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How Bernie, Hank, and Harry Are Making Your Job Tougher

Have you noticed your employees looking at you with unwarranted suspicion lately? Are you sensing that their trust in you is waning--even though you haven't done anything unethical? If so, you can thank Bernard Ebbers, the former WorldCom chief, who a jury convicted last week for his part in the biggest accounting scam in U.S. history. And you can thank Maurice "Hank" Greenberg, who last week resigned his post as CEO of the world's largest insurer, AIG, amidst regulatory inquires into fraud and accounting irregularities. And you can thank former Boeing president Harry Stonecipher, who recently lost his job for having an extramarital affair with a female company executive. And don't forget Richard Scrushy, fired CEO of HealthSouth, who is now on trial for fraud, and Kenneth Lay, former chairperson of Enron, due to go on trial next January.

Why should you blame these people? We create stereotypes when we base opinions about an entire group on the behavior of a few members, and we seem to be doing that now with business leaders. Newspapers report daily on investigations into corruption involving companies like WorldCom, AIG, Boeing, HealthSouth, and Enron. Business leaders face accusations of overstating earnings, hiding massive debt, diverting millions of dollars in company funds for their personal use, using questionable accounting practices, and obstructing justice. Is it any wonder many employees develop biases that lead them to associate all leaders with dishonesty and untrustworthiness?

A 2004 study found that only half of all U.S. workers, just 51 percent, trust their organization’s senior leaders. Another national workplace study conducted in 2003 revealed that just 30 percent of U.S. workers are loyal to their employers--that is, they feel a personal connection, are apt to recommend their organizations to others, and are resistant to offers from outside employers. Diminishing trust and loyalty levels may in part reflect "fallout" from the many highly publicized corporate scandals of recent years, and how these disgraces have affected employees at all institutions.

Trust and employee loyalty are interdependent. When employees mistrust their leaders, or are ashamed of their organization's behavior, they are more likely to leave. Employees feeling trapped--those who doubt they can find a job that pays the same, feel reliant on a specific benefit, or consider their skills inadequate--might stay, but their fading commitment is damaging to productivity. And crumbling confidence is harmful to the bottom line, whether you measure your bottom line in dollars earned or clients served.

More than ever, employees are searching for leaders with integrity who prove their continuously. In values-based leadership, credibility means consistency between an organization's spoken values and its leaders' actual behavior. To prove your credibility you must repeatedly exhibit your faithfulness to your organization's values. Understand that and your leadership will have far greater impact--all because your can’t-miss-it credibility underscores your integrity as a leader.

It's a concept Bernie, Hank, and Harry never did understand.
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