This paper describes qualities of successful leaders who were highly regarded in their fields. My observations are based on 30 years of working in the corporate environment. My career spanned corporations ranging from Forbes 500 companies to family owned businesses. These leaders were known as visionaries in their company, in the community they lived in and by their peers. They inherently recognize that trust is a critical component to long term sustainable growth and consistently applied this principle. I found that organizations that had trust embedded in their culture could act quickly on decisions during periods of major changes.
There are a few characteristics that were visible from my experience. Each one had their own way of creating trust, but there are some commonalities in their behavior. I found that the visionary leaders shared of themselves, some by implementing company policies that impacted hundreds of employees and some in more subtle gestures. Through my personal experience, these people did this by: 1) aligning their actions with their words, 2) admitting to mistakes, and 3) exhibiting ethical behavior.
Aligning Actions and Words
Early in my career, I was privileged to work for Henry A. Walker, Jr., Chairman and Chief Executive Officer for Amfac, Inc., in Hawaii. Amfac, Inc. was a $2 billion company with operations in hotels, real estate, retail, and horticulture. Mr. Walker was a classic leader who gave great speeches. During his tenure at the helm, Amfac, Inc. acquired about 40 companies and became a major conglomerate listed on the New York Stock Exchange.
During a time when the standard work week was 40 hours, Mr. Walker implemented a 35 hour week at Amfac, Inc. He trusted the employees to produce the same level of productivity with less time. It was risky to cut the hours when the company was embarking on a growth campaign to diversify and build a conglomerate and expand. Amfac, Inc. was mainly an agricultural company to with roots in sugar, but grew to include hotels and resorts, horticulture, food and retail. The growth of the company during the 1970’s proved that Mr. Walker was right. Although the working hours were less, employees were motivated to get the work done in a faster more efficient manner. Such shift in the paradigm also set the tone for the employees to think differently. It created an environment for unique ideas to surface. Ultimately, employees themselves proactively began to make their own unique recommendations. It was a change that engendered trust in the employees. Mr. Walker’s belief that the employees were the greatest asset of the company lined up with his actions when he implemented the new policy.
The positive outcomes from his actions were three fold: 1) he created a trusting and safe environment for employees, 2) he capitalized on the brain trust of hundreds of employees for new ideas, and 3) his bold initiatives and company changes were supported during a period of critical growth.
As stated in Organizational Behavior, “Trust is a psychological state that exists when you agree to make yourself vulnerable to another because you have positive expectations about how things are going to turn out.” (Robbins and Judge, 2011) The downside of taking a risk like shortening a work week is lost productivity. Understanding the culture of the organization and what motivated his employees was a key factor that needed consideration when implementing a significant policy change. It was evident to the employees that he was taking actions based on the trust he had for them. In other words, his actions directly corresponded to his speeches. Consequently, an atmosphere conducive to taking the organization forward into new industries was present.
In another, entirely different situation, I was employed at SPC, a family owned business with assets of $200 million. The organization was made up of a large community of long term employees. The president of the company deceased after 30 years and his son who had recently moved from working on Wall Street as a lawyer took his father’s place. Employees were on edge about the change in leadership while mourning the loss of their beloved leader. They were also afraid of the potential change in culture strictly based on the differences in the family culture of Hawaii versus the culture of New York.
Over the next two years, the new CEO embarked on a restructuring campaign that included removing senior executives, closing out divisions and selling assets of the company. During this period, the communication felt detached and lacked compassion. Key employees were let go and executives were demoted. Reassurance from senior leadership was rare and questions were not adequately addressed. As a result, the morale dropped and the company suffered for it. The norm during this time was to keep quiet and remain hidden.
Mergers, divestitures of business lines and acquisitions make employees nervous and uncertain about their own future. These corporate activities conjured up images of massive layoffs as portrayed in the media. Leaders making changes without communicating intentions to build an atmosphere of trust will find resistance to new programs. Resistance to new changes and lower levels of participation are some of the negative consequences of mistrust.
As author, Daniel Goleman (1998) says in his book, Emotional Intelligence at Work, emotions are contagious. People were scared at SPI. The mistrust spread through the organization quickly. The employees relied on each other for moral support and it was the prevailing emotion during the restructuring.
Admit to mistakes
In Zimbardo’s prison experiment (Robbins and Judge, 2011) normal Stanford students with no pathology history were confined in a basement and took on the roles of prisoners and guards. Within a day, the guards took on superior roles acting more aggressive and cruel than they normally would have. They forced the prisoners to submit to severe dehumanizing treatment and stated that they could not control themselves. Zimbardo summarized that people quickly take on behaviors of new roles based on their past experiences, whether that is through family, school or other relationships. The BBC later conducted the same experiment under the scrutiny of the public with very different results. The guards in the BBC experiment did not take on aggressive personalities. It was thought that the behavior was different in the BBC experiment because the people knew they were being observed by millions of viewers and their behavior was being recorded and televised.
We can extrapolate from the Zimbardo experiment that new leaders will exhibit leadership styles learned from past role models. The results of the Stanford experiment, demonstrates that people in different roles act according to the way they perceive the role should be. When actions violate federal or state laws, external agencies or board of directors intervene to implement penalties.
In instances where mistakes do not violate the law, but are strictly bad judgment, frequently leaders will gloss over the infraction. In my experience, many leaders do not feel that they are in jeopardy for their mistakes. They rationalize their acts as necessary and appropriate under the circumstances. During the early stages of taking on leadership positions, leaders do not have the courage to offer apologies. A simple, “I’m sorry” or “I made a mistake” resonates with people as an act of humility, but their belief systems do not allow them to admit to mistakes as it equates to a sign of weakness.
