In the last few years, a lot of training has gone into people management and organisational development. Models and tools have been developed to measure performance and considerable investment was channelled into change management. Sophisticated and expensive systems have been introduced to keep track of costs and maximise revenue.
This approach to management seemed to give results, provided that demand remained sufficiently high. For a relatively long period of time, at least in the developed world, we experienced sustained growth, low unemployment and a high degree of social well-being.
However, the financial crises and global economic recession have changed all this. What was once the bulwark of the market economy, the credit system and its operators – the financial institutions – lost credibility. People all over the world could not comprehend such a let-down. The distrust and insecurity that arose brought demand down to unprecedented levels and the shock to peoples’ trust was simply too great to bear.
No amount of rhetoric could have stopped the meltdown that has been witnessed in the last few months, with the only alternative seeming to be the infusion of billions into the banking system to halt the free fall of the major economies. Never in recorded history has there been a situation where such a high monetary cost has had to be paid for the lack of trust being experienced.
And so, while for many years organisational development and people management focused on skills, techniques, technologies and academic qualification, once this trust was gone, these factors could do very little to stimulate demand. Every time people are let down, they trust a little less. They just do not bounce back as quickly. And this has resulted in demand plummeting, unemployment rising and living standards falling.
Companies have been compelled to take stock and implement measures that would, at worst, ensure their survival and at best enable them to compete. Often, in such situations, companies tend to cut deep only to realise, albeit too late, that the very measures they have introduced to help them cope with the situation have, in fact, eroded their competitive edge and placed their organisation in a vulnerable position. Fortunately for us in Malta, leaders of industry here took a more cautious approach while unions rambled on without much ado.
Nevertheless, the situation called for, and still does, measures that go beyond the typical operational pruning and organisational re-structuring. The measures need to facilitate genuine reconciliation between the expectations and dilemmas facing the various stakeholders of the organisation, the shareholders, the customers, the employees and the community. This calls for more than just competence, it calls for the building of trust. People want leaders, even business leaders, that they can truly trust, leaders who deliver and who have a track record of delivering.
Trust is not a soft option but rather a hard one. Trust is about character as much as competence. The new leaders are those who are credible – and credibility is built over time. When you have it, it is a force to be reckoned with, a force that yields prosperity and well-being. However, this force needs to be nurtured, sustained and maintained continuously.
In their efforts to re-build trust, shareholders, clients, employees and citizens alike will thoroughly analyse the character of the chairperson, the CEO, the manager and the sales person and will look for congruence in behaviour and courage. They will check the intent and values of the leader. They are not interested in what the leader knows, they just want to know that he or she cares. Competence, as opposed to qualifications, will be the measure that people will increasingly use before they trust again.
People expect business leaders to deliver, in terms of quality, value for money, return on investment, good conditions of work, respect for the environment and their corporate social responsibility. People will increasingly hold business leaders accountable for these functions. Post-recession business leaders will be dealing with a much more intelligent and demanding public, and rightly so.
In this scenario, the search is now on for leaders who are trustworthy because they are credible, leaders who, on the one hand are able to reduce bureaucracy, redundant systems and time wasters and, on the other hand, enhance innovation, improve collaboration, stronger partnering and accelerated growth. A trusting environment produces efficiency, teamwork and the speed to deliver. This is what gets results.
It is a tall order that calls for leadership that is visionary and pragmatic, inspiring and enabling, catalyst and servant. We are looking at a new breed of leaders who defy previous stereotypes and who are able to feel comfortable with complex situations, communicate in simple terms, integrate various approaches, trust their co-drives in business and serve well.
Kim Burke, former chairman and CEO of Johnson and Johnson said: “You cannot have success without trust. The word ‘trust’ embodies almost everything you can strive for that will help you to succeed. You tell me any human relationship that worked without trust, whether it is a marriage or a friendship or a social interaction; in the long run, the same thing is true about business, especially businesses that deal with the public.”
Therefore, transcending values like trust and credibility will literally translate into revenue, profits and prosperity. The ability to trust and be trusted is fast becoming the key leadership value and competence for successful business wherever this is being conducted.
Joe Gerada is the chief executive officer of the Foundation for Human Resources Development and has a track record of over 20 years in senior management positions both in the private and public sectors. He is one of the speakers at the conference on 16 October, where he will discuss ways in which credibility is built and how this translates into a strategic tool for business.
For details of the conference go to www.frhd.org/conf09regform.html, www.fhrd.org/programme.pdf or www.fhrd.org