Caught Between the Grinding Wheels of Sales

A workshop participant recently said something that instantly took me back a few decades. I remember feeling exactly as he described it:

What am I supposed to do? On the one hand, I genuinely want to do right by my client. At the same time, my firm is depending on me to drive revenue there. They’re not asking me to do anything wrong, of course, but the pressure is there nonetheless; it’s on me to figure out how to do it, how to ring the bell. And I’ve got to make it happen; it’s my job.

I feel caught between two grinding wheels: everyone’s nice about it, but that just makes it worse.  I don’t know how to make both sides happy, and it’s just grinding me down.

Exactly. Boy do I remember that. And if you sell systems, or professional services, or complex B2B services, I bet you can relate too.

So here’s what I’ve learned that’s kept me away from the grinding wheels for a long time now.

What You Must Remember

Here’s the thing. Three things, actually.

Thing 1. You can’t make people do what they don’t want. Trying to do so just makes it worse. And much ‘selling’ rhymes with trying to do just that. (One of my favorite findings in Neil Rackham’s great work SPIN Selling is that attempts to teach ‘closing’ actually made students worse at closing).

Thing 2. If you help other people, it predisposes them to help you. And “help” comes in many flavors, including – very much including – just plain old listening. Listening to people predisposes them to listen to  you. And listening to you tends to increase the odds of their buying.

Thing 3. Principle-based behavior beats tactical behavior. If your actions are always based on short-term self-interest, others will not trust you. If your actions are based on principles, others will see it and trust you, including in the buying process.

If you accept Thing 1, you’ll lose less. If you start doing Things 2 and 3, you’ll win more.

If you think rightly about these three ideas, and act on them – you can escape that feeling of being ground down.  Here’s how.

Putting the Basic Things Together

In the happy event that your offering is better than your competitor’s, don’t blow it by over-reaching. Be calm, open, and natural. Be forthright, but confident that your offering can speak for itself.

If your offering is worse than your competitor’s, don’t blunt your sword. Admit it. Do what you can to help your client, including – yes, I’m serious – recommending your competitor (you’ll gain hugely in credibility). Then go back to your product people and convince them you’ve got a product problem, not a sales problem.

In the most usual case – your offering is comparable – you do not win by clever pricing, sexy presentations, or ingenious politics. And frankly, winning by adding more value or being cleverer at content is over-rated. Because let’s be honest: your competitors are more or less as smart or clever as you are. Expertise these days is a commodity.

Where you can win is by playing the long game, and the principles game. If you consistently aim to help your clients, being forthright at all times about what is in their best interest, they will notice. And you will get more than your “fair share” of business, i.e. more than just the share you might expect based solely on quality of service offering.

Because buyers prefer to deal with principled sellers who have their long-term interests at heart, rather than with serially selfish tacticians. For proof, just ask yourself and your firm how you behave as buyers.

Escaping the Grinding Wheels of Sales

Back to my workshop participant, caught between the grinding wheel of sales. How to escape it?

The answer is an inside job. It requires recognizing that all the tension comes from an inability to accept the Three Things:

  • We feel tension when we try to get people to do something we know they don’t really want
  • We feel tension when we try for what we want, rather than what helps the client
  • We feel tension when we try for the transaction, not the relationship.

So – don’t do that.

You must believe in and act on those principles. If you decide the principles need a little nudge, that somehow they’re not strong enough on their own, then you are simply willing yourself back into that space between the grinding wheels. If you can’t live your principles, you will not benefit from them. Nor would you deserve to.

But if you can believe and act on them, you no longer have to worry. Just do the next right thing. Be client-helpful in the long term. Don’t Always Be Closing: instead, Always Be Helping.

Work hard, but don’t spend an ounce of your effort on trying to get others to do your short-term selfish bidding. Let your competitors play that game, because it simply helps you play yours.

Answering Objections

What if your boss doesn’t buy it, you ask? Tell them you need 9 months to prove it. If they refuse to have anything to do with your view, then you must either come to peace with the grinding wheels, or accept that you’ll be happier in another place. The good news is, many managers are quite educable in this regard, particularly if you begin to deliver the numbers, and 9 months give or take is about enough time.

What if your clients don’t buy it, you ask? In my experience, about 80% of clients react the way I’ve described above. The others are either nasty people or monopolists, and they are the ones you should willingly cede to your competitors.

