How naked leadership builds trust

Portrait of a tired young business man bored during meeting iStockphoto

(MoneyWatch) The stock price was falling; the business environment was turbulent. Analysts were critical. Yesterday's rising star had become today's football. If you've ever worked in a company going through a rocky time, you will know that the first thing to vanish is trust. The workforce no longer believes that management knows what it's doing, that the business plan still makes sense, that their investment of time will be rewarded. And as trust disintegrates, the company becomes dysfunctional and failure accelerates.

If you're a manger under these circumstances, what should you do?

Doug McCallum led eBay's European business in  2008 after the stock price fell from a high of $56 to around $10, analysts claimed the company had lost its ability to innovate and CEO Meg Whitman had stepped down. Last week speaking to a leadership forum sponsored by Purple Beach, McCallum talked about how the management team got through the crisis.

It wasn't, he said, rocket science, but simple things worked. What he and his team did was this:

-- Weekly video conference with every employee across the business. It was important that they had to come together physically for this event. Just being in the same room helped to build a sense of solidarity.

-- Reiterating the plan and progress. That this was often repetitive was fine: it signaled that things weren't changing, which also implied they weren't getting worse.

-- Unscripted Q&A. This was the most important thing the leadership team. By being willing to take and address unscripted questions while everyone was watching, the leaders signaled that they were open, that they were hiding nothing and that they were confident enough to be challenged. Devoid of script, props, rules, they stood naked before their employees and rebuilt their trust.

I was struck that what McCallum said was pretty obvious and straightforward -- but still needed to be said. That it was not rocket science was, of course, why it worked.

I wonder how many leaders dare emulate their example.

  • Margaret Heffernan On Twitter»

    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com.

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