The Semantics and Study of Trust

This post isn’t quite as wonky as the title would suggest. Bear with me.

Most of us would agree that ‘trust’ is a complex concept. But few of us, I suggest, have any idea how sloppily we think about it.

The Semantics of Trust

Consider some obvious grammatical usages of ’trust’:

  • Trust as a verb, as in “I trust James.”
  • Trust as an adjective, as in “James is less trustworthy than Jane.”
  • Trust as a noun, as in “trust is less common in Russia than in Denmark.”

Now ask yourself: what is the meaning of the sentence, “Trust in banking is down”?

Does it mean:

  1. that people are less inclined to trust banks these days? or
  2. that banks have become less trustworthy than they used to be? or
  3. that the customer-bank relationship is less based on trust than it used to be?

Why is that important? Because if you don’t know what problem you’re trying to solve, you’re just going to spin your wheels.

Is that a real issue? You betcha. It goes to whether we need more bank regulation, better bank PR, or a rebirth of spiritual values.

For an analogy, consider the fact that serious crime in the US has been declining for about two decades – and the mistaken belief held by majorities that it has actually been rising.  That’s a PR problem.

Now consider that Wells Fargo consistently and consciously incented its employees to sell unnecessary products for years. That’s a trustworthiness problem.

In the aforementioned link, from the Edelman Trust Barometer, you can find hints of all three meanings.  Which suggests, first of all – we have a semantic problem. What the heck does Edelman mean by ‘trust’?  Because if that answer isn’t clear, then how can we meaningfully talk about how to create trust (by smarter consumer risk-taking? by better regulation? by broader social change?).

Biases of Trust Researchers

Psychologists who study trust are, as a group, fixated on trust-the-verb. This is hardly surprising; their view of the world is from an interior perspective, the mind looking out, hence on issues of perception.  They focus on the decision to trust, and thus on the attitudes toward risk-aversion and risk-seeking. Trustworthiness as an adjective is dealt with as an issue of perception by the trustor, not as an attribute of the trustee – trustworthiness is all in the eye of the beholder.

Sociologists are concerned with trust the noun, and with questions like why southern Italy is a lower-trust society than Sweden. When they say ‘trust is down,’ they are talking about the  likelihood of a surveyed population to have a more suspicious outlook on strangers than they used to. They’re interested in herd behavior, not in the perceptions of individual cattle.

Business writers on trust are the most confusing of all.  They pay about as much attention to trust-as-adjective (trustworthiness) as they do to to trust-the-noun. Unlike the academics, however, business writers use the word ‘trust’ to refer to institutions, as opposed to most academic talk (and most talk on Twitter, for that matter), which is about interpersonal trust.

Unfortunately, business writers are often unclear about the distinction (if banks are untrustworthy, is this because bankers are venal, or because ’the system’ is amoral? And is my trusting JPMorgan Chase really not qualitatively different from my trusting Susie?).

Definitions: A Simple Trust Ecosystem

Here’s a simple, five-factor description of the trust ‘ecosystem.’

Trust (1. the noun) is a relationship, between a trustor who trusts (2. the verb) and a trustee, who is or is not trustworthy (3. the adjective). The trustor initiates the relationship by taking a risk (4. the driver of trust); and continues when the roles reciprocate (5. the sustainment of trust).

At the risk of grammatically complexifying what isn’t all that complicated in practice: trust is an asynchronous bilateral relationship initiated by risk-taking and sustained by reciprocation.

If all who wrote about trust simply referred to these five factors, and were clear about what meaning they intended, the trust literature would be much clearer, and recommendations more cogent.

 

 

 

Technology Transformation vs. Trust

Is technology killing trust in your organization? Are we heading for a dehumanized, low-trust business world?  Can technology itself come up with trust-enhancing ways to guard against this trend?

I’m getting asked these questions lately. And while there’s some merit to the question as framed, the news is not nearly as bad as it sounds – provided we remember a few basics.

The Technological Threat to Trust

Think of your own business – how is it being affected by:

  • Social collaboration
  • Big data/analytics
  • Mobility
  • The cloud
  • CRM
  • Process automation
  • Robotics
  • Internet of Things
  • 3d Printing
  • Cognitive systems
  • Blockchain
  • Digital wallets
  • P2P lending
  • Crowdfunding
  • RoboPlanning

Since trust is largely personal – so the logic goes – and the thrust of most of those technologies is to reduce the human connection, if not eliminate it entirely, then we must be heading into a dangerously low-trust future.

  • How can you trust a robo-planner the way you trusted a CFP?  Alternatively, maybe the robo-planner is actually more trustworthy?
  • How can you establish customer relationships when the customer has walked themself through half the buying process online without speaking to anyone? And what if the customer no longer wants those relationships?
  • What happens to trust when my firm automates a process? Doesn’t going from trusting a person to trusting a process create an inherent reduction in trust?

What We Forget

In this way of framing the problem, we forget two major offsetting benefits of technology – each a significant cause for optimism.

