Don’t Manage My Expectations

“An expectation is a pre-meditated resentment.”  So goes one interesting saying aimed at managing our own expectations.

But what about managing others’ expectations of us?

  • Have you ever done a small extra favor for a client, just to show your good will, and then ended up getting called out for not doing it repeatedly – even though it was outside the scope of your original contract?
  • Have you ever over-promised in an attempt to close a deal or a budget?
  • Have you ever under-promised in order to make sure you could over-deliver on a contract, or a sales target?

Setting expectations is a major issues in our professional relationships. All these situations are fraught with peril – let’s just focus on the third as a case example.

Always Exceeding Expectations

You know this one – the mantra to ‘always under-promise and over-deliver,’ perhaps as a way to achieve customer delight. Problem is – if you consistently under-promise and over-deliver, you are,  in an important sense, lying. You are deliberately telling your customer (or whomever) one thing, and then doing another. How else to describe that form of managing expectations?

Over time, this destroys your credibility. Whether it’s stock analysts looking at your quarterly guidance, or employees expecting you to top last year’s ‘surprise’ holiday bonus, once you say one thing and do another, the only expectation you’ve ‘managed’ is the expectation that your future behavior will resemble what it was – an intentional sandbagging – not what you said it would be.

And so the party you’re trying to influence makes their own mental adjustment to counter-balance your expected over-delivery– negating your attempt at ‘management.’ Except that another degree of uncertainty is added on each end.

Managing Attitudes

There’s no question that a good attitude helps with life. Measured optimism, a propensity to trust, a positive outlook – all these increase the odds of positive interactions with others. Whether you expect ill or good of another person, that’s probably what you’ll get.

But what if an entire generation is raised the Lake Wobegon way, believing they’re all above average? What if self-help affirmations are of dubious benefit because on some level we don’t believe what we’re trying to tell ourselves? What if corporate and political spin get so bad that they destroy our trust in the very institutions and people who are seeking to manage our expectations?

Attempts at managing attitude are ultimately seen as patronizing. Whether it’s “don’t get your hopes up,” or “you should feel really good about this,” we resent others doing our feeling for us. We want the right to determine our own reactions, therefore our own attitudes.

Managing Expectations the Right Way

It is true that bad surprises are not a good thing. It’s also true that expectations aligned with reality (or slightly more optimistic) are preferable to living in a fantasy world. The problem is not with the noun ‘expectations.’ It comes with the verb – it matters who does the ‘managing.’

I want to manage my own expectations. You can help me by telling me the truth. That means six things:

  1. Be transparent. Get way past just not lying to me. Tell me all the truth you have access to. Make it a policy to give me access to data-without-interpretation.
  2. Prove to me – over and over – that I can depend on you. Promise me lots of little deadlines and meet every one of them – precisely, on the money, not ‘over-performing.’ Do exactly what you said you would do.
  3. Trust me. Share things about yourself with me that I could misuse against you, take risks on me that allow me to over-perform. Because then I have a chance to prove to you how competent and trustworthy I am.
  4. Respect me. Give me the data and let me make up my own mind how I feel about it. Don’t spin me, don’t tell me how I should feel.
  5. Be straight with me. If you do see my expectations careening out of control, and you think I’m about to make a serious error, then pull me aside and tell me straight; don’t sugar-coat it.
  6. Hold me accountable. Call me on my bullshit; confront me when I fail to deliver on time; be forthright with me when I let you down. And let me know that you expect me to do the same.

The best way for you to manage my expectations is to leave their management to me – that’s hard enough.

Are You Selling to Vulcans?

Nowhere am I so desperately needed as among a shipload of illogical humans.

Mr. Spock in ‘I, Mudd’

The iconic Mr. Spock from Star Trek was half-Vulcan, half-human. It’s the former we first notice in Spock – Vulcans are governed entirely by logic and rationality, unencumbered by emotions.

But it’s his human heritage that takes Spock from caricature to character. Spock mirrors our own schizophrenic, rational / emotional natures. He is the sock puppet for humanity, allowing us to look at ourselves afresh.

That much is evident to the casual sci-fi viewer, or any fan of The Big Bang Theory. But you wouldn’t know that from looking at economists, strategy consultants – or much of the B2B sales literature. They suggest that people – particularly smart business people – are mostly rational decision makers, persuaded by well-established rules of scientific evidence, logic, and the inexorable rules of mathematics.

In other words – they treat buyers like Vulcans. Only trouble is, at most, they’re like Spock – half-human. And truth be told, most B2B buyers are even less Vulcan and more human than Spock.

My Brain’s Bigger than Yours

I’ve now spent four decades working with B2B sales organizations.  Lately, I’m reminded even more of how much businesspeople have bought – hook, line and sinker – the idea that customers buy through rational decision-making. The economists’ models are live and well in sales training programs.

Feeding the ratiocinating Vulcan side of buyers is necessary. But it is almost never sufficient. The true role of the intellect in B2B buying is as follows: Buyers scan options rationally, but they make their final selection with their emotions – then rationalize that decision with their brains. In other words, buying is a sandwich – rationality is the bread, but the meaty filling is a rich, emotive set of feelings, finely honed over eons of civilization.

The cognitive role in buying is vastly over-stated. Brains don’t rule. Spock is not 100% Vulcan. Neither is your customer. Not even by half.

Your Customer is Not a Vulcan

Question: What do the following things have in common? Value propositions; challenger selling; strategic fit; problem definition; pricing; negotiation; objection-handling.

Answer: In B2B sales, they usually center around analytical economic value, assuming that the rational resolution of each issue is the key to helping a buyer achieve a decision. Look for these buzz-phrases; clients buy results, show the bottom line, demonstrate value, value proposition, business case, and so forth.

