Leadership in Economic Development: It's About Credibility

By Joy Wilkins, CEcD

Many wonder if there are any leaders left who have the strength of character to sustain their trust.  Substantial numbers of people believe that leaders lack the capability to guide business and governmental institutions to greatness in this intensely turbulent and competitive global marketplace.  There is a gnawing sense in many corridors that leaders are not competent to handle the tough challenges; that they are not telling the truth; and that they are motivated more by greed and self-interest than by concerns for the customer, the employees, or the country.  So what can leaders do now to restore trust and confidence?  What positive actions can leaders take to strengthen credibility over time? – James M. Kouzes and Barry Z. Posner

In 2011, James M. Kouzes and Barry Z. Posner observed the turbulence organizations and communities were undergoing at the time and predicted many more “massive and wrenching changes” in the years to come. In such times, they noted that leaders will have to ask their constituents to change, to transform, and to do things differently. And they pointed out how people will commit to the extent they believe in those guiding the change. 

In the past decade, 2020 notwithstanding, Kouzes and Posner’s prediction likely hits home for many of us as we consider how much our lives – and society around us – have indeed changed.  And as successful economic development leaders know from experience, change is inevitable; progress is optional.  Helping those we serve navigate change and leading them to progress is at the heart of what economic developers do.  

So how do we lead others in today’s turbulent times?  How do we provide leadership that others will want to follow?  Fortunately, in their book, Credibility: How Leaders Gain and Lose It, Kouzes and Posner discuss how we can all contribute to the renewal of mutual trust and understanding among leaders and those who follow them.  A selection of their key points is provided here. 

Leadership is a relationship

“Leadership matters, and it matters more in uncertain times than stable times,” say Kouzes and Posner. 

The days when leadership was conferred by rank or characterized by command-and-control are long gone, say the authors.  In fact, leaders who try to lead in this manner often find themselves frustrated by their lack of efficacy.  Instead, they describe leadership as an aspiration.  Say Kouzes and Posner: “It is something you have to earn every day, because on a daily basis, people choose whether or not they’re going to follow you.” 

Kouzes and Posner advise that success in leadership is not only about understanding the desires and expectations of constituents, but also about acting in ways that correspond to their image of an exemplary leader.  To inform their work, the authors had surveyed more than 75,000 people around the globe on the “characteristics of admired leaders.” Consistently, they have found that honesty eclipses all other leadership attributes, followed by being forward-looking, inspiring, and competent. 

“Honesty is absolutely essential to leadership,” say the authors.  “If people are going to follow someone willingly, whether into battle or into the boardroom, they first want to assure themselves that the person is worthy of their trust.” 

As stewards of the public trust, successful economic developers know the importance of serving as an honest broker between economic assets and the people who can mobilize those assets for the greater good.  They can attest to how trusted relationships, built through daily interactions, become the life support for making things happen, and how that trust can be shattered by just one interaction not handled in a truthful and ethical manner. 

The matters before our profession are rarely clear cut and often complex in nature.  Indeed, in a survey by IEDC, economic developers identified maintaining confidentiality, communicating truthfully, and avoiding conflicts of interest as key characteristics of our professional ethics.  Fortunately, IEDC provides economic developers with the ethics training and tools to make better decisions as part of our ongoing professional development.  This training is not just a box to check off, but rather a valuable shared experience with peers where iron truly does sharpen iron. 

Credibility makes a difference 

“Despite the evidence that some people can succeed, for a time, in ways that are devious and dishonest, credibility has a significantly positive impact on individual and organizational performance,” say Kouzes and Posner. 

Credible leaders strengthen the people around them and make others feel more important, explain the authors; they raise self-esteem. “Credible leaders make people feel that they too can make a difference in others’ lives,” explain Kouzes and Posner. And by lifting others up, these leaders inspire commitment and loyalty, say the authors. 

Kouzes and Posner’s research illustrates a clear contrast in outcomes for organizations led by highly credible leaders versus those with low credibility.  In organizations led by highly credible leaders, the authors observed how people see their own personal values consistent with the organization, feel attached and committed to the organization, and even feel a sense of ownership for the organization.  In contrast, they point out how people those serving in organizations led by low credibility leaders may say good things about the organization publicly but feel different in private and would not be willing to stick around if the organization experienced problems. 

