on the right track, an especially challenging task since this was a virtual retreat.

The leadership team of a late-stage SaaS startup with over 500 employees was surprised that the large majority of their direct reports reported feelings of work-from-home burnout and “Zoom fatigue” among employees as one of the most serious problems.

It’s key to realize that the issues stemmed not simply from burnout but from much more. These include dealing with:

  • Pandemic-related mental health challenges such as anxiety/depression/trauma/grief
  • COVID-related pragmatic challenges, such as kids staying home
  • Social isolation from friends, family, and community events, as well as our previous outside hobbies and entertainment
  • Poor work-from-home environments with inadequate home office setups
  • Lack of skills in effective virtual communication and collaboration
  • Being deprived of the fulfillment of those basic human needs — sense of connection, tribe, meaning and purpose – that we naturally get from work

Even worse, the vast majority of us don’t realize we aren’t simply experiencing work-from-home burnout, and don’t recognize what we’re missing. To address this requires not simply financial support for home office setups or flex time to address pragmatic pandemic challenges. It also requires professional development in effective virtual communication and teamwork. Moreover, it requires professional development in emotional and social intelligence, to enable employees to recognize and address the emotional and social gaps left by the pandemic.

Operations Day

The next day should be focused on operationalizing the strategic changes in the business model. You need to address potential threats and opportunities in a variety of future scenarios and revise the previous day’s strategy if needed. These scenarios need to include at least the three different COVID futures described above, and several different potential economic recovery scenarios (K, U, W, V, L).

An enterprise data analytics startup with over 120 staff recognized an unexpected opportunity. It had long been trying to get some lucrative client accounts held by several competitors. The startup’s CEO knew that most of the competitors’ leaders had a dismissive attitude toward COVID.

The startup decided to adjust its marketing and sales to demonstrate the steps it took to be pandemic-proof. It would then have its salespeople call on the competitors’ client accounts and tell them about these steps. It would then offer to provide support if the pandemic lasted longer than the most optimistic predictions and the competitors couldn’t uphold their previous high standards.

Next Steps and Follow-Up

After the operations day, determine specific next steps for each new initiative that you discussed. Decide on resources required and the metrics of success. Choose one member of the leadership team accountable for implementing the initiative, with others potentially involved in the effort. Finally, prepare a report for the Board of Directors on the retreat, highlighting how the strategic pivot will help the company adapt to various scenarios of COVID and the economic recovery.

Follow up on all the next steps in the weekly leadership team meeting or whatever other leadership team forum your company already uses. Then, in a month, have a half-day event where you assess the strategy shift and make any corrections to strategy or implementation as needed. Do the same in three months.

Here are the key take-aways: remember, the first step, always, is challenging assumptions. Second, gather internal information; don’t skip this step, assuming your leadership team knows what’s truly going on. Third, spend at least a day revising your external and internal strategy. Fourth, operationalize your strategy, addressing threats and seizing opportunities in a variety of potential future scenarios. Fifth, commit to next steps, determining resources required, metrics of success, and who will be responsible for implementing each step, with a report to the Board on the event. Sixth, follow up regularly on all steps once a week, with one-month and three-month half-day follow-ups revising both strategy and implementation as needed.

While nothing can guarantee success, I can guarantee that taking these steps will maximize your chances of not only surviving but thriving in these troubled times.

Trust Is the New Currency. Here’s How to Build It

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You’ve heard the cliché: trust is the grease that lubricates business. Without it, transactions become time-consuming and expensive because everything must be negotiated, tested, verified, and, perhaps, litigated. Innovation and nimbleness suffer. Partners and consumers go elsewhere.
The confidence needed to try the next new thing evaporates.

Trust in government, science, NGOs, business, and other major institutions has been eroding for decades. Business stands out as the exception. In Edelman’s 2021 Trust Barometer report, business is the only institution seen by people worldwide as both ethical and competent. What are the implications for business leaders? Does it create an opportunity? An obligation?

