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Is trust in leadership critical or BS?

The common belief is that when leaders build trust with their teams, they create a culture of openness, collaboration, and mutual respect. But some argue that trust can be overrated and even harmful in certain situations.

Is trust in leadership critical or BS?

Picture this: you're a sailor on a massive ship, sailing through uncharted waters. You're far from land, and the only thing keeping you afloat is the trust you have in your captain. You know that they have the knowledge, skill, and experience to guide you through any storm, and you trust them to make the right decisions, no matter what.

Now consider this: The captain is someone who has a history of deceit and the skills they display are questionable at best. It's obvious which captain you would want leading through a storm but are there circumstances where trust can be overrated and even blinding and problematic?

The Theranos case

One example where trust was harmful in leadership is the case of Elizabeth Holmes, the former CEO of the now-defunct biotech company, Theranos.

Holmes founded Theranos in 2003 with the goal of revolutionizing the blood-testing industry by developing a technology that could perform multiple tests with just a single drop of blood. The company quickly gained attention and raised millions of dollars from investors, in large part due to Holmes' charismatic leadership and vision.

However, as it turned out, the technology behind Theranos' products was flawed, and the company was unable to deliver on its promises. Despite mounting evidence of these problems, Holmes and her inner circle continued to insist that everything was fine and that the company was making progress.

One reason why Holmes was able to maintain this façade for so long was that she had built a culture of trust and loyalty within the organization. Employees were encouraged to keep quiet about any doubts or concerns they had and to put their faith in Holmes' vision. Anyone who spoke out against the company's direction or practices was quickly marginalized or dismissed.

This lack of transparency and openness ultimately led to Theranos' downfall and the indictment of Holmes on charges of wire fraud and conspiracy to commit wire fraud. The example of Theranos illustrates how blind trust in a leader can be harmful to an organization and its stakeholders, and how important it is to balance trust with transparency and accountability.

The sorry case of Enron

Jeffrey Pfeffer is a well-known American business theorist and professor of organizational behavior at Stanford Graduate School of Business. He has written extensively on the topic of leadership and trust in organizations.

Pfeffer has been critical of the notion that trust is always a necessary component of effective leadership, and he has argued that trust can sometimes be overrated or even harmful in certain situations.

In his book "Leadership BS: Fixing Workplaces and Careers One Truth at a Time," Pfeffer uses the example of Enron to illustrate his point. Enron was a highly successful energy company that ultimately collapsed in a major accounting scandal in the early 2000s.

According to Pfeffer, Enron was a company that was highly focused on building trust, both internally and externally. The company had a reputation for being innovative and entrepreneurial, and its leaders were celebrated as visionaries and risk-takers. However, Pfeffer argues that this emphasis on trust ultimately led to a culture of deception and fraud within the organization.

Pfeffer notes that Enron's leaders were skilled at creating a façade of trust and transparency while actually engaging in unethical and illegal behavior behind the scenes. He suggests that this illustrates the danger of relying too heavily on trust as a leadership principle, as it can lead to complacency, naivety, and a lack of accountability.

Overall, Pfeffer's example of Enron illustrates his belief that trust is not always a panacea for effective leadership and that leaders must balance the need for trust with other important factors such as transparency, accountability, and ethical behavior.

General Matthew Ridgeway

Recently, I read about General Matthew Ridgeway, an active US commander during the Korean War. General Ridgway was given command of the 8th Army after its disastrous defeat at the Battle of the Chosin Reservoir. The morale of the troops was low, and many soldiers were demoralized and disheartened by the recent defeat.

To boost morale, Ridgway decided to give a speech to the troops. Instead of delivering a typical motivational speech, however, he chose to speak to the soldiers as equals, emphasizing the importance of trust and communication between the soldiers and their leaders.

Ridgway spoke about his own experiences as a soldier and the lessons he had learned about leadership and trust. In contrast to that of Enron and Theranos, General Ridgeway emphasized the need for transparent communication and trust between leaders and their troops, and encouraged soldiers to speak up if they had any concerns or suggestions.

The speech had a powerful impact on the soldiers, and many later credited it with turning the tide of the war. By acknowledging the soldiers as equals and emphasizing the importance of trust and open communication, Ridgway was able to build a strong sense of camaraderie and unity among the troops that ultimately led to a positive outcome in an infinite situation.

Captain, my captain

Coming back to our untrustworthy captain of the ship facing a major storm. Imagine that untrustworthy, questionable captain is the leader of your team. They're responsible for navigating your ship through the choppy waters of your industry, and the whole team rely on the captain to set the direction. Without trust, the crew will hesitate, the ship will flounder, and the team will be lost at sea.

This is why trust is so important in leadership. It's the foundation upon which everything else is built. Without trust, a leader is just a figurehead, floundering in the wind with no direction or purpose.

But trust is more than just a feeling or a belief. It's a tangible, measurable asset that can be built, nurtured, and leveraged for success. It has to be coupled with a culture of transparency and accountability. When a leader builds trust with their team, they create a powerful force that can weather any storm, overcome any obstacle, and achieve any goal.

Here is what the most trusted leader do:

  1. Be transparent: Transparency is the cornerstone of trust. Be open and honest with your team, even when it's difficult. Share information, admit mistakes, and be willing to listen to feedback.

  2. Follow through on commitments: When you make a promise, keep it. Be reliable and consistent in your actions and decisions, so your team knows they can count on you.

  3. Communicate openly: Communication is key to building trust. Listen to your team's concerns, encourage transparency, share your vision, and be willing to collaborate and compromise.

  4. Lead by example: Your actions speak louder than words. Set a positive example for your team by modeling the behavior you want to see.

We have every metric available to measure financial performance, but do you measure trust in your workplace? In a recent Gallup survey, only 21% of employees agree they trust the leader yet companies with high trust, perform significantly higher than those with low trust. The team at Grind Academy have real-world, practical experience developing high-performance teams and cultures. Reach out today to learn more.

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