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Bankable Leadership
Happy People, Bottom-Line Results, and the Power to Deliver Both
By TASHA EURICH Greenleaf Book Group Press
Copyright © 2013 The Eurich Group, LLC
All rights reserved.
ISBN: 978-1-62634-019-0
CHAPTER 1
TRUST AND BE TRUSTED
My heart was pounding out of my chest. Had it really come to this?
In a windowless conference room, I sat across the table from Barry and Jim, two vice presidents in a small high-tech company. I waited in the uncomfortably long silence for someone to say something—anything. "So," Jim said, "is this our marriage counseling session?"
I sighed. This was going to be a tough meeting.
Six months ago, Barry's company had acquired a smaller organization where Jim worked and retained its finance department due to a proprietary technology. I was hired to conduct a strategy session with the combined teams to bring the members together, create a common vision, and drive business results.
Things had started off promisingly. Barry and Jim knew they had to work together—this had been drilled into their heads by their boss, the senior vice president of finance. It was large-scale change, and the only way it would work was if they—and their teams—cooperated. And the only way to partner effectively would be to trust one another.
Luckily, Jim and Barry seemed up to the challenge. They had known each other socially for many years and were thrilled at the prospect of working together. In the strategy session, they sat next to each other, and every time I glanced over at them, they'd be whispering like schoolchildren. I remember standing back and thinking, This is going to be a slam dunk.
But immediately after the session, the SVP of finance made the abrupt decision to reorganize the division and give Jim's team some of Barry's people. Jim assumed that the SVP had consulted Barry, though he hadn't. Barry felt blindsided. On top of that, the SVP's direction was lacking, without clear goals or details on exactly how the changes would be implemented.
Soon, I started hearing stories of an epic conflict between Barry and Jim. For at least a month, I figured that these were simply rumors: It couldn't have possibly gotten that bad.
But unfortunately, it had. Both teams had almost completely disintegrated. There was finger-pointing, gossip, and fear. Barry questioned the motive behind every little thing Jim did, and Jim did the same with Barry. Even worse, their teams were adopting the leaders' general distaste for each other.
What's more, both teams—and leaders—started to seriously question the competence of the other team. Unsurprisingly, when I spoke to the teams' internal customers, they complained of a decline in service and a general lack of effectiveness from both functions.
At that point, e-mail was the only way Barry and Jim would communicate with each other. Because of the medium's inherently ambiguous and inhuman nature, this just made things worse. Internal clients, confused about the roles of Barry's and Jim's teams, would often e-mail their questions to both men. Before considering who should respond, they'd each reply with their own thoughts on the issue, which usually differed. It perplexed clients and chipped steadily away at their remaining modicum of trust.
After a few more weeks, Barry and Jim would no longer communicate even by e-mail. This will not be their fate, I said to myself, undeterred. Not on my watch. It was my personal—if not slightly idealistic—mission to help them figure out a way to rebuild the trust they'd lost.
Each was happy to talk to me, but less so to talk to each other. "What about the strategy session?" I pleaded. "Things were good between you two, right?" Both said, almost word for word, "Things have taken a turn since then." Though both knew that the current situation was abysmal, each held back for a different reason. For Jim, it was fear that Barry wouldn't reciprocate. For Barry, it was cynicism that things would never change. It took more than one meeting to convince each of them that it was in their best interest to try to rebuild their trust.
After Jim's marriage counseling quip in that first meeting, Barry had been the first to break the ice. "My son told me he had a great time last night with your son."
Jim's face lit up. "Yes! He told me his last name—I had no idea that was your kid!" It turned out that their sons were in the same grade at the same school. All of a sudden, instead of being bitter adversaries, they were two parents talking about their kids. I noticed the shift and slowly steered us into a conversation about work.
We spent time comparing Jim's and Barry's versions of the events, identifying where they agreed, where they disagreed, and why each acted as he did. They gave each other feedback and asked questions. What had appeared to be nefarious motives and lapses in competence turned out to be true situational pressures—once we put this idea on the table, I could see each realizing, "Oh! That makes a lot of sense."
At the end of the meeting, both agreed to my challenge: to touch base by phone every workday and meet in person weekly. They vowed to be curious, to not assume negative motives, and to make decisions that would support each other's success. After that meeting, it wasn't smooth sailing every moment—they sheepishly admitted falling off the wagon for about three weeks, and it took an additional sit-down between the three of us to right the course after one particular event.
