Corporate governance has taken it on the chin in the past few days. Over the past week:

News of these latest accusations has re-rattled investors and created speculation that economic recovery might be an illusion. But the real deception is the belief that large companies can be trusted to regulate their own behavior.

Agree or disagree: At the risk of causing Ronald Reagan to roll over in his grave, the government needs to impose greater oversight on big business. I'd like to know your thoughts.

Labels: business, credibility, ethics, integrity, trust, values

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Last week, two former top-ranking Citigroup officials apologized on Capitol Hill for taking the banking giant to the brink of extinction. Former CEO Charles Prince and ex-board member Robert Rubin offered repentance to the Financial Crisis Inquiry Commission.

Prince ran the company from 2003 through 2007. During much of his watch, Citigroup ran up billions of dollars in losses, eventually causing the U.S. government to spend $45 billion to prevent its collapse. "I'm sorry," said Prince, "that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us."

For his part, Rubin offered regrets but refused to accept responsibility for the day-to-day operations that created the Citigroup debacle. Like Prince, he indicated that the entire banking industry shared the blame, saying that nearly everyone "missed the powerful combination of forces at work and the serious possibility of a massive crisis."

But committee chair Phil Angelides wasn't willing to let the two off the hook so easily. As Angelides put it, "You were either pulling the levers or asleep at the switch."

Thanks for the apology, guys. I hope you're not offended if your former employees, customers, and stockholders don't forgive you immediately. 

Labels: business, credibility, ethics, integrity, leadership, trust, values

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On October 11, 2007, former North Carolina senator and presidential hopeful John Edwards spoke to reporters about rumors that he had an extramarital affair with campaign staffer Rielle Hunter. "The story is false," ABC News timeline "It's completely untrue, ridiculous." In the meantime, his wife Elizabeth was battling breast cancer.

Labels: communication, credibility, employees, integrity, leadership, trust

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For many leaders, empowering employees can be a personal challenge. For one thing, the thought of sharing our power might mean confronting some of our personal insecurities. What's more, empowerment requires that we trust workers to fulfill their commitments -- and that can seem risky. We must work hard at being empowering, lest we become micromanagers.

Not surprisingly, our bosses face this same challenge. And that increases the odds that you work for a micromanager.

If you work for a micromanager, you know the drawbacks. Micromanagers continually interrupt you, rearrange your priorities and deadlines, hand off their crises to you, and take credit for your good ideas? If that's not enough, they consume your time with countless, endless meetings and overburden you by commissioning a stream of pointless reports.

Some leaders micromanage because they can -- their positions give them the authority to boss people around and they intend to use it. Other micromanagers fear falling short in terms of their own performances. She won’t get this done, we’ll miss the deadline, and that will make me look bad. That fear prevents micromanagers from trusting their employees; consequently, they attempt to establish complete control.

As long as you work for a micromanaging boss, you will struggle in your leadership role. Through their actions, micromanagers broadcast their lack of trust. Your employees will sense your micromanaging boss's doubts and wonder whether you are worthy of their trust. Therefore, if you work for a micromanager, you need to confront the problem directly.

I suggest that you start by asking your boss the following:

"Am I fulfilling your expectations as a leader? If not, please tell me how to improve. Otherwise, when you meddle in my actions, countermand my decisions, or outright do my job for me, I have to conclude that you distrust my judgment."

If your performance does need improving, this kind of candid conversation with your supervisor can help you grow as a leader. On the other hand, drawing attention to micromanagement behavior could actually help your boss recognize a personal leadership weakness. You might point out the obvious:

"You're probably unaware of how your behavior causes my employees to wonder if I have any real authority. That's why they often go around me to you."

But some people micromanage consciously and deliberately; many micromanagers try hard to intimidate. To them, you need to be blunt:

"You hold me accountable for getting things done. But by constantly overriding my authority, you’re making it impossible for me to succeed."

By challenging micromanagement behavior you're telling your boss that you welcome constructive feedback and are eager to work hard toward improving, but that you are unwilling to endure unwarranted bullying and second-guessing.

Enough is Enough

If your micromanaging boss is unreceptive, or proves unable or unwilling to change, you should consider changing bosses. Unchecked, micromanagement limits your opportunities to grow. Your micromanager will continue to ignore you, abstain from teaching you new skills, withhold company news from you, exclude you from decision making, and selfishly hold back the most demanding assignments. Your employees might see you as weak or untrustworthy. You will expect less from yourself. Your performance will reflect your boss’s low expectations. And, lo and behold, another self-fulfilling prophecy will come true.

