While credibility, leadership effectiveness, and institutional trust are highly interconnected, great leaders understand that these are very distinct pillars that form the infrastructure of leadership in complex environments. As such, leaders cannot afford to focus on one and ignore the other, and they must instead find ways to integrate the three. We look at how they tie into each other and how communication is the key to unlocking their potential.
Understanding Credibility, Leadership Effectiveness, and Institutional Trust
From the outside perspective, the concepts of credibility, leadership effectiveness, and institutional trust may look similar. But they are not.
Credibility refers to the perception that people have about a leader’s competence, honesty, and reliability. And as we will explain in a later section, people base this on results, consistency, and expertise. Where a leader is seen as credible, they earn respect and confidence, which allows them to be more influential in their organizations.
Leadership effectiveness, on the other hand, refers to how capable a leader is in mobilizing people to achieve organizational goals. The more effective they are, the better their chances of improving organizational outcomes, fostering innovation, and building resilience. As you would expect, this effectiveness hinges on credibility. However, it also relies on other factors such as trust and good decision-making.
Finally, we have institutional trust, which is a measure of the level of confidence that stakeholders have in the reliability and integrity of an organization. Unlike the previous concepts, which are largely rational, trust tends to be more of an emotional and collective decision that comes down to transparency, fairness, and consistency. Organizations with a high level of trust enjoy a positive reputation alongside a loyal community, and the converse is also true.
As a whole, credibility influences leadership effectiveness, which, in turn, determines the institutional trust that sustains the credibility of the leader. So, one cannot exist without the other. Interestingly, though, one thing unites them, and that is communication.
Building Credibility through Effective Communication.
Credibility is deeply personal because it serves as a measure of whether a leader is who they say they are. And it all comes down to how you communicate, as follows:
Matching Words with Actions
Many people get into the habit of saying one thing and doing another entirely, and it is not uncommon for leaders to fall into this trap. But here is the problem. When you express yourself as a leader, people do not just listen to your words. They also watch you to gauge if you live by the same rules.
Say, for example, that you advocate for a work-life balance, but you send people emails outside the official working hours. Your actions would be contrary to your words, and people would thus not take your stance seriously. In fact, they would think of you as performative or a hypocrite, which is not the best reputation as a leader.
However, if you were to say that you care about this work-life balance and refrained from sending emails or calling people outside working hours, people would learn that you are a person of your word. And when people can predict what you will do based on what you say, then they think of you as credible.
Being Clear
Have you ever noticed how some people go out of their way to use jargon or confusing language so that they can look smart? Well, this strategy works in most areas because people tend to associate how people speak with how much they know. But in leadership, this is a bad move, especially when it comes to credibility.
When you use jargon, overly technical or vague language, people take this as a sign that you are hiding behind big words. And they come to the conclusion that you are keeping the truth from them or that even you do not understand what you are explaining. Either way, your credibility takes a hit. But when you use simple and direct language, people appreciate this as it shows that you understand a subject well enough to explain it to them. More importantly, it shows that you care about their comprehension.
Showing Vulnerability
In the previous traditional leadership models, leaders held on to the idea that showing weakness hurt their credibility. So, even when they were between a rock and a hard place, they put a brave smile on their faces and assured people that all was well. But later on, studies revealed that pretending to have all the answers was actually hurting leaders, as people could not trust them. Now, more leaders are moving away from these traditional views and embracing openness in their organizations.
But how does this work? It is not about sharing every minute detail that goes into leadership decisions. Instead, it is about addressing the elephant in the room. For example, during a crisis, a leader can say, ‘I do not have the answer to that right now but I am working on it.’ Or if they make a mistake, they can own up to it.
Being vulnerable is actually a sign of strength, as it proves that you are grounded in a reality where life is not just about wins. This way, when you do come around to sharing positive news, people believe you because they know that you are not afraid to tell them when you have hit a wall.
Appreciating Feedback
Many leaders are so against the idea of criticism that they barely allow feedback from people within their organizations. However, having one-way communication can only work for so long. At some point, people get tired of leaders who never listen. It’s even worse when a leader says that they are open to feedback or their door is always open, and yet they never address suggestions or complaints that people share.
Great leaders know that active listening is part of building their credibility. Not only do they allow people to share their ideas, but they also process the information and get back to their teams regarding their thoughts. By taking ego out of the equation, they cultivate an environment where communication comes down to evidence and respect, and people embrace this.
Modeling Transparency
Leadership often revolves around telling people what to do. But have you ever stopped to explain the why behind the what? It might surprise you to hear that people are often invested in the logic behind the decisions. What’s more, when leaders get into aspects such as the trade-offs they considered and the risks associated with each choice, they show their team that this decision was made after careful consideration. And this helps people trust their judgment more, even if the decision does not pan out as expected. It is unlike situations where leaders announce what they plan to do without encouraging any buy-in, which leaves people wondering what process was used and why.
How Strategic Communication Improves Leadership Effectiveness
Being a credible leader does not automatically make you effective at your job. In fact, there are many credible leaders who barely move the needle in their organizations because their communication is not strategic enough to result in collective action. Here is how you avoid becoming part of this statistic:
Eliminate the Friction Points
Organizations grapple with barriers such as vague goals and misunderstandings that take up so much time and energy that they affect people’s abilities to do their work. As a leader, you can minimize these barriers by defining organizational goals using clear terms. For instance, instead of saying that ‘we will improve customer service,’ you can say ‘we will reduce our ticket response time from 3 hours to 2.5 hours by August this year.’ By being precise, you equip your team with the knowledge of what to do so that they no longer spend time waiting for direction or permission.