You can stop feeling ground down any time you choose to, starting now. Just choose to Always Be Helping.

Grow Trust with Delegation and Boundaries

Taking Care of The Horses

We often think of ‘management’ as black and white. It’s not. I’m delighted to welcome Jurgen Appelo, one of Europe’s finest management writers, to Trust Matters, to finely articulate some shades of gray. Check out Jurgen’s new book, Management 3.0 Workout, as well.”

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I once tried to figure out what the difference is between the words responsible and accountable. I honestly didn’t know. The words are often used interchangeably. And in Dutch, German, Swedish, Finnish, and other European languages, they even translate to the same word! This makes the use of the two words confusing for readers and annoying for translators. The Wikipedia entry on Delegation tries to clarify it like this:

“Delegation (or passing down) is the assignment of authority and responsibility to another person (normally from a manager to a subordinate) to carry out specific activities (…) However the person who delegated the work remains accountable for the outcome of the delegated work.”

Wikipedia, “Delegation”

In my own words:

You are responsible for your own agreement to be held accountable by someone else.

Beware the accountability trap

It is crucial that you understand that this works in both directions. In any value exchange between two people, each is responsible for his own actions, and for agreeing that he can be held accountable by the other. Sadly, this is often misunderstood. In management 1.0 and management 2.0 organizations, “superiors” seek fulfillment of their own goals over the fulfillment of others, and they hold their “subordinates” accountable without acknowledging that they themselves should be held accountable for the well-being of the workers. Some call it the accountability trap. [Mayer, “The Accountability Trap”] This one-sided view of accountability leads down the path to compliance, compulsion, and complicacy and probably some complaints. You can escape this trap by not only ignoring the difference between the words (as we do in some European languages), but also by acknowledging that empowerment is a reflexive relationship between two equal partners.

Defining Boundaries

The word “management” is derived from the Italian word “manneggiare,” which means “taking care of horses.” I often compare teams and organizations—not people!—with horses, and I believe in mutually respectful relationships between horses and their caretakers. The caretaking of horses includes giving direction and setting boundaries. Quite often, when managers delegate work to teams, they don’t give them clear boundaries of authority [Vozza, “How to Set Healthy Boundaries in Your Workplace”]. By trial and error, teams need to find out what they can and cannot do usually incurring some emotional damage along the way. This was described by Donald Reinertsen as the “discovery of invisible electric fences,” [Reinertsen, Managing the Design Factory pag:107]. Repeatedly running into an electric fence is not only a waste of time and resources but it also kills motivation. And it ruins the coat of the horse. With no idea of what the invisible boundaries are around it, the horse will prefer to stand still or kick another in the head.

Reinertsen suggests creating a list of key decision areas to address the problem of not setting boundaries. The list can include things like working hours, key technologies, product design, and team membership. A manager should make it perfectly clear what the team’s authority level is for each key decision area in this list. When the horse can actually see the fence, there will be less fear and pain. And the farther away the fence, the more the horse will enjoy its territory.

It also works the other way around because of the reflexive relationship of responsibility and accountability. A team usually delegates work to management, such as rewards and remuneration, business partnerships, market strategy, and parking space. The horse is not required to simply accept any kind of boundaries, constraints, and abuse. Nature gave the horse strong teeth and hind legs for this very reason.

Balancing Authority

There’s nothing that scares an inexperienced rider more than the loss of control over the horse. Indeed, a well-managed horse will heed the instructions of its rider, while at the same time the rider will understand the needs and desires of the horse. When we consider a manager and a team, is there an equivalent of the bridle and the reins? Delegation is not a binary thing; there are shades of grey between a dictator and an anarchist. Managers can hand over responsibilities to teams in a controlled and gradual way. The art of management is in finding the right balance. You want to delegate as much as possible in order to decrease bureaucracy and increase power. But if you go too far, self-organization might lead to an undesirable and costly outcome, maybe even chaos. How much you can delegate depends on the maturity of the team, the status of its work, and the impact of decisions on the organization.

Delegation is context-dependent and reflexive. Teams are responsible for their agreement to be held accountable by their managers, and vice versa. Trust between the horse and the rider should always work both ways.

