An article published by Charles Green in Forbes magazine seven years ago, still resonates and even more strongly today.
Leadership theorists nowadays stress authenticity, emotional intelligence and relationships. This makes intuitive sense. But it isn’t just a fad; there is a solid reason behind the shift. It is driven by changes in the world. Above all, it reflects the growing importance of trust.
Old Leadership: Old Business
Leadership used to be about leaders: the powerful people who had reached the top of their organizations. The rules of business were clear: the essence of business was competition. Shareholder value was the main goal, as well as the main measure. Scale economies dictated being number one or two in your markets.
The leadership imperatives were equally clear: Leaders were scarce and special; followers were many and common. Leadership was a vertical function, related to power. Horizontal relationships related to markets and contracts, and were the purview of strategy, not leadership. The old leadership model implied scouring the organization for “high-potential” leaders of the future and a cult of personality. This made good sense in a vertical, siloed, competitive business world.
New Business: New Leadership
Then things changed. The business world went from vertical to horizontal; flat, if you prefer. Or virtual. Business processes can be sliced and diced, reconfigured, contracted out. Businesses have become constantly morphing configurations of modular pieces. The boundaries separating them from their employees, their suppliers, and even their competitors have become porous; while the ties to their home nations, even to space and time, have become tenuous.
In such a world, vertical power-based leadership becomes less relevant. The key success factor becomes the ability to persuade someone over whom you have no power to collaborate with you in pursuit of a common mission. Leaders can no longer trust in power; instead, they rely on the power of trust.
New Leaders
Those who can successfully persuade others to trust them will evidence certain behaviours. They themselves will be skilled at trusting, because trusting and trustworthiness enhance each other. They will be good at collaboration and the tools of influence. They will operate from a clear set of values and principles, because opportunistic or selfish motives are clearly seen and rejected. They are likely to be more intrinsically than extrinsically motivated, and more likely to use intrinsic motivations with others. They will not be dependent on direct authority or political power.
In short, leaders in the new business world will be skilled at the art and science of trust.
Leading From Trust
Leadership development is not dead, but it does need reformulating. The scale is different, for one thing; the new world needs many more leadership-capable people than did the old world. And the teaching of trust needs to be defined. Three points in particular are key.
Trusting and Trustworthiness
We too often talk about “trust” as if it were a singular thing; it’s not. Trust is a relationship established between a trustor and a trustee. It takes two to tango, and two to trust (this is true not only of interpersonal trust, but of trust between people and institutions).
The role of the trustor is to take risks; the role of the trustee is to be trustworthy. When each is good enough at their roles, a state of trust results. If either party falls down on the job, trust will disappear. Finally, trust involves a frequent exchange of the two roles; if one party seeks only to be trusted but never to trust, the other eventually will stop taking all the risks and shut down the relationship. This simple distinction is key to leadership development. Simply analyzing a state of trust doesn’t enable anyone to do anything. Leaders must be taught both how to trust, and how to be trusted.
Virtues and Values
Leadership development must begin using a vocabulary that’s been absent for half a century – the language of “virtues.” We have gotten accustomed to “values,” because those are easily described in organizational terms like “alignment.” We are less comfortable using words that sound moralistic, or judgmental – we fear being politically incorrect. Yet “virtue” is the right word. Virtue is to the individual what values are to the organization: a personally-chosen, consistent set of principles, reflective of the person’s character. Aristotle saw ethics, virtue, character and excellence as intrinsically intertwined. We praise those we admire as exhibiting virtues. In a diffuse, horizontal world, virtue is a leadership trait that matters.
Risk
Notwithstanding Ronald Reagan’s attempt to combine trust and verification, there simply is no trust without risk. Trust without risk is an oxymoron. If you’re verifying, you’re not trusting. At the same time, trust is much more than card-counting, or doing clever probabilistic analyses of the odds.
The trust-based leader does manage risk, to be sure. But it’s relationship risk, long-term risk, not short-term or transactional risk. Managing relationship risk is less about analytics, and more about forging bonds with others. Sending a leader into today’s world armed with only the vertical, power-based skills of the past is like sending a Civil War soldier into modern battle. The leadership weapon of the future is trust – a change so profound that it invalidates the “weapon” metaphor itself. Winning with trust is different; it’s not a zero-sum game. We all benefit from it.
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