Our governor has been asked to resign by top leaders because issues “have resulted in a loss of the people’s trust.” Governor Kitzhaber is not alone – countless corporate leaders have been forced to resign because of lack of trust. Arthur Andersen and Goldman Sachs went out of business because of untrustworthy behavior.
Trust is essential for a leader to be effective. The best leaders – those whose organizations outperform their competitors by 2.5 to 1 – are honest, trustworthy, authentic, and humble, according to ground-breaking research by James Sipe and Don Frick.
On a broader scale, trust is absolutely essential for our society to operate. The Boy Scout Law states, “A Scout is Trustworthy” as its first attribute. We have to be able to trust that the other person will stop at a stop sign, that the food we buy in a grocery store or restaurant will be healthy and safe to eat, that the internet company will indeed ship the product that we just paid for (and that the manufacturer has made a product that will work according to specification), that the medicine will cure the illness.
How does a person create trust? By keeping one’s word. However, our word is often a promise of future action, dependent on actions of others. I’m co-teaching a certification class for APICS, the operations management association. We had a spirited discussion last night about the continual reschedules caused by late/incomplete deliveries from suppliers, quality not meeting spec, people not showing up for their shift, customers not ordering as they promised, etc.
But reschedules due to extrinsic causes are very different from loss of trust due to lack of integrity. Violating ethical boundaries destroys the very foundation of a relationship. Because are unable to trust the person again for a long time, if ever, they have lost their ability to influence us. In that situation, a leader can no longer be effective as a leader, because the job of leadership is influencing others.
What’s your reaction? How important is trust to being an effective leader?