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References
Mayer, Tobias. “The Accountability Trap” <http://bit.ly/YLhZsS> Business Craftsmanship, 20 December 2012. Web.
Reinertsen, Donald G. Managing the Design Factory: A Product Developer’s Toolkit. New York: Free Press, 1997. Print.
Vozza, Stephanie. “How to Set Healthy Boundaries in Your Workplace” <http://bit.ly/1l9NgRs> Entrepreneur, 30 December 2013. Web

Integrity: What’s Up With That?

Can You Roll The Dice On IntegrityLike trust, integrity is something we all talk about, meaning many different things, but always assuming that everyone else means just what we do.  That leads to some vagueness and confusion. But a careful examination of how we use the words in common language is useful.

Integrity and the Dictionary

Merriam Webster says it’s “the quality of being honest and fair,” and/or “the state of being complete or whole.”

If you’re into derivations of words (as I am), then it’s the second of these definitions that rings true. The root of “integrity” is Latin, integer.  That suggests the heart of the matter (integral), and an entirety. “Integer” also has the sense of a non-fractional number, i.e. whole, not fragmented, complete.

In manufacturing, we have the idea of “surface integrity,” the effect that a machined surface has on the performance of the product in question: integrity here means keeping a package of specified performance levels intact. Similarly, a high-integrity steel beam is one that will not break or otherwise become compromised within certain parameters of stress.

Related also to this theme of wholeness is the idea of transparency, of things being whole, complete, not hidden – in this sense, we have high integrity to the extent we appear the same way to all people. Think of the phrase “two-faced” as an example of someone without integrity. (For a somewhat different and nuanced take on this issue in cyberspace, see @danahboyd on Mark Zuckerberg and multiple online identities).

Sometimes when we say someone has integrity, we mean they act consistently, in accord with principles. We say someone has high integrity when they stick to their guns, even in the face of resistance or difficulty.

Which raises an interesting question: where’s the line between integrity and obstinacy? For that matter, can a politician who believes passionately in the art of compromise ever be considered to have high integrity?

Then there’s that other common use of integrity that has a moral overtone – honorable, honest, upright, virtuous, and decent. Some of it has to do with truth-telling; but some of it has to do with pursuing a moral code.

Yet that raises another interesting question: can a gang member or a mafioso be considered to have integrity? Can an Occupy person ever consider a Wall Streeter to have integrity? Or vice versa? There may be honor among thieves, but can there be integrity?

Integrity – Your Choice?

So which is it?  Does integrity mean you tell the truth? Does it mean you operate from values? Does it mean you always keep your word? Does it mean you live a moral life? Does it mean your life is an open book?

Let’s be clear: there is no “right” answer. Words like “integrity” mean whatever we choose to make them mean; there is no objective “meaning” that exists in a way that can be arbitrated.

But that makes it even more important that we be clear about what we do mean. It just helps in communication.

For my part, I’m going to use “integrity” mainly to mean whole, complete, transparent, evident-to-all, untainted, what-you-see-is-what-you-get.

For other common meanings of “integrity,” I’m going to stick with synonyms like credible or honest; or moral and upright; or consistent.

What do you mean when you think of integrity?

Applying Trust Principles to Pricing

A New Perspective on PricingLet’s get tactical.

Friend Mark runs a small coaching business, mainly by himself.  He focuses on an intersection of personal and business development issues: helping people get unstuck.

The usual approaches to pricing in that business are tried and true. Rates are typically quoted for a month at a time, over a planned period of months. Variations on the theme are weekly rates, or hourly rates with a stipulated number of hours agreed upon up front.

Basically, it’s a time-based fee linked to some agreement about the period of time over which the agreement will be in effect. It’s an arrangement familiar not only to coaches, but to consultants, lawyers and other professionals.

Attempts are occasionally made to introduce value-based billing. The attempts succeed or founder based on both the definition of value, and the percent of said value attributable to the professional. I’d love to hear from readers about successful examples, but I’ve rarely run across them.
Mark, however, has some interesting ideas.  Let him tell it.

Many of my clients are hourly-type billers like me.  Since it takes me 8 hours, on average, to get a client from stuck to where they want to be…one approach is to charge them 8x the rate THEY bill at. Using their rates rather than mine, I suspect, is both easier to comprehend for them, and it strikes them as client-focused.