The Tradeoff.

The most obvious is that there is trust, and there is trust. In particular, there is “soft” and “hard” trust. These correspond to the Trust Equation components as follows:

“Soft trust” — Intimacy and Self-Orientation

“Hard trust” — Credibility and Reliability

In many of the technologies we talk about, there is a direct trust trade-off. What we lose in human contact, we often gain in reliability (in particular). It wasn’t that long ago that people stood in lines to get cash from their checking accounts. You had to walk a distance; banking hours were restricted; and you never knew how long the lines would be.

Would anyone – bank or customer – ever want to give back the freedom that ATMs gave us? In trading off the polite chit-chat with your friendly neighborhood teller, you got reliable convenience, reliably availability, (pretty) short lines, and reliable accuracy.  A net plus.

Such is often the case with automation, CRM, the cloud, and other technologies. What we lose in one part of trust, we gain with another.

The Multi-part Solution.

The least obvious offsetting benefit is that all the technologies above have not affected by one iota the basic biology of humans. We still are complex,  non-linear, and emotionally-driven in our fundamental approach to people, risks, relationships, and business. Neither Steve Jobs nor Stephen Hawking have come anywhere near close to rewiring humans.

And humans have always resisted purely logical reasoning. Whether you prefer the observations of Daniel Kahnemann or of StarTrek’s Dr. Spock, we like to make decisions based on emotion – then rationalize them after the fact with linear logic.

–We buy with the heart, and justify it with the brain.

–We don’t care what people know until we know that they care.

–The fastest way to make a man trustworthy is to trust him.

What does this mean for the technology v. trust conundrum? Plenty. It means that it’s impossible to engineer out all “soft” trust in most situations – we humanly resist it.  And if we have less of an opportunity for ‘soft trust’ creation, then the entire weight of the soft trust creation will rest on the few remaining opportunities for interaction.

In other words – fewer trust opportunities does NOT mean lower trust – it means more trust weight and emphasis being placed on fewer personal interactions. The trust-importance of those interactions is actually increased, not decreased.

Trust Design Implications

What’s to be done? There are two false solutions, and two better ones.

  1. The technical temptation. It’s tempting to ask technology to solve its own problem, but it’s nearly always the wrong answer. More metrics won’t help if your values are wrong (see Fargo, Wells). Customer sat surveys are as bloodless as the technologies they’re deployed to measure. And no matter our Hals, Siris, and Alexas, we know they’re not ‘soft,’ they’re just software. You can’t get intimate with an avatar (yet, anyway).
  1. The specialist temptation. Similarly, it’s tempting to view technologists as hopeless cases, and to bring in a special squad (group, team, unit) whose job it is to do trust. Wrong: you’re far better off training technologists to get a little better at trust than you are training poetry majors to talk to technology clients. Anyway, you can’t fix a technologist’s low trust by pointing to someone else’s high trust.
  1. The transparency solution. However, technology can help in two particular ways. One is simply to leverage the informational power of technology, and move radically in the direction of transparency.

The reason is simple. A big component of people’s trust is whether they think you have something to hide. That is true at the personal and the institutional level. If we sense that the person, process or organization has no axe to grind, no hidden agendas, and no secrets, then we are inclined to trust them.

This kind of transparency is evident even before we meet someone – in our website designs, in our employee and customer policies, in our public responses.  In an evolving world, when we start by assuming confidentiality, we are setting ourselves up for failure. The right beginning question is “Why shouldn’t we be sharing this?”

  1. The design solution. A technical world is one in which users have power. Users include employees, customers, suppliers, neighbors. Most cases are not like the ATM, where zero contact is required. In most cases, some contact is required.  The key is to give the participant maximum power over the timing and nature of that contact.

In a sales process, this means make everything feasible available without personal contact – eg. online. Then, when the customer gets to the inevitable point where they actually need, and want, a real-person interaction, make that interaction available:

  1. immediately (e.g. within a click for text support, two rings if phone)
  2. with high quality (i.e. a qualified, unscripted support person authorized to talk.

Digitization is not immutably opposed to trust – we’re just not thinking about it rightly. The challenge is for us to get better at trust in the remaining interpersonal situations, and to design the non-personal interactions in ways that respect our analog nature.

 

 

 

How Smart People Get Stupid

Exhibit A. Google conducted a multi-year, multi-million dollar study called Project Aristotle to determine just what distinguishes successful teams from unsuccessful ones. Tons of data were examined, decades of research studied, multiple hypotheses explored.

The answer? Drum roll: successful team members display more sensitivity toward their colleagues, e.g. granting them equal talk time.

THAT’S IT!

If you find that a stunningly unsurprising flash of the obvious, you don’t understand how things work in business these days. Here’s the reaction of one Googler to that study:

“‘Just having data that proves to people that these things are worth paying attention to sometimes is the most important step in getting them to actually pay attention…I had research telling me that it was O.K. to follow my gut,’’ she said. ‘‘So that’s what I did. The data helped me feel safe enough to do what I thought was right.’’

