Posts

Books We Trust: The 3 Power Values by David Gebler

This is the tenth in a series called Books We Trust.

The 3 Power Values is, simply, an excellent book. Author David Gebler’s unique talent is to combine a Big Idea, such as the need to remove roadblocks as the key to performance, with precisely defined linkages between values, culture and behavior. He brings needed commonsense to the often vague, un-actionable, and fog-sculpting enterprise known as organizational effectiveness.

David is a consultant and educator, with 20 years experience helping leaders understand how to use their organization’s culture to improve performance and to stay out of trouble.

The Interview

Charlie Green: David, we spoke a couple of years ago about why companies have so much trouble getting a handle on ethics issues and it seems like things are getting even worse.

David Gebler: I agree. Ethics scandals fill the papers every day. We don’t see change because we’re not dealing with the real issues that lead people to do bad things. We think that regulations will define outer boundaries to actions and that morals will guide us inside those boundaries. And that just isn’t the case.

Charlie: Why not? You would think that following the rules and knowing right from wrong would be enough.

David: What doesn’t get factored in is the environment we work in. Whether we follow the rules, even what we think is proper, is heavily influenced by the culture. Social norms tell us whether it’s OK to flout the rules. The norms also tell us whether to feel entitled or remorseful when we cheat or do something wrong.

Charlie: When is it OK to violate rules?

David: Charlie, even you have driven over the speed limit. But you wouldn’t call it morally reprehensible, I suspect. We have normalized that speeding, up to a certain point, is something we all do. So even if it’s illegal, we don’t see it as a moral issue.

Charlie: Did you say that moral issues are also subjective? What do you say to those who say morals are morals, right is right, and wrong is wrong?

David: The truth is, even our definition of what is right is subjective. Leaders in behavioral economics, such as Dan Ariely, point out that everybody has the propensity to be dishonest, and almost everybody cheats—just by a little. The behavior of almost everyone is driven by two opposing motivations.  On the one hand, we want to benefit from cheating and get as much money and glory as possible; on the other hand, we want to view ourselves as honest, honorable people.

What determines whether we feel good about ourselves is the environment we’re in. If we’re in a culture where cheating is frowned upon, people will cheat less, because cheating impacts their sense of self. But if the culture is to take advantage and win at all costs, then cheating and cutting corners becomes just the way we do business.

Charlie: So if the key factor is culture, why do so few leaders tackle this issue head on?

David: Culture is so intangible that leaders hesitate to dive in – not even just to understand it, much less to tweak it. Many leaders haven’t focused on measuring and managing culture, not realizing that they can. Most don’t understand whether their culture hinders or supports performance, much less the implementation of strategies. And finally, many leaders don’t even know whether their culture encourages unethical or illegal conduct.

Charlie: In the book you explain that three “Power Values” are essential to get a handle. What do you mean by that and what are those values?

David: Twenty years of work with companies showed me that three values – integrity, commitment and transparency – stand out in fostering identification and community. I call these the power values because they can influence specific behaviors that in turn positively influence an organization’s culture. The chain is: values > behaviors > culture. It is the behaviors that nudge the organization’s cultural components (goals, principles, and standards) into alignment.

By focusing on the specific behaviors that make up integrity, commitment and transparency, you can transform negative behaviors impeding performance into positive behaviors supporting performance. This is how you measure and manage culture as a way to rev up performance and reduce risk.

Charlie: What if employees in the organization don’t understand these values?

David: Most employees already hold these three power values personally. When the power values are highly visible in an organization, they clarify the organization’s intentions and give employees a unifying sense of purpose and direction.

Employees who share their principles, goals, and outlook – the essence of the power values – can let their guard down a bit. They can trust that they will be understood, that there will be fewer booby traps, and that their leaders and coworkers will generally act in a predictable way, consistent with their shared values.

Charlie: What’s the connection between these power values and the kinds dysfunctional cultures we were just talking about?