Nothing wrong with that list – it’s all necessary. But it’s not sufficient. What’s missing are the things that actually trigger a buyer’s decision – not just justify it. Those include, for starters:

  • confidence that the seller can deliver what (s)he promises, and
  • the resulting ability to sleep through the night
  • integrity
  • belief that the seller will adjust their commitment to accommodate changing circumstances
  • character
  • commitment to principle
  • a long-term relationship focus
  • a sense that the seller has the buyer’s interest at heart
  • the seller’s ability and willingness to defer gratification
  • vulnerability of the seller
  • a set of values beyond the purely economic
  • a sense that the seller is a safe haven for conversation.

In short – trust in the seller.

Your customer is not a Vulcan. Your customer is barely even Spock.

The Cognitive/Emotive Disconnect

I spend my time with smart, complex-business, B2B professionals. Every single one of them will acknowledge the importance of the above list. Yet every one of them lives in an organization where 90% of attention is focused on the buyer’s Vulcan side, doing slide decks, spreadsheets, valuations and scenario0

Buyers often (rationally) screen sellers. But they quickly form favorites, unconsciously, and usually before the sellers have even had a chance to address the issue. All the Vulcan-targeted approaches are aimed either at forming a buyer’s opinion (too late, already done), or changing a buyer’s preformed opinion (already set in concrete).  It rarely works.

Proof? Ask yourself how many times your customers failed to see the brilliant case you had made, because they were somehow biased against you. You tried to sell to the Vulcan in your Spock-customer; but that human side kept rearing its ugly head.

How Complex B2B Buying Really Works

Very few buyers will tell their boss, “Gee, I guess I bought from those guys because, you know, I really trust them.” That’s career suicide. Buyers need the air-cover (and, to be fair, the reality check) of a rationality-based argument. It’s our job as sellers to deliver that rationale to them, bullet-proof and logic-tight as it can be.

Because in business, we all need to pretend we’re Vulcans.

But deep down, we all know what’s really going on. People buy with the heart, and rationalize with the mind. Brains are a necessary but not a sufficient condition. Being right, by itself, is a vastly over-rated proposition. Being right too soon just pisses people off. All else equal, a trust-based sell will always beat a rationality-based sell.

The truth is, our emotional instincts are extremely powerful (not to mention frequently accurate). We make our decisions first based on those emotions, and then struggle to justify them according to the rules of the game.  Unlike Spock, we lead with the human, and bring in our Vulcan sides as a check.

Many, many of my clients say: “That may be true for lots of people, but not for my [boss] [client] [customer]. They’re completely Vulcan, data-based, just-give-me-the-facts people. You’ve got to treat them like Vulcans, because they demand it.”  But the fact that they demand to be treated like Vulcans is 95% about ego – and that’s their human side.

Ironically, all this is especially true for those who believe the world works on brains. They are prone to buy even more emotionally, because their self-worth is tied up in thinking that emotions don’t matter – which renders them oblivious to their own human decision-making process.

Even if your customer thinks they’re a Vulcan – treat them at least like Spock. Address the human side – then give them Vulcan-food to justify their feelings.

It is curious how often you humans manage to obtain that which you do not want.

– Mr. Spock in ‘Errand of Mercy’

8 Ways to Make People Believe What You Tell Them

How do you get people to believe you?

It sounds like a simple enough problem. In business, most of us – implicitly, if not explicitly – have one answer (or at most, two). That answer is to prove it with data; and to look polished and confident while doing it.

Particularly in complex, B2B services businesses, this is the knee-jerk response. It gets applied to sales pitches, and to handling sales objections. Consultants who advise you on giving presentations will say the same thing: marshal the data, and present it convincingly. It is the approach taken to journalistic writing (at least in J-schools). It is the approach to writing legal briefs.

In consumer marketing, we can be more skeptical. Ah, those wacky consumers, they can be conned by slick TV ads and Instagram campaigns.

But in the ‘real,’ ‘hard’ world of B2B services – not so much. Surely you can’t con sophisticated audiences like the buyers of legal services, the clients of accounting firms, or the CXOs who buy from systems and strategy firms. Surely they abide by the iron-bound rules of logic and evidence. After all, they insist on the point themselves. Surely the only way to get them to believe what we tell them is to provide them with data, delivered with practiced panache.

Isn’t it?

No. And here’s why.

Credibility

Credibility is one piece of the bedrock of trust. If people doubt what you say, all else is called into doubt, including competence and good intentions. If others don’t believe what you tell them, they won’t take your advice, they won’t buy from you, they won’t speak well of you, they won’t refer you on to others, and they will generally make it harder for you to deal with them.

Being believed is pretty important stuff. The most obvious way to be believed, most people would say, is to be right about what you’re saying. Unfortunately, being right and a dollar will get you a  cup of coffee.  First, people have to be willing to hear you. And no one likes a wise guy show-off – if all you’ve got is a right answer, you’ve not got much.

While each of these may sound simple, there are eight distinct things you can do to improve the odds that people believe what you say.  Are you firing on all eight cylinders?

1. Tell the truth. This is the obvious first point, of course – but it’s amazing how the concept gets watered down. For starters, telling the truth is not the same as just not lying. It requires saying something; you can’t tell the truth if you don’t speak it. (A quick test: ask yourself if anyone believes the opposite of your claim. For example, “we are extremely high quality.” Does anyone advertise their so-so, or their low quality? If not, ditch the pitch).

2. Tell the whole truth. Don’t be cutesey and technical. Don’t allow people to draw erroneous conclusions based on what you left out. By telling the whole truth, you show people that you have nothing to hide. (Most politicians continually flunk this point).

3. Don’t over-context the truth. The most believable way to say something is to be direct about it. Don’t muddy the issue with adjectives, excuses, mitigating circumstances, your preferred spin, and the like. We believe people who state the facts, and let us uncover the context for ourselves.

