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What Problem Are We Trying to Solve?

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

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

How Business Conversations Go Astray

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

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

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

Then you’ve seen the following dysfunctions:

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

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

It Doesn’t Have to Be That Way

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

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

Notice what this simple formulation does.

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

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

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

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

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

 

Don’t Treat Clients Like Competitors! The Four Principles Of Trust-Based Selling

The words “trust” and “selling” are rarely mentioned in the same sentence, and some people feel that “trust-based selling” is an oxymoron. That says something about the relationships between sellers and their clients.

And it’s one reason that professional services firms don’t like the “S” word. We prefer euphemisms like “business development,” itself phrased in the passive voice as if to distance ourselves as far as possible from the crassness of commerce.

Trust-based Selling® is a principled way of approaching the commercial relationship between two parties. It is not a methodology, or a process model; it can coexist with existing methodologies or processes, as long as they are not manipulative or selfish.

People—including sophisticated clients—are overwhelmingly disposed to buy what they need to buy anyway from someone they trust. They trust people who are trustworthy— worthy of trust. Trustworthiness can be defined as behavior in accord with certain principles.

There are four such principles. Trust-based Selling means applying these principles across all stages of the sales process, all aspects of selling, and all characteristics of the client/professional relationship. Those principles are:

  1. Client focus for the sake of the client;
  2. Medium to long-term perspective;
  3. A habit of collaboration with the client; and
  4. Transparency in all things with the client.

In total, the principles of Trust-based Selling define an alternative to the heavily competition-based paradigm that defines most approaches to selling.

Let’s look first at each principle and its applications.

Client Focus For The Client’s Sake

A lot of what goes by the name “client focus” or “customer-centric” these days is a bit misleading. It is client-focused, all right—but in the same sense that a vulture is client-focused. The focus benefits the seller, not the buyer.

For example, loyalty programs are designed by paying very close attention to exactly what clients are looking for. CRM systems are designed (and sold) to allow very fine analyses of client behaviors and preferences. But in each case, their ultimate purpose is to enhance the bottom line of the seller – not the client.

The more refined and the more pervasive those measurements become, the more obvious it becomes to the client that “having his needs met” isn’t really about him at all. Instead, it’s about getting a greater share of his wallet. When we treat clients like we treat supply chains, they will feel like supply chains. They become means to the seller’s ends, rather than valued as ends in themselves.

Client vulture focus comes from the competitive paradigm: a semi-conscious belief that selling is a zero-sum game in which we compete with our clients.

In Trust-based Selling, client focus is practiced for the sake of the client. This doesn’t mean we are oblivious to the impact on us as sellers, but it does mean we approach clients in fundamentally different ways.

Medium to Long-Term Perspective

A lot of firms feel that their time perspective is reasonable—a bit short-term, perhaps, but not out of line. But look at behaviors.

Most approaches to professional selling are derived from industrial process models; they all have a few things in common. For one, they all have arrows, going from left to right. For another, the last step is almost always “closing,” followed by a feedback loop that says “go back to start and repeat.” That is a short-term model. It’s a transaction model whose end is closing. How much reward does your firm give to maintaining the relationship and how much to the sum of the year’s transactions?

Trust-based Selling focuses on the relationship, not the transaction. This longer-term focus takes care of much of the concern that some people have over the client focus principle. They need not worry that the client will take advantage of free services and bleed the provider dry.

In the long term, it is not just unfair but infeasible for the provider to lose money and the client to make money. In the long term, unequal relationships are simply unsustainable. The discipline of thinking long-term forces provider and client alike to think in terms of win-win or lose-lose, rather than the competitive paradigm of win-lose or lose-win.

A Habit of Collaboration

In most approaches to selling, the firm and client spend most of their time apart from each other. Firms spend the majority of their time imagining what the client might be thinking, how the client might react to our guess about what they might be thinking, and even more time developing elaborate “what-if” scenarios about how to respond to and control the client’s reactions to our guesses. What an elaborate substitute for simply asking clients what they think and talking about it!

Again, the paradigm underlying the usual belief is competition. We act like face time must be “managed,” as if client interactions are theatrical events which require staging and rehearsal.

Trust-based Selling demands collaboration. Significant selling acts are undertaken together. The next time you write a proposal, instead of doing it back at the office and emailing them files, what if you were to book the conference room or set up a videocon and actually write the proposal with the client – with each of you bringing to the process all the information needed to prepare the best proposal possible?