David: In a positive corporate culture, employees feel good about themselves and their work (commitment).  They raise issues and freely ask questions (transparency).  They don’t feel challenged by unfair or inconsistent work processes, because people take personal responsibility for their actions and live up to their commitments (integrity).

When the elements of culture are out of alignment, frustrations arise. If principles are unaligned with goals, employees disengage and don’t feel a vested interest in their work (lack of commitment). When goals are out of sync with standards, unfairness arises as managers and employees “do what they have to do” rather than what they have said they would do (lack of integrity). And when standards are aligned with values, employees see that the organization’s actions are inconsistent with its principles, and it becomes hard to ask uncomfortable but important questions and ensure that the truth is heard (lack of transparency).

Charlie: How can you foster a positive corporate culture right from the start?

David: Organizational culture isn’t something that can be faked – or “implemented” – by leadership. The culture is simply the way the organization and its people conduct themselves. Organizations have cultures from their outset, though few start-ups spend time defining their culture when they’re small and everyone knows everyone.

When a culture goes bad, it’s not a sudden event; it’s a case of of slow erosion over time. Things begin to change. At the beginning it’s little things, e.g. a business decision made in the heat of the moment when the decision-maker didn’t feel the urgency to deal with the long-term impact at the time of the decision.

Leaders who understand the role organizational culture has in shaping behavior and performance, however, will be mindful of the early warning signs of trouble. Successful culture management means that leaders recognize the first steps down the proverbial slippery slope, and take actions to address them when they’re still small.

To do that, leadership must have a clear sense of a) what kind of culture is needed to achieve the organization’s goals, and b) what behaviors are needed to ensure that the desired culture is sustained. Successful leaders know that the small things matter greatly, and that veering off course is not to be done lightly or without serious plans to right the ship.

Charlie: Thanks, David, for sharing your insights. Until reading this, I also didn’t have a good idea of how one could actually manage culture.  You have managed to educate me greatly!

David: A pleasure, Charlie .

A Separation: a Cinematic Tale of Truth and Lies

This past weekend I saw A Separation, an Iranian movie with more awards to its credit than a dictator’s military jacket. It deserves every one of them.

You’ll never find better screenwriting. Rolling Stone rightly calls it “a landmark film.” Filmcritic calls it a brilliant political metaphor. Roger Ebert praises it as a critique of religion. The Irish Times calls it “a thoughtful film that also works as a crackling melodrama.”

It is all those, and something else. It’s a poster child for the corrosive influence of lying and the power of truth-telling.

Relationships in Disarray

I’ve often quoted (and will again here) Phil McGee’s brilliant insight that “all business problems flow from a tendency to blame, and an inability to confront.”

In A Separation, we see a couple struggling with their relationship. The wife wants to leave Iran; the husband refuses to leave his ailing father. The wife goes to stay with her parents. Their daughter is caught in between.

A woman, hired as a caregiver to the ailing father, brings her volatile husband into the mix. A small set of events trigger a progressive breakdown of relationships among these five key characters.

It is the breakdown that is portrayed so brilliantly. All five are shown as partly sympathetic, and the incidents are so trivial that it doesn’t feel like a deus ex machina. And so the plot feels inevitable – the situation falls into disarray like water forming a funnel down the sink.  How could it be otherwise?

The Truth Shall Set You Free

Until, that is, you realize that every one of these people is fundamentally, deeply, living a lie. One’s lie is about honor; another’s about God; a third about loyalty to family. All the lies seem trivial, and understandable. But they all collide; irresistible forces meeting immovable objects.

And I realized, walking out of the theater, that every single one of those characters held the power within them to change everything – simply by being willing to tell the truth. And the power they held was not just to change themselves, but to change everyone else as well – the entire situation.

A Tendency to Blame, and an Inability to Confront

Back to McGee’s thesis. Dysfunction in groups is rarely about one stubborn person gumming up the works. That is the blame game. The one bad apple spoiling the barrel.

More often, it’s a group conspiracy that’s at fault; the entire organization opting to point fingers, rather than engaging in confronting the true issue at hand. And as the movie reminded me, a conspiracy doesn’t need to be undone by everyone – a single defector can do the job.