Though Barry's and Jim's trust level didn't immediately revert to where it had been before, the change was profound. They started making decisions after considering the other's perspective, not before. They approached each other after anxiety-provoking situations. And the two of them made it a point to walk around their teams' work areas together, laughing and talking, a development that had puzzled employees, at least at first. The tide had turned. All of a sudden, doing the work as one team seemed easier. It was Barry, Jim, and their teams against the world—not each other.
Barry recently told me that during all of this, he'd started to notice similar friction in two of his managers. He quickly set up and brokered a meeting between them. "How are you guys communicating with each other?" he asked.
"E-mail," they admitted.
"Well, let me say this based on personal experience," Barry replied, "it's nearly impossible to have critical conversations over e-mail." He proceeded to take them through the same process I had taken him through. It was confirmation that the learning had happened and the ripple effect had begun.
Think of someone in your life whom you trust completely. Take a moment to consider the reasons you trust them. What behaviors do you see that make you sure they're acting in your best interest? What do they do that makes you trust them? It's likely that they do things like keep confidences, tell the truth even when it's hard to hear, do what they say they'll do, and act in accordance with their principles.
Here's how I define trust: I can show you my true self and know that you won't take advantage of me. And although most of us know trust when we see it, it isn't commonplace in most organizations. Sometimes it's easiest to identify situations where trust isn't present because FEAR—the opposite of trust—prevails:
* Finger-pointing: Employees act territorial. The leader ends up playing referee for team squabbles.
* Energy wasted: Employees burn through energy worrying or positioning themselves to look good relative to peers.
* Anxiety about speaking up: Employees don't share their honest opinions. People can't speak truth to power.
* Rumors: Conspiracy theories are invented to explain the actions leaders take.
When FEAR is gone and trust is present, however, employees feel valued and are willing to go the extra mile. Team members don't waste energy worrying or being afraid, so they're happier and can devote more energy to the team's success.
Kurt Dirks, while assistant professor at Simon Fraser University, studied trust in the NCAA by looking at 355 players and coaches in thirty men's teams. Dirks measured players' trust in the coach before the team's conference schedule, then measured performance as the number of games each team won. Even after he statistically eliminated factors like the coach's experience and career record and the team's talent, he found that the players' trust in their coach accounted for a 7 percent winning advantage. The two teams with highest trust levels excelled—one was ranked first in the nation before the NCAA tournament and the other played for the national championship. The team with the lowest trust in its coach only won 10 percent of its games, and the coach was fired at the end of the season! Coincidence? I think not.
COMPETENCE AND MOTIVES
So how do the best coaches—and leaders—help their teams win? They build two types of trust: trust based on competence and trust based on motive. When you earn competence-based trust, others see you as competent and reliable—the first step toward being bankable. Earning competence-based trust means that your team believes in what you're doing.
When you earn motive-based trust, people believe you have positive intentions. With this type of trust, your team will support your vision because they believe you have their best interests at heart. They will follow you to the ends of the earth and give you the benefit of the doubt when you need it. Let's say you have to cut 10 percent of your budget. If you've earned motive-based trust, employees are more likely to accept the cuts rather than calling them out as evidence of your evil nature.
Both competence-based and motive-based trust can take years to build and one moment to destroy. Earning both types of trust isn't rocket science, but it requires a series of consistent and sometimes counterintuitive behaviors. Matt Twyman, a research fellow in the Psychology Department of University College London, and his team were the first to split trust into these two types. Using a sample of university students, they created an experiment to learn whom people trusted when presented with advice about risky activities like hang gliding or working in a mine. They found that students placed trust in advisors who demonstrated accuracy in past advice and with whom they shared values—like environmental responsibility, political activism, and morality—and to a lesser degree, physical characteristics. The first element, accuracy of past advice, has to do with competence. The second, shared values, has to do with the advisor's motives. (The third is less relevant to our discussion, but it might affect your dating life!)
Think of competence-based and motive-based trust as two vital organs in your body—your heart and your lungs, for example. Each is necessary, but neither will keep you alive on its own. Likewise, you need to earn both from your team. Let's learn how to do that.