That is collaboration. It doesn’t guarantee you get the job. That’s not the point. The point is to help the client get the best possible proposal while you are secure in the belief that, if you behave consistently in a trustworthy manner, you will get more than your fair share of the business—in truth, much more.

Again, the resistance to collaboration comes from our internalized beliefs that somehow we are in competition with our clients.

Transparency in All Things

Being trustworthy means, above all else, having the client’s best interests at heart. One way to demonstrate this is to be open with them in all our affairs. Conversely, the biggest reason a client might suspect we don’t have their best interests at heart is a sense that we are hiding something. So – make sure your policies are right and then don’t hide anything.

In particular, be willing to discuss sensitive issues like pricing policies, reasons for discounts, leverage models, overhead models, staff assignment models, even billing rates. And be prepared to insist that if you share such information, the client will give you adequate time to do a good job of putting that information in its proper context.

Most firms find transparency the most radical principle of all: “There’s no way we’d tell them our billing rates. They’d freak out!” But they already know you have billing rates and make their own guesses without any context to understand them. Remember your feelings when you first heard your billing rate? Most likely initially you were overwhelmed with responsibility. Later, you started wondering where all that money went.

It’s the same with clients. The solution isn’t to keep secrets from them; it’s to explain reality to them. You gain three benefits by being transparent:

  1. You show you’ve got nothing to hide;
  2. You distinguish yourself by so doing;
  3. If your policies are weak, wrong or inconsistent, you’ll find out fast and have to fix them so they’re stronger—in which case, repeat the first two benefits.

Why do we resist transparency? Again, the culprit is the competitive mindset we bring to bear in selling. In this case, we’re afraid that if we share certain information, the “other party”—in this case, a potential client—will use that information against us, or we will lose advantage. That is the language of competition, not of trusted relationships.

We have to stop viewing our clients as our competitors. What we fear, we empower. If we treat our potential clients as competitors during the sales process, we will end up with competitors.

The cycle has to stop with us. We need to sell from principles of trust, rather than from principles that create more competitors in the very process of gaining clients. Trust begins in the sales process, if we have the courage to put it there.

 

Three Things You Need to Know About Trust: Part 2

There are really only three things you need to know about trust. You can pretty much deduce the rest. The three parts are:

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

Part 2: Trust Requires Risk.

First, there is no trust without risk. Second, only one player takes the risk; this sets up a particular dynamic.

No Trust Without Risk

Ronald Reagan was blowing smoke when he famously said, “Trust, but verify.”  The truth is, if you have to verify, it’s not trust. If it’s trust, then it’s not about verification. (Tellingly, Lenin was fond of the same phrase).

At one extreme, trust is bordered by blind faith, which is unbounded by data or reason. At the other, we have statistics, where risk is strictly a matter of probabilities and assumptions, governed by the rules of mathematics.

Trust lies curiously in between faith and probability – and a little off the straight and narrow of the continuum as well.  A psychological relationship, it involves one party willingly putting itself in harm’s way of the other, with a significant but not perfectly quantifiable chance that the other may abuse the situation. No wonder we speak of it often with metaphors.

People say trust mitigates risk. That’s true, but it’s also true that risk creates trust. Without risk-taking, there can be no trust. We forget this when we try to create trust by eliminating risk.

Why is this important? If you remove temptation or risk, you create an artificial dependence outside of the critical trust relationship. For example, if you render financial institutions completely non-risky by over-doing tick-box compliance, you will also choke off trust. Trust eats risk for breakfast, and becomes stronger for so doing.

As with many things trust-related, this is paradoxical. Trust reduces risk, but it also thrives on risk. Robotic safety and predictability are components of trust, but small ones. A completely mechanical world may be risk-free, but it’s also trust-free.

One Player Takes the Risk

In its pure form, one party trusts, while the other is trusted. In my classes, it’s a running joke I play: would you rather get better at trusting? Or at being trusted? So far, every class has opted to get better at being trusted. Doh! That’s the non-risky choice.

It’s human nature to wish others to take the risk. Sometimes, we’re lucky. The other person asks us out first; the customer shows their hand first, reducing our fears about price; the interviewer shares something personal about themselves, setting us at ease.

If you’re willing to run your business dependent on the kindness of strangers, that’s fine. But if you prefer to make your own luck – or trust – you’re going to have to learn to take risks. As Wayne Gretzky said, you’ll never miss a shot you don’t take; but of course, you’ll never score a goal either.