Another approach is that I figure I can work with about a hundred paying clients a year.  So, each client represents 1% of my income.  So I now ask 1% of their income as the fee.

Again, from what I can see, it engenders even more trust in the coaching relationship, helps things go faster, and makes it more likely for clients to refer.  Now, there’s no way I’d ask them to verify that the figure they give me is 1% of their income – I leave it all up to them.  And, of course, if they aren’t satisfied with the journey, I don’t charge them at all.  I leave that entirely up to them.  [David Maister used to do the same—CHG]

I see two powerful themes in the approaches that Mark is developing. First, I’m sure the pricing feels more ‘fair’ to his clients, because he is overtly working off their economic model, not his. It’s the opposite of one size fits all.

The other thing is that he trusts his clients – right from the outset. And as I’ve often written about, the impulse toward reciprocity plays out strongly in trust. We live up to the trust people place in us – and live down to the suspicions others have of us.

I asked Mark, “Have you ever, to your knowledge, been screwed over by an unscrupulous client taking advantage of your ‘honor-box’ approach to pricing?”

Mark’s answer: “Never.”

S&P and the New Challenge of Integrity in Business

We’ve all read tales of corporate wrongdoing – think Bernie Madoff, Enron, LIBOR. In most cases, managers engaged in nefarious behavior, knowing they were doing wrong. There are a few cases where the miscreant could plausibly argue ignorance, or good intentions – Martha Stewart, perhaps.

But a recent courtroom defense by Standard & Poors in response to a Federal charge of fraud, opens up a whole new threat to corporate ethics.

Subordinating Ethics to Legal Arguments

Back in April, S&P responded to a Justice Department’s complaint that S&P’s claims of ratings objectivity, independence and integrity were false, and part of a scheme to defraud investors.

S&P’s creative approach was to argue that such statements were only “puffery,” and that a reasonable investor would not depend on them.

Let’s underscore this. S&P, as a legal strategy, decided to disavow its own declarations of objectivity, independence and integrity, saying in effect, “everyone knows we’re just blowing smoke.”

  • Picture Boeing saying, “About that 787 safety stuff – you didn’t really think we were serious, did you?”
  • Picture Legal SeaFood saying, “Oh, you thought we meant genuine bluefish?  Ha ha, silly you.”
  • You get the picture.

This is not a company trying to avoid being caught. It’s not a case of extenuating circumstances, or offsetting benefits.  It is not even arguing an interpretation of what is wrong.

S&P is arguing – as part of a legal strategy – that “integrity” is just a marketing tool. This subordinates “integrity” to both marketing and legal considerations. It puts it somewhere on a par with market research or creative ad spots.

 The Name of the Problem

It’s not just S&P that is confused – the media is implicated too. In his Bloomberg News story on the issue, Jonathan Weil characterizes the problem this way:

The problem is that sound legal strategies sometimes create public-relations nightmares…Often PR and legal professionals end up pursuing conflicting agendas if they don’t work cooperatively. There’s an old test that everyone in the public eye should use when making important decisions: How would this look if you read about it on the front page of a major newspaper or website?

Where S&P’s lawyers confuse ethics and legal arguments, Weil is reducing ethical issues to ones of reputation and PR.

At least Bernie Madoff had a moral compass. He knew what he was doing was wrong, and tried to hide it. But if “integrity” is a marketing tool, justified by ROI or PR, then we are in uncharted waters.

A Simple Problem

This should not be hard to manage. If someone brings a legal strategy of “integrity as puffery” to the Chief Counsel or CEO, this is what they should say in response:

“Excuse me – you are deeply confused.  This is not a legal or marketing strategy issue. There will be no analyses of riskiness, ROI, or trade-offs with reputation. Integrity is not something we bargain with. It is a core value. That means precisely what it says.

“Throw away immediately any work you were doing in that direction. And I want to know tomorrow at 9AM, in writing, why it was you were even thinking in this misconceived direction. Am I clear?”

Which would you trust?  A company with leadership that answered this way? Or a company that went to court with integrity for sale?

Judge Carter, who heard the case, was clear:

The court cannot find that all of these ‘shalls’ and ‘must nots’ are the mere aspirational musings of a corporation setting out vague goals for its future. Rather, they are specific assertions of current and ongoing policies that stand in stark contrast to the behavior alleged by the government’s complaint.