I’m not picking on Google; they are not unique. (And they are, indeed, really smart). But let me restate what Exhibit A is really telling us:

Millions of years of evolution have brought humans incredibly complex and exquisitely tuned neurological systems, capable of instantly intuiting not just friend vs. foe, but parsing a spectacularly wide array of emotional messages being sent out by our fellow humans.

Yet the smartest of the smart among us have determined that you can’t trust that system – unless it’s backed up by years of technological research that couldn’t have been done even just ten years ago.  Fortunately, we have now been given permission by that research to ‘trust your gut.’

It’s a wonder the human race stumbled along without that study for so many years.

 

Exhibit B. We recently got a plaintive email from a genuinely perplexed  client.

He said:

I hear constantly that being authentic is crucial. But it’s hard to get a clear grasp on the idea. It’s especially hard to figure out how I can know (instead of just feeling or believing) that I am authentic – much less know that someone else is.

Absent knowing we’re authentic, can’t anyone believing they’re authentic just claim to be so? How could anyone prove otherwise?  And since we can’t really know authenticity, doesn’t that also mean we can’t measure it, so we can’t compare it across people or time or situations?

Hasn’t someone come up with a way of getting at authenticity by way of knowing, rather than feeling or believing? I’m struggling to know how I can know I’m authentic. I hope this makes some sense.

This person’s pain is real, and deep; I don’t want to appear insensitive by citing it as a cautionary example, we can all relate to the sentiment. Yet, contrary to their hope, the query makes no good sense at all. Instead, it represents the abandonment of commonsense.

Authenticity – to pick that particular example – speaks to an alignment of beliefs and feelings with the cognitive functions that our writer called “knowing.”  When we run across someone who accesses solely their cognitive talents, we don’t think of them as authentic – we think of them as Sheldon Cooper. They are inauthentic because they are presenting not their full selves, but only their frontal cortexes to others.

“Authentic” is what we feel instantly in our pre- and sub-conscious instinctive feelings about other people. It is the same kind of feeling we get when we jump away from the speeding car, recoil at the sight of a snake, or feel our hearts tug when a puppy wags its tail at us.

An Outbreak of Reductionism

This is hardly the first outbreak of hyper-rationalization. In the social sciences it has a name – physics envy. It is particularly virulent today in neuroscience, where some, having locating certain emotions in particular areas of the brain, claim to have “explained” those emotions. Description is by far the narrowest form of explanation – it’s more akin to translation.

But the disease affects business as well. We have no trouble smiling at the naiveté of Frederick Taylor and his stopwatch, measuring people like machines. Yet we are every bit as mechanical and naive today.

Today, it is an article of faith in many of our most successful companies that “management” is a matter of decomposing goals into a series of cascading behaviors which, properly measured and carefully matched to incentives, produce an internally consistent, humming machine. All you need is a dashboard, which is easily available in the form of widgets.

The manifestation of this belief system (codified in “if you can’t measure it you can’t manage it”) is the enormous investment in training, goal-setting, reporting, progress discussion, and performance reviews – all of them non-direct value-adding processes.  All of them are built around a behavioral view of meaningfulness, a pyramid view of behaviors, and a system for metrics and incentives.

Every training department knows to use the Skinnerian language (“attendees will learn the behaviors associated with mastering the skills of XYZ…and will be rated regularly thereafter on a four-point scale of Early, Maturing, Mature, and Master.”)

Petrification by Metrification

This is precisely the technique used decades ago by Harold Geneen, who believed in rolling up data from all his subsidiaries and managing by the numbers. Except Geneen was measuring profit margins, inventory turns and capital costs. (And it turned out it was Geneen’s outsized personality, not his system, that made it work).

Today’s managers are applying the Geneen model to manage things like trust, authenticity, ethics and vulnerability – with the same tools they apply to measuring click-through rates. There is a huge mismatch. Entire organizations – and not just Left-coast tech companies – are being managed by cascading goals and KPIs, each firm with its own acronym for the process.

This continued reduction of higher order human functions to behavioral minutiae, coupled with the rats-and-cheese-in-the-maze approach to incentives, succeeds only in hollowing out those functions. Try this thought experiment: How do you incent unselfishness?

In the words of ex-consultant and CEO Jim McCurry, all this leads to “petrification by metrification.”  You don’t get the genuine article, but a fossilized replica. It may look real, but it’s checkbox stuff.

Scaling the Soft Skills

George Burns once said, “The most important thing in life is sincerity; if you can fake that, you’ve got it made.”

Ironically, the management teams who try to apply Big Data techniques to rich, basic human interactions are swimming upstream. The right way to scale soft skills and sensitivity not only looks different than the way you incent car  salespeople, but it’s a lot cheaper and faster. It has to do with leading with values, engineering conversations, and role-modeling.

But that’s fodder for another blogpost.

