The (R)evolution of Trust-based Leadership

It’s been (gulp) more than 20 years since I got my MBA.

At the time, just before the turn of this century, Gordon Gekko’s fictional speech in the movie Wall Street that “Greed is Good” resonated. Icons like Jack Welch, Michael Eisner, Albert (“Chainsaw Al”) Dunlap, and Lou Gerstner were heralded for their ruthless commitment to corporate profitability. “Cash is king” was the watchword of the time, and “corporate value” usually meant the value of a company’s stock. Trust rarely came up as a topic.

Today, business schools commonly have courses, if not whole curricula, dedicated to the topic of leadership, with trust being a core element. An internet search for “trust in business” returned almost two billion results, and a search on the same phrase in Amazon Books returned over 8,000 results. To say trust-based leadership is a current topic is a gross understatement.

So what changed?

Trust Didn’t Change

The dynamics of trust are the same. Trust is personal: it occurs when one person takes the risk of trusting someone, and that person proves themselves trustworthy.

Our core models for trustworthiness and building trust – the Trust Equation, the ELFEC process, and the Trust Principles – have evolved, but the fundamentals, and the dynamics between trustor and trustee, are unchanged.

That’s hardly surprising. Trust is a fundamental human relationship that’s been around since well before the written word.

The World Changed

Back then, cellular phones were still a rarity, and the internet was only just catching on. Google was a brand-new company, Bluetooth and HDTV were just barely commercially available, and Mark Zuckerberg was in middle school. We got our information primarily from print newspapers and on-air newscasts.

Technology, and the easy access to information it provided, catapulted us into the 21st century. The internet changed the way we do almost everything. Smart phones are ubiquitous, and news of events is practically instantaneous. Climate change went from a political debate to a grim reality, and social issues are in the spotlight.

In particular, the business world is now:

  • Flatter – more horizontally linked, less vertically integrated
  • More inter-connected – global teams and globally-available resources
  • More technological – IOT, AI, machine learning, smart devices
  • More collaborative ­– ecosystems, innovation networks, supply chain integration
  • More transparent – social media, business intelligence, digital everything
  • More networked – a competitor in one deal is a partner in another
  • More values-based – social responsibility, sustainability, corporate culture

Leadership Changed

Old-school “leadership” was a one-size-fits-all approach to getting things done. Founded in command-and-control corporate models, it dictated that the role of the leader was to set corporate direction, which relegated everyone else to carrying out orders. This approach emphasized the mentality that leadership is done the same way, all the time, and by only a very few people.

Today, just as everyone is a salesperson and everyone is in customer service – so too everyone is a leader.

That’s not corporate double-speak; it has meaning. Dictating execution of strategy from the top down worked in an industrialized economy, but the flatter organizations of today distribute the responsibility of executing strategy throughout the organization.

In this new environment, leadership also is about more than just strategy execution. Gallup’s latest State of the American Workplace Report finds that “employees who are supervised by highly engaged managers are 59% more likely to be engaged than those supervised by actively disengaged managers.”

The role of leading is no longer reserved exclusively for those at the top of the organization chart.

The leadership skills of today are persuasion, influence, collaboration, the ability to create alliances, to join forces, to create environments that encourage collaboration, the ability to play nicely together in the sandbox, to forge agreements, and to play long-term win-win rather than screw-your-customer to jack up the quarterly numbers.

Leadership Skills are Trust Skills

Those skills are trust skills. We don’t need fierce competitors; we need fierce collaborators. We don’t need to ‘win one for the Gipper;’ we need to win one for all of us. We don’t need vertical skills; we need horizontal skills.

Certain leadership skills are constant: the ability to inspire, to create and articulate visions and stories, for example. But others have been replaced. Being good at vicious infighting to gain the top job is – on balance, in most companies – a lot more dysfunctional these days than valuable. Making “tough decisions” isn’t the virtue it used to be; sometimes it just reflects a failure of imagination.

Today organizations are less about being led and more about cultures that foster leadership throughout. Such cultures are driven by what we call Virtues and Values.

New leadership requires versatility and depends more on influence and collaboration than hierarchical authority and procedures. And that requires trust.

Are you ready to be a trust-based leader?