What makes a manager, a CEO or a president a leader that people will follow? According to Lynne Andersson, associate professor of Human Resource Management, it all hinges on credibility. 

Consider the downfall of John Stumpf, former CEO of Wells Fargo in 2016. According to Andersson’s personal experiences and extensive research findings, perception of competence and trustworthiness are the main reasons employees believe in—and follow—their leaders. But when employees lose faith in leadership, that lack of trust can turn into cynicism. Andersson posits that cynicism can transform into a type of ‘social contagion’ that can transform the culture of an organization—or a nation. 

But there are ways to earn credibility back, even amidst a crisis such as the current COVID-19 pandemic.  

In this episode of Catalyst, Andersson dives deep into what causes employee cynicism, and what managers can do to make sure it doesn’t happen to them.

Catalyst is a podcast from Temple University’s Fox School of Business about the pivotal moments that shape business and the global economy. We interview experts and dig deep into today’s most pressing issues. Season two will answer questions like: How will COVID-19 impact my financial future? Why hasn’t the #MeToo movement reached the professional sports industry? And what makes a leader credible? We explore these questions so you can spark change in your work. Episodes are timely, provocative and designed to help you solve today’s biggest challenges. Subscribe today.

Key Links: https://www.fox.temple.edu/posts/2019/09/for-credible-leaders-perceiving-is-believing/

Podcast Transcript

Host: Welcome to catalysts of the podcast of Temple University’s Fox School of Business, I’m your host Tiffany Sumner. Today we’ll discuss what makes a business leader credible, how their credibility can be lost and how today’s media landscape complicates this balance. I’m joined by Lynne Andersson, associate professor in Human Resource Management at Fox School. inspired by personal experiences, Lynn has dedicated her career to researching what she calls the “Dark Side” of business. She has [00:01:00] long studied social maladies such as employee cynicism and its impact on a company’s culture. During our conversation Lynn explains that when employees lose faith in their leader that lack of trust can turn into cynicism. She discusses modern examples among managers, CEOs and world leaders.

 All right so Lynn, I please tell us what is a catalyst for your research on employee cynicism?

Lynne: The Catalyst for my research on employee cynicism is really, I hate to say it, my personal experiences. I didn’t have a big long illustrious business career or anything like that—in fact, I only worked in the business world for six years after my undergrad and after my MBA program and during my MBA but I held four jobs during those six years and [00:02:00] I feel like in each of those jobs I just witnessed things it just had me kind of unsteady and feeling uneasy about business. I saw examples where my managers would say one thing and then do another, I saw examples where the employees that were being rewarded the most were doing the least work, and brown-nosing the most. I saw examples of, you know, my bosses and colleagues saying certain things in the office and then saying something very different when we were out having beers after the office. There were all these inconsistencies in the way people were acting and behaving and then, personally—and it might have been my poor selection of jobs as a young person—but probably that but I never really found meaning in my work. With the tasks my managers and bosses and colleagues were having me do, I was never able to connect what I was doing to the bigger picture of what the organization needed. So I guess I just kind of felt lost and I guess I have to admit I [00:03:00] was cynical, I felt cynicism myself. And so, that cynicism sort of drove me to think, well you know, where have I been happy in my life? I think I like being in school. I’ll just go back for another degree so that’s basically what I did. I started applying to PhD programs in organizational behavior because, prior to that in my work experience, I’ve done management information systems and computer programming and biostatistics and so I was sort of a misfit. I didn’t really love what I was doing, but I found organizational life and the inconsistencies in it really fascinating. I tried to figure out where I could study that. I could do it in the sociology department, I could do it in a physic department, but my experiences have been in business and I knew that business academia was really growing at the time, in the late eighties early nineties when I was looking into programs and I just sort of was fascinated with the dark side of business.

 Host: You have a fascinating background and so [00:04:00] pertinent to today. From your research and your experience can you talk to us a little bit about some of the way’s leaders end up losing their credibility?

