Skip to contentSkip to navigation

Putting Credibility First

Before embarking on transformations, executives must establish trust with employees. Following this three-step process will help.

I sat in the conference room with poor lighting and industrial carpeting as a healthcare executive began to speak. “This is not an important initiative you are working on,” he said, followed by a dramatic pause, “it is the most important initiative this company is working on.”

He was right — the business did not have scale in an industry where scale is necessary to survive. But when I looked around the room I saw mostly blank, unenthusiastic faces. As I walked into the hallway after the meeting, I heard people jokingly repeat “the most important initiative” to one another. When I asked a team member why people didn’t take the phrase seriously, I received a telling response: “I’ve heard him say that three times for three different initiatives in the past year.”

Because the well-intentioned executive had lost credibility with his teams, even logical and necessary proposals were met with skepticism and resistance. Which highlights an important reality: People will not believe a message that presses the case for change if they don’t believe the messenger.

That’s the bad news. The good news? Three steps can give executives a greater chance at success. To build a transformation that people will enthusiastically support, leaders should (1) identify and understand personal values; (2) align those values with the transformational goals; and (3) identify actions to model those values to the organization. We call this a “credibility first” transformation.

Personal Values

Although many leaders may think they know their personal values, an honest assessment of them should be the starting point of transformation efforts.

Although many leaders may think they know their personal values, an honest assessment of them should be the starting point of transformation efforts.

In the enduring classic Built to Last, Jim Collins and Jerry Porras define personal values as a north star, inherent and unmoving. Personal values describe what is important to leaders, guide daily actions, and help prioritize tough trade-offs.

One way to understand values is to understand the activities that take up most of a leader’s time. So record your time and activities for one week. For, example, if you value helping others succeed, the record should show time spent in coaching and mentoring. If you spend the majority of your time in meetings, collaboration and consensus may be important to you.

Stephen Covey’s 7 Habits of Highly Effective People famously described another exercise that can help you identify and understand your values. Consider your funeral, Covey wrote. What do you want your loved ones and colleagues to say about you?  Do you want to be known as a caring person, a great mentor, a savvy businessperson, or a bold decision maker? Your answers will reveal what is most important to you.

Looking to your past can help you identify values as well. Doing so helped John Hammergren lead a credibility-first transformation at medical supplies company McKesson.

Growing up, as he tagged along with his father, a medical supplies salesman, on sales trips, Hammergren learned that trust was the basis of successful sales relationships. This value served him well as he built his successful career in the healthcare industry, eventually joining McKesson in 1996.

In 1999, when McKesson became involved in an accounting scandal, the company was forced to restate (lower) three years of earnings and its stock plummeted 84 percent. Amid this turmoil, Hammergren became co-CEO. And he immediately put his values into action to transform the business. Mindful of his father’s experience, he went on the road and met personally with employees, suppliers, and customers in an effort to rebuild trust. The efforts helped restore the company’s value and put it back on a growth trajectory.

Ensuring Alignment

After they have a good handle on their own personal values, leaders have to consider whether they truly align with the transformation efforts. When values line up neatly with necessary, unavoidable transformation efforts, it can add momentum. When they don’t however, they can become a roadblock.

Take cost transformation, for example. A leader may pride him- or herself on personal efficiency, effectiveness, or, as Warren Buffett’s license plate reads, “THRIFT.” When they do so, leaders may naturally bring deeply held personal values to the transformation effort, and help people understand why it is needed.

In many cases, though, cost transformations are tough sells. Leaders may struggle with the personal consequences that come when layoffs are part of a cost reduction. It is important to go deeper into what the goals of the transformation are to see if values are misaligned, or if you can make a stronger case for how the goals and values actually work together. For example, although a leader may be loath to reduce head count, he or she might connect with the potential to free up funds for investments in capabilities that improve customer service or that grow the business in other areas.

On both an individual and team level, people have to think about whether they really want to be part of the transformation. Zappos, the online shoe retailer owned by Amazon, has taken this reasoning to its logical conclusion. As it moved to a holacracy, a radical management transformation, the company offered every employee the option to take a severance package and pursue other passions.  About 18 percent did so, which ensured that those who remained were consciously committing to the company’s transformation.

Creating a Road Map

If executives really want to lead with credibility, aligning their values with the company’s transformation strategy is not enough. No, they must also lead by example and put those values into action.

Because doing so doesn’t always come naturally or intuitively, it’s a good idea to identify and adopt specific behaviors to model how your values will enable transformational success. Creating an individual behavior road map can be an effective means of singling out actions you can take. The road map consists of four basic steps.

First, gather feedback on your behavior and values. Feedback can be collected through a 360-degree survey to peers and direct reports or through face-to-face informal actions. Questions should focus on whether your actions are true to the stated values, whether you are acting in accordance with what you say, and whether these values support the current transformation.

Second, think about discussing behavior change options with a coach or mentor, either internal or external. The primary goal is to interpret the feedback received from the surveys and to identify new behaviors that will enhance your credibility.

Third, go public. It’s known that leaders will show greater commitment to the behaviors they have shared in a group setting. We recommend creating circles of peers to discuss behavior goals and to help keep one another accountable.

Finally, walk the walk. You need to mindfully put your behavior goals, aligned with transformational efforts, into practice.

Following these steps will enable a credibility-first transformation that has the potential to unlock enormous value and improve your executive effectiveness.

Take another example from Warren Buffett. The longtime head of Berkshire Hathaway is widely admired as one of the most successful business leaders of the 20th century. And he has long pursued and cultivated a credibility-first approach. He lives and conducts business inspired by a clear set of core values — among them, trust and integrity. As a result, when he wanted to purchase McLane Distribution from Walmart in 2013, he was able to seal the US$13 billion deal with a two-hour meeting and a handshake. The entire transaction was completed in a month.

Negotiators often swear by the old saw: “Trust, but verify.” But when people trust, implicitly and explicitly, that you will do what you say, they don’t have to spend as much time or as many resources verifying that you will.

Augusto Giacoman

Augusto Giacoman advises companies on people and organizational issues for Strategy&, PwC’s strategy consulting business. He is a principal with PwC US, based in New York.

Get s+b's award-winning newsletter delivered to your inbox. Sign up No, thanks
Illustration of flying birds delivering information
Get the newsletter

Sign up now to get our top insights on business strategy and management trends, delivered straight to your inbox twice a week.