If your core personal values include principles like trust, respect, and helping individuals grow then living by the values you profess requires standing up to micromanagement.

Labels: employees, leadership, management, trust, values

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Looking for a great place to work? Consider applying at the Mountain View, California headquarters of Google. Among the perks enjoyed by Google employees are onsite haircuts, free laundry facilities, workout and massage rooms, in-house childcare, and car washes. And then there's the free food. The campus has eleven cafeterias serving everything from gourmet meals to M&Ms. Legend has it that Google workers are never more than 150 feet away from free food. No wonder the company topped Fortune’s list of the 100 Best Companies to Work For in 2007 and 2008.

But there's a new number one company on the Fortune list this year: storage and data management company NetApp. Unlike Google, which got to the top largely by providing employees with lots of goodies, NetApp earned the number one spot because of its culture of trust. NetApp's leaders promote an atmosphere of openness and honesty, and they go out of their way to proactively share information with workers.

Robert Levering and Milton Moskowitz, whose Great Place to Work Institute has been compiling information on great workplaces since 1980, have been quoted as saying, "The most important factor in selecting companies for this list is what employees themselves have to say about their workplace." For their part, NetApp employees say they appreciate how easy it is to share ideas, get answers to questions, meet with senior leaders, and find opportunities to take responsibility. Funny, no one mentions wanting free M&Ms.

At number four on the 2009 list, Google is still clearly a great place to work. And Google's culture of fun, high energy, and innovation undoubtedly attracts as many people as the free chow does. But NetApp's elevation reveals how important trustworthy leadership is to workers in today's business environment. "Perks are nice, but employees are looking for something more basic," Levering and Moskowitz have noted. "They want to be told the truth, especially if the news is bad."

If you want employees to consider your company a great place to work, focus less on promoting financially oriented rewards and more on demonstrating the values that attracted them in the first place.

Labels: business, employees, integrity, leadership, management, trust, values

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This is part of a series of posts featuring earlier content from the Vital Integrities Blog along with updated information and opinions.

Here's an excerpt from a March 2006 post:

Weather forecasting, once an easy way to fill five minutes on a local news broadcast, is transforming the six o'clock news into reality TV. Network affiliates, which used to compete to be their area's preferred "news station," now market themselves as "weather stations." Meteorologists don't transmit from a studio anymore; they come to us "live from the weather center," conjuring up images of scientists sequestered away, scouring weather maps with military precision. And they no longer rely on simple radar; they now use Doppler. But not just your run-of-the-mill Doppler; it's now Super-Digital-Pinpoint-Triple-Bigfoot-Skytrak-Accu-Doppler. Unfortunately, the "reality" is forecasters still get it wrong at least 20 percent of the time.

Here's why this bothers me so much. I can accept that even the best forecasters will be wrong one out of five times. But TV stations are using weather to generate ratings, and ratings come from sensational stories. Meteorologists are "creating news" with their dire forecasts and reporting their grim predictions as fact. And, in today litigious society, we force people to react to those reports to avoid lawsuits if they don't. For instance, school systems must respond to heavy snow forecasts by keeping their buses off the roads, so that means closing schools. Local governments must deploy snowplows to await the storm on highway roadsides; otherwise, we won't blame the storm for traffic accidents, we'll blame the government for not being ready. News shows are pumping up their ratings at our financial expense.

Amid the current recession, local television news shows have added economic reporting to their repertoire. And like their exaggerated weather prophesies, their forecasts for the economy are overly ominous. While we can't blame the media for creating our economic mess, we can fault television news for fostering a sense of doom and gloom. It's one thing for newscasters to report the latest unemployment figures or announce an area plant closing. But it's journalistically irresponsible to falsely state that we're in the worst economic period ever (does anyone else remember the double-digit mortgage rates of the 80s?), or to predict that a recovery is years away. Is it any surprise that consumers have stopped spending money?

Like weather forecasters who continuously miss the mark, TV journalists who pretend to be economic experts will lose credibility with their viewers. In the meantime, we're better off weathering this economic storm without them.

Labels: credibility, integrity, trust

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This is the part of a series of posts featuring earlier content from the Vital Integrities Blog along with updated information and opinions.

Here's an excerpts from a March 2005 post:

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.