4. Freely confess ignorance. If someone asks you a question you don’t know the answer to, say, “I don’t know.” It’s one of the most credible things you can say. After all, technical knowledge can always be looked up; personal courage and integrity are in far shorter supply.

5. First, listen. Nothing makes people pay attention to you more than your having paid attention to them first. They will also be more generous in their interpretation of what you say, because you have shown them the grace and respect of carefully listening to them first. Reciprocity is big with human beings.

6. It’s not the words, it’s the intent. You could say, in a monotone voice, “I really care about the work you folks are doing here.” And you would be doubted. Or, you could listen, animatedly, leaning in, raising your eyebrows and bestowing the gift of your attention, saying nothing more than, “wow.” And people would believe that you care.

7. Use commonsense anchors. Most of us in business rely on cognitive tools: data, deductive logic, and references. They are not nearly as persuasive as we think. Focus instead more on metaphors, analogies, shared experiences, stories, song lyrics, movies, famous quotations. People are more inclined to believe something if it’s familiar, if it fits, or makes sense, within their world view.

8. Use the language of the other person. If they say “customer,” don’t you say “client.” And vice versa. If they don’t swear, don’t you dare. If they speak quietly one on one, adopt their style. That way, when you say something, they will not be distracted by your out-of-ordinary approach, and they will intuitively respect that you hear and understand them.

What’s not on this list?  Several things, actually. Deductive logic. Powerpoint. Cool graphics. Spreadsheet backup. Testimonials and references. Qualifications and credentials.

It’s not that these factors aren’t important; they are. But they are frequently used as blunt instruments to qualify or reject. We’d all prefer to be rejected or disbelieved “for cause,” rather than for some feeling. And so we come up with rational reasons for saying no, and justifying yes.  But the decision itself to believe you is far more likely driven by the more emotive factors listed above.

Now – this blogpost was written about B2B services businesses. Just for kicks, try going back and reading it as being about congress and politicians. Does that shed any light on trust in government?

 

When the Client Demands Price Cuts

We’ve all been faced with that dreaded moment when a potential client – or even an existing one – demands a price cut. While some basics about price cutting are the same, there are unique versions of this problem facing those of us in advisory, services businesses.

Does this one sound familiar to you?

———–

“A long-standing client came to us and said our price was too high for a job we quoted. They said one competitor was priced 20% below us, and another 30% below. We’re seeing this a lot; word is we’re the high-priced firm in this market, and we’ve lost a few big jobs. It seems to be pretty much a question of price. This business is getting commoditized. Particularly in this economy, we need to seriously consider cutting prices. But our margins are already low.”

Have you heard those words lately? Perhaps spoken them? Before you act, make sure you investigate the situation. This article gives you a structured approach to doing so—looking at causes, solutions, and handling discussions.

CAUSES: WHAT DRIVES CLIENT DEMANDS

Before you respond to demands for price, it is useful to understand what lies below such demands. Three things drive the vast majority of client demands:

  • Fear—the simple fear of being taken advantageof. If clients perceive that someone else is getting a better “deal,” they can quickly feel abused, and may react very negatively. Clients who feel abused become very creative about attributing causes—your rates, your profits, your margins, and so forth.
  • Miscommunication—usually around scope and design issues. The “apples and oranges” problem can arise from many project design issues, including the scope of issues addressed, the leverage of your team, the depth to which issues are explored, timing, and choices about staffing. If the client orders an apple and you price out an apple pie, the client may think you are charging absurd margins on fruit.
  • Quality—misaligned assumptions about quality required. Many service providers make an implicit assumption about the quality required for a certain kind of work. Often the client doesn’t perceive the need for the Cadillac/Mercedes solution—they think a Chevrolet/Volkswagen will do just fine. And often, it will.

Clients demanding price concessions don’t present the issue in these neat terms. They simply say, “your price is too high, and you need to cut it.” Listen carefully – this does not mean that your price is too high. Nor does it mean you need to take drastic action. But you’d better investigate what’s going on.

SOLUTIONS: FIX THE RIGHT PROBLEM

When your client demands a price concession, she usually assumes that rates, costs and profit margins are the problem. Few clients (or providers) challenge this assumption. The client thinks she is being taken advantage of by a voracious provider. The provider feels pressured by a callous client playing him off against others. Both then cast the issue in terms of greed and motives, and dig in for tough price negotiations.

But rates and margins are almost never the real problem. The real problems lie in design issues and in misunderstandings. The worst thing to do is negotiate on a total price alone – it makes the client think you’ve been hiding something, and wonder if he should ask for even more. Too often both parties try to negotiate price—when they should be discussing design. To see why rates are not the issue, consider your economic model. The building blocks of a project bid boil down to:

  • The firm’s costs—i.e. compensation levels
  • Rates—a function of cost, utilization and margins
  • Project design scope
  • Project design leverage
  • Project design quality

Now ask yourself—how does my competitor’s model differ from mine, and what is he cutting to get his prices 30% below mine?

Compensation costs vary hardly at all. The salary market is extremely competitive. Nor do firms vary much on billing rates, utilization and models. None of it is enough to explain a competitor’s 30% discount. That leaves two explanations: either the projects being discussed are just not comparable – or your competitor will lose money on this bid. The discussion you need to have with your client explores both options – in that order.

HANDLING THE PRICING DISCUSSION

Above all, clients want to know they are being treated fairly. Doing so starts with a fair price for work done, and the willingness to be open about how you arrive at that price. Very few clients actually want to pay an unfair price to a provider who has dealt fairly with them. Here’s how to have that discussion. 1. Commit to resolution. Make sure you spend enough time understanding and empathizing with the client’s concerns. Say you’re committed to finding a mutually acceptable resolution—and mean it. 2. Suggest a series of price drivers—from scope and quality concerns to economic drivers—and commit to exploring each in turn.