 

 

 

Four Principles of Organizational Trust: How to Make Your Company Trustworthy

Here’s a “Golden Oldie” post from 2011. Has anything changed in the passage of five years?

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iStock_000018524776XSmallTrust, in case you hadn’t noticed, has gotten “hot” lately. But much of it sounds very vague—soft, fluffy, nice-to-have, the buzzword du jour.

I’d like to do my part to make it real.

To me, that means breaking it down and making it sound; tapping into the strategy and mysticism, but also staying grounded in the tactical and the practical.

So let’s review some context; then talk about four specific operating principles a business can hone in on to improve its trustworthiness.

Putting Trust into a Workable Context

I’ve suggested elsewhere that “trust” is too vague a term to work with. To do something practical, we need first to identify the trust realm: are we talking about personal trust, or business/organizational trust, or social/institutional trust?

The next question is about the trust role: are we working on being more trusting? Or more trustworthy? They are not the same thing.  And “trust” is the result of them both interacting.

Building a Trustworthy Business

In the realm “personal” and the role “trustworthy,” we can point to personal beliefs and behaviors as indicated in the Trust Quotient. But in business, trustworthiness is built through a set of daily operating principles. Trustworthiness is built from habitually behaving in accordance with a set of commonly shared beliefs about how to do business.

I suggest they can be boiled down to four.

The Four Trust Principles

1. A focus on the Other (client, customer, internal co-worker, boss, partner, subordinate) for the Other’s sake, not just as a means to one’s own ends.  We often hear “client-focus,” or “customer-centric.” But these are terms all-too-often framed in terms of economic benefit to the person trying to be trusted.

2. A collaborative approach to relationships.  Collaboration here means a willingness to work together, creating both joint goals and joint approaches to getting there.

3. A medium to long term relationship perspective, not a short-term transactional focus. Focus on relationships nurtures transactions; but focus on transactions chokes off relationships. The most profitable relationships for both parties are those where multiple transactions over time are assumed in the approach to each transaction.

4. A habit of being transparent in all one’s dealings.  Transparency has the great virtue of helping recall who said what to whom. It also increases credibility, and lowers self-orientation, by its willingness to keep no secrets.

Executing on the Trust Principles

What are the tools an organization has at its disposal to make itself more trustworthy? Any good change management consultant can rattle off the usual suspects, but for trustworthiness, the emphasis has to shift somewhat.

The usual change mantra includes a heavy dose of behaviors, metrics and incentives. Some of that works here, but only to a point.

For example, Principle 1, focus on the Other, is contradicted by too much extrinsic incentive aimed at leveraging self-interest–it undercuts focus on the Other.  And Principle 3, relationship over transaction, forces metrics and rewards to a far longer timeframe than most change efforts employ.

Another great shibboleth of change is that it must be led from the CEO’s office. But with trust, it ain’t necessarily so.  Trustworthiness is a great candidate for infectious disease change strategies; guerrilla trust strategies can work at the individual level, and individual players can lead. Behavior in accord with these principles cannot be coerced; the flipside is, it can be unilaterally engaged in.

The most powerful tools to create a trustworthy organization are things like language, recognition, story-telling, simply paying attention to the arenas where the principles apply—and the will to apply them.  Role-modeling helps; some skill-building helps.  But most of all, it is the willingness to notice the pervasive opportunities to work in accordance with this simple set of four principles.

Trustworthiness breeds trusting (the reverse is true too); the combination is what leads to trust. Which, by the way, is quite measurable in its impact on the bottom line.

Living Inside a Pariah Company

Doggie at Door Exile iStock_000042122536_smallLast week I wrote a very critical blogpost about Volkswagen. I was, of course, hardly alone in doing so; the scandal has created tremors beyond even recent examples.

But in the days since, I’ve been trying to think in different terms – in particular, what must it be like to be an employee of VW in these difficult days? What is the view from inside the glass, looking up and out? What tensions must it cause people – and what can they do?

The Pariah Organization

My good friend Matt Nixon started writing a book last year, tentatively titled “Working for the Pariahs: Can Good People Stop Organizations Going Bad?”  He send me an early draft outline last year, and I’m re-reading it again now.

Matt has the credibility to write this book: an MBA, he spent over a decade in consulting (Accenture, Towers Perrin), then another decade as a VP at Shell Oil and later an MD at Barclays. He knows something about whereof he speaks. Combined with a classical English education and a wide network, the book makes for illuminating reading. [Matt – when are you going to finish this book?]

Matt suggests that being a pariah organization (think “outcast” and “exile”) is a phenomenon on the increase (just because you’re paranoid doesn’t mean they’re not out to get you, it’s really true).  He also points out that pariah-dom is about much more than individual moral failings – it is trackable at an industry level (another gut feeling ratified by data).

He provides some diagnostics and descriptive models to identify and predict pariah-like conditions in organizations. Particularly telling is his critique of “false metamorphosis,” the consultant snake oil of “transformation” that has been overblown. True change, he suggests, requires a lot more, and is a lot more uncommon.