A few months after that post, student-loan lender First Marblehead's board fired CEO Daniel Meyers for giving expensive gifts to a Bank of America executive. BofA was a major client of First Marblehead and Meyers appeared to be enticing one of its decision makers to send more business his way with a pricey watch and other lavish gifts totaling $32,000. Meyers claimed that he purchased the gifts with his own money; nevertheless, the board concluded at the time that he had violated a company ethics policy and sent him packing.

Last week, First Marblehead rehired Meyers as chief executive, asserting that Meyers is the best person to lead the company out of its current financial crisis. Explaining the board's change of heart, a company spokesperson described Meyers' gift-giving transgression as a judgment lapse, rather than a policy violation.

Is First Marblehead's board putting financial results before ethics? Maybe. If the recent wave of corporate scandals has taught us anything, it's that a leader's lack of judgment is what causes ethical missteps and, eventually, financial meltdowns. When you already know a fox makes bad moral decisions, why give him a second chance to guard the hens?

Labels: credibility, integrity, leadership, trust

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"I don't go out of my way to earn my employees' trust," a banking colleague once told me. "But whenever the moment of truth arrives, I think they know I'll do the right thing." To illustrate the flaws in that mindset, I shared the following banking analogy with him.

Banks occasionally receive large cash deposits just before closing time, when it's too late to count the cash. When that happens, banks will often give a good customer provisional credit; that is, they'll credit the customer's account with the amount listed on the deposit slip and then count the money on the following day. Of course, banks reward that level of trust only to customers with a demonstrated history of accurate deposits.

Your employees grant trust the same way. Every time you do something that demonstrates adherence to your organization's values, each employee who either witnesses or hears about it will subconsciously give you a deposit in an imaginary "trust fund." Employees give you provisional credit for those deposits until you prove worthy of their trust. So, if you wait for a moment of truth to come along to show your commitment to the organization's values, your chances of earning employee trust are limited, and building up a permanent balance in your trust fund will take years. The real time for action is now.

Leadership is not about the moment of truth. It's about every moment. You must demonstrate your organization's values continuously and proactively in order to secure your employees' trust.

Labels: employees, leadership, trust

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It's time to recognize the ten dumbest leadership moves of the year. In what has become an annual tradition (hey, it's the second year in a row!), I have compiled ten examples of leadership behavior certain to strip the offenders of any credibility while triggering an employee stampede to the door.

1. In March, consumer-electronics retailer Circuit City fired 3,400 salespeople who earned 51 cents more per hour than what management called the "market-based salary range for their role." The company intended to replace the overpaid employees with workers willing to work for less. Then, the company's sales tanked. Stock analysts blamed the slump on management's decision to fire its most experienced employees. So, in a move even more offensive than the firings, Circuit City asked those terminated employees to come back to work and help revive the company's sales. Perhaps the company should consider the sincerity of its slogan, "It's all about helping you."

2. Circuit City is the first company to earn two spots on the 10 Great Leadership Blunders list, and it's an honor the retailer rightfully earned. In December, the same leaders who fired frontline salespeople for earning 51 cents an hour too much, awarded millions in cash incentives to "key executives" who agreed not to quit. Top executives were offered between $600,000 and $1 million each for promising to remain with the company until 2011. The company said it established the incentives "to ensure the stability of the company's leadership team." What stability? Circuit City’s board should think about offering Philip Schoonover a cash incentive NOT to stay.

3. Managers at Catfish Bend Casino in Burlington, Iowa were livid when they discovered a "Dilbert" comic strip hanging on an office bulletin board. In the cartoon, Dilbert begins a conversation with another fictional character by asking, "Why does it seem as if most of the decisions in my workplace are made by drunken lemurs?" The offended managers reviewed surveillance tapes until they found footage showing security supervisor David Steward posting the strip, and they promptly fired him. Defending the termination in court, the company's HR director Steve Morley testified, "Basically, he was accusing the decision-makers of being drunken lemurs." The judge sided with Steward -- who said he was simply trying to cheer up coworkers worried about upcoming layoffs -- and ordered the casino to pay his unemployment benefits. As if describing the leadership mindset that led to Steward's firing, Dilbert's comic-strip friend answers his question by explaining, "Decisions are made by people who have time, not people who have talent."

4. It's impossible to compile a list of leadership blunders without including politicians. Two particularly bone-headed moves stood out in 2007. Senator Larry Craig of Idaho was arrested after making sexual advances toward another man in a Minneapolis airport bathroom. The other man was an undercover police officer. After his arrest, Craig announced he would relinquish his Senate seat; he later changed his mind and plans to serve out the remainder of his term. In Plant City, Florida, vice mayor Robert Brown apologized publicly to his wife for having an extramarital affair. Although it's not uncommon for politicians to openly beg forgiveness for their indiscretions, Brown's apology came during a city commissioners' meeting. "I apologize for my behavior and the hurt I caused," Brown told his wife of twenty-five years, who was sitting in the audience. He presented her with flowers and a kiss and then resumed the meeting.