  • Start with scope and design issues. Ask the client to compare in detail your project design with the competitor’s. That means nailing down modules, scope of research, staffing levels—everything that might be different. Then compare. More than half the time, discussion will stop right here. Most fears are simply misunderstandings of design.
  • Move on to quality issues. Determine whether quality in your proposal is higher than that proposed by a competitor. If so, then ask whether the client is willing to pay for extra quality—or not. If the answer is “not,” be ready to scale back or walk. Your “standards” may be costing you business.
  • If the issue is not yet settled, then put your structural economic cards on the table. Tell the client your billing rate structure, base compensation structure, leverage model and utilization rates. Explain why these numbers add up to a fair profit model for you, and why they probably don’t vary much by competitor—certainly not 30%.

Now you can face the competitor 30% discount head on. Confirm the project design is comparable. Say to the client, “I believe their economic model is similar to ours – and we could not sustain a 30% discount. How long do you believe you will continue to get that discount? And are you willing to switch again if and when they move to sustainable prices?”

If the client would be willing to switch yet again to find yet another discounter, then you should probably walk away and find a relationship buyer. If so, walk away smiling – your competitor just lost money, and you didn’t. Price negotiations don’t have to be about power and control; trust and openness go a very long way. Most clients are happy to pay a fair price to a provider they trust. Just give them the information with which to trust you.

Should you ever cut price? Yes, in two cases. The first is for a volume discount, including existing-client discounts. In these situations, your cost of sales is genuinely reduced; that’s real money, and can be shared. The second reason is to buy your way into a new business or client. Don’t do it lightly. Eventually you will have to raise rates to sustainable levels; and a client who switched to you on price is prone to switch again.

Don’t Be a Social Selling Lemming

 

You probably have a social media presence. You might even call it a social media strategy. But is it really strategic? Or is it just a lemming strategy—making you look like a thousand other firms rushing headlong together toward a cliff? There’s a chance your social selling strategy may not be very strategic at all.

Let’s review a few basics about strategy, then come back to the question.

Competitive Strategy Must Differentiate You

First, a strategy that doesn’t distinguish you from competitors’ strategies is not a strategy at all. The whole point of a competitive strategy is to point out why you, in some important way, are different from your competitors.

This is why the pursuit of “best practices” is not only un-strategic, but it’s anti-strategic. The more you adopt everyone else’s best practices, the more you look like everyone else. A “me-too” strategy isn’t a strategy at all.

Economist Mike Porter suggested years ago there are only two kinds of strategies: being a low-cost producer or being a differentiated producer. Differentiation, in turn, can be along product or industry lines. That makes for three distinctive, differentiable strategies. If you are not following one of the three, then you are in danger of being un-strategic.

What does it mean to be un-strategic? It means you present no compelling reason for anyone to hire you—unless you’re willing to cut your price (an act that often lowers your perceived quality anyway).

The Social Media Lemming Strategy

As the popular myth has it, lemmings throw themselves en masse into the waters in a collective undifferentiated rush toward oblivion. Clearly that’s not a metaphor you want your social media strategy associated with.

But there are two huge forces that drive us all in that direction. One is the zero-marginal cost of volume on the Internet. The other is an obsession with metrics in social media.

Zero-marginal cost: As direct marketers found out to their glee when they discovered Internet marketing, the marginal cost of adding another name to your email list is infinitesimal. The result: spam.

The zero-marginal cost feature has likewise encouraged people to build massive databases, expanded Twitter lists, turned “friend” into a verb, and so on. It all costs nothing. If X is good, then X + whatever must be even better, so why not go for it?

Obsession with metrics: The zero-marginal cost factor is a feature of Internet economics. By contrast, the obsession with metrics is a purely human creation. Encouraged by a tsunami of data supply and a desire to appear scientific on the part of dozens of management gurus, the field of business has been overwhelmed by a tendency to mistake a measurement for the thing that is being measured.

This mistake—basically confusing cause and effect—is evident in the ever-finer increments of activity to be found in CRM systems. It’s embedded in the formulaic insistence of learning and development managers that all training must be evidentially behavioral to be relevant. But nowhere has it become more endemic than in the field of social media.

Think Klout: a metric of metrics. Think Twitter: how many followers you have and how many people you follow. Think LinkedIn: how many “contacts” you have. Think about the incredibly complex mix of analytics put out by Google and a thousand website traffic consultants. All are aimed at improving your metrics. And what do they measure? Basically, more metrics. The ultimate substrate of reality (revenue, anyone?) is sorely missing.

Four Anti-Strategic Social Strategies

  1. Promoting the Same Content: Consider one social media “strategy,” exemplified by Triberr but also evident in LinkedIn groups. Join a group, and the agreement is “we’ll all promote each other,” thereby driving up everyone’s numbers. Does the metric work? Sure, it works to drive up metrics. The cost, however, is strategic.

If you and 25 others all agree to auto-tweet everyone else’s blog post, you then have 25 people all tweeting the same content. Their twitter behavior becomes asymptotically identical to each other. The result: mass un-differentiation.

  1. Pumping Up the Numbers: Another social media “strategy” is to simply increase your number of followers. The direct approach is to announce to the world that “I follow.” Thus, any lemming-like-minded twitterer who follows you can automatically expect you to return “the favor,” thereby increasing each of your numbers.

Do the numbers work? Sure. They work to increase your numbers. Eventually, high numbers will get you onto lists—lists like “Top 50 sales bloggers” or similar. Finally, at that point, differences become grossly evident. There really are some true sales experts. And, there are others who got there solely on social media grade inflation. The difference becomes stark. In the sunlight, quality is evident.

  1. No-Value Content: Another social media “strategy” is a perversion of “content marketing.” Originally (and still, for some people), this meant offering high-quality content in an accessible way to help potential customers develop their thinking. But it rapidly succumbed to the “obsession with metrics” rule.

