TRUST... The Overlooked Key to Leadership, Efficiency and Productivity
By Richard J. McGowan

Efficiency, as defined by Mr. Webster, is the ability to produce a desired effect, product, etc. with a minimum of effort, expense or waste He further describes productivity as the abundant creation of goods and services of economic value. To paraphrase an old song, you can’t have one without the other, and most corporate managers would agree.

Are they preoccupied by the obvious, and short-sighting something more important?

The goal – or the problem – is how to achieve efficient productivity in an organization. Whether the output is agricultural, industrial or informational, the task is made even more difficult in today’s high-tech world that seemingly reinvents itself, at home and in the workplace, on a daily basis. As America’s economic base changed over time, there were always management challenges. But today, there are a host of new burdens that harm workers and threaten competitiveness.

For example, manufacturers, unlike other sectors, face a cost-price squeeze because intense global competition prevents them from raising prices despite rising costs. According to a 2004 study by the National Association of Manufacturers, external overhead costs from taxes, health and pension benefits, tort litigation, regulation and rising energy prices add approximately 22 percent to U.S. manufacturers’ unit labor costs, relative to major foreign competitors.

And then there are the twin terrors of the shrinking dollar and record high crude oil prices, to say nothing about the price-tag of waging a war against terrorism. The out-sourcing of jobs, however overblown, still managed to become a political football in the presidential campaign.

Once again, are corporate leaders too preoccupied with the obvious and overlooking something even more important?

When all is said and done, another set of challenges that can be met, and overcome, by America’s business leaders. Whether lobbying Congress and/or the White House for regulatory relief or facilitating employee’s involvement in the decision-making process, the modern-day leader can achieve efficiency and productivity by being flexible and knowing when to pull the plug.

Remember the lesson of Henry Ford, the industrial giant who gained limitless efficiency in automobile production after World War I by producing the inexpensive Model T – the car that would “get you there and get you back?” Ford’s unchallenged dominance of the auto industry became a victim of Ford’s inflexible single-mindedness and absolutism. He refused to listen to his advisors and the public, both of whom were demanding a shift to comfort, styling and performance in their cars. GM quickly overtook the nearly bankrupt Ford’s share of the market he once dominated. He didn’t know how to be flexible or when to pull the plug.

There are, of course, timeless and time-tested models for leading a successful organization that are still effective in today’s fast-changing world. After all, the problems that are central to effective leadership – motivation, inspiration, sensitivity, flexibility and communication – have changed little in the past 3,000 years. We can talk about leadership built on such characteristics as humility, service, vision, courage and so on. We can substitute network models of organization and communication for outdated hierarchies and tinker with even newer and more innovative models.

But, as author Les T. Csorba recently wrote in “Trust: The One Thing That Makes Or Breaks A Leader,” our culture’s legacy of leadership is in trouble, and the crisis is not one of competence but of character.

From the ashes of Enron, Adelphia and WorldCom, Csorba notes, there can be little doubt that the leadership that dominates corporate America is in trouble. Without honesty and trust, even simple problems can ripen in disasters, with honesty and trust, even the most contentious disputes can be settled.

Leaders become worthy of trust for several reasons. They develop a track record of credibility over a long period of time. They do not make bad decisions willfully, and they take responsibility for mistakes.

So the road to efficiency and productivity is more, much more, than high-tech breakthroughs, organization models and innovative slogans. When it comes to leadership, character and trust still count.

Richard J. McGowan, a former White House correspondent during the Kennedy and Johnson Administrations, later served in the Reagan-Bush, Bush-Quayle Administrations. He is a regular contributor to the APS Review.

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