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Leaders’ credibility is fragile and easy to lose

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Leaders’ credibility is fragile and easy to lose

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Leadership

Leaders’ credibility is fragile and easy to lose

An unforeseen crisis can destroy years of work, unless you are the US president

Manchester United manager José Mourinho was only a few games into a new football season before speculation began about his team's morale © AFP

“Losing the dressing room” is that moment when a coach realises the players’ confidence in his or her ability to lead them has evaporated.

Small acts of subordination, an upsurge in backchat, a falling off in punctuality, effort or general commitment. All of these could be signs that the boss’s credibility is shot.

José Mourinho, for instance, was only a few games into a new football season before speculation began that Manchester United, the team he manages, was in fact disunited. Every social media post by a player or sidelong glance in the dugout is now analysed for signs of disenchantment.

All leaders, from Pope Francis to Donald Trump (of whom more later), have to worry about their credibility. It is the precious but brittle raw material of leadership.

Academics have long tried to codify the elements of competence and trustworthiness that contribute to credibility. In a recent MIT Sloan Management Review, four professors conclude from field studies among staff that to promote competence, leaders should, among other things, emphasise the future, take tough decisions, communicate effectively, and acquire and demonstrate knowledge and experience.

Easy enough, except that a single mis-step, an unforeseen crisis — not to mention a bout of unethical behaviour — can often destroy that work.

Last week, Stephen Kelly was sacked as chief executive of Sage, the UK’s largest listed technology company, accused of having lost the dressing room. Paul Pester finally stepped down as chief executive of TSB, the unavoidable consequence of a shattering crisis of credibility earlier this year when the bank botched an IT upgrade.

The researchers also point to Tony Hayward, the former BP boss, whose mishandling of the 2010 Deepwater Horizon crisis doomed his leadership of the oil company. Once lost, the academics point out, credibility can be rebuilt only through a long slog of “repeatedly engaging in trustworthy acts” and projecting competence.

Barry Posner, co-author with James Kouzes of Credibility, a book about how to gain and lose it, refers me to the counter-intuitive idea that a company that handles a problem well can see its reputation enhanced.

I am sceptical about the theory, though. Recent research suggests this paradox applies only to mild failures over which a company has little control. No amount of making amends, would have permitted Mr Pester to stay at TSB or Mr Hayward at BP after their respective disasters.

As their fate and that of Mr Kelly suggest, investors and boards are rarely patient enough to wait for individuals to rehabilitate themselves. Prof Posner says: “The truth is we’re just not very forgiving.”

I wonder if that is quite right. It is rare for an individual’s credibility to evaporate altogether. Leaders may lose the confidence of one group, but retain it with another. Much as those hurt by management failures may wish it otherwise, this is one reason executives and directors dented by disaster often pop up elsewhere.

Mr Hayward is a good case in point. His appointment at BP was itself an attempt to restore the company’s credibility after John Browne, his predecessor, resigned abruptly following a series of accidents that had tainted his reputation.

Then within a few years of Mr Hayward’s own tumultuous exit from BP, he was back, chairing two public natural resources companies, Genel (from which he stepped down last year), and Glencore. Those companies have fared poorly recently, but their directors and investors at least deemed Mr Hayward sufficiently competent and trustworthy to return him to high corporate office, despite his BP record.

Then there is Donald Trump. The US president is a one-man experiment in whether a leader can survive violent shocks to personal credibility.

Mr Trump models almost every type of behaviour that usually undermines trust — from inconsistency and dishonest communication to taking self-serving actions and treating staff as expendable. That some of his own people seem to be working to thwart him is an obvious indication he is losing the dressing room.

Among his core supporters, though, each damaging episode appears to enhance Mr Trump’s credibility. They applaud the offsetting behaviour — his emphasis on the future, his aggressive decision-making, and so on — and believe his counter-attacks on his opponents’ reputation for competence and trustworthiness.

US voters will give the ultimate verdict on Mr Trump’s approach. Given that it is impossible for him to recover credibility with his critics, though, there is — believe it or not — a certain logic to his determination to double down on his strategy.

andrew.hill@ft.com

Twitter: @andrewtghill

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