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 credibility 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. Bookmark this post on del.icio.us

Fifteen months ago, Boeing's board fired its CEO after two highly publicized scandals. Hoping to repair its ethical image, the board lured former Boeing president Harry Stonecipher out of retirement and gave him the CEO position. Said Stonecipher at the time, "We need to strengthen our reputation with our customers, employees, investors and the communities in which we operate." On Monday, the board acted again, this time tossing out Stonecipher for having an extramarital affair with a company office manager.

"The Board concluded that the facts reflected poorly on Harry's judgment and would impair his ability to lead the company," said Boeing's Chairman Lew Platt. That goes without saying. But now the board should turn its attention to its own poor judgment.

Stonecipher retired from Boeing in June 2002. Four months later, Boeing's chief financial officer Michael Sears had illegal discussions with Air Force acquisitions official Darleen Druyun. The discussions, which centered on Boeing potentially hiring Druyun, took place while she was awarding billions of dollars worth of Pentagon contracts to Boeing. A year after Stonecipher's departure, a federal grand jury indicted two former Boeing officials for illegally acquiring proprietary documents from competitor Lockheed Martin and using them to win a government rocket-launch contract in 1998.

While Stonecipher and Boeing's board would like us to believe the affair was a one-time act of poor judgment by an otherwise ethical leader, we can't ignore that Stonecipher oversaw the company during and immediately before the uncovered illegal activities took place. It would be naïve to discount a correlation between his recent bad behavior and his leadership of a company prone to unethical business practices. By allowing an old fox to guard the chickens, Boeing's board undermined any effort to restore leadership credibility.

What effect does such misbehavior have on Boeing's employees? A 2004 study found that only half of all U.S. workers, just 51 percent, trust their organization's senior leaders. In the wake of stories about leaders like Stonecipher, is it any wonder that many employees associate their bosses with dishonesty and untrustworthiness? When there is discrepancy between what leaders say and what they do, employees recognize those leaders as frauds. And when an imposter's real values are uncovered, employees feel unaligned, lost, and foolish for trusting the leader in the first place.

Consistency between an organization's stated values and its leaders' actual behavior is critical to credibility. That's why all leaders must Live By the Values They Profess. Bookmark this post on del.icio.us

The most successful companies hire people whose values align with the organization's culture. Face it: finding the specific job function skills you need is one thing, but hiring people who fit your culture is critical to retaining your new hires. That's why the interview questions you ask are important, because each applicant's answers will provide an indication as to how that person will fit into your organization. The following examples will help you determine whether the candidate is the right fit:

Why are you really leaving your current job? Since their friends advise them to avoid "burning any bridges," most job applicants spin their reasons for looking, listing issues like pay, promotion opportunities, or additional benefits. In fact, information garnered from exit interviews is so irrelevant, some companies postpone exit surveys for six months after employees have said farewell. After several months, employees are less emotional, because enough time has elapsed for them to weigh objectively their former situations and experiences against their new jobs. Less reliant on positive references from their former employers, they are free to answer honestly when questioned about the reasons for their departure. Make sure candidates understand that your reason for asking is to help them avoid jumping from the frying pan into the fire. For instance, candidates might hesitate to say that their current employers require too many hours. Only by being open and honest can they avoid leaving for a company that requires even more face time.

At your current job, do you get to do what you do best every day? Gallop asked 1.7 million workers in 101 companies from sixty-three countries that question. Only 20 percent strongly agreed that they got to use their best talents. Odds are your candidates have skills their present employers are not exploiting. If you strive to match employees with jobs in which they can succeed and excel, you will recognize--and capitalize on--the best in others.

Tell me a story that illustrates your current organization's values. Communication is most effective when we speak to the emotional, as well as the intellectual, region of our listeners' minds, and stories are a potent way to reach our listeners' emotions. Asking candidates to relate stories that exemplify their organization's principles gives you a preview of how they communicate, as well as how passionate they are about their company's values.

When you disagree with your boss, what do you do? Employees who disagree with you, and risk telling you so, can introduce new perspectives, raise provocative questions, or bring attention to unforeseen problems. You undoubtedly have enough employees who refrain from challenging the status quo and fritter away their insights while swapping lunchroom grievances with their hapless coworkers. You want candidates who express a willingness to question conventional wisdom and who refuse to assume that every outcome is a foregone conclusion. Find yourself some mavericks.

Tell me about your most recent failure. No, this is not a weasel way to phrase the "What are your weaknesses" question. People venturing outside their comfort zones and seeking risks will fail a significant portion of the time. Suffice it to say, if your candidates are not failing, they are probably not taking enough risks. When employees are afraid to fail, they are afraid to try. On the other hand, experienced risk seekers, having tried, failed, and returned to try again, are wiser, hardier, more creative, and better qualified to know what--and what not--to try next. Most applicants will struggle to think of an answer to this question; hire immediately anyone who relates a failure from earlier that day.

Replace your standard interview questions with these and watch how easily the employees you hire adapt to your organization's culture. Bookmark this post on del.icio.us