Leadership BS: Fixing Workplaces and Careers One Truth at a Time by Jeffrey Pfeffer

Author:Jeffrey Pfeffer [Pfeffer, Jeffrey]
Language: eng
Format: epub, mobi
ISBN: 9780062383143
Publisher: HarperBusiness
Published: 0101-01-01T00:00:00+00:00

WHAT DO WE KNOW ABOUT TRUST?

Although many commentators on leadership consider trust to be essential for social and economic organization, few contemporary leaders garner much trust. Consider some representative data. The 2013 Edelman Trust Barometer, based on surveys conducted all over the world, reported that fewer than one in five respondents believed that government or business leaders would actually tell the truth when confronted with a difficult issue.4 The 2014 index reported that trust in CEOs remained below 50 percent worldwide.

Maritz, a company that does customer and employee research and polling, reported in 2011 that only 14 percent of Americans believed their company’s leaders were ethical and honest, while just 10 percent of those polled trusted management to make the right decisions in times of uncertainty. That same poll uncovered that just 7 percent of employees believed that their senior management’s actions were completely consistent with their pronouncements.5 These are not exceptions found by lots of digging using online searches. Any search for data on trust in leadership reveals that such trust is generally lacking, and if there are trends, they are mostly in the wrong direction, down not up, except for some recovery from the nadir of the 2007–2008 financial crisis. So it cannot be true that trust is necessary for organizations to function, because numerous organizations are operating even though trust in leaders is in short supply.

Roderick Kramer, a business school professor, has studied and written about trust for decades. In an insightful article, Kramer makes the following important points: First because trust is essential for human survival, it is hardwired into us so that in many cases we are predisposed to trust too much and the wrong people. Second, we are likely to trust those who are similar to us, something that the Edelman surveys also confirm. Third, and most important, our ability to accurately discern who is taking advantage of us is remarkably poor. Kramer cites the case of Bernie Madoff and his $65 billion Ponzi scheme as just one example of the many instances in which massive frauds have been perpetrated even on seemingly sophisticated, well-connected individuals. Kramer also lists just a small but nonetheless extensive selection of the numerous business frauds perpetrated over the decades, ranging from false claims of automobile safety (including the Pinto, the Ford model with the exploding gas tank, and the Chevrolet Corvair, the subject of Ralph Nader’s pathbreaking book Unsafe at Any Speed) to the AIG insurance group’s financial collapse from uncontrolled gambling on financial derivatives.

In his article, Kramer details the reasons why people are frequently unable to spot untrustworthy people or situations. Those reasons include the tendency to see what we want or expect to see (sometimes called confirmation bias); an illusion of personal invulnerability in which we underestimate the likelihood of bad things happening to us; a related illusion of unrealistic optimism; a tendency to believe that we are above average in our abilities (the above-average effect), which also applies to our perception of being above average

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