The Best Way for New Leaders to Build Trust

by Jim Dougherty  |   8:00 AM December 13, 2013

When I took over as CEO of Intralinks,  a company that provides secure web based electronic deal rooms, the company was hemorrhaging so much cash that its survival was at stake. The service was going down three times per week; we were in violation of the contract with our largest client; our chief administrative officer had just been demoted, and so on.

So, what I do on my first day? I spent more than four hours  listening in to client support calls at the call center.  I shared headsets with many of the team, moving from desk to desk to speak to the reps. To say they were surprised is an understatement: Many CEOs never visit the call center, and virtually none do it their first afternoon on the job.

I made this my priority partly because I wanted to know what customers were saying—but also to make an internal statement. I knew there had to be some radical changes to behaviors, expectations, and attitudes.  There was no time to be subtle.  I needed to show I was different, that things were going to be different, and I needed to establish trust as quickly as possible.

In leading various companies over the years, one of the most valuable lessons I’ve learned is that establishing trust is the top priority. Whether you are taking over a small department, an entire division, a company, or even a Boy Scout troop, the first thing you must get is the trust of the members of that entity.  When asked, most leaders will agree to this notion, but few do anything to act on it.

Without trust, it is very unlikely you will learn the truth on what is really going on in that organization and in the market place.  Without trust, employees won’t level with you—at best, you’ll learn either non-truths or part truths. I see this all too frequently. Sometimes employees will go out of their way to hoard and distort the truth.

The best way to start building trust to take the time and meet as many individual contributors as you can as soon as you can. In addition to meeting customers, meeting rank-and-file employees should be your top priority.

This is not a common approach. Many leaders see their role as directing and giving information, rather than gathering.  There is pressure to “come up with the answer” quickly or risk looking weak.  Too many new leaders believe they’re expected to know the answer without input or guidance. Nothing could be further from the truth.

Doing this correctly takes time—but less than you might think. The meetings can be on one on one or small groups.  The sessions can’t be rushed.  In the first few weeks I’d suggest you spend up to half your time in these meetings. Take a pad and take notes.  Listen intently.  A simple but effective open-ended question is: “If you were put into my role tomorrow, what would be the first three things you’d do and why?”  Or: “What are the three biggest barriers to our success, and what are our three biggest opportunities we have?” Really great ideas can emerge from these meetings—along with some really mediocre ones—but it’s your job to filter and prioritize them. First, gather the information.

Later on my first day at Intralinks, I began arranging meetings with individual contributors. That’s where my learning really began. Over the next few weeks I met with over 60 individual contributors. Not only did I learn a lot, but I convinced them that I cared what they thought and could be trusted with the truth.

In the middle of my first week as CEO, one of the company’s original VCs called. “So, what’s your plan?” he asked. I said I have to spend a few weeks learning. He was incredulous that I did not have a pre-baked plan. I was incredulous he thought that I should.

Over those weeks I learned how unhappy clients were with our complex bills, why service went down so often, why our pricing gave our clients headaches, that 80% of the customer calls could be eliminated with a simple fix to our service, and that clients wanted predictability of expenditures with us.

After six weeks, I had enough information to return to the management team with specific recommendations on what I thought we should do. Instead of just laying this out in an all-hands meeting, I began laying out the plan in one-on-one meetings in which I talked about how each individual’s feedback had helped guide my thinking. This created a tremendous buy in among all levels of the team.

By mid March, after only 10 weeks on the job, we rolled out the new plan. By the end of the year we’d signed 150 new long-term contracts (up from zero), revenue was up by almost 600%, our burn rate was cut by 75%, and we’d positioned ourselves to raise a $50 million round of financing a few months later in the heart of the dot.com winter.

None of this could have happened without building the trust of the team. New leaders must remember that many of the best insights on how to fix a company lie with employees further down the org chart. Creating a trusting, honest dialogue with these key personnel should be every new leader’s top priority.

Doing Less, Leading More

by Ed Batista  |   10:00 AM December 17, 2013

Our first accomplishments as professionals are usually rooted in our skill as individual contributors. In most fields we add value in the early stages of our careers by getting things done. We’re fast, we’re efficient, and we do high-quality work. In a word, we’re doers. But when we carry this mindset into our first leadership roles, we confuse doing with leading. We believe that by working longer, harder, and smarter than our team, we’ll inspire by example.  Sometimes this has the desired effect–as Daniel Goleman wrote in his HBR article “Leadership that Gets Results,” this “pacesetting” leadership style “works well when all employees are self-motivated, highly competent, and need little direction or coordination.” But the pacesetting style can also carry a high cost – Goleman notes that it “destroys climate [and] many employees feel overwhelmed by the pacesetter’s demands.”

Instead simply doing more, sustaining our success as leaders requires us to redefine how we add value. Continuing to rely on our abilities as individual contributors greatly limits what we actually contribute and puts us at a disadvantage to peers who are better able to mobilize and motivate others. In other words we need to do less and lead more. Sometimes this transition is obvious and dramatic, such as when we’re promoted and obtain our first direct reports or hire our first employees. Suddenly we need to expand our behavioral repertoire to incorporate new leadership styles as a means of influencing others effectively. (“Leadership That Gets Results” provides a useful roadmap here, highlighting the styles that have the greatest positive impact or are used less frequently by managers.)

Subsequent transitions may be more subtle and nuanced, such as when we go from leading front-line staff to leading managers, who themselves must navigate this same transition. A coaching client realized that he was running his company as though he were the “Doer-in-Chief,” and this model of leadership had permeated throughout the organization and was holding everyone back. He revamped his role, delegating almost all of the tasks on his to-do list to his senior managers and had them do the same to their direct reports. Rather than simply creating more work for junior employees, this emphasis on leading rather than doing resulted in greater efficiencies throughout the company. In my client’s words, “We went from being firefighters to being fire marshals,” taking a more strategic approach to the business, redesigning inefficient systems, and solving problems before they became crises.

This emphasis on leading and not merely doing has had a profound impact on management education. In 2010 Dean Garth Saloner of the Stanford Graduate School of Business (where I’m an Instructor) told McKinsey that, “The harder skills of finance and supply chain management and accounting…have become what you think of as a hygiene factor: everybody ought to know this… But the softer skill sets, the real leadership, the ability to work with others and through others, to execute, that is still in very scarce supply.” We expect our students to have solid technical and analytical skills—to be effective doers. But we also expect that within a few years of graduation our students will be managing people who are even more technically and analytically capable than they are—and this requires them to be effective leaders.

Many of my executive coaching clients and MBA students at Stanford are going through a transition that involves a step up to the next level in some way. They’re on the cusp of a big promotion, or they’ve launched a startup, or their company just hit some major milestone. Very few, if any, of these people would say that they’ve “made it”; they’re still overcoming challenges in pursuit of ambitious goals. And yet their current success has created a meaningful inflection point in their careers; things are going to be different from now on. The nature of this difference varies greatly from one person to another, but I see a set of common themes that I think of as “the problems of success.” You can read my first and second posts on “the problems of success.”