Confucius said that rulers need three resources: weapons, food and trust. The ruler who cannot have all three should give up weapons first, then food but should hold on to trust at all costs. David Watkins explains.
Trust has become one of the most pervasive – and perhaps for that reason least noticed – aspects of social and business life. We need it in order to live at all. Think about how we conduct our daily lives – would you go to a dentist or doctor with a suspicious reputation?
Trust is like a bank account. You can make deposits and withdrawals. The higher the trust account, the more likely that the company (or person) will attract more business. We trust in the things that we have confidence in.
Therefore, leaders must deal and trade in trust. They should have an understanding of how trust is built, sustained and if necessary recovered. As Warren Bennis stated in his book On Becoming a Leader, one of the basic ingredients of leadership is integrity. Integrity is the basis of trust. Integrity, however, cannot be acquired – it must be earned.
Project Globe, a study conceived by Robert House of the Wharton School of Business in the US, set out to measure the most universally acceptable great leadership characteristics. After more than a decade of work and careful study of 112 considered characteristics, “honesty and integrity” stood out as being the most universally “desirable” of those leadership characteristics.
Nevertheless, we appear to be beginning to witness a crisis of trust in leadership. Too many scandals, too many examples of misused power and too many broken organisations are leaving us with a predisposed assumption that leaders cannot be trusted.
Take Bernie Madoff, for example. He ran what appeared to be a successful finance and investment firm and as a non-executive chairman of Nasdaq at the time presumably generated a perception of great integrity. One who could be trusted withan individual’s life savings.
But hiding behind the mask was a leader who, according to Denny Chin, his federal trial judge, committed crimes of “extraordinary evil”. Madoff, having effectively run the largest Ponzi scheme of all time and swindling some $65 billion, was sentenced to 150 years in prison. Madoff has dealt his last card as, on paper at least, he will get to taste freedom sometime in 2139.
According to the Edelman Trust Barometer of 2014, trust in company leadership has plateaued. In terms of the credibility of people, for example, academics and other experts are the top of the trust list (67%); CEOs are at the bottom (43%). And this gap is wider than in 2009. This surely means that the time is ripe for business leaders to have the courage to act aggressively through transparent engagement in their activities.
For the full article, you can view the PDF or listen to the podcast.
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