Today, I get at least one invitation a day from fly-by-night auto-emailing outfits asking if they can write “content” for my site or to embed a link in a post I might make available to them. In any real sense of the word, there is no “content” there.

  1. The Aggregation Delusion: Mimicking news sites, this delusion consists of writing zero-insight-added blog posts that have titles that begin with “Top 12 reasons why…” They amount to little more than clickbait, since they consist of regurgitated, even directly plagiarized, content from elsewhere. The purpose is to drive clicks and traffic so that the blogger can show up on lists of clicks and traffic. Again, there comes a point in the actual buying process where buyers easily note the difference between vapor-ware and real content.

Don’t Be a Lemming

When you set out to compete on volume alone, you’re up against some seriously tough competition. There is room for only one low-cost producer in any market, and it’s traditionally the one with the highest volume. In an Internet world of zero-marginal cost and a lemming-like belief that more metrics are better, there is no shortage of people willing to bankrupt you by leading the way to bankruptcy. Don’t go there unless you have deeper pockets than anyone else.

Competing on differentiation is inherently more attractive. But a lemming strategy is equally seductive here: just because you can “move the needle” doesn’t mean the needle is connected to anything real. It’s easy to get lost in the supposedly quantitative world of social media metrics and forget that there’s not necessarily any “there” there.

Ask yourself the tough strategic question: Why, really, am I different? And the equally tough follow-up question: How would a customer be able to really notice and appreciate that difference?

If you’re not seriously asking yourself those questions, why should anyone believe your answers? They may click, but they won’t buy.

Selling from Inside Your Client’s Shoes: Part 2, Execution

I recently wrote about Selling from Inside Your Client’s Shoes

The gist of it was to drill-down into the interior dialogues that we all engage in at the outset of a sales  conversation. (The subject is related to what famed sociologist Erving Goffman explored in the 20th century – we are all actors on varying stages). 

I suggested that much trust creation in sales happens precisely in the opening, small-talk interactions – “small-talk” really isn’t small.  Done right, we can break through our parallel internal rituals and make a trust connection.  Trust in sales is as much about courage and intimacy as it is about preparation and credibility.

But How Do You Do It?

One reader (thanks Rich) said he totally bought the analysis, but took me to task for leaving out the good part – namely how you do this connection thing. How do you make small-talk Big, and truly connect to the feeling of being in the other’s shoes? 

Fair enough. Here we go.

The problem is that we (both our client and ourselves) are acting out pre-rehearsed, pre-scripted dialogues. There may be some room for improvisation, but not much. 

And when we all operate on auto-pilot, everyone’s interior dialogues continue as well, even taking on greater importance (“when’s he going to be done?” “huh just as I suspected,” “gotta pick up milk on the way home” ).

Why We Destroy Real-Talk

What causes this navel-gazing in place? Ironically, it’s a direct result of planning and rehearsing.  That sales program you’ve been taking?  The one that tells you how to set objectives for the meeting, how to articulate your value proposition, and how to handle objections?  That sales program is not the solution (in this instance), it is the problem! 

If all your interactions are “successfully” scripted in advance, do not pat yourself on the back for good planning.  Instead, kick yourself for having turned a potential human interaction into a bloodless, robotic performance.  

Think about it: If a successful sales call can be programmed in advance according to if-then clauses and do-loops, then why not just send in Robo-Seller? Better yet, email it.  

Borrowing from Pogo, we have met the enemy, and it is us. Sales planning and sales training all conspire to render us impersonal, unconnected, and unable to be effective at creating trust. 

The spell needs breaking. The inner dialogue, on each side of the table, has to be exploded and exposed to the bright light of connection. And it has to start with us, the seller. 

How to Break the Spell

The enemy is planning. The cure is spontaneity. You can’t be “real” if you’re not reacting in the moment. 

And the time to ‘get real’ is right at the outset. Make the small talk real. Let the client know that you are showing up in person, right from the outset, fully present and ready to interact. 

Meaning – improvise. React. Be in the moment. Comment, observe, be curious – about something that occurred to you no earlier than 60 seconds ago. 

Yes, I’m serious. Do not script your opening lines. In fact, don’t even think about them. 

I can hear you – “Whoah, that is risky!”

Yes, it is – and that’s the whole point. Think about the message that taking a risk sends. It says:

  • I’m confident in myself, enough to be at ease and relaxed
  • I’m aware of my surroundings
  • I’m paying attention to and focused on the person I’m talking to 
  • I came to bring value by interacting, not by playing a pre-recorded tape.

And if you make a “mistake?” First of all, making a mistake proves you took a risk, which is the whole point. Secondly, the frequency of making ‘mistakes’ is vastly overrated (really, how likely are you to say, “Who’s that ugly girl in the photo? Oops, that’s your daughter?”)

Prepping for Improv

There’s a reason improv comedians are being hired more and more by consultative organizations – what they teach is what we need in this situation. Here are a few tips.

  1. Don’t over-rehearse
  2. 10 minutes before the meeting, go clear your head. Take a walk; breathe deeply; meditate if you’re into it (count to a thousand if you’re not); notice what your senses are telling you (taste? smell? touch? sound? colors?)
  3. In the waiting room – notice stuff without judgment. What magazines are there? Is it cold? How old is this building? Chat up the receptionist about the weather, or how long they’ve been there with the organization.
  4. When you meet your prospect – focus on them. Pay attention to their voice, their pace, their emotional state. Make yourself wonder what’s going on with them?
  5. Say something. Better yet, ask something. Better still, make an observation and ask something.

At the risk of appearing to give instructions, here are some examples of what you might end up saying. These are only examples: you’re not allowed to use any of them :-).