One of the biggest barriers to trusting is the cult of trustworthiness. The professions in particular like to cloak themselves in the idea of a Trusted Advisor that is strictly about trustworthiness – but not about trusting.  Such ideas include the high-minded virtues of integrity, tell-it-like-it-is courage, and a professional remove. But they frequently don’t encompass vulnerability and emotional risk-taking.  They should.

———–

In the third part, I’ll talk about the reciprocity of trust – how the role of trustor and trustee gets traded back and forth, and what that means for the development of trust.

Books We Trust: The Collaborative Organization by Jacob Morgan

This is number 11 in a series called Books We Trust.

I first met Jacob Morgan a little over a year ago in New York. Appropriately, we had first met on Twitter, then agreed to a coffee on an East Coast trip of his that coincided with a free midday on my end. Lucky for me!

What’s unique about Jacob is the extent to which he intuitively grasps how new digital tools and strategies can be used to create Collaborative Organizations where employees share, connect and engage with each other and with information.  This in turn helps build trust, fosters collaboration and positively impact the lives of employees both at and outside of work.

Most of us “get” that collaboration – whatever that means – is a powerful force in today’s networked business world. Unlike most of us, Jacob “gets” just what that does mean. That’s what his book is about.

Charlie Green: Jacob, you’re so modest. I honestly did not know, until I saw the draft the number of interesting people you connected with in writing this book: Don Tapscott, Gil Yehuda, Craig Newmark, Darren Entwistle – and I’m just scratching the surface. How did you gain entrée to all these interesting folks?

Jacob Morgan: I’ve been very fortunate to get such amazing people involved. The former CIO of the USA (Vivek Kundra) was the closest I could get to the President himself endorsing the book!  As soon as I had something I could share with people I immediately began reaching out to leaders who I thought would make great supporters of the book.

These leaders themselves believe in the concept of a Collaborative Organization so the book really resonated with them.  I had relationships at many of the companies who were able to help make this happen; without them, none of this would have been possible.

Charlie: You spent a month traveling throughout China, including rural areas, and were amazed at how easy it was to stay digitally connected. Easier, in fact, than inside some major US corporations. The corporate use of technologies lags the social uses that are developing outside the walls. What’s up with that?

Jacob: The barrier for individual use of social media is non-existent. All you need is an internet connection.  For corporate-led collaboration initiatives to take place, all sorts of things need to be considered: cost, security, risks, employee adoption issues, vendor selection, integrations and customizations and more. Realistically many companies are still trying to figure out what it all means and how it can be applied to their business. There is also a high degree of fear.

Charlie: We often hear people – let’s say mainly from my generation – who bemoan the lack of depth in relationships that comes about from the “shallowness” of social media connections. In contrast, you point out that in 1977, an MIT researcher found that people working 30 yards apart from each other interacted as well as people half a world away.

The problem this raises is not what came to be called strong ties, but rather one of weak ties.  The power of weak ties to extend functional work relationships, you point out, is revolutionary and massive.  Say a bit more about that please?

Jacob: The study showed that if you’re more than 30 meters away from someone, you might as well be in another city.  Beyond 30 meters, collaboration and communication drop off significantly.

Weak ties act like bridges between groups or areas. Think of Oakland and San Francisco.  Each can be considered a strong community with a lot of strong ties. But the Bay Bridge, which connects the two, allows people from San Francisco to go to a new area, Oakland, and vice versa.

The same is true within companies. People with strong ties typically know the same group of people; it’s an overlap, it can lead to staleness, which is why we need to extend beyond our networks. This we do through weak ties.

How often were you able to get a job interview, access to a party, a discount on something, or an introduction to someone based on a weak tie?  LinkedIn is a great example of a platform that allows you to build weak ties in the business world that you can potentially call on later.

Charlie: It’s my sense that many people in business think of collaborative tools with the paradigm of sharing databases, as a problem of knowledge management, powerful queries and the like. But you caught my attention with three items right out of my own books: thinking out loud, listening and remote team trust-building.

These are core skills for human-to-human trust creation; how in the world can bloodless abstract digital tools help us to connect in these powerfully human ways?

Jacob: Keep in mind that technologies are simply the enablers; it’s still people that are using these tools and engaging with each other. These tools allow us to share information in new ways; the same is true for listening. 