All it takes is one person to Speak the Truth, to point out the emperor’s new non-clothes. If that can be done, everyone else immediately recognizes that truth has been spoken. Then, whether from shame or from gratitude at someone else having taken the first step, the healing can begin.

Is this too abstract? What about you? What tangled webs are you a part of? What truth might be spoken by others caught up in the web that would set everyone free?

What truth might be spoken by you?

Trust Tip Video: Truth is More Than Not Lying

We all think lying is bad. Pretty much, mostly, usually. We think of lying as saying something that is not true. But not saying something that is true can get us in even more trouble.

We underestimate the power of truth-telling.

That’s what this week’s Trust Tip video is about.

For more on the subject of truth-telling, lies and untold truths, you might enjoy reading Truth, Lies and Unicorns.

If you like the Trust Tip Video series, and you like our occasional eBooks, why not subscribe to make sure you get both? Every 2-4 weeks we’ll send you selected high-quality content. To subscribe, click here, or go to http://bit.ly/trust-subscribe

___________________________________________________

Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ info@trustedadvisor.com.

The Best Business Blog You Probably Haven’t Read

My nominee for one of the best business blogs ever is The Cynical Girl, previously known as Punk Rock HR. It may also be the funniest business blog going.

In a recent posting, Laurie Ruettimann explained what employers think makes a great employee: a super hardworking slob who labors for love of the company and its brand, who has no discernible self-respect, and cares nothing about money.

However, like all Laurie’s posts, this one featured a respectful and sensible alternative point of view, her definition of great employees:

1. They have skills. They can do something important and in demand.

2. They have integrity. Principles matter.

3. They can commit to the job and its responsibilities. They live up to those commitments every single day.

4. They enjoy working hard and challenging their brains. Great employees don’t shovel corporate dog poop.

5. When they make a mistake, they own it and apologize. They also expect a second chance to make things right.

I was especially struck by points two, three and five, all about people who have integrity, demonstrate responsibility and consistency, and own their mistakes. This is a pretty good definition of someone you can trust:

1. Integrity – someone who is whole, who acts the same way around everyone and in all circumstances, who doesn’t do expedient things for their own gain at the expense of others.

2. Responsibility – someone who takes work seriously, and is reliable in making commitments and following through.

3. Owning their Mistakes – someone you can trust, because they are honest about their mistakes and missteps and willing to bring them into the open and make them right.

Laurie could really call her blog The Common Sense Girl, or The No BS Girl, and she would still get my vote for best business blog. Check her out. WARNING: strong language and frank opinions!

Doing the Right Thing May Be Easier Than You Think

We all know the hard stories of corporate whistleblowers. Sharon Watkins at Enron, Cynthia Cooper at Worldcom, for example. We view such people—quite rightly—as having not just the courage of their convictions, but courage enough to put their social and economic lives at risk for the sake of what they see as right. We all live in a better world because of the risks taken by such people.

Most of us think that such whistleblowers are rare, and perhaps they are. But we also think the cards are stacked against them—that the reason they are so rare is the likelihood of retaliation against someone going up against ‘the system.’

What if that’s not true? What if the risk of doing the right thing is in fact vastly overstated? That virtue is in fact appreciated more than we think? If that’s true, then what excuse do we all have for not doing the right thing more often?

Examples of Ethical Behavior that Evoke Admiration

Twice in the past two weeks I have heard stories that make me think we underestimate the power of good behavior. Briefly:

Story One. I was brought in to manage a main stream of a major contract we had with the government. To my horror, I quickly realized it was over budget, behind schedule, and we were not in a position to attest otherwise. Yet we had a major meeting upcoming at which I would be asked to do just that.

My boss and my boss’s boss had a lot riding on this. The government client had a lot riding on this. It was clear everyone wanted me to sign off and just deal with it, somehow, later. As I entered the headquarters building that day, I had this horrible feeling I was about to lose my job.