  • Do you folks get fresh flowers in here every day?  Must be nice.
  • Driving in from the City, what a nice commute that must be every day – is that how you come in?
  • Your receptionist tells me you just moved in to this location last month – do you feel settled in yet? 
  • I’m picking up a sense here that you’re really busy today – anything special going on? Do we need to revisit our time contract?
  • Is that really a Rolls Royce I saw in the front parking lot? What’s the story behind that?
  • I confess, I thought the operation here would be somewhat smaller – then I walk in and I see you’ve got four whole floors here. 

The way you get inside your client’s shoes is to get out of your own. That in turn encourages the client to be present with you. When you do that, the ‘small talk’ actually becomes real. It becomes less a mechanical ‘business-only’ interaction, and a more personal one. 

After all – if you’re really interested in a potential relationship with someone, wouldn’t you want to be real with them from the start?

Selling from Inside Your Client’s Shoes

You know the phrase, “Walk a mile in someone else’s shoes.” It’s short for empathy, understanding the Other so well you can intuit what it feels like to take a long walk—wearing their footwear, no less.

Let’s adapt that idea to selling. What if you could understand your client so well that you could intuit how it feels to be sitting in their seat in a sales meeting, sensing every nuance along the way?

Shall we give it a try?

Sales Meeting Time T-minus-10

It’s 10 minutes before meeting time. You arrive early, and the receptionist ushers you into the conference room and offers you coffee. You nervously drum your fingers on the laptop you brought to introduce yourself and your firm to Claudio and Taciana. They are CEO and COO, respectively, of the relatively new marketing automation firm C3PX. You spoke by phone with Taciana to set up this meeting. You’re optimistic, marshaling your nervous energy as you mentally rehearse your key points for the nth time.

Claudio. Meanwhile, Claudio wonders if he has time to call his 19-year-old daughter at college. Actually, whether to call her at all. Things are not well between the two of them—they haven’t been since he and his wife divorced last year. Teenage girls can be so—difficult. And it seemed like she so often took sides with her mother.

Meanwhile, C3PX is doing well—sometimes too well. Claudio just signed another line of credit extension. The good news was the firm’s credit was good. The bad news is he wants to pay down some debt, but there was always a need to invest in some new software or process. The meeting in 10 minutes may be another example—a necessary expense, but not welcome in terms of cash flow.

Claudio hopes Taciana can take the lead on this. He’s been leaning a lot on her lately. Is he holding up his end of the bargain? Or is it welcome to her—a chance to grow into the business? But what if she’s growing too fast and taking over some of Claudio’s roles as CEO?

Taciana. Taciana is running late. She’s just finished a meeting with HR, and she is concerned the experienced hire recruiting program is short of target. She wonders if she’ll need to postpone the ops team call this afternoon until tomorrow, though she did that last week as well. Is she getting a little overloaded? Does it show?

Taciana has mixed feelings about this meeting. On one hand, she genuinely liked the phone call she had with you. She felt you sounded sharp, competent, and confident. But she can’t help worrying about your service offering.

Does C3PX really need your kind of service at this point in its growth? You offer some great services, but with them comes another level of complexity. Are the benefits worth it? Should they get along for another 12 to 18 months? What if some new technology comes along and leap-frogs your offering?

Also, is this going to be yet another Taciana-solo project? “Sure, I’m the COO,” she thinks, “but that doesn’t mean I have to do everything. Am I leveraged enough? Will Claudio think I’m empire-building if I try to delegate? But if I don’t, how am I going to get time to spend with my husband? We’ve been trying to get more time together; he has a demanding job, too. I hope Claudio takes the lead in this meeting.”

Sales Meeting Time T = 0

It’s time. You take a last look at your phone just as the door opens. In walk Claudio and Taciana.

You all smile and shake hands, then pass out business cards. You each reject offers of more coffee and strategically settle into your chairs, all the while smiling and uttering meaningless phrases in non-committal tones.

The meeting commences.

Like all meetings, it commences on multiple levels. There is the overt agenda to be discussed. There are first impressions, flooding each of you as you quickly take into account the others’ appearance, sound, bearing, and manner. Are you who they expected? What’s different? What does that mean?

And are they who you expected? What did you misjudge? What did you get right? Can you afford to focus on that and pay attention to what’s being said? Do they seem a little rushed? What does that mean? Are they going to sit through your deck, or should you skip it? When should you bring up price?

You can ask them to tell you a bit about their situation, but you can’t do too much of that. These days no one has time for someone who hasn’t done their homework. Yet neither can you waste time proving you’ve done your homework. What does it mean that they placed their iPhone next to them? And so on.

Behind the Scenes

The internal dialogue is endless—and that’s just yours! What about the dialogue inside Taciana’s and Claudio’s heads? How important is this inner cacophony? And what should you do about it? Ignore it? Address it? If you choose to address it, how do you do it?

The truth is those internal dialogues are not trivial. They are important. You need to address them. Most of all this is a great opportunity cleverly disguised as an awkward social moment. You can dramatically affect the whole sale, and the whole relationship, by how you conduct yourself in the first few minutes regarding these internal dialogues.

Small Talk Isn’t Small

The idle chit-chat we engage in is a potent social ritual. The point is not to find out that you both went to Ohio State or love basketball or have kids. Those are proxies.

The real issue at stake is whether they can trust you—in a very specific sense of that word. It’s what we call “intimacy” in the trust equation. Do they feel safe being who they are in your presence? Do you laugh at the right moments—with the right kind of laugh? Do you wince at the right statements—like when Taciana mentions meeting overload? When they say, “Tell us about yourself,” do you remember that mostly they’re just being nice and then turn the conversation to them?

Do you have the emotional courage to raise your eyebrows when Claudio says, “Teenagers—am I right?” and invite further comment should he choose to go there? When one of them raises price concerns, do you respond with curiosity and say, “Tell me what’s behind that concern?” Or do you reply with a canned defense of your value-for-price? Do you have the nerve to say, “I’m sensing a little bit of stress from each of you. Is this decision a source of concern to you?”