But what about VW’s employees? As Matt notes from other pariah organizations, a great many people in such companies feel bewildered and unfairly treated.  They see themselves, and their company, as largely ethical, and remain quite positive about staying with the organization they are part of.

The overwhelming criticism of their organizations feels like torches and pitchforks.

At a time of crisis, Matt suggests employees go through a predictable sequence of emotions – shock, followed by anger and shame, swinging back to resurgent loyalty, and ending in a blend of guilt, responsibility, and denial. He talks as well about three “tribes” of employees: Loyalists, Mercenaries, and Heroes. The three tribes react differently to the four phases.

What Can Be Done?

I hope Matt finishes his book. It’s got some great insights for organizations and leadership. For me, for right now, I want to focus on what an individual at VW might be thinking about, what they can do, and what we can do to support them.

Human beings are delicate creatures. We process information that is critical of us in very self-protective ways. We will take advice from a friend that we would never take from a stranger.

As outsiders, this means we have to temper criticism with the recognition that exceeding few employees assume personal guilt. The vast majority feel very little personal accountability for the sins of the organization, and personalizing accusations doesn’t help them come to grips with any objective truth.

The increasing demand for personal civil and criminal accountability of leaders in pariah organizations is, I think, a good thing. But it must be tempered by some focus on responsibility – our criminal justice systems are easily inclined to focus on the underlings, and not the leaders. Indiscriminate demonization of employees is counter-productive. In the VW case in particular, the role of culture and corporate environment seems a strong contributor, rather than a simple case of “bad apples.”

As employees, the challenge is to see this as a “Santa Claus” moment: as in, “there is no…”  This did not happen in a vacuum; as Matt notes, the cult of leadership is partly to blame for obscuring the truth that corporate cultures “eat strategy for breakfast,” not to mention well-intended but impotent compliance programs. It’s critical to employees – for their own psychic health, as well as that of the organization – to be constructively schizophrenic.

They need to both feel secure in their own good intentions and, at the same time, be able to objectively see how things could have gotten to this point. As Henry Mintzberg angrily points out, this kind of phenomenon is best seen not as a scandal, but as a syndrome. And only insiders have access to the “real” story.

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Moral outrage has its place in the reform of business. So does shaming, by bringing business issues outside narrowly proscribed economic boundaries and into the social realm as a whole.

But blame and shame are two-edged swords, and very hard to control. At a social level, their overuse just promotes entrenched ill-will; look no further than the current state of US national politics.

At an individual level, blame and shame keep us from seeing and accepting reality, as it is. In a very real sense, as my friend Phil McGee puts it, “Blame is captivity – responsibility is freedom.”

As we look at the VW scandal/syndrome, we need to balance our outrage with a sense of respect for other individuals, and our defensiveness with a willingness to see things as they are.

Question Obsession: The Consultant’s Nemesis

Consultants and salespeople (especially consultative sellers and sellers of consulting) have learned one mantra, and we love repeating it. It is the mantra that says, “Listen first; talk later.” In other words, it’s all about the question. Ask a great question, the logic goes, and all else will fall into place.

That is the great lesson of Sales and Consulting 101. The trouble is, if you never graduate from 101, you will end up in quicksand because an obsession with questions ultimately leads nowhere.

The Obsession with Questions

There’s good reason for the Sales 101 and Consulting 101 lesson of focusing on questions. Go no further than Neil Rackham’s SPIN Selling, in the case of sales, or Peter Block’s classic Flawless Consulting for consultants. Each one shows with wisdom and data that artfully posed questions generate dialogue and interaction, and that is always superior to pre-emptively beating up the client with the answer.

Of course, we often forget our 101 lesson and go into meetings with answers blazing. But that’s not what this article is about. This article is about the downside of obsessing with questions. It’s what happens when we turn the 101 lesson into a mantra, and we begin to focus on questions alone.

Is questioning an obsession? Try doing a web search on “Top Ten Sales Questions;” you’ll get millions of results.

Now ask yourself whether you recognize these themes:

  • Should I ask open-ended or closed-ended questions?
  • Should I ask about implications or needs?
  • Should I ask about the client’s opinions or offer “challenger” questions?

As one sales website puts it, “Get the answers to these questions, and take action based on those answers, and you’ll get the sale. It’s that simple.”

No, it isn’t.

The sales version of question obsession manifests in lists. The consultant version of question obsession manifests in the Great Keystone Arch Question—what is the central supporting element?

You can recognize this form of obsession because it leads consultants speaking among themselves to say things like, “If we can set the data up right, we can frame the discussion such that when we finally pop the Keystone Arch Question, the whole logjam will be released. They’ll feel the pain, envision the solution, and fall all over themselves in a rush to buy our solution.”

No, they won’t.

That’s because good questions are necessary—but not sufficient. You have to have them, but they won’t get you to the end zone.

