A Crisis of Trust
by Lorne Armstrong
A financial crisis is making headlines but the financial mess is the fallout; not the real crisis. The financial crunch is not likely to be the most significant fallout; the real crunch is a trust crunch.
It doesn’t take a genius to recognize the house of cards: risky mortgages rapidly churned out in a fantasy of a never ending increase in property values, repackaged in obscure ways, subsequently rated as low risk, combined with illusory insurance and sold to “trusting” clients by institutions with insufficient resources to withstand a crisis of trust.
We will never really know but their financial modeling likely indicated they could withstand market slowdowns or the odd hiccup in cash flow. Clearly, and tragically, they did not factor in a crisis of trust.
Trust and transparency determine your leadership capacity
The lesson here is clear. Trust is essential to leadership; trust is essential to accomplishment; trust is essential to staying in business. If there is insufficient trust – with colleagues, “bosses” or those to whom you would provide leadership – not much of significance will get accomplished. Insufficient trust with clients, others in your industry or suppliers can mean the end of your business – even if you have been in business for decades and previously enjoyed a good reputation.
Trust can take decades to establish and be vaporized in an instant.
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