How CEOs Build Company-Wide Results

By Allen Pratt, Member, Executive Leadership Alliance International

“Remember teamwork begins by building trust. And the only way to do that is to overcome our need for invulnerability.” ― Patrick Lencioni, The Five Dysfunctions of a Team: A Leadership Fable.

In his first book, The Five Temptations of a CEO, Lencioni identifies the fifth temptation as invulnerability. “The need to maintain an air of invulnerability among the people we lead is natural – but deceptively dangerous. The old adage, “don’t let them see you sweat” may be appropriate for actors or salespeople, but for leaders it is a problem. This hampers our ability to build trust among our people. Employees want to see their leaders as human beings, so that they can be comfortable being human. In organizations where a CEO is never wrong and never weak, employees emulate that behavior. The result is a never-ending posturing exercise, where real dialogue and decision-making die.

Leaders who are open to being wrong, to being weak, to being honest about their shortcomings build rapport with their people. They eliminate much of the politics and butt-covering that exists in many companies where blood in the water means death.”

I’ve seen first-hand how a CEOs need for invulnerability can lead to mistrust among his/her staff and throughout the organization. Over time, the organizations results are limited and the CEO eventually fails to reach his/her full potential. Begging the question, how does a CEO build trust? According to Lencioni, first, acknowledge your own weaknesses and mistakes and second, allow direct reports to see your human side. I do like Lencioni’s encouragement but if you haven’t read his book, this may not be enough to get started. Let’s go deeper to discover how a CEO builds company-wide trust in an organization.

Michael Hyatt has created a list of thirteen behaviors of high-trust leaders:

“I approach this strategy primarily as a practitioner, both in my own experience and in my extensive work with other organizations. Throughout this learning process, I have identified 13 common behaviors of trusted leaders around the world that build—and allow you to maintain—trust. When you adopt these ways of behaving, it’s like making deposits into a “trust account” of another party.”

Allow me to share my experience-based observations expanding on this list of thirteen.

1. Talk Straight. Be true in your words. Open and honest communication with all employees is a good start. Don’t tell employees that the company is not for sale when the CEO is directly involved with the negotiations at the time. Do share honestly the company’s market position and upcoming prospects so they can make an informed decision. Will they stay and help the company fight to recover lost ground or move on to another opportunity? Either decision is healthier for the company in the long term.

2. Demonstrate Respect. Mutual trust and respect is a stronger basis for a CEO to operate from. Employees want to be respected and will respond favorably when they know the CEO respects their value. If the CEO fails to respect the company or the employees, he/she must immediately leave the firm.

3. Create Transparency. Not every company is in a position to reveal all financial information but the CEO can find operational metrics that tell the employees how well the company is doing. While earnings are the CEO’s number one priority, translate the health of the company in terms that can be shared with employees to inspire a unified effort to maximize the performance for all stake holders.

4. Right Wrongs. Be sensitive to wrong decisions from the past. I’m not ready to right every wrong from the start, but the CEO must be aware of those wrongs and work to correct any issue that is an obstacle to organizational performance improvement.

5. Show Loyalty. Be the first to demonstrate loyalty to the company. If the CEO expects loyalty from employees, then he/she must be willing to show loyalty too. Too many companies allow internal disputes to distract from outside competition. Be loyal within the company and focus the organization’s attention on the enemy outside the company.

6. Deliver Results. Everyone wants to be part of a winning team. Focusing the organizations attention on results with performance improvement methods will create the win.

7. Get Better. Employ a process of on-going improvement. Seek out a professional who has a track record of creating performance improvement in an organization that’s a living process. Find someone with the energy to start over when one initiative is in place and the company is ready to tackle the next biggest issue.

8. Confront Reality. Don’t hide from bad information or avoid unpleasant issues. Attack the process, not the people is a good mantra but when changing personnel is the obvious answer, take action without delay.

9. Clarify Expectation. Over communicate individual roles, company vision and mission. Be the flag bearer, so the entire organization knows where the company is headed, why and how fast it needs to move. See questions as teaching moments and an opportunity to remind the organization about expectations.

10. Practice Accountability. Trust leads to constructive conflict and an openness to conflict leads to improvement accountability. With trust and clear expectations, individuals will find their role better defined.

11. Listen First. Steven R. Covey once wrote, “Seek first to understand and then to be understood.” Interview key employees and engage others in conversations with the intent to understand what’s important to them. This is an effective method for newly arrived CEOs and tenured CEOs alike. Walk around to hear and see the organization. Be available and approachable, so employees can express their concerns about how to improve the company.

12. Keep Commitments. Stay true to promises made. This assumes that the CEO doesn’t make promises he/she can’t keep. Be prudent with commitments, write it down and make sure you keep your word.

13. Extend Trust. Be open to vulnerability. This may be the hardest for many CEOs. Clearly, the organization can take advantage of the CEO when the company’s history has been unhealthy. A good CEO will know the limits but he/she will also know where to extend trust that will help the company to find a course for improvement.

A CEO has the responsibility to influence others. The job of a leader CEO is to go first, to extend trust first. The best leaders lead with a decided propensity to trust. As Craig Weatherup, former CEO of PepsiCo said, “Trust cannot become a performance multiplier unless the leader is prepared to go first.” The best CEOs recognize that trust impacts us every day throughout the year. Live trust every day and build company-wide results into the organization.

NOTE: This article first appeared on on February 26, 2012. It appears here by permission of Allen Pratt.

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