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First, if there is one defining characteristic of leaders who are effective over long periods of time, it's that they behave in ways that cause people to see them as credible. That means that they are believed, and trusted, both in the specifics of what they say, and generally, as people.
How do they do this?
First, credible leaders are consistent in their words and their behaviors. They are not constantly shifting courses, and reversing their decisions. They do not shift their leadership and management styles here and there. They are relatively predictable.
Second, they are honest to the degree that it's reasonably possible to be so. That may sound odd, but leaders may be in positions where they cannot reveal everything they know to followers. In this sense honesty does not necessarily mean sharing everything (since some things often need to remain confidential). It does mean that what a manager can share is the truth, even if it may not be the whole truth.
Third, credibility and trustworthiness occur through personal contact, and effective interpersonal communication. For example, as we've indicated elsewhere, a responsive leader will be perceived as more credible and trustworthy as compared to a relatively non-responsive leader. And, a leader who knows when to interact face-to-face (rather than, let's say via email) will tend to be seen as more credible, and inspire greater loyalty compared to a leader who uses (or misuses technology based communication.
Of course, there's much more to the psychology of creating credibility, but it can be boiled down to this: Employees and followers will watch the leader, and look for the degree to which the leader behaves in ways consistent with his or her expressed values. In other words, walking the talk, while a bit of a cliche, is absolutely critical.Where does leadership credibility fit in terms of effective leadership?