We can have a pulse on the company by checking out a corporate activity feed, or sharing an idea or a challenge that we’re trying to figure out.  This happens often in the consumer space with Facebook and Twitter – again, it’s the corporate world that lags.

As far as trust goes, we tend to trust people with whom we have something in common.  These new collaborative tools allow us to form communities of interest, passion and expertise that help employees build relationships, and hence trust with one another.

Charlie: One of the several rich case studies you describe was for a 1500-employee group at Penn State that created an intranet. What struck me was that the plan for implementation and adoption was to take 3-5 years. In fact, it was done in 1.5 to 2 years. And – wait for it – you say there was never an in-depth strategy for doing this.

What was the secret sauce that pulled that one off?

Jacob: No two companies go down the same path. Penn State planned quite conservatively for their initiative but even they were surprised by the faster adoption.

I can’t say there was a secret sauce per se, but I do know that they really cared about this initiative and they made it front and center. Though they didn’t have an in-depth strategy, they did have some foundation laid out for what they wanted to do.

It’s a bit like trying to become a great swimmer by studying YouTube videos, reading books, and interviewing the greatest swimmers.  Sure, it’ll you give you some tips and ideas, but at the end of the day you need to jump in the water to learn and adapt.

Is this the best approach for every company out there?  Probably not, but it can certainly work for some, as Penn State has shown.

Charlie: You talk about the risks of implementing new collaborative technologies, but also about the risks of not implementing them.  What are the biggest of those latter risks, the risks of not taking a risk?

Jacob: I’d say some of the top risks are:

  • Having a disengaged workforce that doesn’t care much about the work they do or the company they work for
  • Inability of the company to stay competitive
  • Having an inefficient workforce

Charlie: Jacob, I’m totally sold that an organization using these technologies fluently could become enormously successful. If you had to narrow down the top two or three barriers to acceptance of them, what would you say they are?

Jacob: There are three types of resistance: they come from employees, managers, and IT. Respectively:

The top employee barriers are not wanting to learn a new technology, and saying they don’t have enough time.

The leading managerial barriers are not seeing it as a priority (which I believe is a fear and a lack of understanding problem), and uncertainty about the overall business value and ROI.

For IT, the top barriers are low prioritization (again, often due to fear and understanding), security issues, and lack of budget.

Charlie: The full title of the book is The Collaborative Organization: A Strategic Guide to Using Emerging Social and Collaborative Tools, and it just formally came out on July 9th. I hope you sell a boatload of books. Thank you for sharing your thoughts with us here.

Jacob: My pleasure, thanks Charlie!

 

 

Blow Up Your Budgeting Process

If you work in a large organization – This Blog’s for You.

You know what season is coming soon – you dread it. ‘Tis the season of Planning & Budgeting; the annual ritual of much time, many iterations, and little meaning – full of sound and fury, signifying not much.

What if you could radically revolutionize that process? Almost blow it up? All in a socially and politically acceptable manner, of course.

Resource Allocation is So Last Millennium

Planning and budgeting processes are about resource allocation. Partly that’s to coordinate plans. But partly it’s about predicting the future – of markets, the economy, technology – so we can intelligently place resource bets. So that we can plan on having umbrellas in case it rains.

We have built processes to worry about the future so that we can place resource bets in advance. But what if we didn’t have to place those bets in advance? Who cares about predicting rain for tomorrow if I know there will be an umbrella within arm’s reach when I need it?

What if you always had access to an umbrella? What if you did not have to make capital investments, hire and train people, develop new products – until the day before you needed to? And you were then able to do so with the snap of a finger?

You wouldn’t waste time predicting the future – you’d just deal with it on arrival. And increasingly, that’s what the world looks like.

The umbrellas, it turns out, are right within our grasp, right when we need them – if we just know to look for them. And there are three places to look.

The Three Sources of Umbrellas When You Want Them

Old style planning and budgeting assumes scarcity of resources – few umbrellas. We need to re-think; to recognize the umbrellas are already there, and we’re just facing a sourcing or distribution problem.

The three keys to changing that problem definition are speed, collaboration, and transparency.

Speed. You probably budget for headcount. If so, you assume a certain elapsed time for a category of employee – let’s say, a three-month cycle.

What if you could cut that to three weeks? To three days?  Think contracting, outsourcing, working virtually, across time zones, modularizing work. It’s the way software and movies and consulting and projects get done now, why not extend it to “core” hiring?

Speed attacks the need to plan for umbrellas, because it reduces your exposure to time-spent-without-umbrella.