Align People’s Efforts
It is quite possible for people to spend hours at work and yet achieve little because they are focusing on different things. In some cases, their efforts can even cancel each other out! Great leaders step in to channel people’s efforts into the same goal by explaining the why behind the work. For example, you can tell your team that you are working on adding 3 local payment options to the checkout page because it will address the high cart abandonment rate. Since they know why this is important, they will find ways to work together until they accomplish it, and this will turn them into a single yet powerful machine.
Use the Feedback Loop
Many great leaders rely on the OODA Loop (Observe, Orient, Decide, Act) to address issues in the workplace. But for this system to bear fruit, leaders have to be proactive in communicating their findings with their team in real-time so that they can go through these cycles faster and become more effective. Here is an example – Instead of waiting for monthly or quarterly reviews to address a lag in a project, a leader can mention this in a message or quick meeting. These small corrections are easy to communicate, and they eliminate the need for bigger overhauls down the road since everyone will be on the right track.
Encourage Openness
Under credibility, we mentioned that leaders should open up to criticism. But what about the reception to problems in the workplace? Some leaders are so aggressive or dismissive that they cultivate a fear culture where their teams are afraid to be honest with them. As such, when these employees face setbacks in their work, they keep this information hidden, and the leader finds out when it is too late or when the issue has progressed significantly. Not only is dealing with such issues time-consuming, but it is also costly.
Great leaders openly communicate that bad news is okay and that mistakes serve as data points. In this way, their teams feel more confident in opening up about where they have gone wrong, which is a plus for the organization.
Simplify Communication
While regular and direct communication is a good thing, too much of it can be a problem. When leaders get into the habit of holding too many meetings, making too many calls, sending too many emails, or engaging in activities that contribute to information overload, they hurt the organization. In fact, it can get to a point where people disregard this communication, fail to listen to or read the messages, or feel overwhelmed.
Leaders are in place to act as bridges between new information and their teams. It is up to them to take in all the information, organize it, and share it in a simple way. The best way to do this is to decide who needs to know what and when. On top of segmenting the communication, you need to break down the complex topics into summaries that best serve the needs of the recipients, which saves them time and reduces their cognitive load.
With this strategy in place, the team can focus on the implementation rather than the complexity of the entire project.
Safeguarding Institutional Trust through Communication
When communication fails, people do not just stop believing in you as the leader. They also stop believing in the organization, and this hurts it in terms of revenue and sustainability. So, how can you use this trust to make rather than break the organization?
🧭 Be Predictable
People feel safe in predictable environments because they know what to expect at every stage. With organizations, this predictability takes the form of consistent communication. You see, when leaders are inconsistent with updates, then employees never know what will happen, and this leaves them feeling vulnerable to both internal and external influences. However, if you have a set schedule for updates as well as clear policies that remain the same, come rain or shine, then you take away the fear of the unknown. After all, by looking at the policies, people know what will follow after each incident, and they can focus on their work.
⚖️ Act Fair
Budget cuts, denied promotions, and other incidents in the workplace can leave people feeling sidelined if they do not understand why these decisions were made or if they believe the processes were unfair. In some cases, it can lead people to believe that there is bias or favoritism within the organization, which can create tension and hurt morale.
Leaders who communicate effectively can get ahead of such narratives. It all comes down to sharing the logic behind these decisions before announcing the results. For example, when promoting someone, you can explain the criteria that the organization considered so that people can understand the benchmarks and work toward them. While people affected by the decision may not be all too happy about it, they will respect and trust the organization because of the transparency.
🤝 Treat People Equally
In some organizations, leaders use information as a reward or a weapon to encourage competition. Unfortunately, this creates in-groups and out-groups, where some people are part of the inner circle while others are shut out, creating rifts within the workforce. Additionally, this creates a culture of gossip as people try to figure out who knows what. At the end of the day, this not only lowers the institutional trust but also dampens the organizational growth.
Rather than using information to cause divides, good leaders master how to share information with all stakeholders. While the communication style may differ for each audience, the goal remains ensuring that everyone in the organization has access to the same details, which levels the playing field. And when people are not busy trying to determine who has the upper hand, they all feel like equal stakeholders and are able to focus on their work.
📣 Be Accountable
How many organizations are eager to communicate their failures? You find that in most cases, organizations sweep their bad news under the rug and focus on their successes. While this may seem like a way to boost positivity, studies show that employees feel gaslit and lied to when their leaders do this. They prefer when organizations are upfront about their downs as well as their ups.
Being accountable involves communicating openly about failures, such as layoffs and failed projects. In these meetings, leaders should strive to steer away from blaming people and instead focus on taking responsibility for the organizational decisions that led to these outcomes. In doing so, they prove that the organization is aware of its own mistakes and is willing to learn from them and make better decisions in the future. This honesty builds trust and also encourages employees to own up to their own failures when they go wrong.
✨ Stay Authentic
It is not uncommon for organizations to say one thing to the public but do another thing behind closed doors. For instance, an organization may present itself as innovative while, in fact, it is highly bureaucratic and stuck in its old ways. When employees notice such mismatches, they lose their trust in the organization because they realize that it is putting on a front to appeal to the masses.
As a leader, you need to review what the organization communicates to the public against what it actually does internally, including its communication in internal memos and meetings. If a mismatch exists, going back to the drawing board and fixing this misalignment can foster more trust in the organization and prevent employee disengagement.