On Monday, we summarized research that showed how people responded to breaches in trust. To recap, there were 2 types of trust studied:
- Competence based trust: employees believe the leader possesses the technical and interpersonal skills to do the job.
- Integrity based trust: employees believe the leader operates and adheres to a moral and ethical system and set of principles.
The research experiment showed that when leaders admitted guilt and asked for forgiveness with competence based breaches of trust, their employees would forgive them. However, when integrity based trust was broken, the effect was just the opposite. In these cases, it was more effective for the leaders to use a strategy of denial.
The results of this study did provoke a reaction from some of our readers. Just to be clear: we, and the researches in this study, are certainly not encouraging you to lie. However, the research does help explain why some leaders lie when their hand is caught in the cookie jar. Perhaps they feel they are in a lose-lose situation. If they admit guilt, followers will lose trust so they roll the dice, deny any wrongdoing, and hope no one is the wiser.
What the research can’t show are the long term effects of a denial strategy. What happens when additional evidence is provided to counter the leader’s denial? Leaders can then admit guilt, and may forever lose the trust of their following or double down and keep denying. Eventually, things may compound and have disastrous consequences for the leader and their organization.
Want a good example? Please watch the excellent HBO documentary The Inventor: Out for Blood in Silicon Valley (trailer below). Elizabeth Holmes was the founder of Theranos, once billed as the Apple of healthcare, a tech company that was going to revolutionize blood tests. At its height, the company had a valuation of $10 billion. Too bad it was all smoke and mirrors. It’s amazing to watch footage of Holmes repeatedly lie into the camera about the technology that didn’t have the capability the company promised or the profits that didn’t exist. What would have been the outcome if Holmes had come clean at any point before things finally fell apart?