Effective and trusted leadership drives performance
“Telling CEOs these days that leadership drives performance is a bit like saying that oxygen is necessary to breathe”, McKinsey says in Decoding Leadership: What Really Matters (The McKinsey Quarterly, 2015). McKinsey’s research has consistently shown that good leadership drives shareholder returns.
The opposite is true as well. The erosion of trust in leadership is one of the key factors of declining performance. When C-suite leadership does not earn the organisation’s trust, the business suffers.
Benefits of a trusted senior leadership team
“Inspiring leaders drive employees to be their best and do their best work each day, and trust is fundamental to inspirational leadership”, Forbes says in How Trust Accelerates Success.
1. Talent Retention
Employees who trust their leaders are highly engaged. High engagement results in high retention. When senior leaders are trusted, it is evidence of good relationships between C-suite and staff.
Trust and care provided by leaders create an emotionally safe place for innovation, an atmosphere where employees are not afraid to take risks and fail forward.
Trust enables organisational agility. The organisation is more open to change when employees trust that their leaders have their best interest in mind, and that they are safe through disruption and transition.
Trust accelerates success
“Trust begins with leadership. As leaders build an environment of trust, the values and positive impacts of trust ripple through their teams, and then through entire organizations”, Forbes says in How Trust Accelerates Success.
Lack of trust: leadership’s biggest barrier to success
A senior leader’s words and actions can make or break trust. Some actions may seem small to a senior leader but speak volumes to the staff.
Some examples are:
- Withholding information
- Retaliation for giving feedback
- Tolerating dishonesty
The simple act of a C-suite leader failing to share a piece of relevant information can influence trust levels between senior leadership and staff. “Without a specific reason not to share information, employees should be told everything”, Forbes says in How Leaders Build and Destroy Trust. "... there was universal agreement on the correlation between distrust and poor communication”.
The Forbes article stresses the importance of alignment between what C-suite leaders say and do. “Managers shouldn’t say they want honest feedback unless they really do. Have you ever tried telling your boss the bad news? Well, I did, and I’m still suffering the repercussions”, one employee shares.
What C-suite leaders choose to tolerate also affects employees’ perception of how much they can trust their leaders. When leaders choose to disregard dishonesty in a fellow C-suite leader or top performer, it sends a message to the staff, and trust is immediately broken.
When trust is broken, senior leadership’s ability to lead well is compromised.
Lack of trust results in low retention, in which staff don’t give their best to their work. This negatively affects the company’s ability to be agile in seasons of disruption and change. Mistrust also results in low innovation, a big barrier to achieving business goals.
Restoring and building trust is crucial
Restoring and building trust between the leadership team and employees is critical to drive talent retention, innovation, and agility.
Trust is the key ingredient for leadership teams to build good relationships with employees, and encourage openness. Trust increases engagement and healthy communication, leading to high performance.
In Why Trust in Leadership Leads to Better Performance, Forbes puts it simply: “People want to do their best for people they trust.”
A more engaged workforce is a more committed—and thus, high performing—workforce. When performance increases, innovation and results are likely to follow.
Build the foundation for leadership success: start with trust
Restoring and building trust in the leadership team is critical for an organisation’s performance. For businesses to ensure profit and growth in their future, trust needs to be top priority.
“Building trust takes time”, says Forbes.com. “But with a committed leadership team and clearly defined expectations, you can begin to build trust from the inside out”.
How C-suite leaders can build trust over time:
1. Develop relational leadership
When the C-suite leadership is relational, this inspires trust from staff. Trusted leaders increase talent retention, build organisational resilience in times of change, and enable learning agility and innovation.
A leader who is relational puts people before a task that needs to be done. Putting people over process creates an atmosphere of trust.
Relational leaders are humble
Relational C-suite recognise their role and responsibilities, which are to serve their people, rather than rule over them. Staff trust leaders who are humble, authentic, self-aware, and secure.
Relational leaders challenge and care
Relational C-suite leaders are tough-minded yet tender-hearted; both courageous in challenging their staff and caring deeply about their needs, their growth, their future.
Relational leaders resolve conflicts well
One key trait of being relational is the ability to resolve relational and people conflicts in a way that honours each person involved. This is an important skill in restoring and building trust.
2. Create a safe environment
Creating a safe work environment is not an HR’s responsibility—it is a C-suite imperative. Due to senior leaders’ position and authority in the organisation, their actions and words bear much weight in defining the work environment and its culture.
This is how C-suite leaders can make a work environment safe and inspire trust:
Model the behaviour the company desires
C-suite leaders are role models and advocates for desired behaviours to be adopted and embraced by the rest of the organisation.
Be consistent in words and actions
C-suite leaders need to walk the talk. When the organisation’s top leaders say one thing and do another, trust is lost. They are no longer credible, and the organisation’s reputation suffers.
“As one savvy executive put it: ‘If I can articulate my strengths and weaknesses to the organization, I believe that people come to understand me as a leader who has integrity, who is trustworthy, and who will trust them — because I haven't positioned myself as some perfect being with all the answers. I think that's very effective.’”
Senior leaders admitting their failures with honesty and vulnerability builds trust.
Speak honourably of every person
When a senior leader exhibits behaviors that may tear a person down, that erodes trust.
Correct staff in private to show that they are respected and cared for. Praise them in public to share the appreciation and affirm their value.
Practice transparency and open communication
Senior leaders can encourage honest feedback by starting with themselves—demonstrate what it means to share difficult truths, to have uncomfortable but necessary conversations to resolve issues. This sets the tone for courageous conversations and shows the power and importance of communication.
Good leaders build the business. Great leaders build trust. - SOPHIA NG, CHIEF, STRATEGY & MARKETING, ROHEI
When leaders focus on trust and relationships, the business reaps the benefits.