BUILDING COMPETENCE-BASED TRUST
The most basic qualification for earning trust is competence. Your team members will trust you if they believe you know what you're doing. Leaders today might even supervise departments or functions in which they've never worked. For example, a chief financial officer might have a background in finance but oversee accounting, finance, real estate, and human resources. Whatever your role, your team must believe that you have the necessary skills for your position. This doesn't mean a CFO needs to complete a rotation in HR. It does mean that she needs to demonstrate an understanding of each function (and admit what she doesn't know—but we'll get to that in a moment).
Competence-based trust from (and among) your team encourages its members to operate at a higher level. In one study, Satyanarayana Parayitam of University of Massachusetts–Dartmouth and Robert Dooley of Oklahoma State University surveyed the top management teams of 109 US hospitals, including hospital administrators and physician executives (two groups that are not notorious for working well together). They found that when competence-based trust existed, teams actually made better strategic decisions.
Let's review a real-world example. In 1997, Andrew Lobo was in his first month as human capital planning director at Coca-Cola when he was tasked with introducing human capital management to the company's business leaders around the world. As he opened his first few workshops, the attendees' expressions seemed to suggest they were expecting a "normal" HR presentation.
So Andrew took a rather unexpected approach at the time. Instead of launching into HR, he spent forty-five minutes deconstructing the company's market capitalization. He reviewed the valuation of the company's tangible (plants, equipment, inventory, offices, etc.) and intangible assets (trademarks and goodwill) and then added them up, noting the difference between the company's market capitalization and its total assets. There was a $70 billion gap. "The remaining seventy billion dollars," he noted, "is the total of our customer contacts, our processes, and the knowledge, skills, and performance of our people. Let's say that twenty to thirty billion is the people piece. That's pretty important to our market capitalization, right? And probably worth spending some time to plan around?"
The business leaders agreed.
"Okay," Andrew said, "now let's talk about human capital planning."
Andrew had cracked the competence code. He quickly showed that he understood their goals and the things that were important to them. And that he could actually help them.
Let's look at two ways you can follow Andrew's lead and build competence-based trust among your team.
Assess and Develop Your Knowledge, Skills, and Abilities
As Andrew did, Bankable Leaders must identify the areas in which they need to be conversant. Typically, that means understanding how to speak the language of the disciplines that report to you or work with you. The goal is to demonstrate that you know what you're talking about, and therefore what they're talking about. I've worked with one successful senior executive for the last five years who's done this particularly well. She leads a highly technical function and is so conversant in her business that I was shocked to learn her educational background: political science!
How do you best develop your competence, both actual and perceived? First, make it a point to attend conferences and keep up to date on the latest in your profession. If you don't have a mentor, get one. You might also consider creating a dashboard of key personal indicators. This need not be a complicated exercise, and the indicators need not be numeric. Just pick four or five key measures you want to keep track of and review them monthly.
Always, Always, Always Follow Through
Competence-based trust is also an accumulation of satisfied promises. If you are not seen as someone who makes good on your word, you won't be seen as competent. Most leaders who don't follow through have good intentions; sometimes we don't even realize we've made a commitment. Once, as I was packing for a business trip, I complained to my husband that we had quite a lot of leaves in the yard. He nodded and said something like, "Oh, yes. I do need to rake them." I returned from my trip after a week and, much to my surprise, was greeted by the same pile of leaves. When I asked him about it, he looked at me quizzically and said, "I never said I'd do that! I just said I needed to!"
No one is right or wrong here. I had interpreted my husband's comment as a commitment and was disappointed when he didn't deliver. (Don't worry—our marriage survived the rest of this conversation quite nicely, thank you.) But just one missed commitment can be all it takes to erode trust.
Another reason leaders don't follow through is overcommitment. Take Greg Herr, a hospital radiology director who was appointed as the administrator of a newly acquired radiology practice in New Hampshire.
Shortly after the acquisition, Greg visited the practice, took a tour, and spoke to his new team. One of the sonographers showed him a broken doorstop in her ultrasound room. This was not a minor problem for her; she had to prop the door or hold it open with her backside every time she went through. Greg figured that a defective doorstop would be easy to address and said confidently, "Well, let's get that fixed!"
(Continues...)
Excerpted from Bankable Leadership by TASHA EURICH. Copyright © 2013 The Eurich Group, LLC. Excerpted by permission of Greenleaf Book Group Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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