5. Things have not gone well at British Petroleum over the past two years. In May 2005, an explosion at a Texas refinery killed fifteen people. A pair of Alaskan pipeline leaks in 2006 was attributed to the company's shoddy maintenance practices. And recent problems have delayed completion of an oil production platform in the Gulf of Mexico. Through it all, John Browne somehow managed to hang onto his job as CEO. But at last, BP's board found something to fire Browne for: having a four-year relationship with a male escort and lying about it to the High Court during his lawsuit against a London tabloid. Board chair Peter Sutherland said Browne "should be compelled by his sense of honor to resign in these painful circumstances." Note to Sutherland: there's nothing honorable about deadly explosions and environmental disasters.

6. For eight years, an anonymous contributor to Internet financial forums wrote scathing criticisms about natural-food grocer Wild Oats Markets. In hundreds of posts, the writer known only by the pseudonym "Rahodeb," claimed the retailer's shares were overpriced and questioned why anyone would own the stock. In February, rival Whole Foods Market announced its intention to buy Wild Oats. While considering the antitrust ramifications of the merger, the Federal Trade Commission uncovered Rahodeb's true identity: Whole Foods Market CEO John Mackey. Whole Foods officials deny that Mackey used his secret identity to drive down Wild Oats' stock price before he bought the company, but a skeptical FTC moved to block the merger. Perhaps Rahodeb's most pathetic post was his response to another discussion-board writer who unwittingly poked fun at Mackey's haircut. "I like Mackey's haircut," said Rahodeb. "I think he looks cute!"

7. In its Code of Conduct for event attendees, Madison Square Garden -- owner of the New York Knicks basketball team and the New York Rangers hockey team -- asks guests to "be respectful of others around them" and "refrain from using foul/offensive language." Apparently, the Code does not apply to the Garden's male employees. In October, a Federal District Court in Manhattan ordered the Garden and its parent company Cablevision to pay $11.6 million to a former executive who was fired after she reported obscenity-laced tirades and unwanted sexual advances by Knicks coach Isiah Thomas. Sixteen days later, the company settled another sexual-harassment lawsuit filed by a former Rangers cheerleading-squad captain. The headline of a New York Times article by Selena Roberts appropriately cautions: "The Garden Needs a Warning Label."

8. While his company's hedge funds crumbled and helped fuel a developing global credit crisis, Bear Stearns CEO James Cayne went golfing and played bridge, according to a Wall Street Journal investigation. The newspaper reported that during an especially critical ten-day period in July, Cayne was in Nashville playing in a bridge tournament -- without his cell phone. Even as the crisis worsened throughout the summer, Cayne knocked off work on Thursday afternoons and played golf every Friday, according to the Journal. Two of Bear Stearns Asset Management's hedge funds lost billions through investments in securities backed by subprime mortgages. Cayne, who denied the allegations, announced that he would forgo his 2007 bonus.

9. MIT students and faculty members were shocked to learn that their school had fallen several places in U.S. News & World Report’s annual ranking of colleges. Investigating MIT's drop from fourth to seventh place, the school newspaper discovered that officials had quietly fixed an "honest mistake" that inflated MIT's standings in previous years. Until this year, when calculating the average SAT scores of new students, MIT excluded the scores of foreign students. Non-native English-speaking students tend to score lower in reading on SAT tests than their American-born classmates, so omitting their scores overstated MIT's average and, thus, improved its standing in the magazine's report. It was the second scandal involving the MIT admissions department in 2007. In April, admissions dean Marilee Jones resigned after admitting she lied about her credentials when applying for a job at MIT twenty-eight years ago.

10. Before the New England Patriots went 16-0, they had to go to the woodshed. NFL officials discovered team leaders spying on New York Jets coaches during an early-season game, using a video camera to steal defensive signals from the Jets' sideline. Commissioner Roger Goodell fined Patriots head coach Bill Belichick $500,000. He also fined the team $250,000 and ordered owners to forgo this year's first-round draft choice. Critics say the Patriots' perfect season should be marked with an asterisk.