Collaboration. You probably budget for facilities and equipment – because you assume you must own or have first call on assets. But what if you could get all the access you need just by sharing with others? And save tons of money at the same time?

After all, you rent a room at the Marriott in Chicago instead of owning a condo there. Push that thinking further; it’s like doubling your proven resource reserves without spending a penny on exploration.

Why own a car when you can use Zipcar? Why are you paying Microsoft for software to sit on your PC getting old when you can access cloud software, always updated, for less? Why are you buying books instead of renting them? Why are you spending money on dedicated office space when you could share it out with other tenants? Why are you driving alone?

Collaboration attacks the need to plan for umbrellas, because it changes a resource scarcity problem to a capacity utilization problem, while expanding perceived capacity.

Transparency. You probably budget for knowledge management and IP development – because you think your organization must carefully nurture its precious wisdom. But what if you could generate more knowledge, and more know-how, by openly sharing what you have with everyone else?

This is the logic behind meet-ups, networks, communities of interest, affiliate marketing, tribes, wikis, webinars, curating, mash-ups, and Spindows.

Transparency attacks the need to plan for umbrellas, because it sensitizes everyone to the presence of more umbrellas, to the availability of umbrella substitutes, and to rain-control initiatives.  

——-

Help free your organization from the tyranny of old-think resource-constrained planning and budgeting processes. Ask yourself how to get your group’s work done faster, more collaboratively, and more transparently.

This is how to be a socially and politically acceptable business revolutionary.

(Props to my mastermind group of @StewartMHirsch, Scott Parker and John Malitoris for this post) 

Creating a Culture of Trust: Virtues and Values

This post comes from our upcoming book, The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading With Trust, from the chapter on Implementing a Culture of Trust. Tools for trust initiatives include principles, or values, at the organizational level, and personal attributes, or virtues, at the individual level. The chapter explores five tools for implementing trust change initiatives: leading by example, stories, vocabulary, and managing with wisdom. This post explores two diagnostic tools: the Trust Temperament™ and the Trust Roadmap.

We will be sharing selected portions of the book with our readers leading up to the publication date. The Trusted Advisor Fieldbook will be available from Wiley Books on October 31, 2011, or you can pre-order The Trusted Advisor Fieldbook today.

What Is a High-trust Organization?

Our definition: an organization of people who are trustworthy, and appropriately trusting, working together in an environment that actively encourages those behaviors in employees as well as stakeholders.

Creating a culture of trust requires a different emphasis than do most change initiatives. What works to reduce accident rates, increase customer-centricity, or become ISO-9000 compliant isn’t the same as what’s needed to create a high-trust organization.

Trust is about interpersonal relations. For people to trust and be trusted by others, they must take personal risks and face personal fears in ways that cannot, by their nature, be fully planned and structured in ways that typical change initiatives can rely on.

That suggests a different emphasis: an initiative built around personal change.

Two Keys to Trust Culture Change: Virtues and Values

Creating a high-trust culture boils down to two main thrusts: virtues and values. “Virtues” are the personal qualities that high-trust people embody, and “values” are what guide the organizations they work in. In trust-based organizations, virtues and values are consistent and mutually reinforcing.

We use these words very intentionally, because they’re commonly understood–and common language matters. Each deserves its own word and understanding, and both are required for trust culture change. In our experience, some companies rightly focus on organizational values, but few focus enough on personal virtues.

The virtues of trust are personal, and involve your level of trustworthiness and your ability to trust. The virtues of trust are contained in the trust equation: credibility, reliability, intimacy, and self-orientation.

It is virtuous for someone to tell the truth, to behave dependably, to keep confidences, and to be mindful of the needs of others. Unless people take personal responsibility for their own behavior around trust, the organization will never be a trust-based organization.

The values of trust are institutional, and drive the organization’s external relationships, leadership, structure, rewards, and key processes. The values of a trust-based organization are reflected in the four trust principles: other-focus, collaboration, medium- to long-term perspective, and transparency. An organization that espouses these values treats others with respect, has an inclination to partner, has a bias toward a longer timeframe, and shares information.

Trust-based organizations take values very seriously. If your organization has never fired someone for a values violation, then either you’ve been astoundingly successful in your hiring and development efforts, or you’re not a strongly values-driven organization.

Diagnosing Trust

To improve virtues and values, it’s helpful to know where you’re starting from—to have some kind of diagnostic. For virtues, there is the trust quotient: for values, there is the Trust Roadmap™.

