By Susan Battley

We are experiencing a deep crisis of confidence about whom we can trust. Seemingly upstanding companies and institutions, such as Fannie Mae and Freddie Mac, AIG, General Motors - as well as individual chief executives - continue to sustain tremendous blows to their reputations and credibility. Faced with higher levels of scrutiny and a negative ripple effect, leaders are at greater risk of behaving in ways that erode trust rather than restore it.

Scandals and mismanagement have rocked our confidence in corporate America, venerable institutions, and those who lead and oversee them. As a result of these events, leaders everywhere - not just those in the direct line of fire - are being stretched far outside their comfort zones. The public's default position has shifted from low trust to  no trust, and this has been reflected in depressed consumer confidence levels, roiling stock prices, and volatile global markets.

Years of success, respect, authority, and control have not prepared leaders psychologically for today's climate of intense inquiry and anger. When top officials feel under attack or very stressed, they - like all people - are at greater risk of behaving in ways that are defensive and maladaptive.

Five Common Maladaptive Behaviors that Leaders Use

1. Denial: outright rejection of unacceptable facts or feelings. ("There is no problem.")
2. Minimization: lessoning the importance of a fact or situation ("It doesn't matter.")
3. Rationalization: justifying an action or stand ("Everybody's doing it.")
4. Black-White Thinking: all-or-nothing approach ("We're right, they're wrong.")
5. Projection: redirecting an unacceptable attribute to someone else ("We're not the problem, they are.")

These behaviors are dangerous to leaders and their organizations for two reasons: first, they produce exactly the opposite of the desired effect, which is restoring trust. Instead, the public sees these behaviors as self-serving, which reinforces skepticism and further erodes leader credibility. Second, they distort or limit critical information. This in turn compromises management's ability to take accurate corrective action.

Reforms instituted by government, trade, and other oversight bodies are necessary but not sufficient to restore public confidence and trust. The same applies to prosecution of wrongdoers. These are all important corrective actions from the "outside in." However, they comprise only half of the equation. The other half involves restoring trust from the "inside out." This is the number one challenge facing America's leaders now.

Six Trust-Enhancing Strategies

1. Recalibrate mentally. Key audiences such as investors, customers, and employees are looking for true leadership, not lawyering or lobbying.

2. Accept that perception is reality. In other words, if you wear two hats, you're likely to be seen as two-faced.

3. Stand and deliver. Take bold corrective action that fully addresses key issues and concerns. Over-correct, if necessary. Acknowledge unintended errors.

4. Lead by example. What gets rewarded or penalized in fact, not in word, is what people notice. Tough action trumps tough talk every time.

5. Practice consistency, communication, fairness, and patience. People have long memories for when they've been treated badly. Restoring trust takes significant amounts of time.

6. Remove those associated with the problem from implementing the solution. Exemplary standards and practices must take precedence over old loyalties and relationships.

Copyright Susan Battley, PsyD, PhD. All rights reserved.