This isn’t about your value proposition. It isn’t about proposing challenging questions or asserting your qualifications. But it’s critical. The buyer/seller interaction is many things, but it’s first and foremost human. First impressions matter, and not just about clothes and looks.

What buyers want is to feel at ease, trusting, and confident they can be authentically themselves with you and not have to look over their shoulders when dealing with you.

Buyers make up their mind about this subconsciously, and they do it very quickly. Trust in this sense doesn’t take time; it takes courage, connection, and empathy. Don’t be afraid to let your guard down. Doing so shows others that can do the same with you from the get-go.

This article first appeared on RainToday.

Read Part Two of this post, here. 

What Problem Are We Trying to Solve?

An old business friend told me the other day that the thing he most remembers me saying was, “What problem are we trying to solve?” As he put it, “That little phrase is the key to unfreezing more off-course conversations than any other technique I know of.”

I can’t claim invention. I got it from the United Research side of Gemini Consulting, one of several pieces of clever social engineering they brought to business. Here’s how, and why, it works.

How Business Conversations Go Astray

To hear us tell it after the fact, many business meetings follow a logical flow. They start with an agenda or problem definition, data are then presented, discussions held, and conclusions reached.  Then pigs fly.

It’s not that those individual elements don’t happen – they do. It’s that they happen like a Tower of Babel, randomly and all at once. When everybody’s got an opinion and a vested interest, and nobody’s a designated facilitator – a description of most meetings – we shouldn’t expect much else.

Have you ever been in a planning board meeting?  A condo association meeting? A meeting within your firm’s HR department? An inter-departmental meeting? A sales call with an interested but wary client?

Then you’ve seen the following dysfunctions:

  1. People pursuing their own agendas as sub-text to a given issue
  2. Aimless wandering around various problem definitions
  3. Randomly proposed solutions without grounding
  4. A social struggle for air time
  5. An airing of pet peeves as they manifest in the given issue
  6. A game of dominance and submission playing out in an issue.

And I’m sure there are more. All are forms of incoherence, lacking sequence or structure, generating more frustration from which to feed more incoherence.

It Doesn’t Have to Be That Way

If the root issue is incoherence, then there are several ways to tackle it. You can agree on an agenda. You can enforce sequencing. You can apportion air time.

But one way seems to work better than others. When the babble begins to peak, and the frustration level is palpable, raise your hand, furrow your brow, and ask, genuinely, “Hey folks – what problem are we trying to solve?”

Notice what this simple formulation does.

First, it is socially neutral-to-positive. Logically it has the same effect as saying, “You fools are all over the map – you can’t even define the problem” – but the emotional effect is totally different. You’re not claiming the moral high ground or fighting for your point of view – you’re simply observing a phenomenon, and asking a question.

Second, it’s a very good question. Asking a group to gut-check a problem definition almost immediately elicits an answer – and often it’s the same answer. In which case, collaboration is restored – you all have a common mission again.

And if it’s a different answer, voila, you’ve distilled the essence of the debate – “we have two competing problem definitions, no wonder we were having such difficulties!” In either case, the group becomes re-centered around a dynamic goal – problem definition and resolution, rather than bitching and moaning, or power games.

The net effect of all this is claiming, centering, and norming. A group becomes a group again, with common goals, moving forward, rather than a fractious collection of squabblers.

Give it a try next time you’re in a meeting that’s driving you a little batty – just ask, “Hey folks – what problem are we trying to solve?”

 

Building the Trust-based Organization, Part II

In last week’s “Building the Trust-based Organization Part I,” I suggested that approaches to trust at the organizational level fell into several categories. Like the parable of the blind men and the elephant, all captured some part of the puzzle, but none grasped the entirety of the issue.  The five categories I listed were:

1. Trust as communication
2. Trust as reputation
3. Trust as recipe
4. Trust as rule-making
5. Trust as shared value.

I suggested a holistic approach would have a Point of View, a Diagnosis, and a Prescription.  Here is my attempt at offering such an approach.

Organizational Trust: A Point of View

Trust relationships are asynchronous – one party, the trustor, is the one who does the trusting, and who takes the risks. The other party, the trustee, is the one whom we speak of as being trustworthy (or not). “Trust” is the result of a successful interaction between these two actors.

Trust is largely an interpersonal phenomenon. Trustworthiness is mostly personal, though we do speak of ‘trustworthy’ companies as having a track record or being reliable. Trusting, however, is a completely human action, not a corporate one.

Risk is necessary to trust: if risk is completely mitigated, we are left only with probability.

It follows that the most powerful meaning of “organizational trust” is not an organization that trusts or is trusted, but an organization that encourages personal trust relationships:

A trust-based organization is an organization which fosters and promotes the establishment of trust-based relationships between various stakeholders – employees, management, shareholders, customers, suppliers, and society.

Organizational Trust: Diagnosis

What is needed to create a trust-based organization? Since ‘trust’ is such a broad concept, it’s clear that themes like communications, regulations, and customer relationships will have a role. But to avoid a mere laundry list, what’s needed is some kind of primus inter pares relationship; or perhaps some necessary vs. sufficient distinctions.

My nomination is simple: an agreed-upon system of Virtues and Values. Virtues are personal, and represent the qualities sought out in employees and managers. Values are organizational, and reflect basic rules of relationship that ought to govern all relationships within the organization.

Some typical trust-based virtues include: candor, transparency, other-orientation, integrity, reliability, emotional intelligence, empathy.

I have suggested elsewhere Four Trust-based Organizational Values. They are expressed below in terms of customer relationships just to be specific, but they apply equally to relationships with suppliers, fellow-employees, and so forth.