Virtues.

The trust quotient is a self-diagnostic taken at the individual level, based on the four values of the trust equation.   With individual data aggregated anonymously at the group level, you can profile the organization in terms of Trust Temperaments (the pair of highest-scoring values in the trust equation for an individual), as follows:

Trust Temperament™ Highest Ranked Attributes Motto
The Expert C, R “Lead, follow, or get out of the way.”– Anonymous
The Doer R, I “As for accomplishments, I just did what I had to do as things came along.”– Eleanor Roosevelt
The Catalyst C, I “A genuine leader is not a searcher for consensus but a molder of consensus.”– Martin Luther King, Jr.
The Professor C, S “The important thing is not to stop questioning. Curiosity has its own reason for existing.”– Albert Einstein
The Steward R, S “My goal wasn’t to make a ton of money. It was to build good computers.” – Steve Wozniak
The Connector I, S “It’s not what you know, it’s who you know.”– Anonymous

 

Values.

The Trust Roadmap is a diagnostic tool that surveys the Trust Values across components of organizations, as below:

Collaboration Medium- to Long-Term Perspective Transparency Other Focus
External Relationships
Leadership
Structure
Rewards
Processes

 

Generic and organization-specific questions are developed for each of the 20 cells, and the survey administered to groups of stakeholders: customers, employees, managers, for example.   For example, the question for Leadership and Medium-to-Long Term Perspective might be “Your leaders are willing to sacrifice short-term gains for the long-term benefit of the organization.”

The survey results allow a management team to assess, in a structured manner, where the organizational values that drive trust are being implemented, and where they’re not; how those patterns vary across constituencies; and what they feel the priority should be in addressing the issues.  In short, a Trust Roadmap.


The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading With Trust will be published by Wiley Books on October 31, 2011.  Pre-order your copy of The Trusted Advisor Fieldbook today.

Balance Trust and Control for Innovation

The storyline almost writes itself. Blinded by infighting and bureaucracy, both Microsoft and Nokia squandered great opportunities to innovate. In turn, they are then overtaken by more nimble competitors, particularly Apple.

While there’s truth to that simplified storyline, the lessons to be learned are less obvious. Let’s tease it all out a bit.

Microsoft: Innovation Killed by Competitive Culture?

In an editorial earlier this year (February 2010), former Microsoft VP Dick Brass ran down the list. He identified three significant technological innovations at which Microsoft had a good shot, only to be leapfrogged by Apple: tablet computers, ebooks, and smartphones.

There was no doubt in Brass’ mind about the villain: Microsoft’s powerful competitive culture. Caught between competing principalities in the kingdom, forward progress was slowed. The kingdom of MSFT was therefore bogged down itself.

Possible Hypotheses:

a.    Better to collaborate than compete?

b.    Better to have top-down direction than laissez-faire innovation?

Nokia: Innovation Killed by Bureaucratic Conservatism?

Kevin O’Brien, in an International Herald Tribune front page story on September 27, 2010, writes that Nokia showed business customers a prototype touch-screen, internet-ready phone three years before Apple’s 2007 iPhone introduction. However, because it was expensive to produce, a risk-averse management team killed it.

O’Brien cites several variations on the theme: Nokia was historically a hardware-driven, not a software-driven, firm. Its previous success made it more risk-averse. The committee-structure employed by Nokia moves decisions to lowest-common denominator design and a tendency to defer decisions.

Possible Hypotheses:

a.    Re-organize to separate mature and evolving businesses?

b.    Develop an incubator operation to nurture small-sized innovations?

These are only a few hypotheses, of course. Another way to phrase the problem might be: When do you go open-source, and when do you dictatorially shut down debate?

Greater minds than mine have been over this issue. Sometimes it gets phrased in terms of innovation; other times, it surfaces as a debate about centralization vs. decentralization. 

It also shows up as a trust issue: when do you trust, as in collaboration–working closely and openly with others. And when do you trust, as in delegation–being willing to let go, to subordinate your wishes to a greater good.

Seen this way, the right answer is probably a blend. Business innovation rarely comes from brilliant minds sitting in isolation; it grows when people are willing to openly engage with each other, rather than to identify their mission as self-aggrandizing. (Ross Smith has written about this, as has Robert Porter Lynch.) Successful innovation depends on successful collaboration at the personal and organizational level.

