Believe in the power of Leadership Trust

Believe in the power of Leadership Trust

By Tierney Remick, Vice Chairman, Board and CEO Services

Over the past year, there have been numerous and increasing examples of egregious lapses in ethical judgement on the part of leaders across industry and government.  These lapses, and the leaders who made them, have harmed customers, employees, and other stakeholders.  The actions they took also eroded the trust we have in leaders and severally damaged the reputations of the executives involved and the organizations they work for, resulting in loss of shareholder value and the emergence of a rallying cry for sincere Leadership Trust.

Ethical lapses and toxic behaviors generally don’t happen in a vacuum; they tend to originate and thrive in autocratic, ego-driven, and hierarchical cultures that that lack both transparency and trust. These cultures are bred by leaders who speak of, but don’t embody a clear set of positive values and honest communication.

Research shows that, in these types of “bully” cultures, employees fear speaking up.  At the same time, technology has created a level of transparency and democratization of information that increases potential exposure.  In today’s market, where dynamics are constantly changing, losing your footing can be devastating for a company and can result in a low degree of Leadership Trust across the organization and with customers.

It has always been important for Boards and CEO’s to articulate the organization’s values clearly and consistently but today’s’ leaders must also demonstrate these values and serve as examples to all stakeholders. We know that the most successful CEO’s are driving transformations by creating cultures that are characterized by openness, honesty, and enthusiastically embrace the challenges facing the organization. Instead of presenting themselves as having all the answers, they create forums where the best ideas come forward – not just the ideas of the powerful or the favored few.  These CEO’s move beyond emails and webcasts and are actively present and engaged with their employees. As Jim Hackett, the CEO of Ford recently said in a NY Times discussion, “…if you want to lead others, you must have their trust.  And you can’t expect to have their trust without personal integrity.”

In place of an autocratic and fear-based culture, successful leaders are nurturing environments that are creative, inclusive, agile, and more empathetic.  It all starts with leaders who express the values of the organization and establish connectivity with every layer in the organization. A great example of this is Mary Dillon, CEO of Ulta Beauty. Dillon is a hands-on manager who frequently visits stores, talks to store associates, and works the counters. She embraces inclusiveness and encourages everyone to express their views on the business. She is willing to admit when she doesn’t have the answers and she does not tolerate bad behavior.  Under Dillon’s leadership, Ulta has grown to become one of the most successful retailers, in the US at a time when the industry overall is reeling.

The data is clear.  A company’s level of Leadership Trust can either accelerate a business or hold a company back. Transparent, inclusive, and trust-based cultures discourage toxic behaviors and help to marshal the full power of the entire workforce toward achieving an organization’s goals.  A powerful, positive culture is a huge strategic competitive advantage in today’s competitive marketplace and CEOs who optimize this through their own leadership will thrive.