After decades of financial success and economic prosperity, the western world is confronted with the most precarious situation since the onset of the Great Depression. Every day we hear frightening news like the collapse of the housing bubble, the financial meltdown, the threat of the revival of 1970s-style stagflation, incomes that continue to lag behind inflation, as well as our household and international debts piling higher, disastrous climate change looming, energy and food prices continue to escalate, etc…
The banking system is going through a liquidity crisis, the likes of which have not been seen in our lifetime, all because banks don’t trust each other anymore. As businesses struggle to adapt to these realities, employees fear the loss of their jobs and income.
For the first time in years, many of us are suffering from a feeling of insecurity due to the precarious status of the financial system. As I watch the world slide into an unstable condition, I cannot help but believe that we are at a crossroads and that unless we take the time to analyze what is happening and derive some lessons from this crisis, we won’t find the appropriate responses to allow us to overcome these major challenges.
Solutions do exist, but they will not be found in overly cautious or expedient quick fixes.
We can either deny that the world is arriving at this crucial point, resist change, go on with life as nothing is happening and deal with the consequences later. Or we can rise to the occasion and accept the reality of change. This challenge is an opportunity to undertake a powerful journey of self-discovery and personal growth. Never has the need for a mental and emotional change been as great as it is today. My experience has taught me that those able to accept a changed reality and adapt to it will be able to devise effective strategies to thrive in this challenging environment.
As the writer John Gardner once wrote, “Life isn’t a train ride where you choose your destination, pay your fare and settle back for a nap. It’s a cycle ride over uncertain terrain with you in the driver seat, constantly correcting your balance and determining the direction of progress.”
Our ability to successfully navigate uncertain terrain depends on many factors. As I see it, the most important of these is trust. To overcome the challenges ahead, we need to reassess our understanding of what trust is and what trust means in all aspects in our life. Without trust in ourselves, others and the overall economic and financial system, overcoming today’s challenges will be impossible.
As the world is going haywire, our trust in ourselves and in others is being more and more solicited. Everything and everyone, including politicians, bankers and the companies we work for, are asking us to trust them. Yet, it is at this very time that we are most distrustful of politicians and the financial wizards for their numerous irresponsible actions and behaviors.
Phillip Moffit of the Life Balance Institute tells us that “having a healthy, balanced sense of trust is a bedrock for being truly alive… when it is lacking, the ground of your existence is shaky.” I am left to wonder how many of us have a clear understanding of what trust is and what it means to us.
The dictionary defines trust as having confidence in the character, ability, strength or truth of someone or something. In common usage, the word trust refers to relying on someone or something for a future action.
But how can trust help us maneuver through the exchange of life? And to understand trust, we need to define what we mean by it.
The first type of trust we use in our daily lives is called Transactional Trust. It is based on mutual self-interest and involves acting according to common agreement.
This type of trust is the backbone of our personal and professional lives. For example, every company’s success is dependent on how much it can trust its employees and to what extent its employees trust its management.
Transactional trust is about relying on someone or something for future action, provided that the desired future action has been clearly communicated up-front. Transactional trust is largely performance based, involves an agreed-upon exchange and is measured by outcome.
In the past, people had a relationship with their bankers, who in turn knew the most important details of their clients’ lives and were therefore able to assess their financial needs.
Personally, although internet banking offers some great advantages, and despite the past few years astronomical banking fees’ increase, my choice of bank relies entirely on the personal relationship I have developed with the person in charge on my account. As I have discovered, the simplest of transaction beyond just withdrawing cash or paying bills can become a painful adventure.
When we invest our savings into the financial products banks are offering us, we also invest in the people who are selling us the products.
Today the real danger doesn’t come from the trouble the financial markets are facing but from the collapse of trust between banks themselves. Currently the biggest challenge the banking system is facing is not just to fix its broken parts, but to rebuild the trust with the public.
The second type of trust, Inner Trust, is not based on the future performance of another but rather upon how we can live in the present moment and not worry about the outcome.
It is about trusting our ability to find our way through life’s challenges even when we are feeling confused. We experience inner trust when we live in our own hearts and minds right now without the interference of the past or the future. Inner trust is about knowing that life will unfold the way it supposed to and being at peace with the result.
The lesson this crisis can provide is to remind us of the importance of trusting ourselves and others on a daily basis, not just when the world seems to fall apart. Provided we can rise to the occasion and meet the challenge, this crisis will lead to a powerful journey of self-discovery and personal growth.
We start this journey by reconciling both transactional and inner trust within our lives, by clarifying what is important to us, be it our family, our health, the purpose of our lives and the kind of life we want to live, and trust our inner self to orient us toward the right direction.
It is time to appeal to our better angels and start our journey to the self, a journey that takes us though the rugged terrain of uncertainty, but a journey that will help us achieve fundamental change.
Originally published in Prague Leaders Magazine.