Exactly.

 

 

 

The Problem with Lying

Dilbert on trust and lying:

dilbert

Scott Adams nails it.  With a sledgehammer, as usual. The pointy-haired boss is ethically clueless, and blatantly so.

We all get the joke, much the way we get the old George Burns line, “the most important thing in life is sincerity – if you can fake that, you’ve got it made.”

But sometimes it’s worth deconstructing the obvious to see just what makes it tick.  So at the risk of stepping on the laugh line, let’s have a go at it.

Lying and Credibility

The most obvious problem with lying is that it makes you wrong. Anyone who knows the truth then immediately knows, at a bare minimum, that you said something that is not the truth, aka wrong.

The shock to credibility extends even to denials. Think Nixon’s “I am not a crook,”  or Clinton’s “I did not have sex…” or the granddaddy of them all, the apocryphal Lyndon  Johnson story about getting an opponent to deny having had sexual relations with a pig. In each case, the denial forces us to consider the possibility of an alternate truth – and the damage is done.

But credibility is the least of it. There are two other corrosive aspects of lying: evasiveness, and motives.

Lying and Evasiveness

When you think someone is lying to you, you likely think, “Why is he saying that?” Evasive lying is rarely as direct as the Dilbert case; more often it shows up in white lies, lies of omission, or lies of deflection. “You know, you can’t really trust those damage reports anyway,” “I wouldn’t be too concerned about the service guarantee if I were you,” and so forth.

If the first response to a lie is to doubt that what is stated is the truth, then the second response is to wonder what the truth really is. And we sense evasiveness as we run down the list of alternate truths, each more negative than the last.

Lying and Motive

But the most damning aspect of lying is probably the doubt it casts on the liar’s motives. We move from “that’s not true!” to “I wonder what really is true,” to “why would he be saying such a thing?”

To doubt someone’s motives is to add an infinite loop to our concerns about the lie. First of all, motive goes beyond the lie, to the person telling the lie – who is now incontrovertibly a liar.

Second, the rarest of all motives for lying is an attempt to do a  greater good for another. Despite frequent claims that “I did it for (the kids / the parents / justice), almost all motives for lying turn out to be self-serving at root.  (Including the lies we tell ourselves about why we’re telling lies). Why would he do such a thing? Because there was something in it for him, that’s why! It’s almost always true.

And if people act toward us from selfish motives, then we know we have been treated as objects – as means to an end and not as ends in ourselves. This is unethical in the Kantian sense.

Worst of all, bad motives call everything else into question. “If he lied about this, then how can I know he was telling the truth about that? Or about anything else?” This is why perjury is a crime, and why casting doubt on someone’s character is a common way to counter their statements.

Recovering from Lies

We’ve all told lies. At least, everyone I know has. Okay, I have. We can often be forgiven, just as we can forgive others their lies to us. To forgive and to be forgiven, the liar must express recognition and contrition around the full extent of the lie, and then some.

This can be done more easily for the wounds of credibility and evasiveness. “I was wrong to do that, I know it, and I am sorry.” It is harder to forgive the part about motive, because it goes to something much deeper. How can someone be believed about changing their motives?  How easily can you change your own?

 

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

This week, as we get ready to say goodbye to 2012, we’re going to be posting some of what we call “Golden Oldies,” great posts from our Trust Matters vault. We hope everyone has a safe and happy holiday and wonderful New Year.

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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.

Trusting: the Other Side of Trust

A lot has been written about trust.  It’s often not clear, however, whether the subject is trustworthiness, or trusting.  If trust in banking is down, does that mean that banks are less trustworthy? Or that people are less inclined to trust?

Most of my work has been about trustworthiness (e.g. The Trusted Advisor). Other people write more overtly about trusting – a good example is the HBR article ReThinking Trust,  by Stanford Professor Rod Kramer, which focuses on the danger of trusting.

Some people write about the big subject of trust itself – the end result of the interaction between trustor and trustee.  A fine example is Francis Fukuyama’s classic Trust: the Social Virtues and the Creation of Prosperity.

Finally, many other sources end up talking about all three; think Covey’s Speed of Trust, or Bob Hurley’s The Decision to Trust.

