Why People Believe in Their Leaders - or Not

In recent years, executives at numerous companies have learned tough lessons through high-profile scandals that swiftly damaged their reputations. Credibility, the authors argue, is based on two key elements: perceived competence (people's faith in the leader's knowledge, skills, and ability to do the job) and trustworthiness (their belief in his or her values and dependability). In field studies, the authors explored the specific behaviors that affect how people assess their leaders' competence and trustworthiness and, in turn, their credibility. The authors identified a number of behaviors that can cause leaders to lose credibility, including displaying a lack of relevant job knowledge, struggling to handle key tasks that are part of their job, and making decisions that don't align with their organization or its broader environment.