  1. Lead with customer focus – for the sake of the customer. Begin interactions with other-focus rather than self-focus.
  2. Collaboration rather than self-orientation. Assume that the customer is a partner, not in opposition to us.  We are all, always, on the same side of the table.
  3. Live in the medium-to-long term, not the short term; interact with customers in relationship, not in transactional mode. Assume that all customers will be customers in perpetuity, with long memories.
  4. Use transparency as the default mode. Unless illegal or hurtful to others, share all information with customers as a general principle.

Advocates for Values.  I am not alone in citing Values as lying at the heart of the matter.McKinsey’s Marvin Bower put values at the center of his view of business, and McKinsey for many years was run from his mold. As Harvard Business School Dean McArthur said of Bower, “What made him a pioneer was that he took basic values into the business world.”

In 1953, Bower said, “…we don’t have rules, we have values…”

In 1974, he wrote, “One of the highest achievements in leadership is the ability to shape values in a way that builds successful institutions. At its most practical level, the benefit of a managed value system is that it guides the actions of all our people at all levels and in every part of our widespread empire.”

Bower’s biographer noted that Bower believed that “while financial considerations cannot be ignored, business goals must not be financial; if they are, the business will fail to serve its customers and ultimately enjoy less profit.”

The alumni of McKinsey – some, anyway – learned well. Harvey Golub said, “[values are] a powerful way to build a business…it worked for McKinsey and it worked for IDS and for American Express.”

IBM’s Lou Gerstner said: ‘“I believe that I learned from [Marvin] the importance of articulating a set of principles that drive people’s behavior and actions.”

[Note: McKinsey itself had some noticeable hiccups post-Bower. In my view, this is not an indictment of values-based management, but a sad example of how it requires constant values-vigilance].

The Case for Values.  The use of values as the basis for management is well-suited to the subject of trust, and this advantage shows up in numerous ways.

  • Values scale, in a way that performance management systems never can do.
  • Values are about relationships, in a way that incentives never can be; this makes them highly suitable to the subject matter of trust.
  • Values are infinitely teachable, in a way that value propositions or communications programs alone cannot aspire to.
  • Values are among the most un-copyable of competitive advantages.

Organizational Trust: Prescription

Managing a values-based organization will center around keeping the values vibrant. This is pointedly not done mainly through compensation and reward systems, corporate communications plans, or reputation management programs. Instead, it is done through the ways in which human beings have always influenced other human beings in relationship.  To name a few:

  1. Leading by example: trustworthy leaders show the way to their followers by their actions, not just their words
  2. Risk-taking: trusting others encourages them to be trustworthy, and, in turn, to themselves trust others
  3. Discussion: principles undiscussed are principles that die on the vine. Discussion, not one-to-many communication, is key to trust
  4. Ubiquitous articulation: trust principles should underpin many corporate decisions and actions; trust-creating leaders seize the opportunity for teaching points in every such case
  5. Recognition: Public praise for values well-lived is intrinsically motivating
  6. Confrontation: Trust-building leaders do not hesitate to overrule business decisions if they violate values, and to do so publicly in ways that teach lessons. Values, not value, are the ultimate arbiter of all actions.

To sum up: it’s a simple concept. Trust in a corporate setting is achieved by building trust-based organizations. Trust-based organizations are built to consciously increase the levels of trusting and of trustworthiness in all organizational relationships. The best approach to creating such an organization is values-based management and leadership. This is different from most approaches to management and leadership in vogue today.

The quotes about Marvin Bower were taken from:
Edersheim, Elizabeth Haas (2007-12-10). McKinsey’s Marvin Bower: Vision, Leadership, and the Creation of Management Consulting. Wiley.

 

Building the Trust-based Organization

Last week, I wrote about why organizations don’t teach trust.  Now let’s move from diagnosis to prescription – let’s delve into how to build a trust-based organization.

—-

Let’s start by behind honest: do your eyes glaze over at a title like “building the trust-based organization?” Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So, I set out to tighten up the perspective.

Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. But more frequently it’s a “blind men and the elephant” scenario: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

The following is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into the following five categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.

Trust as Communication.

“Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”

This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.

However, the communication approach begs one huge question – the content being communicated.

Trust as Reputation.

The Edelman PR firm’s annual Trust Barometer has been a major communications success.  A sample statement:

Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the [2012] Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.

This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee – think Wells Fargo, if you want a succinct example of the danger.  It is also inherently corporate, and therefore impersonal.

Trust as Recipe.

There are probably more approaches that fall into this camp than any other.  It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.

A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language.  They offer  four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.

Trust as Rules-Making.

In a Harvard Law blogpost titled Rebuilding Trust: the Corporate Governance Opportunity, Ira Milstein points out the critical roles that can be played by boards and shareholders in increasing trust.

A similar point is made from an Asian perspective. In Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.”

While these views may appear slightly narrow, they’re part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.

The strength of this view lies in its linkage of business to society – the implicit statement that there is no Natural Law that says business has any right to stand alone outside a broader social context.

Trust as Shared Value.

In Michael Porter and Mark Kramer’s notable 2010 HBR articleCreating Shared Value, Porter performs an eyebrow-raising reversal of his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.

Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. (Incidentally, this view reclaims Adam Smith from the clutches of the Milton Friedmans and Ayn Rands who suggest competition is purely about survival of the fittest, and restores to him a sense of Smith’s broader views as reflected in his Theory of Moral Sentiments).

They are not entirely alone. The Arthur Paige Society some years ago published The Dynamics of Public Trust in Business, which similarly stated:

…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.

Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.

Seeing the Elephant Whole

All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”

So what would constitute a good answer?  It must have three parts: a Point of View, a Diagnosis, and a Prescription.

Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.

In Part II of this post, I offer my suggestion for how to best answer the question across all three dimensions.

 

This post first appeared on TrustMatters.