Labels: credibility, integrity, leadership, trust, values

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Dell Inc. announced yesterday that it will restate more than four years of financial results after a yearlong internal investigation discovered "errors and irregularities" in its accounting and reporting practices. During that period, Dell's finance department manipulated its earnings in order to meet Wall Street's quarterly expectations. What, you might wonder, would compel the computer maker's accounting team to fudge the company's numbers?

"People cheat," says Wharton School of Business professor Maurice Schweitzer in an article for Knowledge@Wharton. And, he adds, people with goals that they fail to meet are more likely to cheat than those people simply instructed to try their best.

Schweitzer and colleagues Lisa Ordonez and Bambi Douma conducted an experiment to study the relationship between goals and cheating. The researchers gave three groups of college students sixty seconds to form as many words as possible out of seven jumbled letters. They told one group to "do your best to create as many words as possible." They gave another group a goal of creating at least nine words in each round and offered participants $2 for each time they met the goal. They gave a third group the same nine-word target, but without the financial incentive. Participants kept and reported their own scores, which made it easy for subjects to cheat.

Schweitzer and his partners analyzed the behavior of participants who falsely claimed to have met the goal of forming nine words. They found that participants who had a goal and failed to meet it were more likely to cheat than those without a specific target were. Schweitzer and company also noticed that people who missed their goal by one or two words were more likely to cheat than people who came up several words short. And contrary to the researchers' expectations, participants with unmet goals were just as likely to cheat whether or not there was a financial incentive at stake.

Are Dell's accountants bad people, or did the pressure to meet goals encourage their unethical behavior? I think Erica Ogg of CNET News.com answers that question best in her article "Goals led Dell to cook the books." Writes Ogg: "Dell felt so pressured to meet Wall Street expectations that its finance department bent accounting rules to make up for shortfalls in certain quarters and underreported earnings results in others, each time ensuring that Dell seemed to hit earnings targets that financial analysts were expecting."

Labels: credibility, integrity, trust

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"Duke University is a community of scholars and learners, committed to the principles of honesty, trustworthiness, fairness, and respect for others. Students share with faculty and staff the responsibility for promoting a climate of integrity. As citizens of this community, students are expected to adhere to these fundamental values all times, in both their academic and non-academic endeavors." -The Fuqua School of Business Honor Code

The honor code at Duke University's Fuqua School of Business hangs in every classroom, serving as a constant reminder to students of the college's core values. What's more, all prospective students receive a written copy of the code and, before gaining acceptance to the prestigious school, must agree in writing to abide by it. Why so much emphasis on a values statement? "Fuqua depends on every member of its community to uphold the code in both spirit and action," says Dean Douglas Breeden. Sounds good, right?

Maybe it's not good enough. There's news this week that officials at Fuqua caught thirty-four first-year MBA students cheating. A professor noticed suspicious similarities in students' answers to questions on a take-home exam. An investigation revealed that the students collaborated on the test in violation of the professor's instructions. All but four students in the class of thirty-eight participated in the cheating.

Although it may be the largest incident of college dishonesty, Duke's is not an isolated episode. In a survey published last year in Academy of Management Learning & Education, 56 percent of graduate business students acknowledged that they have cheated. Donald McCabe, a Rutgers professor who worked on the survey, says students are quick to blame their cheating on the post-Enron business environment. "They'll argue that they're just emulating the behavior they're seeing in the corporate world," he says. "They're acquiring a skill that will serve them well when they're out there."

So is college cheating just one more consequence of the corruption involving companies like Enron, Arthur Anderson, Global Crossing, WorldCom, and Tyco?

Labels: integrity, trust, values

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In this age of instant information, any ethical misstep by a well-known person is just a click away from the world's desktop. That's why, after watching the behavior of the former heads of scandal-plagued companies such as Enron, WorldCom, and Tyco, many people now find it difficult to trust any corporate CEO. The barrage of news stories reporting the transgressions of powerful people is creating an overwhelming generalization among the American population: that is, that no one is trustworthy.

What can a single person do to change that mindset? Consider this passage from the book, Essays to do Good, by Cotton Mather (1663-1728): "A little man may do a great deal of harm; and pray, why not a little man do a great deal of good?" Weigh Mather's argument in light of today's ethical environment: if the behavior of a small group of business figures can cast suspicion on the integrity of an entire nation, why can't the actions of a small number of morally strong individuals restore the public's faith that people are generally good?

By choosing to live with integrity, you'll help to fight back the onslaught of unethical behavior. You might not get the publicity afforded notorious business scoundrels. But those close to you will notice, and you'll succeed in proving that there are still honorable people in the world.

