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Leadership Credibility – Why It Matters & How To Develop It

What is credibility? Credibility is simply the quality of being believed or accepted as true, real, or honest. Personal credibility is about trust, respect, and being believable. A leader’s credibility is typically defined in terms of the degree of employee confidence, belief, and acceptance towards the leader.

Why is leadership credibility important?

While personal credibility applies to everyone in the workplace, it is especially important for leaders. Why is that? Because, if your employees do not believe in you as their leader, you just cannot be effective as a leader. Under these circumstances, employees will simply comply with rules but will not work towards the common goal and will not put in their best efforts. Their morale will be low and customer service will be poor.

Lack of leadership credibility creates employee distrust and disengagement thus impacting the reputation of the organisation and also its profitability. Studies have shown that the credibility of the leader influences employee engagement which in turn impacts the organization's productivity and performance. 

While credibility has many facets, in most cases it is judged simply by comparing what you say with what you do in your day-to-day behaviour. Leaders that say one thing but do another won’t have the authenticity and credibility that’s essential to be an effective leader in today’s VUCA environment.

But being trustworthy is not the only contributor to your credibility as a leader. The other very important component of credibility is the perceived competence of the leader – i.e., people’s faith in your knowledge, skills, and ability to do your job and get the job done as a leader.

Employees form such opinions or perceptions not just through direct interaction with you but also through indirect observation of your actions and performance. And these perceptions are extremely important in this hyperconnected age, when vast amounts of information about you is easily accessible in the public domain.

So basically, your credibility as a leader is important because employees want to have the assurance that when you are managing them and assessing their performance, you are yourself competent and trustworthy.

To assess the level of your leadership credibility in your organization, you need to ask yourself these questions and honestly reflect on your answers:

  • Do your employees view you as being believable?
  • Do your employees have confidence that you will do the right thing?
  • Do your employees believe that you have the overall organization’s interest and employees’ interest in mind while taking strategic decisions?
  • Do your peers or partners or shareholders or board members view you as being trustworthy?

If the answer to any of these questions is “no,” then you have a leadership credibility gap that you need to work on.

What takes away from your credibility as a leader?

While there are many factors, let’s talk about the six key behaviours that undermine your credibility as a leader.

Inaction

Research shows that employees seriously question the competency of leaders who fail to take action or ignore problems. This is especially true when it comes to problems that impact the sustainability of the organization.

Indecisiveness

One of the key roles of a leader is to make sense of the operating environment and take strategic decisions about the future of the organization. When you are seen as not fully clued in to the operating environment and lack vision and clarity about the future direction of the organization, you quickly lose the respect of your employees.

Inconsistency

Leaders who make promises without making any effort to fulfil them, really erode their credibility. For example, if you keep saying “I’ll get back to you,” but never do so, it impacts your credibility. Many leaders tend to over-promise even if it is with good intentions, but when it comes to the crunch they can’t deliver what they promise. Your employees will believe your promise and expect you to fulfil them. If you can’t offer what you promise then you will quickly lose credibility as a leader. Another behaviour that undermines your competence is giving contradictory information. The contradictions might come from different people on the leadership team or even from the same person- but it confuses employees and makes them suspicious.

Incoherent communication

When leaders create confusion among employees and other stakeholders by distributing incorrect or misleading information or they misrepresent the facts, it can really undermine their credibility. Sometimes leaders do this without even realizing and sometimes they may do it intentionally to paint a rosier picture, in the hope that it will motivate employees – either way, it results in people getting totally confused at best — and suspicious at worst.

Self-serving actions

Research shows that self-serving behaviours can undermine employees’ trust in their leaders. These include bending the rules to privilege yourself or your close associates, making decisions based on your self-interest rather than what’s best for the organization, urging employees to make sacrifices while wasting the organization’s resources on perks for yourself, and taking credit for the achievements of others. Even if you don’t act unethically yourself, you can suffer a serious loss of trust if you permit colleagues to act unethically. You must uphold high ethical values to protect your organization and your people, or your followers and key stakeholders will lose faith in you.

Treating employees poorly

Leaders who treat their employees as expendable or tend to openly ignore the opinions of employees and key stakeholders are perceived as untrustworthy and hence not credible. Leaders can damage their credibility when they ask for information and reports that don’t seem worthwhile or that they don’t review and act on. Such requests can cause confusion as to what the organization’s priorities are, and the employees may feel resentful about what they see as a waste of their time.

So, these are some specific behaviours that erode your credibility as a leader. What is interesting is that even though leaders lose credibility when they display incompetence or untrustworthiness, employees are much more tolerant and forgiving of an incompetent leader than they are of an untrustworthy leader. They believe that incompetent leaders can at least try to become more competent, whereas untrustworthy leaders can’t easily become more trustworthy.

How can you as a leader build credibility?

What positive actions can you take to strengthen your credibility over time?

Credibility isn’t something that you just gain as you step into a leadership role. There is a process to gaining trust and dedication from your employees, which then leads to credibility.

Here are five specific things that you can do to build your credibility over time:

Focus on long term success

This is very different from simply stating a strategic vision or setting performance targets and then just going about business as usual. It involves mapping out, in detail, how the organization will achieve its goals in the medium to long term.

Develop Foresight

Having a sophisticated knowledge of industry trends and clear ideas about how the organization should respond to them can really build your credibility as a leader. You can also actively predict and prepare for upcoming changes. For example, by making strategic investments in new technologies or markets. These will really enhance your perceived competence.

Streamline Operations

When you work consistently to improve organizational structures and processes and maintain financially sound operations, your credibility as a leader soars. Eliminating unnecessary reporting structures and careless spending, establishing new strategic roles, or investing in technology that improves operational efficiency or business effectiveness are some actions you can take to build your credibility as an action-oriented and competent leader. Don’t shy away from taking tough decisions.

Be Consistent

Leaders are perceived as trustworthy and credible when they communicate and behave in a consistent manner. To begin with, this means making decisions that aren’t contradictory. But it also means behaving in a way that aligns with the promises (both explicit and unspoken) that the company makes to employees and other stakeholders. By pre-emptively looking out for stakeholders’ needs, you can prevent stakeholder conflicts and organizational crises, as well as gain the trust of your employees and other key stakeholders.

Model the Way

Be clear about your values and the organization’s values so that employees and other stakeholders can see why you do what you do. The culture of the organization flows from the top. If you want your employees to trust you, you need to start by showing that you trust them. If you want your employees to be open to change, be change-ready yourself. Basically, know that your employees are observing you minutely all the time and if you want them to behave in a certain way, they need to see you doing the same. Demonstrate your values in how you talk and act to establish credibility and authenticity as a leader.

So, there you have it. Why credibility is important for leaders – because your success as a leader and the success of your organisation depends on it. Credibility stems from your perceived competence and your trustworthiness.

Credibility takes time to build, but it can be torn down in seconds. You don’t need a big scandal or mess up to destroy your credibility – it’s often the little things that you do over time that can add up to destroy your credibility. So, keep your promises, do what you say you will, give credit where it is due, acknowledge mistakes, don’t talk about others behind their back, don’t withhold information, don’t belittle others, be consistent and be accountable.

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