The basis of trust is changing. Throughout most of human history, trust required proximity: you learned who to trust by observing the behaviors and hearing the stories of people you knew and encountered. To use lodging as an example: when traveling, you stayed with people you knew or places endorsed by people you knew. Proximity trust became less effective as society industrialized, mobilized, and urbanized. For society to function, trust needed to come from different sources. People needed to learn how to trust food that came from afar, currency based on credit, dependability based on brands, and expertise based in professions. A new source of trust emerged to replace our own eyes and connections: referees, regulators, authorities, experts, watchdogs, and gatekeepers. Trust became an attribute sought, earned, managed, and protected by brands, political parties, media outlets, professions, universities, science, government, and other institutions. To continue the lodging example, we trusted where to stay based on a hotel brand’s reputation.

Institutional trust is eroding for three reasons:

  1. Declining accountability: not all people and institutions get punished for wrongdoing.
  2. End of expertise: eroding confidence in gatekeepers and referees such as scientists, professionals, and other experts.
  3. Echo chambers: segmented media that limits access to some information while reinforcing access to other information.

In Who Can You Trust, Rachel Botsman argues that we are living through a trust transition. A new form of trust — distributed trust — is emerging and it is transforming markets and governance. Trust has turned on its head. Rather than flowing vertically, down to users from experts and brands, it now flows horizontally, from and among other people and, in some cases, from and among programs and bots. The consequences, good and bad, cannot be underestimated. How should you respond?

All three trust models are similar in that they rely on the following three evaluations: Is the actor competent? Is the actor reliable? Is the actor honest? It doesn’t matter if you decide whether to trust a bank, lawyer, neighbor, hotel, or renter; you will evaluate the same three questions. Distributional trust differs from institutional or proximate trust in how these evaluations are conducted and shared.

Distributed trust is supported by digital technology that allows crowdsourcing evaluations from the users — consumers, citizens, lodgers, renters, you, me, everyone. Continuing the lodging example, Airbnb’s trust model relies on transparent evaluations. Renters evaluate lodgers using evaluations posted by other renters and lodgers evaluate renters using evaluations posted by other lodgers. Your evaluation matters in a distributed trust model because it impacts others’ reputation just as their evaluation impacts your reputation. The towels you would leave on the floor of a hotel you hang up in an Airbnb, because the lodger’s evaluation matters to your online reputation and ability to find subsequent lodging opportunities.

How are businesses responding to the changing nature of trust? You will be familiar with the following innovations, but thinking about them through the lens of trust may help you see new opportunities:

  • Branding: Sophisticated monitoring of social media and timely response to critiques and compliments. Good consumer service and highly visible corporate social responsibility.
  • Employee Recruitment and Retention: Co-create, promote, monitor, and report tangible, meaningful, and visible corporate social responsibility mission and metrics. Distribute responsibility for deciding who is an acceptable client and what is an acceptable project.
  • Community Operations and Relations: Provide clear, transparent, accessible metrics about economic, social, and environmental impacts.
  • Investors and Access to Capital: Monitor, report, and manage for indicators such as those developed by the Sustainable Accounting Standards Board.
  • Supply Chains and Other B-to-B Arrangements: Demand, monitor, report, and base decisions on sustainably accounting metrics such as CDP and GRI. Organize and engage in roundtables such as Responsible Soy or Sustainable Beef.
  • Consumers: Meaningful and actionable product certification and labeling.
  • Purchasing Agents: Engage organizations such as the Sustainable Purchasing Leadership Council.

Of course, there is a potential dark side to distributed evaluation. Botsman describes an Orwellian-like trust-scoring system in China called the Social Credit System that rates its citizens’ trustworthiness based on their honesty in government affairs, commercial integrity, societal integrity, and judicial credibility. The system is currently in prototype, and the details are not exact, but it might evaluate everything from bill paying to court appearances to online browsing activity. The resulting “Citizen Score” would help everyone assess your trustworthiness and could be used to determine your eligibility for a mortgage, employment, where your children attend school, or even just your chances of getting a date.

What is next for your organization?

‘I Know Your Favorite Drink’: Chinese Smart City to Put AI In Charge

Posted on by Real Leaders Inc.

