The Value of Trusted Leadership

The latest Corner Office story in The New York Times is an interview with George S. Barrett, chairman and chief executive of Cardinal Health. The Corner Office column in the Times is a bit of a guilty pleasure for me, since it’s always interesting to see, and critique, the musings of successful leaders. Mr. Barrett made some interesting observations about effective leadership that resonated with me.

One of his key points was about establishing trust and confidence in the leadership of an organization. A study done last summer by Stromberg Consulting had some sobering results about employee confidence:

A significant portion of employees of U.S. and U.K. companies who fear job loss say they are afraid to take risks; 25 percent of employees of U.S. companies believe fear is delaying critical business decisions. When decisions are finally made, only half of employees believe managers and senior leaders are making the right decisions to position their organizations for economic recovery.

After such a considerable amount of time in an economic downturn where employees feared job loss, there is a lesson in this for all of us. Leaders need to shift from a command and control style of leadership to empowering their employees to take risk. However, employees can only do this if their leaders have established an environment of trust. Trust will foster a culture that breeds innovation and allows for success. Trust is embodied in the values that are at the heart of great companies (and great leaders) and these values are best defined with input from employees who make up the soul of an organization.

A powerful example of this is IBM’s Values Jam. In 2003, IBM decided to rewrite the company values. Using its Jam technology, the company hosted Internet-based discussions on key business issues with employees for 72 hours. As a result, the company values were updated to reflect three modern business, marketplace and employee views: “Dedication to every client’s success;” “Innovation that matters – for our company and for the world;” “Trust and personal responsibility in all relationships.”

Defining values isn’t easy, but it is the easy part. The role of the leaders then becomes to live these values, consistently, on a daily basis during both the good and bad times. It is especially critical in bad times to provide an environment where transparency and honesty are paramount. Consistency is the key to building the trust that Mr. Barrett and smart leaders know they need. A leader that demonstrates respect and treats employees as key stakeholders during the good times, will reap the benefits when things go badly.

Social media technologies provide an unprecedented opportunity for leaders to give their stakeholders, employees or otherwise, access into their thinking and decision making. Steve Jobs was recently able to do this when he posted a very coherent blog post about why Apple wasn’t incorporating Flash into iPhones, iPads and iPods. Increasingly, I think you’ll see pressure on leaders to utilize these technologies to more effectively communicate with and drive their organizations.