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One of the most precious commodities in business is the commodity of being credible, believable, reliable…a person of your word. Read these inspiring words from John C. Maxwell: consultant, trainer, speaker, pastor, and prolific author.

Credibility is a leader’s currency. With it, he or she is solvent; without it, he or she is bankrupt.

Consider this metaphor: A leader with credibility has a pocketful of coins. As long as the pocket is full, the leader is believable, worthy of respect and able to be trusted. Each time the leader breaks a promise or acts inconsistently with professed values, he or she must spend some of the coins in their pocket. When the coins are gone, so is the leader’s credibility. No amount of persuasion or personal appeal will be able to buy it back. Once lost, respect and trust take years to regain.

Establishing Credibility:

1) Speak the truth. Be honest and up-front. Transparency breeds legitimacy — make it a priority to be open with financial statements, policies and decision-making rationale.

When I began my pastorate in San Diego, I followed the founding pastor who was retiring after having led the congregation for twenty-seven years.  I knew my success hinged upon my ability to earn the trust of the church. So, one Sunday night a month, for several months, I would invite congregants to the church and spend a full hour answering any questions they had for me. At the first Q&A session, 600 people came. My sincerity and openness in fielding questions disarmed them, and it laid a solid foundation of credibility from which I could operate.

2) Don’t hide bad news. With huge corporate scandals seared in our collective memories, we have entered an era in which transparency is demanded like never before. With multiple information channels available, bad news always becomes known, so it behooves management to be candid right from the start.

3) Never over-promise. Do not make promises you cannot keep. Why do you think politicians have such a poor reputation? It’s very simple. They promise the world and seldom deliver.

I am naturally optimistic, and as my children were growing up, I found over-promising to be a weakness of mine. I would talk with my kids about going to exciting places and doing fun activities, but then my schedule wouldn’t allow me to follow through with my intentions.

4) Do what you say you will do. How many times have you been in a business meeting that ended with warm handshakes but empty commitments? When you say you’ll pass along a friend’s contact information to a business associate, do it. Diligent follow-through will set you apart from the crowd and communicate excellence to those you meet.

When credibility is questioned:

Even the best leaders may suffer a blow to their credibility. This may be the result of a mistake or error in judgment. Or circumstances may conspire against the leader, such as adverse market conditions or the failure of a supplier or partner. As a leader, how can you restore damaged credibility?

1) Acknowledge the mistake. When decisions turn out unexpectedly, the leader owes his or her followers an explanation. The egos of leaders can make them quick to assign blame or make excuses, but the problem compounds when a leader does not acknowledge mistakes. The acknowledgement should be on the front end and should be voluntary. A forced acknowledgement ("Because I got caught, I’d like to acknowledge this") does nothing to re-establish trust.

2) Apologize. Admit what you did was wrong, accept responsibility and say you are sorry. It may be painful for the moment, but it will shorten the agony and enable the leader to put the incident behind him or her.

3) Make amends. Find a way to make amends with the people you’ve wronged. Make restitution to those you’ve harmed. You may not be required to do so, but a trustworthy leader goes the extra mile to remedy strained relationships.

Credibility is the bond between the leader and the follower, and it forms the bedrock of why people will do what the leader asks of them. As a leader, credibility will make or break your success in any industry or circumstance.

Note: Many people expressed an interest in this article since we first posted in a few years ago so we are pleased to post it again.

Best, Kevin