Lynne: Right now, we have so many leaders on the political stage and the corporate stage that we’re seeing the fault lines in their behaviors, right? And then the idea that we have all these various forms of media today, I hear from my ‘Baby Boomer Brethren’ and the people ahead of me that you know if things—if any leaders did anything bad, you wouldn’t hear about it right? Like we didn’t hear a lot about President Kennedy’s affair with Marilyn Monroe because people knew to hush it up. Today, everything is out there right so every inconsistently is just blared back at us. So, what we did we got really interested in this just not long after the financial crisis me and Tom Bateman, we added on a few other researchers we got really interested in how cynicism [00:05:00] might be connected to loss of credibility. We started thinking about how leaders do lose that credibility and so we started really getting into the psychology literature about, ‘what is credibility, actually? What we sorted determined from perusing literature was that there are a lot of things that give one the cause one to a tribute credibility to someone, but there are two main things that cause us to say that a leader is credible. One is, are they competent? Do we have faith in their skills or knowledge of their ability to do the job? Then the second one is trustworthiness. Can we trust them? Are they dependable? Are they consistent? Do they seem to believe in what they’re saying? We make these assessments and we watch leaders over time and, today, with all of the rapid-fire news we get, we get a lot of information about leaders rather quickly. We even knew that, you know if we’re in our own organization there are more ways to learn—and even if you’re in a big company—[00:06:00] there’s ways to be more connected to your CEO than ever before, again, because of social media, because presidents today of companies like to have a personal connection with that underneath. So, there’s lots of opportunity for us to assess competence and trustworthiness, right? What we found in our research is that people perceive competence when they see leaders thinking about the future, and not just, you know, the next quarterly earnings. When they’re thinking about how the outcomes affect employees. When they’re not just holding the status quo but they’re taking new initiatives. When they’re communicating well and effectively and when they’re continuously learning. That, to us, constitutes competence and of course, trustworthiness is so much about consistency. Watching a leader over time, [00:07:00] are they looking out for us as employees in the organization or are they only looking out for themselves? Are they embodying and living the organization’s vision and values are they consulting with and talking with different stakeholder groups to really want to understand the company? These are the kinds of things that we learn from talking with people that are qualitative parts of our research that constitute people’s attributions of trustworthiness and competence. So you can see how it’s easy to lose this to thinking about that television and advertisements really up until through the 1980s during the 1990s both television shows and advertisements seem to change a bit. They seemed less earnest–not that all TV and all ads were honest until then, but we started seeing more irony, humor, sarcasm. I remember distinctly in the mid-90s, Michael Judges first film called “Office Space.” “Office Space” was one of the first films to kind of show the lack of credible leaders in the office world and showed the drudgery of business life and how it could be. So you started to see incompetent leaders being shown in business settings to elicit humor.The final thing I’ll say to this is—I don’t want to get overly political but, you know, the most divisive figure right now that we’re dealing with is Donald Trump of course and he’s revered by many and also disdained by many. That makes him kind of an enigma because arguably or, inarguably really, he’s demonstrated inconsistency and being incapable by mainstream assessors of capability. He’s shown himself to even be the things that we think would make him not credible as a leader; these are really strong characteristics of incompetence and untrustworthiness. But with that said, many of his followers claim that he’s highly credible and they say so because they believe that he’s shown competence [00:10:00] on the issues that are important to them like, for instance, this has been one thing that’s been written about Trump and his competence is that he’s very good during his administration on putting the right judges to please his constituents that like him and he’s done a good job at that. Of course, right now, he’s leading a battle to get another judge put on under his term to the Supreme Court.

Host: And so, [00:11:00] bringing it back to the employees, I’m curious, how can an employee’s cynicism impact a company’s culture? 

Lynne: That is a great question. For me it’s been actually really fun to have stuck with this research stream, not all of my research—I start and stop and I’m not consistent and I’m kind of ADHD so I jump all over the map but cynicism is one area that I have kind of stuck with since the beginning of my PhD program. It’s been about 30 years of paying attention to cynicism research and business schools as well as sociology, psychology, public affairs and so I feel like we’ve had lots of opportunity to sort of look at what mass cynicism looks like and what it looks like when it accumulates in a company’s culture. The way we put to work then builds on other folks’ definition of cynicism, how employee cynicism is an attitude, and in psychology attitudes have three parts: they have a cognitive part, where you think through [00:12:00] something, they have an effective or a motive component. They also have an intention to act or a behavioral component. It’s sort of the ABCs, we call it, of attitudes. So right away we said cynicism is an attitude because you have to think through to see inconsistency, and then you feel bad when you see that inconsistency. It can cause you to be grumpy, angry or can cause you to rebel against your leader or your company. So, it’s a three-part attitude, described as an attitude of frustration, an attitude of hopelessness, of disillusionment. I mean, these are strong words so it’s not one you should be proud of wearing as a badge of cynicism. As well as sort of the contempt for or distrust of your organization other organizations or your leaders and it’s funny because as an attitude, cynicism always has an object [00:13:00] and that object can be one organization, it can be the business world in general, it can be one leader, it can be the leadership team. It can also be like cynicism toward the change initiative your company is undertaking. Most people have studied cynicism in psychology and business as an individual level attitude that we each hold. But there have been some people that have looked at sort of what happens when everybody in the company or lots of people in the company are cynical. What’s a cynical culture look like? Well what academics have described is sort of a culture where people are snarky, people become maybe even uncivil to each other and that’s another one of my research streams: incivility in the workplace. People become ruder and care less about their work or less committed to the organization. They are more likely to turn over and go to another company, right? So those are the behavioral components that are associated with cynicism and its dark sided effects on everybody. It all seems like some people have studied cynicism even in the realm of social contagion, [00:14:00] that it’s contagious right? That employees can start gossiping and talking. When one person is hopeless and disillusioned, that hopelessness and disillusion can be fed to another person. You can get what we call a culture of cynicism, which seems like the opposite of a culture of, say, really highly committed exciting organization.There are also some other a smaller group of researchers and organizations and labor management studies that think it can be a good form of resistance that you need it to act up and push against something that’s not going well for you. That it’s like seeing truth and some scholars have associated it with irony, parody and humor as ways to resist that are maybe light resistance in fact unless Alessia Contu, [00:15:00] a scholar at UMass calls cynicism decaf resistance. Cynicism is decaf resistance because it’s a light form of resistance that is not necessarily going to change anything, but it might help you get through the day. Then, another group of scholars have talked about working at a cynical distance, how that’s sort of healthy as it can protect you and, in their research, they cite really interesting examples that while cynicism can definitely can be a way to disengage from your company that paradoxically it can reinforce your commitment to the company.

