Feigned Outrage: Evidence of Leadership Crisis

Edward Liddy, CEO, AIG

Edward Liddy, CEO, AIG

Trust is so low in America that it’s hard to trust whether or not the outrage of politicians over the AIG bonuses can be trusted. 

I’m thinking the one leader emerging through this whole ordeal is Edward Liddy, AIG’s CEO. 

At least Mr. Liddy is standing up and trying to explain the complexity of his task to save AIG so that we, the taxpayers, have a shot at getting our money back.  I appreciate his courage, candor and patience in explaining both the importance of retaining key talent to ensure success and for protecting the identities of those who received the bonuses.  This is the beginning of the trust-building process.  I believe that Liddy is off to a good start and I hope he will stay the course. 

Maybe I’m too cynical, but I thought all the politicians racing to microphones claiming “outrage” over the AIG bonuses looked ridiculous.  It appeared they were running for cover after failing to lead, past and present.   

Restoring trust must be the top priority of every leader today.  Whether you lead a large multi-national firm or a local civic group, being trustworthy is what your constituency needs from you.  Make no mistake, building trust will take a long time, but you can conduct yourself and the affairs of your organization to not destroy trust.  So, let’s start with building on the trust account we currently have and commit to avoiding those actions that diminish it.

Here are five key things that will destroy trust quickly…

1.  Spin.  There are times and situations when leadership can’t disclose all the facts, but they can at least be authentic in stating that that is the case.  Authenticity in communication is about word choice, tone and good ole’ forthrightness about the state of things.  Give people the benefit of the doubt whenever you can.  You might be surprised how well they can deal with truth and reality.  Important information withheld leads to the kind of questons we are now witnessing in Washington; who knew about those bonuses and when did they know it?  

2.  Lack of Accountability.  Accepting responsibility for a problem is of little value if followed by a qualifiying statement.  For example, to say, “I am responsible” and qualify it with, “but, I didn’t cause the problem” is disingenuous.  This comes across as calculating and does little to nothing for building confidence in the constituency.

3.  Broken Promises.  Max DePree put it best when he called for leaders to ask themselves, “What will I promise to this organization and am I going to keep my promises?”  Leaders ought to promise to manage their organizations with integrity, demonstrate competent decision-making, and always put the well-being of that organization ahead of their own personal interests. 

Make sure you listen to my interview with Max…click the Free Audio Interview in the top right corner of this page for more on this topic.

4.  Failure to Eliminate Things.  Leaders are responsible for making sure the organization is agile and has the resources required to survive and innovate.  We are learning during this economic crisis that resources are limited.  Therefore, leaders must abandon those products, services, and processes that are non-productive, ineffective and outdated.

5.  Dishonesty.  Just tell the truth.  When leaders lie it makes the heart of the people sick.  Better to speak truth in the present, no matter how painful, than to lie and be found out in the future.  People are much more forgiving of a lie than they are of intentional deception. 

Much more can be said about how trust is lost and its impact on our future.  Consider these five things a teaser and share your thoughts in the comment section below.  Your contribution is important and would be valued by me and those who read this blog. 

What do you think leaders should be doing, or not doing, to build trust in these uncertain times?

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03-19-09

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