If all you do is focus on questions, you’ll end up obsessed with yourself, with your solutions and products, and with how clever you are. That’s called high self-orientation, and it will kill trust and sales both. Question obsession is quicksand for salespeople and consultants alike.

Beyond Question Obsession

The narrow purpose of a question is sometimes to get an answer. But there are broader purposes to most questions, and certainly a broader purpose to the art of questioning itself. One is to create a greater sense of insight for the client. Two others are to improve the client relationship and to give the client a sense of empowerment.

These goals are best accomplished not so much by focusing on the “what” of the question but on the “how.” Some examples:

  • Questions to create insight: Consultants often come up with “insights” that only an MBA could understand or that leave the client feeling helpless. These are not useful insights. We don’t want to leave our clients saying, “Gosh, that’s really smart. How will I remember that?” Rather, we want them to say, “Oh, my gosh, of course! it’s so clear when you put it that way, isn’t it?” Our objective is to create insight, not to demonstrate that we have it.
  • Improve the relationship: The better the relationship—buyer/seller or consultant/client—the better everything else gets. Innovation, profitability, time to market, and insights all improve with relationships. Great questions allow the parties to get closer together, more comfortable sharing the uncomfortable, and more willing to take risks by collaborating. Questions such as, “Let me ask you, if I may, do you personally find that scary?” have nothing to do with “content” insight, but they are critical to advancing the relationship.
  • Create client empowerment: The point of all this questioning is not, ultimately, to understand things. It is to change them. And change will not happen if the client feels the insights are threatening, depressing, or out of his control. The key to action is to help the client see ways in which they can change, take control, own, and improve their situation.

It’s not what you ask; it’s how you ask it. All three of these broader objectives have little to do with the content of, or the answer to, a business question. Instead, all of them focus on the outcome of the question-answer interaction. From this perspective, it is not what you ask that is important, but how you ask it. We need to get past the Q&A outcome, which is just about knowledge, and focus on the outcome of the interaction, which is how we help our clients drive change.

Avoid the quicksand: get past questions for questions’ sake, and focus on real business outcomes.

Bloggers’ Top 10 Annoying Spelling Errors: Spellcheck Won’t Save You

You may be uneducated – but you needn’t advertise the fact.

Of course, we all understand typos – though the sight of them uncorrected on a blogpost suggests serious amateurism.

But what’s worse is a spelling error that is more than a spelling error – that belies a failure to understand the difference between two very different words. If you think you ever watched a Western movie that involved sending in the calvary, you are not only mistaken, you are flaunting your ignorance.

Spell-check will not help you here; these are words that have two very different meanings. If all you do is rely on spellcheckers, then all you’ll get is correctly-spelled indications that scream out loud you don’t know what you’re talking about.

You may not have graduated college – but why advertise the fact? And if you did – why make it look like you weren’t paying attention?

Study this list of examples I’ve encountered over the years – my Top Ten Most Annoying Spelling Mistakes. (Non-native English speakers get five free passes).

  1. Cavalry vs. Calvary. A cavalry is a group of horse-mounted soldiers. Calvary is the name of the hill on which Jesus was crucified. The only cavalry at Calvary that day was Roman.    
  2. Compliment vs. Complement. To compliment someone is to say something nice about them; a complement is something that goes well with something else. Being complimentary is a nice complement to a set of good manners.
  1. i.e. and e.g.  i.e. is short for the Latin “id est,” or “that is.” e.g. is short for the Latin “exempli gratia,” or “for example.”   “I’m from Missouri, i.e. show me,  e.g. by citing a few cases.”
  1. Memento and Momento. A memento is a piece of memorabilia. A momento is Spanish or Italian for the English word “moment.” Un momento, por favor, I just want to grab a memento of my last day in Madrid. 
  1. Chord and Cord. A chord is a harmonious set of intervals played at one moment; an idiomatic use is “struck a chord,” meaning ‘resonated with.’  A cord is a length of rope or string.  To make it more musically confusing, we all have vocal ‘cords’ – not chords.  That movie struck a chord with me, especially when the lead character yanked on the cord and proceeded to exercise his vocal cords at full strength. 
  1. Effect vs. Affect. Effect, the noun, is a result – to effect, as a verb, is to bring something about. To affect, the verb, is to influence something – affect, the noun, is a demeanor.  The effect of his affect was to change everything; he affected world politics, and thereby effected world change.  
  1. Pare and Pear and Pair. To pare is to strip something down to its essentials. A pear is a fruit you eat. To pair is to match up with another.  Would you please pare down that pear? I want to pair it with another pear that is already pared down considerably. 
  1. It’s and Its. “It’s” is a contraction for “It is.” Its is the possessive form of “it.”  It’s about time that cartoon rabbit got its own TV show. 
  1. Sight vs. Site. Sight is the ability to see, one of the five senses. Site is a location. He chose the new factory site on paper alone, sight unseen. 
  1. Reader’s Choice. What’s your nomination for number 10 on the list of most cringe-worthy spelling mistakes?  I’ll print all good answers, and the best three get a free copy of one of my books.

