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Credibility goes far beyond employee attitudes. It influences customer and investor loyalty as well as employee loyalty. In an extensive study ofthe economic value of business loyalty, Frederick Reichheld and his Bain & Company colleagues found that businesses concentrating on customer, employee, and investor loyalty generate superior results compared with those engendering disloyalty. They found further that disloyalty can dampen performance by a stunning 25–50 percent.7Loyalty is clearly responsible for extraordinary value creation. So what accounts for business loyalty? When they investigated this question, the researchers found that “The center of gravity for business loyalty—whether it be the loyalty of customers, employees, investors, suppliers, or dealers—is the personal integrity of the senior leadership team and its ability to put its principles into practice.”8And what's true for bricks-and-mortar companies is just as true for the clicks companies. “In fact, when Web shoppers were asked to name the attributes of e-tailers that were most important in earning their business, the number one answer was ‘a Web site I know and trust.’ All other attributes, including lowest cost and broadest selection, lagged far behind. Price does not rule the Web; trust does.”9What Is Credibility Behaviorally?The data confirm that credibility is the foundation of leadership. But what is credibility behaviorally? How do you know it when you see it?We've asked this question of tens of thousands of people around the globe, and the response we get is essentially the same, regardless of how it may be phrased in one company versus another or one country versus another. Here are some of the common phrases people use to describe how they know credibility when they see it:•“They practice what they preach.”•“They walk the talk.”•“Their actions are consistent with their words.”•“They put their money where their mouth is.”•“They follow through on their promises.”•“They do what they say they will do.”
The last is the most frequent response. When it comes to deciding whether a leader is believable, people first listen to the words, then theywatch the actions. They listen to the talk, and then they watch the walk. They listen to the promises of resources to support change initiatives, and then they wait to see if the money and materials follow. They hear the promises to deliver, and then they look for evidence that the commitments are met. A judgment of “credible” is handed down when words and deeds are consonant. If people don't see consistency, they conclude that the leader is, at best, not really serious, or, at worst, an outright hypocrite. If leaders espouse one set of values but personally practice another, people find them to be duplicitous. If leaders practice what they preach, people are more willing to entrust them with their livelihood and even their lives.