The Leadership Code – Part 5

Imagine two companies. Both have a clear strategy. Both have good employees. Both have access to similar technology, similar information and similar markets. And yet one of them is faster.
Decisions are made more quickly there. Problems are raised earlier. Employees take responsibility without safeguarding every step they take. Leaders need to exercise less control. Information moves more quickly through the organization.
In the other company, the opposite happens. Decisions pass through several levels. Employees protect themselves with emails and CC lists. Mistakes are communicated as late as possible. Meetings generate more meetings. Leaders invest a considerable amount of their time in control.

The difference does not necessarily lie in strategy. It may lie in something that hardly ever appears as a separate item on a balance sheet: trust.

After responsibility, learning, intention and action, Die 12 NATURGESETZE zum ERFOLG© lead us to the fifth principle: trust. Yet when companies discuss trust, they often begin with the wrong question: Can I trust my employees?

For leadership, the more important question begins somewhere else: Can other people trust me?

1. Trust begins with reliability

Trust is not created through mission statements, workshops or the declaration: “We have a culture of trust.”
It is created through experience.

People observe very closely whether a leader’s behaviour is consistent with what they say. Do they keep their commitments? Do they maintain their position when things become uncomfortable? Do they take responsibility for their own decisions? Do the rules they expect others to follow also apply to them?

In the Sermon on the Mount, Jesus expresses a remarkably clear principle:

“Let your ‘Yes’ be ‘Yes,’ and your ‘No,’ ‘No.’” Matthew 5:37

The immediate context of this statement concerns truthfulness and the use of oaths. At the same time, it contains a principle that is highly relevant to leadership: people should know where they stand with us.

People do not have to like every decision their leader makes. But they should know where they stand with that leader. If a yes applies today but no longer tomorrow, if values apply only while they cost nothing, or if decisions suddenly follow different standards under pressure, uncertainty arises. And uncertainty creates the need for self-protection.

2. Distrust creates work

Distrust is expensive. It simply rarely appears as a separate item in the profit and loss statement. Instead, it becomes visible elsewhere: additional controls, further approval levels, documentation for self-protection, unnecessary CC lists, escalations, follow-up questions and meetings.

Of course, every company needs control mechanisms. Particularly in regulated, safety-critical or financially sensitive areas, it would be negligent simply to equate control with distrust. It becomes problematic when control no longer addresses an objective risk but is intended to compensate for a lack of trust.

Where trust is absent, collaboration becomes slow, complicated and expensive.

A leader who fundamentally distrusts their employees must control them. Employees who do not trust their leader also begin to exercise control—only in a different way. They document. They protect themselves. They avoid decisions. They look for witnesses. They return responsibility upwards.
This creates an organization in which a great deal of work is done, but a considerable part of that work creates no value for the customer. It serves only internal self-protection.

3. Trust is not naivety

A culture of trust does not mean that leaders simply hope everything will turn out well. Trust requires clarity. What is expected? Who bears which responsibility? Which decisions may someone make independently? When must an issue be escalated? Which results have been agreed? The more clearly these questions are answered, the more responsibility can genuinely be delegated.

Trust does not mean abandoning leadership. Trust means believing that people can take responsibility within clear boundaries.

The Bible also repeatedly connects trust with reliability. The Gospel of Luke says:

“Whoever can be trusted with very little can also be trusted with much.” Luke 16:10

Here too, the immediate context is not modern corporate leadership. Yet the underlying principle is remarkable: reliability does not first become visible in major decisions. It becomes visible in small things. Anyone who constantly postpones appointments, forgets commitments, withholds information or fails to follow up on decisions should not be surprised when others eventually begin to protect themselves.

Trust grows in small moments—and can be damaged in a single significant moment.

4. A culture of trust begins at the top

CEOs and leaders shape a company’s culture of trust more strongly than they sometimes realize. Not only through what they say, but especially through how they respond when something goes wrong.

What happens when an employee delivers bad news? What happens when someone reveals a mistake? What happens when a leader disagrees? What happens when a CEO’s decision does not work?
It is precisely in these moments that people learn how safe it really is to tell the truth within an organization. If the bearer of bad news is attacked, employees learn to deliver bad news later. If mistakes are concealed or blamed on others, leaders learn to protect themselves. If disagreement is interpreted as disloyalty, agreement eventually emerges—but openness does not.

A culture of trust does not ensure that there is less bad news. It ensures that leadership learns about it earlier. For a CEO, that can make all the difference. A problem that becomes visible early can often be solved. A problem that moves through hierarchies for months and is increasingly glossed over along the way can eventually become very expensive.

5. Trust and AI

Artificial intelligence can increase transparency. It can analyse communication patterns, monitor processes, detect deviations, evaluate feedback and make information available to leaders more quickly. But more data does not automatically create more trust.
On the contrary, technology can also be used to monitor employees ever more comprehensively. That may create more control—but not necessarily more responsibility. Ultimately, trust is created through experienced human behaviour.
Does someone keep their word? Do they take responsibility? Are they honest when the truth is uncomfortable? Do they remain reliable when the pressure rises? No technology can answer these questions on behalf of a leader.

AI can analyse behaviour. Human beings themselves must act in a trustworthy way.

This is precisely why trust may become even more important in the age of artificial intelligence. The more processes are automated, the more valuable relationships become in which people know: I can rely on the other person’s word.

6. Trust does not begin with the employee

Leaders often ask: How can I get my employees to take more responsibility?
Or: How can I reach the point where I can trust my team more?
Both are legitimate questions. But another question comes first: What am I doing as a leader to enable my employees to trust me?
Trust cannot be ordered. Nor can it be created through a presentation about corporate values. It emerges from repeated experience. Word and action. Decision and consequence. Responsibility and behaviour.

The greater the gap between words and behaviour, the greater the need for self-protection.

This brings us full circle to the previous parts of The Leadership Code: take responsibility. Learn from experience. Decide clearly what is truly intended. Take action. And thereby become predictable and trustworthy for others.
Trust is not an isolated leadership tool. It is the result of leadership put into practice.

A question for reflection

Can your employees trust you when things become difficult?
Not: Do you believe they trust you?
But: What specific experiences during the past twelve months give your employees a reason to trust you?
Perhaps this is one of the most honest indicators of leadership quality.

Your next step

This week, do not begin by looking at the trust your employees place in you. Look at your own trustworthiness. What commitment have you made? Which decision have you announced? Which behaviour have you expected from others? And where might there be a gap between your words and your actual behaviour?

Ask someone whose judgement you value: “What could I do specifically to enable you to trust me even more as a leader?”
Then do something that is sometimes more difficult for leaders than any strategic decision: listen without defending yourself.

Anyone who wants to lead through trust must act in a trustworthy way.

Because ultimately: Leadership can demand obedience. It cannot demand trust. It must earn trust.

The next part of The Leadership Code will explore a principle that is indispensable for good decisions: reality.

Leadership does not begin with the world as we would like it to be, but with the willingness to see it as it really is.