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Is global warming a serious threat? According to a recent ACNielsen survey, only 42 percent of U.S. citizens think so. What's more, Americans are hesitant to believe that human activities cause climate change. The Intergovernmental Panel on Climate Change wants to convince us otherwise.

On February 2, the IPCC will release its latest assessment on global climate conditions. This year's report will contain some strong evidence that global warming is real -- and that humans are to blame. IPCC chairperson Rajendra Pachauri said, "I hope this report will shock people."

The report will try to "shock" us with predictions of higher temperatures that will melt Artic glaciers and of rising seas that will engulf entire Pacific islands. One included prophecy: average global temperatures will rise by 2° to 4.5° Celsius over "pre-industrial levels" by the year 2100. According to Pachauri, the numbers speak for themselves. "You really can’t get a more authentic and a more credible piece of scientific work," he says.

Well, let's take a closer look at those numbers. To be sure, a 2-4.5°C rise in global temperatures gets our attention. But the shock subsides when you consider that the projected increase will have occurred since "pre-industrial" times. In case you have forgotten, the industrial era started around 1750. That means the projected temperature rise will have occurred over a span of 350 years. With these types of fear-mongering warnings, it's no wonder most Americans fail to take global warming seriously.

The IPCC approach reminds me of a non-profit agency in San Diego County currently making the following claim: "Every one second, a public high school student is suspended in America." I did the math. That works out to sixty suspended students every minute, 3,600 every hour, 86,400 every day, and 31.5 million every year. Yikes! But wait. According to the 2000 U.S. Census, that's twice the number of public high school students in America. As it turns out, the agency only counts the seconds in school days -- 180 days of seven hours each -- and that number just doesn't have the same shock value.

Attempts to manipulate people with sensationalized statistics usually fall short, causing skeptics to distrust even the most compelling scientific evidence. If you want to persuade others, you first have to earn their trust. Only then will people warm up to your ideas.

Labels: communication, credibility, trust

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Mark Fields has a tough job. As president of Ford Motor Company's North American operations, he is spearheading a restructuring effort that includes closing sixteen factories and eliminating almost 45,000 jobs. It's a necessary process because Ford continues to lose money; the company lost $7 billion in the first nine months of 2006.

But while Ford asks workers to tighten their belts or make the ultimate job sacrifice for their company, Fields continued to enjoy a special perk. As part of his employment contract, he had use of a company jet for commuting to his primary residence in Florida. The cost to Ford: over $200,000 for the fourth quarter of 2005 alone.

Now when a local television station featured Fields in a story about the compensation packages of some of Detroit's automotive executives, current and former Ford employees found Fields' flying privileges disgusting. So, in a webcast to employees yesterday, Fields promised to stop using the corporate plane for his personal trips. Instead, Ford will pay for his airfare on commercial flights.

"He did not want that issue or any other issue to distract the North American team," said Tom Hoyt, a spokesperson for Ford. Sorry, Mr. Fields, you're too late for that. You see, when a leader in your position professes a value, like cost cutting for the good of the company, and then he flaunts a personal disregard for that value in the face of his employees, then that leader loses credibility.

To be sure, the piggish behavior of many top executives is robbing once-great companies like Ford of their reputations and, more importantly, of their employees' trust and respect.

Related Post: FORD: Fix or Repair Daily?

Labels: leadership, trust, values

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Only 49 percent of U.S. workers have trust and confidence in the senior managers of their organizations. So indicates a survey conducted recently by Watson Wyatt Worldwide. The global consulting firm assessed the attitudes of more than 12,000 employees, working at various job levels and in all major industries, as part of its WorkUSA 2006/2007 survey. If learning that less than half of all employees trust their leaders does not alarm you, consider this: the trust level is down from 51 percent in 2004, the last time Watson Wyatt took its poll.

"This dip in ratings is concerning because employees' attitudes about their senior leaders are a key factor in building engagement," according to Watson Wyatt's Ilene Gochman. "People want to work for companies where they have confidence in the organization and trust what senior management is doing."

Diminishing trust levels should come as no surprise to business leaders, considering the many highly publicized corporate scandals of recent years. But many leaders are shocked to learn that trust and employee loyalty are interdependent, and that when employees mistrust their leaders, they are more likely to leave.

More than ever, employees are searching for leaders with integrity who prove their credibility continuously. Recognizing that is the key to increasing the level of trust your employees will have in you.

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