07 Sep The Credit Factor
In this week’s Leading Thoughts, let me return to a facet of leadership I believe in strongly and want to urge upon you now.
I counsel all leaders to think in terms of “The Credit Factor.” This is simply the idea that all leaders at all times are building or losing credit with those they lead. How much credit is in the “leadership account” is a factor the wise leader is always monitoring.
Credit is usually built in a leader’s account by victories, wise decisions, and compassion. If Susan has just completed the new health center, engineered a better retirement plan, and assured production goals for the recent period, her credit is rising. This is more than just a rating of popularity. It is trust. It is confidence. It is a force that draws sacrifice and respect.
However, if Susan has just been forced to fire someone and it got bloody or if goals weren’t met for the year or if employee benefits took a hit, then she is losing credit. She might still be respected and workers might still see her as a good leader, but the strength of her credit is slipping.
Now, just as bank accounts rise and fall even with the healthiest income, the “credit factor” for all leaders is ever on a sliding scale. We cannot avoid the dips. They can result from even our wisest decisions. Think of the great leaders in history. All of them had seasons of popular distrust. This is simply part of effective leadership. Not everyone understands the tough decision at first. Not everyone accepts the wisdom of the new policy. Then, the good results start announcing themselves. The leader’s stock rises.
The wise leader knows not to ask too much of their team when their stock is low. Ride it out. Work for healthier accounts. Wait before making the major move. Then, when the credit factor is high, the leader can ask for the sacrifice, for the workers to “buy in” more fully.
Wise leaders also know that if their credit is low and they must build a better account, the necessary payments can be made in dozens of ways: roll up sleeves and work alongside the people, put the workers first, make the smart but costly decisions, admit faults but work to address them, keep the leadership team clear-minded about vision, inspire even more fiercely toward established goals, reward early, celebrate achievements uproariously, reduce individual privileges, resource better, and—always—let gratitude reign.
Finally, the smart leader has to know what the coin of credit is. What do employees want? What do they need to do their jobs well? What is on their wish list? I consulted with a company once that paid its employees very well and had marvelous benefits packages. When surveyed, though, the employees said that some gratitude and some personal time with the bosses would make all the difference. The company increased production 25% soon after and as the result of a strategy that cost the firm absolutely nothing.
What is “The Credit Factor” for your leadership role? It should always be one of the gauges on your leadership dashboard. Know it. Build it. Understand its timing. Master the skills of keeping a full account.