The moment came, and I was asked to publicly attest to our progress against milestones. “I simply cannot do that,” I said. “We are not in compliance on a number of those items, and I can’t claim otherwise.” I went home that night prepared to clear out my desk the next day.

But when I went to work the following day, it was as if little had happened. “Good job,” said one superior, “we had no business signing off.” The client appeared relieved too. I later was promoted; we also got more client work. In both cases, this moment was cited as a positive example of my performance.

Story Two. I was a manager of a large client project, which involved a presentation to the client’s Board of Directors. The CEO suggested that if our work turned out a certain way, we would receive a lot of business. I said I could not in good conscience bend the work the way he wanted it.

The next day, in front of the Board, the CEO put me on the spot, saying I was prepared to comment on my findings in a way that would have favored his request. I gulped. I didn’t confront him head on; but I did say that the data and analysis that we had performed unfortunately did not, in fact, support the CEO’s hoped-for outcome, but rather another.

I thought I would be in serious trouble with my boss. Instead, he told me that’s why they hired me in the first place, to stand up to tough situations. A few weeks later, a board member—a director in half a dozen other, larger companies—came to me with invitations to present at those companies. He said he did so because he could read between the lines and knew what I had done.

We Underestimate the Attraction of Ethical Behavior

I have no idea how common these stories are. They could be the exception rather than the rule (though I rather think there are more than we hear about).

The real point, however, is how easily the two organizations fell in behind these two people to support them in doing the right thing. As it turned out, their fears were unfounded. 

This I suspect is true: that we overstate the threat posed by ‘them.’ We overestimate the likelihood that no one would stand behind us, and that there is no support in our organizations for doing the right thing.

I suspect this too is true: that we understate the ability of people to appreciate the obviousness of the right thing. We under-state their hunger and willingness to follow someone who does the right thing, that there is in fact a reservoir of great good will and support.

Believing this doesn’t take anything away from the true courage it takes to be a whistleblower. On the contrary, it may suggest that the truly unethical and anti-social organizations are fewer than we think.

The bigger problem may lie not in unethical leaders, but in managers and future leaders who are too afraid to try on ethical leadership for size.

Where’s your whistle? What are you waiting for?

Are You as Credible as You Think? Probably Not.

There are lots of ways to build trust with others (four, by our count) and Credibility is a big one. In our Trust Quotient research, Credibility shows up as second only to Reliability as the most favored way to build trust. (‘Most favored’ doesn’t mean ‘most effective,’ but that’s another blog, another day.) 

This makes sense, given the emphasis that most business people naturally place on increasing trustworthiness by demonstrating credentials, experience, and know-how.

The risk is that we stop there or—even worse—spend too much time there. Picture the March of 1,000 Slides.

There’s more to Credibility than meets the eye.

Three Dimensions of Credibility

When thinking Credibility, we mostly think words, as in what you say and how you say it. That means that having information, perspectives, opinions, and recommendations are all important—especially for people in professional services whose very existence depends on high quality advice-giving.

But there’s more. Speaking the truth matters too. A lot. As does delivering your message in a way that makes it easy for others to understand and relate to.

Top Ten List of Ways to Build Credibility

Here’s a Top 10 list of tried-and-true Credibility builders, categorized by Credibility’s three main dimensions.

Feature your expertise and credentials:

1.    Be diligent about researching your customer;

2.    Know about industry trends and information, as well as business news;

3.    Write about your areas of expertise—articles, blogs, white papers;

4.    Host events that bring key stakeholders together.

Improve your delivery:

5.    Use metaphors and stories to illustrate your point;

6.    Practice your delivery so you are clear … and clearly relaxed;

7.    Combine your words with presence—a firm handshake, eye contact (when culturally appropriate), a confident air.

Demonstrate your truthfulness:

8.    Offer your point of view when you have one;

9.    Respond to direct questions with direct answers;

10.   Be willing to tell a hard truth when it’s the right thing to do—including “I don’t know.”

 And as a bonus:

11.   Never ever lie. (This includes tiny little white lies and lies by omission.)

This last category, truthfulness, gets at one of the paradoxes of trustworthiness: The thing we’re most afraid to say is often what will build the most trust.

