Maggie Walsh, Ph.D., leads Forum Corporation’s leadership development practice.
In January, the 2011 Edelman Trust Barometer — an annual global survey of trust in institutions — showed that the percentage of Americans who trust U.S. businesses dropped from 54% to 46%. While it may not be a sharp decline, it’s alarming because citizens are raising concerns and doubts about their nation’s leadership and the direction in which the country is heading. As anyone who has been following the Occupy Wall Street movement should suspect, that’s not the worst of it.
A recent ABC News/Washington Post poll found that the number of Americans who have unfavorable views of Wall Street (70%) is actually greater than those with negative views toward the government (68%). Wall Street seems to be pulling the entire business community down with it.
Why? For the past few years, the U.S. economy has been torpid, producing numerous financial woes such as Bank of America’s layoffs amid the global economic crisis. People have been out of jobs and worried about their finances. What we haven’t seen during these times is effective leadership.
There are lots of characteristics — such as creating strong visions and fostering positive mentorship — that characterize strong leaders, but Americans haven’t been seeing those traits personified. In the wake of Occupy Wall Street, the U.S. has watched itself become even more stagnant.
America has been dormant because our leaders’ actions haven’t changed, and their choices haven’t been for a better society. Because Wall Street produces profits instead of products, it’s easier for citizens to become dissatisfied and question authority.
So what can be done?
A few years ago, Forum completed a study of 313 executives from companies in North America, Europe and Asia to examine leadership competencies. We found that leaders who implement effective growth strategies were able to relay clear strategies and excel in communicating compelling visions, while creating a well-functioning leadership team and building trust.
Wall Street leaders no doubt excel in these competencies (as evidenced by the stratospheric rise in profits prior to the Great Recession and in some cases since). But that’s not enough — we’ve also found that the following things are critically important (and, from the perspective of the Occupy Wall Street folks, may well be missing).
- Take ownership. Leaders must stand up and acknowledge the mistakes they make. They should simply say what went wrong, why it was incorrect and lessons learned. For example, when a 2007 JetBlue Airways flight sat on the tarmac at John F. Kennedy International Airport in New York for 10 hours because of weather delays, passengers became irate. The delay resurrected interest in a passenger’s bill of rights, but most effective was JetBlue’s CEO owning the mistake and apologizing to customers. Being authentic and honest is one of the best routes leaders can take.
- Make and keep promises. Start with small promises and keep them. Small promises are important because if you can’t keep them, you won’t have the opportunity to keep the big ones. Most of all, people won’t believe you.
- Engage employees. According to published reports, 74% of employees report that they are now less productive at work. This relates to anxiety and uncertainty in the workplace. A critical driver of employee productivity is climate, how it feels to work in a place and that determines how engaged you are in your work and in your organization. Employee engagement links to customer engagement and loyalty, and that’s why climate alone accounts for about one-third of business results, according to Daniel Goleman’s Harvard Business Review article “Leadership That Gets Results.” Here’s the key: Leaders mediate climate. Yes, they control the thermostat, and the heat (or cold) they produce radiates outside.
I’m not here to point fingers at Wall Street. It would be giving them far too much credit if we fail to recognize that what has and continues to happen with the global economy is the result of a much bigger, multi-faceted problem.
But let’s face it, no one on Wall Street took ownership for their contributions to this. We haven’t seen much in the arena of keeping small promises (remember the bonus scandal of 2009?), and yes, the Wall Street climate could be better (see Nina Godiwalla’s new book, “Suits,” for an insider’s look at the climate on Wall Street). Wall Street needs to own up, make and keep a few promises and create a work climate that cares. The best (and easiest) place to start is with employees because it will radiate.
Image credit: andipantz, via iStockPhoto.com