The authors make a distinction between what makes a credible person versus a credible leader: The former is known for doing what one says one will do; the latter is known for doing what we say we will do.  

So how do we establish and maintain high credibility as leaders?  Say Kouzes and Posner: “Credible leaders find unity among the diverse interests, points of view, and beliefs of their constituents.”  In other words, they develop a shared vision.  Successful economic developers understand this as a basic practice.  They know that going it alone is not an option and see the work we do as a team sport.  As their journeys illustrate, staying in constant touch with the aims and aspirations of those we serve – above, below and across – is essential for ensuring meaningful outcomes for all concerned. 

Leaders develop capacity 

“Credible leaders know that they have to continuously develop the capacity of their constituents to put shared values into practice,” advise Kouzes and Posner.  This involves liberating the leader in everyone and distributing leadership across the organization, they say.  The authors point to five essential components for empowering others to act: 

• Competence: People must have the knowledge and skills to “do what we say we will do.”
• Choice: They must have the latitude to make choices based on what they believe should be done.
  
• Confidence: They must believe they can do it.
  
• Climate: They need a culture that encourages some risk-taking and experimentation; accepting mistakes as a chance to learn from experience.
  
• Communication: They must be constantly informed about what is going on in order to keep up to date. 
  

By fostering these components, leaders create a culture that focuses on fixing the problems rather than finding the blame, explain Kouzes and Posner. In this culture, they point out how people take the initiative for making things happen, whether attending to something directly or enlisting others to help.  Say the authors: “When everyone is a leader, then everyone is responsible for guiding the organization toward the future…and maintaining alignment with values.” 

For economic developers, the authors provide helpful insights for how to empower others and bring the whole community into the work we do. 

Leaders sustain hope 

Another important role that credible leaders play is as a sustainer of hope, share Kouzes and Posner.  “Leaders must keep hope alive,” they say.  “They must strengthen people’s belief that the struggle they are called upon to deal with will produce a more promising future.” 

The authors point to research that shows how hope is essential to achieving the highest levels of performance.  Hope, they explain, is what drives people to have a greater number of goals across various arenas of life, select more difficult goals, and see the challenges associated with reaching goals from a positive rather than negative vantage point.  Here are additional some ways that Kouzes and Posner describe hope: 

• Hope is an attitude in action.
• Hope enables people to mobilize their healing powers and their achieving powers.
  
• Hope enables people to transcend the difficulties of today and envision the potentialities of tomorrow.
  
• Hope enables people to bounce back even after being stressed, stretched, and depressed.
  
• Hope is essential to an active and healthy life. 
  

In these descriptors, the authors make the point that hope is a critical emotion for reaching our human potential.  By extension, for our communities to reach their potential, there must be a shared sense of hope among community members.  On this, economic developers serve as an essential connector for community members, uniquely positioned to foster hope among those we serve.  

Closing thoughts 

As our communities face ever-pressing challenges – such as protecting public health, fostering economic recovery, addressing systemic racism, and educating our children, to name a few – the hard work of community building and renewal has only increased in importance and need.  Indeed, the stakes have been raised for building bridges and establishing credible joint leadership that can help bring our communities to a better place. 

As we consider the challenging days ahead, Kouzes and Posner also remind us of a fundamental principle for leading with integrity: Do what we say we will do.

ABOUT THIS ARTICLE

Economic development leaders are true change agents for the world around them. The impact of their leadership on those they serve is untold and often cumulative in nature. This article is part of IEDC's ongoing series of articles on "Leadership in Economic Development" that focuses on the application of leadership principles to economic development practice.  How do we respond to the call for dynamic and adaptive leadership given the ever-evolving economic, social, environmental and political considerations affecting our communities and organizations?  This article, and the series as a whole, aims to contribute to the conversation.  

​[This article first appeared in Economic Development Now, a publication by the International Economic Development Council (IEDC), in September 2020 and appears here with permission. Special thanks to IEDC's former managing editor Louise Anderson for her partnership in producing this article.]

​​LEADING INTO THE FUTURE