Executives are frequently faced with difficult decisions that challenge their ethics. In doing so, there are forced to make decision that conflict with their values.
Before becoming a project manager, I was in a department that launched new projects for Kaiser Permanente (KP). The department itself was entrepreneurial and implemented businesses that were different from the core business of KP. Two years of hard work developing a business case to build a medical clinic catering to tourists only and seeking approval from numerous committees reached fruition in 2000. The concept was revolutionary for an organization focused on providing healthcare to people that purchased the Kaiser Health Plan only. The team spent hours developing a model that would be complementary to KP’s core mission while providing an extra stream of new revenue. There was much pride when the clinic was finally built and opened. The staff bonded and were dedicated to the success of the clinic. What excited the staff the most was the significant financial contribution the clinic was making to the organization.
After five years, the building lease was up for renewal. The approval of the regional president was needed for renewal. At that time, KP’s president was newly transferred from the California region. She had a firm belief that all activity should be geared towards enhancing the traditional members of the health plan insurance only. She was not supportive of the venture because it treated tourists only. Although the clinic contributed positively to the bottom line, she made a unilateral decision to not renew the lease. In the aftermath of her decision, 10 employees were let go or transferred. In her speeches the decision was glossed over. Employees knew that KP was financially struggling and needed the financial contribution of the clinic. This same pattern of making unilateral decisions began accumulating. As mishaps became more frequent, it was evident that she wasn’t being forthright. Within two years after the clinic was closed, she was removed from her position for mishandling crucial managerial decisions.
In her dissertation, Marie Legault (2009) studies the reasons some leaders remain ethical, while others succumb to pressures. She explains that leaders have limiting values during their developmental stages. In a table that describes this development, she lists the value of accountability, responsibility, and success as having the limiting belief of “do not make mistakes” when a leader is early in his or her career. The guiding value, however, as the leader matures is that “making a mistake is an important aspect of growth. The ability to be self-aware and recognize a mistake is in large part one of the keys to being a competent leader, which will create a bond of trust.
Be Ethical
How often are leaders seen breaking the bonds of trust? I have worked for leaders who take credit for ideas of their subordinates, tell lies for their personal benefit, or break promises. To my surprise, they have felt that their actions were justified.
Some leaders are willing to cross trust boundaries. How do they choose which are all right to cross? And which are not? I have seen people rationalizing their behavior even after harming another individual. This can be compared to telling “white lie” and justifying it as protecting the individual who is receiving the lie.
In 2008, I was offered a promotional opportunity for a director level job. I had worked at the company for 10 years, in progressively responsible positions and had excellent reviews. In a panel interview that consisted of six, including the chief financial officer (CFO) in Hawaii I received positive feedback. One person on panel told me that I was the only qualified candidate of the two people that were being considered. The other candidate was young, inexperienced and did not have supervisory experience. The job was at least three grade levels above her current position. A reliable source told me that reason she was interviewed, was because she was loyal to the outgoing CFO who was promoting several of his loyal followers as the last act before leaving. (Senior executive level jobs in Hawaii are often used as stepping stones to get to the corporate offices in California and tenure is short. In the last five years, there have been four CFOs and four presidents.)
I received a call from the hiring manager in Colorado letting me know that I was the most qualified candidate and that he is thinking of offering the job to me. There was one caveat. My fiancé was a Vice President in the medical group that provides services to Kaiser Permanente and that there was a possible conflict of interest. He asked me to clear this with the Compliance and Ethics departments.
I proceeded to do so and it immediately cleared at both the regional and national level. In my situation, it was fairly clear that he worked for a separate organization and could not me. My fiancé’s superior was also in agreement.
I was excited about the new job, but the phone call offering me the position never came. Instead, a month later, I was told that the position would be reposted to get a larger pool of candidates. The next time I heard from that manager in Colorado was a year later. The position was vacant for the year.
He was nervous and profusely apologized for not notifying me, but he was calling to let him know that the position was offered to someone in California who will be transferring to Hawaii. The reasons were never offered and promises to document the reason never came.
The new recruited director has now been in Hawaii for two years and it is well known that she is failing at the job. She has cried in front of executives because she isn’t able to perform her job duties, got in a fight with the company security guard and her staff has had 99% turnover.
The entire process was terribly disturbing, not only for me, but for employees that were privy to the entire situation. The hiring manager in Colorado made a decision due to political pressures from a higher level. There is no trust for that manager, the vice president in California and the former CFO, who is in California today. It is common knowledge that these people manipulated the situation .
As I reflect on the leadership in place during that time, there was a high level of mistrust due to the shifting of employees during that period of transition in the CFO. I was a victim of timing and negotiations to further his career in California.
Leaders make compromises every day, but leaders strongly grounded in their values are able to make ethical decisions in the face of adversity. Leadership principles are values translated into action. (George, Sims, McLean, Mayer, 2007) Unethical behavior as I described in my situation is not sustainable in the long run. Such behavior will eventually cause people to fail both by losing the faith of their employees and their peers.
Conclusion
Leaders are on stage at all times. Their actions are under constant scrutiny of the employees. The trustworthiness of the leader is a critical success factor when undertaking major initiatives. Incongruences between action and words are intolerable. Leaders with long term strategic goals achieve them efficiently by enculturing trust into their organizations. A trusting culture frees people to point out problems in its early stages, therefore, giving leaders a chance to take mitigating actions. Those that have the network of strong ethical people in their circle will be able to take advantage of the strengths of others to achieve long term company objectives.
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