Let’s make certain that we are all on the same page from the start here:

Your personal credibility is the currency that you use for all of your business transactions. And like any other currency it is subject to many events and actions that can affect its value. Just like the value of the Dollar can fluctuate with respect to other currencies, the amount of credibility attributed to you can also fluctuate with respect to other leaders.

I had just read some article about writing that said something to the effect of “write killer first sentences to make sure you hook your readers into your story”, and thought I would give it a try. Somehow it doesn’t seem to have me hooked, but then again I’m writing this instead of just reading it. I await feedback to see what the rest of you think.

By the way, I didn’t finish the article. I guess I wasn’t fully hooked.

Despite the somewhat ham-handed introduction I want to look at the role that our credibility plays in business and leadership. I think it is important in that our personal credibility can be the difference between “compliance” with our requests and directives, and “commitment” to our leadership. Compliance occurs because you may inhabit a role where others who report to that role must respect the requests of the “office”. Commitment occurs when the transition is made from aligning with the requests of the office to aligning with the requests of the person in the office.

It’s subtle, but significant.

Credibility is a pretty strange concept. You can increase your credibility by doing incredible things. On the other hand you can decrease or even destroy your credibility by claiming to be able to do incredible things. Credibility is somewhat similar to a retirement or savings account. Credibility is built up over time with continually reinforced deposits. It is added to slowly over time. However it can be destroyed or fully withdrawn as the result of a single, poorly planned action.

Your credibility is based upon other people’s beliefs in your abilities.

Think about that for a minute. Your credibility is not entirely based upon your abilities. Your credibility is not entirely based on what you think you can do, or even on what you know you can do. It is based on what you have done and other people’s opinions of your abilities and what you have done. This idea can lead to multiple mismatches within the business organization.

You can believe you are credible, when others don’t. You can believe someone else is credible when others don’t. You can believe someone else lacks credibility when others ascribe credibility to them. All of these situations can add to the complexities already infesting the business process.

Many items contribute to people’s opinions. It is not just what they observe, but also what they are told, what they hear, and how it is presented. It is also based upon what people want to believe as well. People are required to sort through a blizzard of information on a daily basis. While we all strive to be as objective as possible, sometimes based on the inputs we have received it may be difficult. Such are the vagaries of credibility.

I guess that sometimes credibility doesn’t seem to matter. As I have noted before, we have all been through the various political election seasons where various politicians are contending to see who can appear to be the most credible while claiming to be able to do the most incredible things. This would seem to violate almost all of the precepts associated with credibility, but such is the case for politics. This seems to be a case of who can tell the most people what they want to hear, and not so much what they need to know.

However there are those in business that can also be described as being politically astute. I think that may be where the term originated with respect to business performance. We all know these types. They are more capable of being able to tell people what they want to hear and not so much what they need to know. We look upon them with a mixture of both derision and jealousy. They are able to take what appears to be failure and position it as success. They can take the smallest success and spin it as a game changing moment in business. They seem to be able to create credibility out of almost nothing at all.

Personally, I prefer to see the data.

Here in lies the issue with credibility. It is almost always a personal preference issue. By telling someone something that they want to hear, no matter how outlandish or impossible you can increase your credibility with that person. At the same time there may be those that recognize the implausibility of those statements and will accord a decrease in your credibility because of them.

Every time you say something or do something in business, you change your perceived credibility. Statements are interesting in that they can affect your credibility twice: once as they are first made when people can consider the relative plausibility of them, and then again a second time when the result of the statement can be measured out against the reality of the business performance.

It is somewhat interesting to me in that the credibility associated with actions can only be measured once, when they occur.

It is the action in business that is the credibility defining event. Promising huge growth, or market defining strategies, or game changing products are all well and good. We have all seen many such announcements. It is the delivery of growth, the implementation of strategies and the introduction of new products that define the true credibility. Sooner or later all statements or claims will eventually need to be backed up with performance and attainment.

We have all seen the effect of setting expectations in the valuations of companies in the market. During the quarterly earnings announcement times the company’s actual performance is measured against the markets perceived expectations for earnings. Those companies that consistently “miss” these expectations tend to be priced lower, because the expectations that they set lack credibility.

In short credibility is based on doing. It can be based on doing what you say you can do, but the key aspect is the doing. Meeting the deadline. Achieving the goal. Doing it almost as a matter of course. It seems that Tom Peters, the co-author of the book “In Search of Excellence” has been attributed as the first to coin the phrase:

“Under promise, over deliver.”

It sounds simple to do. If it was, everyone would have a high credibility rating. The reality is that not everyone ascribes to this approach. That’s why we have “marketing”.

Many things go into the credibility that you are accorded. Your level of confidence, how you position or phrase things, it may even be somewhat indefinable as in “charisma”. In the final analysis the end result of what you do will be the primary contributing factor to your credibility. If you are recognized as someone who does what they say they will do, then over time you will build credibility. If that is not the case, you will very quickly lose credibility. And once lost, credibility is very hard to regain.

I wish I could think of a short cut to generating credibility, but I can’t think of one right now. If someone else claims to have one, I might question their credibility.