From robots delivering coffee to office chairs rearranging themselves after a meeting, a smart city project in China aims to put artificial intelligence in charge, its creators told a conference this week – raising some eyebrows.

Danish architecture firm BIG and Chinese tech company Terminus discussed plans to build an AI-run campus-style development in the southwestern Chinese city of Chongqing during an online panel at Web Summit, a global tech conference.

The project named Cloud Valley, plans to use sensors and wifi-connected devices to gather data on everything from weather and pollution to people’s eating habits to automatically meet residents’ needs, said Terminus founder Victor Ai.

“It’s almost coming back to this idea of living in a village where, when you show up, even though it’s the first time you’re there, the bar tender knows your favourite drink,” said BIG founding partner Bjarke Ingels.

“When our environment becomes sensing and sentient … we can really open up that kind of seamlessness because the AI can recognise people coming. So it can open the door, so they don’t have to look for their key cards.”

Cities around the world are racing to embrace technology in a bid to improve urban life by collecting data to address problems like traffic jams and crime.

More than 500 smart cities are being built across China, according to the government, to spur growth amidst a global economic downturn.

Launched in April, the Cloud Valley project envisions a city of about 13 million square foot – equal to some 200 football pitches – where technology allows people to live more comfortably by anticipating their needs.

“As sunlight hits the houses, bedroom windows adjust their opacity to allow the natural light to wake sleepy residents,” Terminus said on its website, which also highlights tranquil green spaces like rooftop gardens.

“Once the light has filled the room, an AI virtual housekeeper named Titan selects your breakfast, matches your outfit with the weather, and presents a full schedule of your day.”

The city, which includes offices, homes, public spaces and self-driving cars that move around under the ever watchful eye of AI, is due for completion in about three years, according to Terminus.

Yet, like other smart cities, its tech-driven approach has raised privacy concerns.

“1984 here we go … sounds like a surveillance state,” Filipe Monteiro, a virtual attendee of the conference, wrote in the panel’s chat, referring to George Orwell’s dystopian novel where citizens are constantly surveilled by Big Brother.

“Isn’t all of this a little scary?” added Gonzalo Perez Paredes, another conference-goer.

Eva Blum-Dumontet, a senior researcher at British advocacy group Privacy International, said smart cities risked becoming a threat to human rights if companies and governments did not take steps to limit surveillance and ensure inclusivity.

“We need to ask, for instance, how the city will affect people who may not be tech literate,” she told the Thomson Reuters Foundation in emailed comments.

“This risk is all the greater when there is not a legal framework limiting the access that governments can obtain over the data collected by private companies.”

By Umberto Bacchi @UmbertoBacchi, Editing by Katy Migiro

Could Your Next Holiday be Inside a Tree Pod?

Posted on by Real Leaders Inc.

As people search for holiday activities where they will be safe from the coronavirus, three European companies have created some innovative solutions, where people can experience something new.

In Belgium, you can camp in a tree, in a tear-shaped pod for two. The $75-a-night tents are booking faster than ever due to their isolating in beautiful, natural surroundings. Designer Dre Wapenaar (pictured right) conceived them as a way of relating to childhood dreams — building a hut in a tree — but they are now the perfect cocoon to stay isolated from others while enjoying the great outdoors. In rural Spain you can sleep in watermelon-shaped cabins, dotted around the landscape.

“People are changing the trend of going to the beach and instead heading inland,” says Candela Luqu, director of Villa Sandia. “They are seeking rural areas because of the tranquility and isolation.” New night train routes are launching across Europe, including from Prague to Croatia’s seaside, and from Salzburg to the German holiday island of Sylt. As holidaymakers look for slower, more sustainable journeys, private train cabins are keeping travelers separate from other passengers and allowing the journey to become as enjoyable as the destination.

Spanish Art Show Spotlights ‘Hidden’ Digital Divide in Pandemic

Posted on by Real Leaders Inc.

A painting of a woman using an iPad, a vase depicting children dreaming of computers – both historical objects with a contemporary twist highlighting the world’s growing digital divide during the coronavirus pandemic.