The Power of Trusting

The sources above are largely academic. In the popular press, by far the most common topics are trustworthiness and the state of trust itself (trust as the result of an interaction between trustor and trustee). Throw a dart into a pile of 100 popular press articles on trust, and you’re likely to find Congress, investment bankers, and the Madoff-du-jour scandal as the subject.

This means most public policy debates focus on trustworthiness.  Most examples are negative; hence trusting is positioned as cautionary, i.e. watch out for car salesmen, lawyers, etc. The moral of the story is tut tut, another untrustworthy group, watch out.

And all this focus on negative examples of trustworthiness is having an effect on people’s inclination to trust. How could it not! And that is a terribly unfortunate thing. Because the scarce trust resource increasingly is not trustworthiness, but the willingness to trust.  We need to start focusing on the trustor, not just on the trustee.

The power of trusting is enormous. When it comes to trust, there is an answer to the chicken and egg dilemma of which comes first, the trustor or the trustee?  The answer is trustor.  Consider:

  • Until one party decides to take a risk and trust another, trust does not come into existence
  • Trusting has a profound impact on trustworthiness – think “the fastest way to make a man trustworthy is to trust him,” or “people live up or down to the expectations of them”
  • Trusting is inherently an act of optimism; a decline in trusting in the business world drives down innovation, and prevents collaboration and alliances

I’ll be writing more about this in the coming weeks. There is interesting material out there on the lessons from Prisoner’s dilemma, game theory, sociobiology, and the global decline in violence over the centuries – not to mention the backlash against competitive strategy going on in business schools.

I welcome any comments on the subject; I’m trying to do some thinking out loud here.  And I trust the readers of this blog to come up with great contributions.

Traveling Trust

I’m in Munich for a one-day stopover en route to Bucharest. I left New York a day earlier than planned to avoid Hurricane Sandy. And I’m realizing yet again – travel has a way of doing that – what an extraordinary level of trust we all take for granted in our modern world.

Yes, the news is full of the opposite. Political campaigns spin the truth (though trust-weary Americans might want to check out the Greek scandal du jour to feel a bit better).

Doctors have a hard time trusting pharmaceutical manufacturers. Patients have a hard time trusting their doctors, and doctors have a hard time trusting their patients. Some patients trust the internet more than their doctors, often with bad results. And let’s not even start with trust in financial services.

A Trusted Trip

With all that going on, it’s easy to forget some basic things. I can freely cross national borders with some mere papers. I can trust the exchange rate when I buy Euros. I can trust the flight controllers that govern the airspace, the airline handling companies that do catering, the bus and taxi systems I encounter.

But most of all, I know I can rely deeply on the basic human decency of people I run into to help with any simple issues – even though we may not speak the same language, and we’ll never see each other again. I can trust that people will give me directions, help me with travel issues, take a moment to help sort out a problem. And I’m almost never, ever wrong in that basic level of trust.

Which motivates me, of course, to try and return the favor whenever I can. And you do the same, I know.

What’s Really Amazing

What’s really amazing is not how often trust goes wrong, but how often it goes right.  Our modern life is unbelievably complex, and yet runs remarkably well.

I don’t want to be Pollyana-ish about this. The fact that trust is so pervasive is precisely the reason we notice and feel trust violations so deeply. We are all right to be deeply offended by untrustworthy behavior; if we lose our capacity to be outraged, we have lost our ability to recover.

Lots of things can be said about lost trust, but I want to highlight one.  Trust is reciprocal. My trusting you causes you to trust me, and vice versa. An absence of trust starts with one party. The presence of trust starts with one party. The question facing all of us is, will you be the one to start?  Or will you always insist on the other party going first?

Do you insist on your vendors insuring you against all losses?  Then don’t be surprised when they don’t trust you.  Do you have all your employees sign cutting-edge non-compete clauses?  Then perhaps you can understand why they might seek ways around it.  Do you give lie detector tests to your employees? Then you might gain insight into why you have a shrinkage problem.

You can do your part as an individual too. To be trusted, be trustworthy.  And if you think others are not trustworthy as you – try trusting them first.

For starters, that’ll make your travel a lot easier.

Cheating at Harvard: Shocked, Shocked!

Perhaps you heard: half of a 250-person undergraduate class at Harvard has been accused of cheating on an exam. Here are:

Let’s get the irrelevancies out of the way.  First, the class was “Introduction to Congress.” Pause for yucks.