But a successful organization can’t live on innovation alone: great insights have to be commercialized, produced, marketed, sold, and controlled. These tasks require different skills. (Malcolm Gladwell draws an interesting parallel when he dismisses the idea that Twitter can be a tool for political revolution; looking at the civil rights movement, he suggests its power came from personal connections, not distant ones).

Ideally, then, a successful organization would manifest two kinds of ability to trust their internal teammates.

1.    the ability to trust peers—to offer up insights, and to hear criticism without shut-down and resentment; to be open to ideas from others; to be free of NIH syndrome, and to embrace others’ ideas as your own;

2.    the ability to trust superiors (or designees), to defer to a majority, to sacrifice one’s own good for a greater good; to accept another as speaking for oneself; to delegate without clawing back; to grant others control over ourselves.

These trust dimensions are not any easier than the dimensions of centralize-decentralize. It’s tempting to look at Apple and glean lessons there; after all, they are cast in the role of successful challenger in both the Nokia and the Microsoft stories.

But technology is a distinct business; and while Steve Jobs’ reputation as a controlling manager is clear, it’s not clear (to me) whether Apple’s at what time in the process a decision is made and the ‘trust me’ approach takes over from the ‘we trust each other’ approach.

My guess is—as in most organizational design issues—the ‘right’ answer consists of a carefully crafted statement of ‘it depends,’ pointing out clearly the what, how and when of ‘depends.’

Trust, Honesty and Authenticity

A few months ago, Deborah Nixon posted an interesting question on LinkedIn. She asked: “Is there a difference between authenticity and honesty?”

She got about 35 answers, and they all make for interesting reading. Here’s what I sent in:

Deborah, I’m sure you would agree the two terms cover a lot of territory in common. The trick with these definitional things is not to discover some underlying reality, because there is none; these are conceptual models that help us explain the world. They are good or bad insofar as they help us; so I’d suggest starting there. What’s the most useful way to distinguish the two?

One way might be to say that authenticity is largely passive, and honesty is largely active. When we say someone’s honest, we usually mean they tell the truth, and go out of their way to do it.

Sometimes we also mean that they don’t tell a lie–but that’s far from all the time. You often hear someone way ‘well, he was honest–he didn’t actually tell a lie.’ In such a case, ‘honesty’ just means I didn’t utter an untruth; it’s perfectly consistent with covering up all other kinds of truth. So the casual use of ‘honest’ may rule out sins of commission, but not sins of omission.

That’s why the legal language "the truth, the whole truth, and nothing but the truth" is required in court; to prevent the ‘honest’ witness from conveniently leaving something out, or snow-jobbing the court with irrelevancies.

Authenticity, on the other hand, I think usually implies a lack of attempt to control another’s perception. It means letting others see us as we are, warts and all. I think it also goes one more step: it means letting everyone see us in a way that’s no different from how anyone else see us: that is, we don’t play favorites in terms of constructing alternative fictions to respective people.

At a corporate level, a company might support a claim of honesty by pointing to the truthfulness of its statements, or the lack of court cases against it. Again, ‘honesty’ conveys a sense of ‘never knowingly told an untruth.’ Whether it includes consciously allowing other people to make incorrect inferences by not telling them something–well, that’s not entirely clear.

Authenticity is a whole ‘nother level. It means not hiding out, opening the door in things that are not excluded through standard rules of privacy, letting the chips fall where they may. Further, I think it usually entails a commitment to be authentic, not just a convenient lifestyle.

Seems that of the two, we might say that authenticity is broader (i.e. it encompasses being honest, but goes beyond that to proscribe sins of commission).

On a practical level, people who strive to be honest often talk of it as a struggle: to resist temptation, to not gossip, to say things that can be embarrassing if they are true.

People who choose to be authentic have, in a way, an easier time of it.  For someone who is authentic, the daily default way of life doesn’t involve decisions or will power: the default is openness, there is no issue of control vs. transparency.

Things are what they are, and there is no threat about them.

What’s trust got to do with it?  To trust a person or a company, honesty is table stakes.  If you suspect they’re lying, trust is stopped dead in its tracks.  But even if they’re honest, that’s nothing compared to authentic.  Think how much more BP, Toyota or Goldman would have been trusted even in the presumably honest statements they made, had they not created an historical pattern of inauthenticity. 

Collateral Benefit on the “A” Train

‘You must take the A train,’ is the opening lyric to Billy Strayhorn’s signature Duke Ellington song.

