Building The Leadership Skills That Build Trust

Even one C-suite misstep, scandal or gaffe can send trust in a company south—and with it, share price. Here are the four most commonly missed critical success factors that enable executives to protect their reputations, and the company's along with them.

Recently large global communications firm Edelman released their annual Trust Barometer, a gauge of institutional reputation and credibility based on 36,000 survey responses from around the world. For senior-level managers concerned about the character and strength of their company, the results were both affirming and cautionary.

On the one hand, business is the most trusted institution, ahead of Non-Governmental Organizations at 59%, government at 52% and media at only 50%. On the other hand, across every single issue (such as climate change, cyber-attacks, and immigration), by a significant margin, people want even more business engagement.

Trust is cherished but delicate. Often, when trust wavers, it is at the hands of individual actors. A scan of recent headlines proves the point—outgoing Starbucks CEO Howard Schultz’s narrow response to worker strife, bumpy Volkswagen CEO Herbert Diess stepping down following a series of missteps and scandals, and bizarre Beyond Meat’s COO Douglas Ramsey’s embarrassing resignation after biting another man’s nose!

These missteps happen at the highest level, they come on quickly and evolve in unpredictable ways. The key to heading off a would-be crisis in trust is preparation in solid leadership practices. Based on experience working with senior-level leaders, here are four commonly missed critical success factors that can aid executives looking to enhance and protect their reputation while developing solid leadership skills:

• Develop keen self-awareness. Following guidelines, taking charge, owning problems, and maintaining respect are certainly key ingredients to reacting responsibly and ethically to a company challenge. But those skills are secondary to a leader who has also developed the skill of self-awareness. Without it, it is nearly impossible for a leader to successfully or authentically execute strategy, engender respect, or inspire ethical decision-making, especially if everyone is mentally rolling their eyes every time he or she leaves the room because they lack it.  In a nutshell, blind spots can derail good leaders. Effective leaders know how to accurately “read a room” and respond accurately and quickly.

• Engage in applied learning. According to a 2018 study in the Journal of Research in Innovative Teaching & Learning, MBA students gained significantly more knowledge (post-test minus pre-test scores)—45 percent higher—through participation in real-world exercises versus a control group. At Pepperdine, executives learn through an applied learning methodology throughout the curriculum including an Applied Strategic Research Project (ASRP) capstone using their own organization as the basis of study. They also have opportunities to partner with companies to provide “hands-on,” real-world application of course content. Companies can take a lesson from executive MBA experience: Applied learning is superior to hypothetical cases or theories. Executive learners who experience this applied dynamic from trainers who are experience tested, tend to put new skills to work quickly.

• Establish one-on-one mentors to build confidence and real-world application. Having an individual mentor is known to improve skills, expand options, boost morale and help workers take action. For example, each of Pepperdine’s Executive Programs (EMBA, Presidents and Key Executives, and Master of Science in Organization Development) are built around the unique feature of providing ongoing executive coaching and mentoring for each student throughout the program. Hand-picked successful global executives who are graduates of the Pepperdine EMBA program, partner with faculty to help individual students and teams quickly apply what they are learning. The process takes learning from the classroom to the conference room on the same day.

• Learn and lead ethically. Media headlines have long shown that ethical gray areas are rife with peril. When problems without clear guidelines escalate from the individual into the company’s corporate culture, it can be fatal. Exactly 20 years ago accounting firm Arthur Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. Faulty auditing practices were found to have taken place with other clients including Sunbeam and WorldCom (the largest-ever bankruptcy up to that time). Although the Supreme Court vindicated the firm of wrongdoing in the Enron case, the prolific unethical actions of multiple executives ultimately wrecked the company.

It is a cautionary tale. Had senior executives engaged in training to head off this unethical behavior, Arthur Andersen might still be a company today. In order to survive and thrive, senior executives should experience and test skills through a curriculum of real-life dilemmas, role-playing, discussion and rehearsal.

Education for executives that embeds the broader ethical application of key content areas from Finance to Marketing to Strategy is necessary for the nuanced leadership skills needed in today’s complex business environment. Corporate Social Responsibility (CSR), Triple Bottom Line or Environment, Social, Governance (ESG) measures are becoming increasingly important to both customers and employees. The right approach to training can help executives take on the dual roles of ethical business growth and bottom-line success.


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