For the last 70 years the world has done remarkably well. According to the World Bank, the number of people living in extreme poverty today is less than it was in 1820, even though the world population is seven times as large. This is a truly remarkable achievement, and it goes hand in hand with equally remarkable overall advances in wealth, scientific progress, human longevity, and quality of life.
But the organizations that created these triumphs — the most prominent businesses, governments, and multilateral institutions of the post–World War II era — have failed to keep their implicit promises. As a result, today’s leading organizations face a global crisis of legitimacy. For the first time in decades, their influence, and even their right to exist, are being questioned.
Businesses are also being held accountable in new ways for the welfare, prosperity, and health of the communities around them and of the general public. Our own global firm, PwC, is among these businesses. The accusations facing any individual enterprise may or may not be justified, but the broader attitudes underlying them must be taken seriously.
The causes of this crisis of legitimacy have to do with five basic challenges affecting every part of the world:
- Asymmetry: Wealth disparity and the erosion of the middle class
- Disruption: Abrupt technological changes and their destructive effects
- Age: Demographic pressures as the average life span of human beings increases and the birth rate falls
- Populism: Growing populism and rejection of the status quo, with associated nationalism and global fracturing
- Trust: Declining confidence in the prevailing institutions that make our systems work.
(We use the acronym ADAPT to list these challenges because it evokes the inherent change in our time and the need for institutions to respond with new attitudes and behaviors.)
Read more: https://www.strategy-business.com/article/A-crisis-of-legitimacy?gko=9c234