Secondly, there are the occasional whiners: “it was really hard, not fair,” or “they didn’t tell us how to define things.” Let’s not pause here either.

Moving right along, now, let’s assume that Harvard is no better or worse than other schools. You may agree or not, but I think the interesting issues lie elsewhere.

David Gebler, ethicist and author of the recent The Three Power Values, says: “It’s the worst hypocrisy to create a set of social norms and expectations in our society of which Harvard is the pinnacle, and then act as shocked as Inspector Renault in Casablanca that the students are acting unethically.”

He’s right. There are three interesting student reactions that seem to crop up in articles about the scandal:

  1. You mean, that was “cheating?”
  2. Come on, everybody does that.
  3. What do you expect me to do, the point is to win.

All three are serious causes for concern, but for very different reasons.

You Mean, That was Cheating?

This isn’t as dumb as many may think on first hearing.

The class in question was conducted making heavy use of teaching aides and study groups. This makes great sense given the need for collaborative workforces in the future. Unfortunately, if learning is primarily group learning, it puts pressure on the academic program and faculty to be very clear about boundaries between individual and group accountability.  (There’s a parallel here between group and individual bonus bases within corporations).

That raises many challenges, chief among them that the exam was “open internet.” In a day and age when everyone can share everything with everyone else in real-time, this goes beyond being just a barn-door of a loophole; it’s a fundamental failure to articulate the distinction between individual and group accountabilities.

This doesn’t mean students didn’t behave unethically; but it puts if anything more of a burden on institutions, particularly on schools, to delineate the boundaries.

Come On, Everybody Does That

To the extent this is true – and it’s considerable – shame on the role models.

As Howard Gardner points out in When Ambition Trumps Ethics, within the hallowed Ivy halls alone there are plenty of examples of

“professors [who] cut corners — in their class attendance, their attention to student work and, most flagrantly, their use of others to do research.

Most embarrassingly, when professors are caught — whether in financial misdealings or even plagiarizing others’ work — there are frequently no clear punishments. If punishments ensue, they are kept quiet, and no one learns the lessons that need to be learned.”

Gardner cites frequent, broad-based, research over time that suggests students over the last 20 years have become blasé about violations.  The majority think firing faculty for falsification of resumes is an over-reaction, and they don’t see much wrong with the behavior of the Enron gang in manipulating prices. After all, “everyone does it.”

I needn’t mention the coverups of the Catholic church, the repression of the ruling class at Penn State, or the general defense of cyclist Lance Armstrong, just to pick a few recent examples. And for heaven’s sake let’s not talk the fate of truth at political party conventions. Sadly, everyone really, really does do that.

“Everybody does that” is no excuse, widespread though it is. Cheating is unethical and should be condemned. But those doing the condemning are frequently those who, like Renault, are by default encouraging the behavior by their failure to act.

What Do You Expect – the Point is to Win

This is the most shocking of the attitudes. While the other two reflect some ambiguity in execution, this argument attacks ethics directly, claiming that ethics should be subordinated to the pursuit of success. A classic ends justify the means argument, which is in principle anti-ethical.

Rich Sternhell, retired executive, says he was not surprised by Gardner’s piece.

“By the time people get to Harvard (or Yale or Penn State or wherever) they have had to compete in ways that never tempted my generation. I note David Brooks’ observation of the recent GOP Convention, how all the speakers with the notable exception of Condoleeza Rice talked about “I” rather than “we”.

Every individual example of ethical violation weakens our community bond.  Baseball players worry about their contracts not the team. CEOs worry about their parachutes or share value, not the legacy of the company.  The concept of stewardship is rarely heard.”

I would throw in for equal blame our leading business thinkers.  We have become subconsciously infected by the doctrines of competitive advantage, shareholder value, and an Ayn-Rand-lensed perversion of Adam Smith’s invisible hand, so much that we have a generation that can’t tell ethics from economics.  We actually have game theorists in the Harvard Business Review arguing that throwing a match in the Olympics is in principle no different from a lob shot in tennis – since after all, the ultimate goal is to win.

People, the purpose of business is not to make a profit.  That way lies madness. And a generation of cheaters.

They are still morally to blame, but the people who raised them, taught them, trained them and role-modeled for them are at least as culpable.