Penn State and the Trustworthy Organization

July 13, 2012
The Freeh report on the Penn State Sandusky child abuse case is now out and it confirms much of what we know about why some organizations produce major trust violations.

1. Individual leaders failed to exercise appropriate stewardship and ethical decision making
2. The Board of Trustees failed to proactively hold management accountable
3. Weak and overly decentralized HR and Compliance functions failed to contain risk.
4. The Penn State culture valued sports and image over transparency, ethics and doing the right thing for all stakeholders.

Trust violations occur when organization systems allow or enable behavior that violates stakeholder trust. These same root causes with slight modifications can be applied to the BP Gulf Oil Spill, Toyota Unintended Acceleration, Goldman Sachs Abacus, and Lehman, Countrywide and Ratings Agencies betrayals of trust. Its time leaders learned how to build truly trustworthy organizations to sustain long-term excellence and stakeholder trust.
 

Jamie Dimon and Trust

June 18, 2012
On May 14 I posted a blog suggesting that JP Morgan Chase might be a high trust bank and part of the trust solution  afterall. After CEO Dimon's appearance in Congress and interview on NBC, we now have more evidence that I may be right and that Jamie Dimon is a high trust leader. Why? There certain key markers for trustworthy leaders and organizations and Dimon sent us some clear signals on them.
1. Similarities and pride - In his actions Dimon reinforced a code at Chase of "doing the right t...
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JP Morgan, Jamie Dimon and Trust

May 14, 2012

JP Morgan's 2.3 billion dollar trading loss has led to a media furor and questions about trust in the financial system but lets put things in perspective. First, the JP Morgan's loss has not put the company in a precarious financial position, much less the entire financial system. Second, JP Morgan immediately disclosed the trades to regulators and the press and was very open in admitting that a) they were to blame and b) that the root cause was poor management. From a transpar...


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Europe in a state of low trust towards Greece

February 11, 2012

Greece badly needs a bailout from the stronger economies in Europe but the finance ministers in these countries seem to have grown skeptical of the commitments coming from Athens. Ministers vented their frustration in public as well. “We cannot live with a system where promises are made and repeated and repeated and implementation measures are from time to time too weak,” said Jean-Claude Juncker of Luxembourg, who chairs meetings of the 17 euro zone finance ministers.

The response to ex...


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Training in Business and Economics May Increase Greed

February 6, 2012
In a study published in the December 2011 edition of the Academy of Management Learning and Education journal, Long Wang, Deepak Malhotra and Keith Murnighan provide further evidence that exposure to economics and the virtues of self-interested behavior can make people more greedy.This follows other research that showed that business students were more likely to engage in opportunistic behavior than students in other types of schools (e.g., Education). We who teach business students must be c...
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Obama is right - Military Shows the Way to Higher Trust

January 25, 2012
The data from Harris Polls supports President Obama's statement in his State of the Union speech, that if we follow the military's example our government will be more trusted. Over the past 30 years the public's confidence in the military has grown but declined in Congress. The reason? The American public doubts the efficiency and effectiveness of Congress to get the right things done, but they do not doubt the capability of the military to protect the country. When Congress makes lofty promi...

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Cruise Ship Captain a Defining Example of Untrustworthy Leader

January 20, 2012
In my book The Decision to Trust there is a chapter on trust in leadership. I suggest that trust among followers comes in part from practices such as "demonstrating capability," "being predictable and having integrity," "aligning stakeholder interests," and "manifesting benevolence." Captain Schettino of the ship Costa Concordia seems to have failed in all of these areas. His flawed maneuver near the coast showed a lack of competence. His unauthorized buzzing of the coast to salute his friend...
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84% Disapprove of Congress - Loss of Trust

January 17, 2012
A record 84 percent of Americans say they disapprove of the way the Congress is doing its job compared with just 13 percent who approve of how things are going, according to a Washington Post/ABC News public opinion poll published on Monday.Research has shown that a primary reason for low approval ratings is that most Americans do not think that Congress, as it operates now,  is competent! Trusting a person, organization or institution requires that we think they care capable of delivering. S...
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An addendum to David Brooks Piece on President as Leader

January 13, 2012
As I expect from Brooks (NYT Jan 12 The CEO in Politics), an insightful view of leadership. I agree with Brook's view but would add a few "must haves" to be a great President based on my 2012 book The Decision to Trust - 1) a few of Brook's points (e.g., instrumentality), can be expressed as "they are great stewards" which implies they serve the larger interests and take a long term perspective. 2) It is political judgment "plus"; beyond political judgment, they also need to be good decision ...

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Decision to Trust Named as Best Leadership Book of 2011

December 19, 2011
The Washington Post has named Dr. Hurley's The Decision to Trust as one of the best leadership books of 2011.
http://www.washingtonpost.com/national/on-leadership/the-best-leadership-books-of-2011/2011/12/16/gIQA3y3lyO_gallery.html

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