We said in the chapter that trust is the essence of leadership. Trust is an important aspect of an organization’s culture, and we already know the role that leaders/managers play in exemplifying and manifesting the culture. However, what happens when an organization’s top leader’s style masks the reality of an organization’s condition? What does that do to trust?

General Electric (GE) has long been a bastion of corporate America. Founded in 1892, GE has been on the forefront of manufacturing consumer products and industrial machinery.81 It’s been touted around the world as an example of American ingenuity and considered a corporate icon. But over the 16-year tenure of Jeffrey Immelt, the former CEO, the company’s stock became the worst performer in the Dow Jones industrial average. What happened at GE? Immelt, who was CEO from 2001–2017, presided over an organizational culture that scorned bad news. The result? Overoptimistic forecasts and bungled strategies. His misguided confidence, which filtered down through the organizational ranks, resulted in unrealistic (and unreachable) financial goals, poorly timed bets on markets, and substandard cash management.82 But you’d never know it from the public face that GE and its leaders were presenting to others. As recently as May 2017 at a yearly outlook forecast meeting held by GE in Sarasota, Florida, Immelt was describing GE as “strong, very strong.”83 The company’s 2018 profit goal was still very reachable, he said, although Wall Street financial analysts had already discounted that notion in its valuation of the company. In fact, Immelt’s comment at this meeting that the company’s current stock price was a mismatch compared to where the company actually was turned out to be a true statement, but not in the way he intended. In the six months after this meeting, when the stock market was setting new records, GE’s shares had fallen by almost half.

What was going on? GE’s executives, with Immelt himself as the leader at the top, projected unbridled optimism about the company’s future that didn’t always match reality. Some company insiders referred to it as “success theater.” Such unsupported optimism led to a “credibility gap between what they (GE’s executives) say and the reality of what is to come.”84 A member of GE’s top executive team said that Mr. Immelt didn’t like hearing bad news, nor did he like delivering bad news. However, the optimism wasn’t warranted, considering what was really happening in GE’s various businesses.

In mid-2017, Immelt resigned and a new CEO, John Flannery, came on board. On his first day, Flannery communicated through a letter to employees that although the transformation under the previous leader was necessary, it was time now for “an intense focus on running the company well.”85 GE still has struggles ahead of it, but perhaps trust will once again become an important part of the way business is done at GE.