The exhibition at Barcelona’s Analog Museum of Digital Inequality aims to show how this gap – laid bare by COVID-19 -disproportionately affects women and low-income and ethnic minority groups.

The so-called “digital divide” refers to the gap between those who have access to computers and the internet, and those with limited or no access.

About 54% of the global population used the internet last year, but less than a fifth of people in the least-developed countries were online, according to the International Telecommunication Union (ITU), a United Nations agency.

“Technological inequality is a hidden problem, (but) it has become especially obvious throughout this unprecedented year,” said Isabella Longo, project director at BIT Habitat, the nonprofit behind the exhibition, which opened last month.

With the pandemic forcing people everywhere to move online for work, school and socialising, citizens and governments have had to take a technological leap, which risks leaving some behind, she said.

“Technology has been a barrier for those people without (computer) skills and who are often part of groups at risk of social exclusion,” Longo told the Thomson Reuters Foundation in a phone interview.

The pandemic has not only revealed the extent of digital inequality, but has also widened it drastically, say tech experts.

“The digital divide has always been there, but what the COVID-19 pandemic has done is turn it into a canyon,” said Lourdes Montenegro, digital inclusion lead at the nonprofit World Benchmarking Alliance, which earlier this month launched a corporate digital inclusion benchmark.

“As more businesses embrace digitalisation as an adaptation to the pandemic, we run the risk of leaving more people behind,” he said.

DIGITAL GENDER GAP

The exhibition, which is planned to run until late next year, includes a painting created this year by Spanish artist Yaiza Ares called “From an iPad” which highlights the gender gap.

The artwork, a reinterpretation of American realist painter Edward Hopper’s “Hotel Room,” depicts a woman sitting on a bed and looking at text on an iPad that reads: “Only 17% of technology specialists in Europe are women.”

The digital gender gap remains a persistent issue, one that needs radical cultural, structural and systemic change, said Longo.

A 2018 report by the European Parliament found that women tend to avoid studies in information and communication technology (ICT) and are under-represented in digital careers.

In the European Union, nearly four times as many men as women graduated from ICT courses in 2020, according to the EU’s statistics office Eurostat.

Inadequate economic resources also make women less likely to have access to technology, resulting in a lack of digital skills that are transferable to the workplace, policy experts say.

In some regions, the gender divide is significantly more pronounced, with South Asian women about 70% less likely than men to have a smartphone and African women more than 30% less likely, according to the Organisation for Economic Cooperation and Development.

The pandemic has exacerbated existing gender inequalities due to increased telecommuting, said Konstantina Davaki, a social policy fellow at the London School of Economics.

Women are over-represented in casual, part-time and temporary jobs that offer little flexibility to work from home, she explained.

And as job markets continue to deteriorate due to the pandemic, further reducing women’s digital access, “the digital gender gap is likely to deepen,” Davaki said in emailed comments.

‘WHOLESALE LEARNING LOSS’

While some children sit studiously doing maths and art classes at their home computers, other less fortunate ones look on wistfully, wishing they had their own screens.

The scene decorates a ceramic pot by Spanish artist Maria Melero – her modern-day version of an ancient Greek pot – which is included in the exhibition to illustrate how the digital divide has impacted children.

Children’s charities say school closures have spotlighted the digital divide among children from different socio-economic groups.

Two-thirds of the world’s school-aged children do not have internet at home, according to a report published last month by UNICEF, the United Nations children’s agency, and the ITU.

Nearly 250 million students worldwide are still out of school due to COVID-19-related closures, it said.

“Closing the digital divide is a fundamental equity issue, critical to breaking the cycle of poverty,” said Lane McBride, a partner at Boston Consulting Group.

Only then can students develop crucial digital literacy, as well as professional and technical skills that they will need in their future careers, he wrote in an email.

“With the onset of the pandemic, this divide has threatened wholesale learning loss,” said McBride.

Davaki, the social policy expert, said that permanently closing the digital divide requires state institutions, policymakers, civil society and the private sector to cooperate to ensure that everyone, everywhere can get online for free.

“Access to technological infrastructure and the internet must be guaranteed to all communities and be free of charge,” she said.