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Trust Between CEOs and CFOs Drive Business Success

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Today we see example after example and we hear story upon story about the breakdown of trust in companies, especially by and between CEOs and CFOs. But having said this, we need to ask ourselves is this trust about which we speak really true and authentic trust? Is it all (and only) about ethics or is there more to it? How can CEOs and CFOs repair, rebuild and maintain trust and drive business success.

Trust Redefined

First, let’s define trust. Trust is a positive assessment of another’s sincerity, competence and reliability which allows us to act together with them.
You make an assessment of sincerity when you believe that the other person does not intend to deceive you. To assess someone as insincere means that you do not believe that they mean what they are saying.

You make an assessment of competence when you believe that a person has the ability to do what he or she promises. Assessing someone as incompetent means that you distrust that they will actually fulfill their promises, not because they are not well intentioned, but because they do not have the skills needed to fulfill them.
You can make an assessment of reliability only after a relationship has been established. Someone can be assessed as being reliable when they have fulfilled their promises consistently over time. If someone makes a promise to you, you may believe they are sincere and competent, but if they have not consistently delivered in the past, you may have an issue with their reliability.

Now when trust is broken, these simple but powerful definitions empower you to take appropriate action. For example, if you as CEO believe the issue with your CFO is incompetence, you may address it through training or by providing additional support. On the other hand, if you the CEO believes that the CFO making a promise to you is insincere, training won’t necessarily be the solution; rather a conversation with the CFO about intention may be necessary. If you assess your CFO as unreliable, again a different conversational solution is needed than if you assess him as not competent.

The Language of Trust

Now managing promises lies at the heart of the conversation to coordinate and implement actions with others. Thus, promises guide all business activity. How a CEO and CFO make, break, or renegotiate promises directly affects their ability to build trust.

So what is a promise? A promise begins when one person realizes that something is missing, needed, or wanted and makes a clear and specific request of or an offer to another person. Of course, with every promise we make there is a possibility that the promise will not be fulfilled. So whether it is due to circumstances beyond our control or not, in order to deal with this issue in a way that develops trust, clear communication is necessary.

If you are the person who promised to perform the action requested, you should renegotiate or revoke your promise in a timely manner and offer an alternative solution. Say you are the CFO who replied to your CEO’s request that you would deliver a full written report by 5pm next Tuesday. Now it is Thursday and for whatever reasons, you know you cannot fulfill this promise. Should you go to your boss and revoke or change your promise now or wait until the deadline of 5pm on Tuesday? What will you do?

If you are the CEO who did not get the report when promised, then you should complain directly to the CFO (and no one else) and promptly. A real complaint can only be the result of an agreed to promise not being fulfilled. Doing so allows you, the CEO, the opportunity to remedy the situation, preserve the CFO’s dignity as well as your own, and nurture the trust between the two of you.

Now an expectation is different from a promise, yet most people do not distinguish the two. This can be a costly mistake for the individual and the organization. In my experience, most people in organizations operate based on what they think are promises but are, in fact, soft expectations of others that have not been clearly voiced and never agreed to. Because unfulfilled expectations lead to resentment and resignation, one of the most powerful moves a CEO can make is to discuss their expectations with their CFO. By doing so, actual promises can be set and distinguished from soft expectations, hopes or wishes.

The Moods and Emotions of Trust

Emotions determine what you can and cannot achieve in all domains of your life. You always speak or act in an emotional context, and that context affects the results you achieve or not. A culture or mood of distrust is created when the following situations occur:

When you make an assessment of insincerity, incompetence, or unreliability of a person in one domain of life and extend it to all domains. For example, if your CFO misses a deadline for completing the annual budget, you assess that you cannot trust him to complete anything on time.

When you make an assessment of insincerity, incompetence, or unreliability for one person and apply it to everyone of the same group or kind. For example, if your CFO misses your email about a significant part of a major acquisition that leads to losing the deal, you then assess that the entire finance team is not competent to pick up your instructions, execute them and achieve your strategy.

Oftentimes in this age of changing jobs, new CFOs can fall into the prevailing mood of either trust or distrust that already has been created by the CEO in their organization when the CFO joins it. More importantly though, we need to know that we can actively generate moods of trust. How do we do that? The mood of trust is generated when members of the group:

Act in ways that create safety among team members such as keeping confidences, speaking from personal experience, making clear requests and keeping promises.

Make legitimate, specific complaints to the person involved when promises are not kept.

Celebrate one another for keeping commitments as well as for outstanding work.

The Physical Side of Trust

Also, creating a culture of trust is not only a matter of language and mood; we must embody and live our conversations. Ambiguity, evasiveness, and duplicity all destroy trust. For example, in an organization where it is not permissible to say no, a yes answer means nothing. It is the leader’s responsibility to ensure that a realistic no is acceptable while an insincere yes is not.

Many of us who are CFOs are not skilled at saying no or making legitimate complaints. Why? Well, we are so afraid to say no, especially to CEOs. What often results for us when we cannot say no are unreasonable amounts of work and unrealistic deadlines that we take on, but for which we blame and resent others. 5
Part of learning this competence has to do with expanding the movements that are available to you in different conversations and finding the movement or stance that permits you to say what you need to say. For instance, it is very difficult to say no or to make a legitimate complaint to the CEO when your body lacks a posture of steadiness or determination. Shifting your body’s habits of moving by practicing stances of determination, stability, openness, and flexibility allow you as the CFO to be more conversationally versatile and more effective.

So What Can CEOs and CFOs Do?

Even with this expanded understanding of trust, it would be naïve to believe that issues of trust can be addressed simply. There are complex forces at work.
So what can CEOs and CFOs do? Well you now know that trust can be learned. Trust can be nurtured and built through effective requests, promises and complaints by CEOs and CFOs together. However, having this information is not enough; you must be willing to act on what you know. You must have the courage to speak about trust, to acknowledge if there is a lack of trust, to eliminate blame while at the same time admitting where you yourself are responsible for the creation of distrust. True leaders like CEOs and CFOs know that it is not enough to understand a new concept; the new idea must be translated into effective action that is practiced over and over again.

With this new learning, CEOs and CFOs can begin to talk about trust in their organizations and in their lives. There is great power in acknowledging what everybody knows to be true and finally talking about what matters. This does not mean there is no risk involved, and for this reason, it is essential for CEOs and CFOs to determine if they need expert help from outside in order to deal with this issue in their organizations. Be Courageous! Be a Leader!

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