 

 

 

 

 

 

Building the Trust-based Organization

The Elephant of TrustDo your eyes glaze over at that title? 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. More often, however, it’s more a situation of the blind men and the elephant: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

This is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into these 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.  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. 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 article Creating Shared Value, Porter auto-performs a conceptual sex-change operation on 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 a few 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.

A Tale of Two Cities: Trust and the iPad

photo by Sean MacEnteeSuppose you’re a high school administrator in a metropolitan area. Your district has the opportunity to use a number of iPads at subsidized rates to help in the students’ education.

Would you:

a. Be sure to load up the tablets with educational software and put in some restrictions on social media sites,
or,
b. Leave the devices pretty much the way they are out of the box, with no particular restrictions?

This happened. One district was in Los Angeles; the other, Burlington Mass, a suburb of Boston.  The question du jour is:

Which school district went with which approach?

So Much for Laid-back West Coasters

Westchester High, part of the Los Angeles Unified School District, went with option a.  Let’s just call it, oh, the “We don’t trust you kids” option.

Burlington (in the heart of Boston’s famed Rt 128 tech corridor) did the loosey-goosey thing.

So much for east coast / west coast stereotypes.

But what’s interesting was the result.

The Fruits of Low Trust

Students in LA took only a few days to hack the filtering software, thus getting into the verboten territories of Facebook and Pandora. The school district:

treated the security breach as a crisis. At Westchester High and two other schools where students managed to liberate their iPads, it ordered that all tablets be returned. In a confidential memo intercepted by the Los Angeles Times, LAUSD Police Chief Steven Zipperman warned of a larger student hackathon and suggested the district was moving too quickly. “I’m guessing this is just a sample of what will likely occur on other campuses once this hits Twitter, YouTube, or other social media sites explaining to our students how to breach or compromise the security of these devices,” wrote Zipperman. “I want to prevent a runaway train scenario when we may have the ability to put a hold on the rollout.

There are plenty of folks who see the LA experience as a fiasco, serving the interests only of tablet producers like Apple.

The Payoff of High Trust

But then there was Burlington. Other than installing a porn filter, the district consciously chose to avoid the “lockdown” approach, instead offering “digital literacy” classes where kids could develop a web presence to impress college admissions officers.

The students already intuitively knew how to use the equipment. They took to it like ducks to water, rapidly outpacing the faculty, who then dug in to catch up with their students.

The teachers now go to a student-run Genius Bar.  The English department created an online vocabulary textbook that saved budgeted funds. And the kids behaved themselves.

The program was enough of a success that they’re expanding it to middle school students.

The Moral of the Story

Too often when we speak of trust, we speak only of static components – moral values, credentials, observing rules.  But an enormous amount of trust is governed by the reciprocating, interactive rules of human behavior.

Specifically – one of the best ways to make someone trustworthy is to start by trusting them in the first place. People hugely live up – or down – to what is expected of them. So much of the cure for low trust lies not in yet-more regulations and audits, but in more risk-taking that requires trust!

Are you listening, banks? HR departments? Employment lawyers? Teachers? The cure to low trust is frequently – more trust.

Trust Inc.: Strategies for Building the Trust Asset – Chapter 1

Trust Inc coverThis is an abridged version of the opening chapter – “The Business Case for Trust” – of the just-published  Trust, Inc.: Strategies for Building Your Company’s Most Value Asset. 

The book is a collection of 30-plus articles by diverse authors on trust in business. Edited by Barbara Kimmel of Trust Across America, the book covers issues ranging from measuring trust, diagnosing its presence or absence, managing trust and increasing trustworthiness, to improving people, companies, industries and societies.

Barbara and I co-authored the opening chapter. Other authors in the book include names like Steven M.R. Covey Jr., Ken Blanchard, James Kouzes and Barry Posner, Peter Firestein (investor relations), Laura Rittenhouse (financial candor), Jim Gregory (branding), and Linda Locke (reputation). And more.

Have a taste of the book, below. And click through here to see a complete table of contents and authors list. Whatever your interest in business in trust, you’ll find something here the addresses it.

The Business Case for Trust

by Barbara Brooks Kimmel and Charles H. Green: from Chapter 1 of Trust, Inc.,publisher Next Decade, November 2013.

Trustworthiness — once exemplified by a simple firm handshake — is a business value that has suffered erosion. We see this in how the public has grown increasingly cynical about corporate behavior—with good reason.

The PR firm Edelman found in a recent “Trust Barometer” survey that trust, transparency, and honest business practices influence corporate reputation more than the quality of products and services or financial performance. And yet, scandals and bad behavior continue to pile up.

Our view is that a company seriously interested in its reputation must increasingly focus not just on “business performance” as it is traditionally understood, but on being seen as trustworthy too.

We believe there is an important, material business case for trust. This doesn’t mean that trust isn’t or shouldn’t be justified on moral or societal grounds. Of course it should. But trust makes for good business as well. This essay will put forth the business case for trust by exploring the gap between low- and high-trust organizations’ performance. We will also offer a framework for assessing corporate trustworthiness, and point the way toward strategies for creating a trust-enhancing business model.