Host: Can you explain how employee cynicism could play out on a larger scale? Like with world leaders or when people lose faith in their government. 

Lynne: Absolutely. I mean, what an interesting time we are in right now right? In some ways, it seems like there’s cynicism everywhere and the way I like to think about it is one of the early [00:16:00] ways that Tom Bateman and I sort of conceptualize cynicism is, broadly speaking, as emblematic of a broken social contract that when your expectations aren’t met, that you have needs that are unmet. Someone promised you something that didn’t come through, cynicism is one of the first and foremost things that happens with these unmet expectations with a broken psychological or social contract. I think cynicism today may be one of the few attitudes that’s experienced across the ideological divide by Americans. Although we may have different reasons for thinking so we all feel that our contract has been broken: that the government’s not looking out for us, that business is not looking out for us and whereas the left side of this ideological divide in America may be more prone to blame corporations for buying out the government. The right side of the ideological divide is disappointed in the government and thinks the government needs to be smaller and so we all share [00:17:00] this sense of a broken contract and hence we all share a cynicism about the American project and where it’s going to go from here. So, there’s sort of a crisis but it seems to me—maybe I’m speaking too strongly about this—but it feels like there’s a lot of cynicism right now because of this feeling that our institutions have broken their contracts with us possibly. Again, that’s not only in the U.S. because we’re seeing it in other countries as well, and then just to bring in the most recent thing the pandemic oh my goodness has that spawned us to think about what our institutions are not doing for us that we think they should have done for us.

Host: How do leaders build credibility especially after a crisis?

Lynne: I think the first step and the leaders that have done this the first step is admitting they were wrong, admitting they did the wrong thing.[00:18:00] In the U.S., we love second chances and we are so willing to give them as long as a leader admits that he or she was wrong. We revere that and so that’s the first step I think and then the second step I think is, you can’t show trustworthiness right away like trustworthiness is the aspect of credibility that needs to be built over time is you have to watch consistency, you have to check out leader actions over a long period of time so that’s the harder one to rebuild but I think competence that aspect of credibility of two aspects is the easier one to demonstrate immediately. To take control of something to develop a plan for something to put it forward; start putting it into action right away.

 Host: Are there other examples of leaders, business leaders today that you think are poised to be credible for a long period of time in the public eye? [00:19:00]