Last night I did just that, enjoying the company of the very wise Peter Firestein.

We were returning from a delightful book party to celebrate the publication of LJ Rittenhouse’s  new book Buffet’s Bites.  I was telling Peter that he really needed to read Chris Brogan, who was the subject of last week’s Trust Quotes interview. (And yes, this is a lot of self-referential links, but it’s all true).

“What’s Brogan’s message in a nutshell?” asked Peter.

I pondered that. “I guess it’s that great marketing and customer relations in the new media age is same as it ever was: the best of it comes from unsolicited testimonials from customers.  And the best way to get that is to focus on the customers and on serving their needs. If you do that, they’ll then market you.”

“And,” I said, warming to the subject, “the paradox is that your own success cannot be a goal—it is a byproduct, a secondary result, an outcome–but not a goal.”

“Sure,” said Peter, “I get it. Like collateral damage—but collateral benefit.”

“Yes!” I said, “Collateral benefit.  It’s what you and I and LJ and (Warren) Buffet believe too. Buffet’s best stock picks are great companies. And great companies are built on relationships—with stockholders, customers, employees. If you serve them, everything works—including your own results. But only as collateral benefit.”

I thought “collateral benefit” was a pretty cool phrase. I still do, hours later. I warned Peter I might blog about it.

So here’s to you, Peter; thanks for the world’s next mega-catch-phrase: collateral benefit.

The rest is up to the rest of you.

The Changing Face of Capitalism: Schizophrenia in the Apple Store

The other day I was in one of the Apple Stores. The hinge had broken on my MacBook Air, which meant the top of the computer, the screen part, had to be replaced. It was to be done for free, which I love about Apple.

The store was crowded; I asked the young lady salesperson if using my Mac ProCare card would move things along. She looked at my card, told me it was out of date, and offered to go update it.

When she came back, she was apologetic. “The thing is,” she stammered, “I think they’re kind of going to be de-emphasizing the ProCare program.”

“Huh?” I said. “Is it continuing, or not?”

“Well, I think they’re maybe going to be phasing it out,” she squirmed.

“As of when is it phasing out?” I asked, “ and is there a replacement program? I just want to know how to get premium service.”

“Well, I think they’ve already stopped it, really,” she stammered. This was getting nowhere fast.

Fortunately, the store manager came by and took over; he assured me I’d get the repaired computer by day’s end (which I did, by the way).  I asked him, “What’s up with the ProCare program?”

“Oh,” he said, “we’re discontinuing it.”

“Why?”

“Well, it was so popular that everyone was buying it, and then you have a problem with, like, who do you let at the head of the line, and who do you have to say no to, and all that sort of hassle.”

This boggled my mind. “Why not just raise the price?” I asked.

He laughed. “You know, several other people have suggested that too.”

“Well no wonder they have,” I said. “If everybody wants something at one price, raise the price—you make more money, and it very easily sorts out to whom it’s worth more and to whom it isn’t.”

“Yeah, but it’s kind of unfair that way too, you know,” he said, in a ‘you clearly don’t get it, do you’ sort of a way. And I left, bemused again at the curious mix of capitalism and west-coast do-goodism that is Apple Computer.

No company is better at in-your-face planned obsolescence than Apple; just trying getting a replacement battery for an iPod. No company is better at aggressive pricing; and how many mature companies can claim a stock price growth of ten fold in five years?

All this, in spite of echoes of PC (not the computer) instincts and shades of tie-dyed Deadhead ethos in the stores. Or, is it because of said instincts and ethos?

Changing Ideologies in Business: From Competitive Capitalism to Collaborative Capitalism

Then again, why should Apple be unique in its schizophrenia about capitalism? Business in general is in the midst of a paradigm shift in business, away from shareholder-centricity toward stakeholder-centricity. An excellent article in the Economist  summarizes this ideological shift, citing several current business thinkers.

Business, I think, is undergoing some serious foment with respect to some very fundamental beliefs. Milton Friedman, Michael Porter, Michael Jensen—these are the thought leaders of the past, championing neo-classical economics, the purification of competition, and the primacy of shareholder wealth respectively.

The new thought leaders remain to be definitively enumerated, but the issues are emerging. They rhyme with collaboration, trust, networking, flat organizations, and Gen Y. To name a few.

Stay tuned, it’s getting interesting. And Steve Jobs may end up, once again, looking pretty prescient.