First, let’s look at the costs of low trust.

How low trust affects stakeholder outcomes

Low Trust in Society

Business operates in a social context; because of that, low trust in society-at-large costs business. Indirect examples include the TSA airport security program ($5.3 billion, not to mention the impact on tens of millions of business travelers), and the criminal justice system ($167 billion in 2004). Both of these examples are funded by taxes on individuals and business.

Businesses also shoulder direct tangible losses from crime ($105 billion), where they are often the victims.

A more obvious social cost for business is the cost of regulation. Economist Clyde Wayne Crews releases an annual report entitled “The Ten Thousand Commandments” that tallies federal regulations and their costs. In 2010, the federal government spent $55.4 billion dollars funding federal agencies and enforcing existing regulation. In 2013, The Washington Post reported that “the federal government imposed an estimated $216 billion in regulatory costs on the economy (in 2012), nearly double its previous record.”

Doing business in a low-trust environment is costly. Whether or not you believe that companies can, or should directly impact social conditions, one thing is clear. In aggregate, business bears a lot of weight for the cost of low-trust in our society.

Low Trust in Business Practices

Social costs on business, however, are just the tip of the iceberg. Far bigger costs are exacted by simple business practices. Consider the
need for detailed financial audits. The Big 4 accounting firms’ aggregate global revenue is $110 billion5, of which about one quarter is made up of audits in the U.S.

Consider lawyers: there are over 1.2 million licensed attorneys in the United States, more per capita than in 28 of 29 countries (Greece being the 29th). The cost of the tort litigation system alone in the United States is over $250 billion—or 2% of GDP. It’s estimated that tort reform in health care alone could trim medical costs by 27 percent.

All these are examples of transaction costs: costs we incur to protect or gain (we hope) larger economies of scale, markets, or hierarchies. Transaction costs add no value to the economy per se; they just foster favorable market conditions so that other economic factors (e.g. markets, scale economies) can add value.

But there comes a point at which the addition of more non-value-adding transaction costs ceases to be positive and becomes burdensome. It’s clear to us today that we are well past this point. A Harvard Business Review article from 8 years ago (Collaboration Rules by Philip Evans and Bob Wolf, July 2005) suggests that nearly 50% of the U.S. non-governmental GDP was, as of 2005, comprised of transaction costs. Imagine the impact of redirecting even a small proportion of these monies to value-adding actions.

Their research goes on to say that, in such an economy, the most productive investments are often not those that increase scale or volume, but those that reduce transaction costs. And the most viable strategy for reducing massive transaction costs? Trust.

Low Trust and Employee Disengagement

Disengagement occurs when people put in just enough effort to avoid getting fired but don’t contribute their talent, creativity, energy or passion. In economic terms, they under-perform. Gallup’s research places 71 percent of U.S. workers as either not engaged or actively disengaged. The price tag of disengagement is $350 billion a year. That roughly approximates the annual combined revenue of Apple, General Motors and General Electric.

According to The Economist, 84 percent of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only 12 percent of them reported doing anything about this problem.

What does disengagement have to do with trust? Everything. In a Deloitte LLP ethics and workplace survey, the top three reasons given for employees planning to seek a new job were:

  • A loss of trust in their employer based on decisions made during the Great Recession (48 percent);
  • A lack of transparency in leadership communication (46 percent); and
  • Being treated unfairly or unethically by employers over the last 18 to 24 months (40 percent).

A lack of trust in the employer is at the heart of each of these reasons. To the extent that plans to find a new job are a proxy for disengagement, the case is clear. Lack of trust drives away employees.

In discussing the survey, Deloitte LLP Board Chairman Sharon Allen notes:

Regardless of the economic environment, business leaders should be mindful of the significant impact that trust in the workplace and transparent communication can have on talent management and retention strategies. By establishing a values-based culture, organizations can cultivate the trust necessary to reduce turnover and mitigate unethical behavior.

The survey also provides some interesting data on the business case for organizational trust. When asked to rate the top two items most positively affected when an employee trusts his or her employer, employed U.S. adults made the following top rankings:

  • Morale (55%);
  • Team building and collaboration (39%);
  • Productivity and profitability (36%);
  • Ethical decision making (35%); and
  • Willingness to stay with the company (32%).

As Mary Gentile eloquently states later in this book, “Very often the most visible, most costly challenges to the public trust in business are fairly predictable: deceptive marketing practices; falsified earnings reporting; failure in safety compliance; lack of consistency in employee relations; and so on.”

In other words, the ability to manage the costs of low trust –whether arising from society, from business practices, or from management practices—is to a great extent within the control of the corporation. And yet, it is largely not being done—with sadly predictable results.

Continue reading:
How high trust improves stakeholder outcomes
A framework for assessing trustworthiness
Trustworthiness in Action