 Lynne: Well I had more examples of not because I am a Dark Side person the quick one I’ll give you of the positive, a porcelain Jimmy Carter right Jimmy Carter had what many would call a failed presidency. he didn’t get the things done that he set out to do, he kind of lost the Democrats a seat at the White House for another 8 years after that leading to the Reagan Revolution. there were some International debacles he endured but in his post-presidential life, he’s a freaking Rockstar he is remedy to show just–  he showed us that ethics and morality and commitment to the public good that he talked about a lot as a presidential candidate right and he was able in overtime is able to gain back our trustworthiness actually awfully quickly through the 80s when putting president started working on Habitat homes and caring about all the right things that the country was worried about. He’s someone that has really fixed himself in some ways and you know he’s still alive [00:20:00] and he’s still doing great work in his mid 90s. It’s crazy.  but on the darker side there’s some opportunities I think for some people to make comebacks, just today we’re talking about in my sports class about Roger Goodell the NFL commissioner and how in 2016 when Colin Kaepernick took the knee he was angry about it he kind of you know quietly live to charge the NFL should sort of blackball Kaepernick. he didn’t like that Kaepernick was politicizing the sacred sport of football and he was causing all of this trouble with viewers, causing viewers to divide right? Between those who were pro taking a knee and against taking a knee. Well just like a month ago he put out he– had in an interview he said you know what I wish we listen earlier to Kaepernick now that he has seen the black lives matter movement, he’s seen you know dozens more black people killed by police [00:21:00] you know he’s changing his mind and he’s coming out now more and support and we’re seeing the NFL taking on. Maybe not to the extent that the NBA is but we are forcing the NFL to sort of take on the idea that there needs to be some support for social action, particularly when it has a lot to do with the players, the people who have the ownership structure in the NFL. It has a lot to do with the other players, where they come from and who they are. So, I think he’s somebody that may be on the verge of gaining back some credibility among half of the football fans. A good half of the football fans were not excited about his comments earlier about Colin Kaepernick I also keep thinking, I can’t stop thinking because my main area of teaching and in scholarship is in corporate social responsibility and last August a hundred and eighty one of the world’s biggest companies, their CEOs who are members of what we call the Business Roundtable they came out with a letter these hundred eighty-one CEOs kind of restating the purpose of a corporation [00:22:00]  from being from the purpose of a corporation being one that looks out primarily for its shareholders to the purpose of a corporation being one that doesn’t prioritize shareholders and in fact  looks for all shareholders and stakeholders equally. and that was a big statement, right? very big statement there was a lot of excitement in the corporate social responsibility world and just before the pandemic at the world economic Forum in Davos all the world leaders made the theme of Davos stakeholder capitalism this new way of looking that we should be looking at all stakeholders and not just prioritizing shareholder value. and one of the core sort of kings of that of course has been on Larry Fink of Black Rock,  Black Rock is a big Investment Company, he’s the CEO and you know before even before this signatory BlackRock CEO he actually wrote this letter in 2018 praising accountable and transparent capitalism and he made the statement in his letter then that Black Rock which is a big deal for big investment companies  [00:23:00] only going to invest in companies that clearly help society. no more like gun manufacturers no more you know no more companies that are making anything or through their processes are harming anything but they’re only going to invest in companies that didn’t do that and of course he was one of the big signatories of this. Well here we are a year after that right there’s one company this consulting firm KKR they just came out with a study 2 days ago that looked and followed up — KKS by the way I’m sorry I said it wrong. KKS is the consulting firm, they tracked the hundred and one companies of the signatories to see what they’ve done a year later in the past year. now granted it was a tough year you know none of these companies expected to have to endure a pandemic when they signed the signatory a year ago but lo and behold you know most of the companies are failing to live up to their signatory at all, they’re really feeling it right? in the years since only a small handful of the companies that signed [00:24:00] the signatory even submitted it to their governing boards for approval so it wasn’t even approved other boards so their boards are the ones you know that are supposed to structure their governance in the way they’re going to act and what they’re going to prioritize where their shareholders and stakeholders. They hadn’t even submitted to their boards and then Wells Fargo , one of our notorious villains in a lot of these discussions, they outright ejected the pledge by all their shareholders to make the statement come to life through reconstruction of the companies as a benefit corporation. They just outright rejected them, right? And even Marc Benioff, the CEO of Salesforce which is always looked upon as a great company, he was one of the key signatories and one of the big mouth pieces for the  statement on the came out even he last week laid off a thousand workers the day after he released his company’s absolutely glowing [00:25:00] earnings report. all that said like you know, all the oldest get all this can make one really cynical right and I think the cynical people like me who want these companies to be held accountable, what we would like to see that would help alleviate or someone would be three’s company’s instead of spending their lobbying money influencing government weather democrat or republican to put in favorable laws for their profit making, that instead they lobby government to change the structure of a corporation. Why couldn’t it be a corporate law that all companies are structured like benefit corporations? Where they have to look out for all of their stakeholders and not prioritize their shareholders. Why can’t all companies be incorporated in such a way that half their board is employees or other stakeholders you know what I’m saying is, it would go a long way to alleviate public and employee cynicism if companies do things that show that they really are going to change the structure and walk the talk that they’re talking. [00:26:00]

Host:  I want to thank Lynne for joining me to talk about the factors that compromise leadership credibility. her experiences with employee’s cynicism and how losing trust in leaders can impact an organization or a country. in a crisis like the BP oil spill or the current Covid-19 pandemic and employee cynicism can spread in mass and strong leadership is necessary. When leaders’ credibility is challenged Lynn suggests that authenticity and honesty can restore trust. When leaders admit wrongdoings and show compassion they’re able to regain buy-in from their employees. These historical and modern examples can help us all recognize the signs of employee cynicism and help ensure we as leaders don’t go over to the dark side. Catalyst is a podcast from Temple University’s Fox School of Business. Visit us on the web at fox.temple.edu/catalyst. We are produced by Milk street Marketing, Megan Alt, Anna Batt, Stephen Orbanekand Karen Naylor. I hope you’ll join us next time. Until then, I’m Tiffany Sumner and this is Catalyst.