By the way, our clients tell us the truth-telling part pretty much applies to all cultures. Even in Asian countries, where saving face is paramount, the Trusted Advisor’s dilemma is generally less about whether to tell the truth and more about how to deliver the truth in a respectful and culturally-appropriate way.  

Credibility-Building Can Happen Lightning Fast

This expanded view of Credibility is good news for anyone new to a profession or new to a relationship. This part of trust–building your Credibility–doesn’t have to take time; being refreshingly honest can build trust in an instant.

Most clients and customers are so used to spin they will immediately take note. So you can actually leave the PowerPoint deck back at the office (or bring it as a leave-behind) and focus on engaging in a genuine, transparent, and honest conversation. Heck, you might even build some Intimacy in the process.

Take Stock and Take Action

Feeling stuck in a particular relationship? Do a credibility check. Start with the honesty dimension—it’s the least comfortable and highest payback. Ask yourself what you’re thinking and not saying, or saying to some but not to all.

 Then do something about it. You’ll be glad you did.

Anna Bernasek on the Economics of Integrity (Trust Quotes #6)

Anna Bernasek is author of the just-published book The Economics of Integrity

No stranger to the subject matter, she’s been a regular contributor to the Economic View column in the New York Times. She has been a staff writer covering finance and the economy at Fortune Magazine, TIME Magazine and Australia’s Sydney Morning Herald newspaper. She has frequently appeared as a guest commentator on broadcast media including CNN, CNBC, public television and NPR.

CHG: Welcome to the Trust Quotes series, Anna. Let’s lead with your book, if you don’t mind. What’s the central thesis of The Economics of Integrity? Or theses, if that’s too limiting?

AB: If there’s one thing I’d like readers to get out of my book, it’s that integrity—or trust if you prefer—is an economic asset. Once you understand that, you can think about the topic without being limited by the conventional idea that integrity is a personal virtue, and that it’s costly. If one approaches it in the right way, integrity isn’t a cost at all. It’s an investment opportunity, a way to build wealth. That’s very exciting because there’s no upper limit to how much trust—wealth—we can create. I think it’s the biggest opportunity we face.

CHG: You use several examples of inter-dependence to make your point about integrity; care to share one?

AB: Well, one of the points I try to make is that integrity—in the sense of trust and interdependence—is an abundant fact that is found literally in every aspect of our economy. For me, a good example is milk. There are about 15 people who are directly involved in making a gallon of milk. Think of the farmer, the vet, the milk hauler, lab technicians at the milk plant and so on.
If you include all the people who are indirectly responsible for making milk the number grows exponentially. When everyone does what they say they are going to do they all benefit. If one cuts corners or does the wrong thing it can hurt everyone in the chain. That’s why integrity is a shared asset. We share in the rewards of integrity but we also share in the risks.

CHG: What do you believe is the most controversial point you’re trying to make? Controversial, that is, compared to current received wisdom?

AB: Not everybody gets my ideas right away. There are two classic responses to my book, usually from people who haven’t read more than a few words of it. The first is what the heck am I talking about, can’t I just pick up the paper on any day and see that nobody has any integrity anymore? And the second is that, well, there’s nothing new here because we always knew that trust is important.

I would say this. To anybody who says we are lacking in integrity, you don’t need to think very hard to see that if we totally lacked trust in our institutions and fellow citizens the economy would be back in the stone age. We are where we are because generations upon generations have through trial and error, with great effort and sacrifice, bequeathed to us an advanced society where our wealth and our economy depends on an enormous stock of integrity.

It’s so ingrained that we take it for granted, and most people can only think of the defects in our collective integrity assets. I’m saying it’s there, it’s enormous, and it’s very important. It’s an opportunity, not a problem. Sure there are places to improve. But that’s the point—let’s do that and we’ll benefit.

To those who say there’s nothing new here, I have to admit that I didn’t exactly invent or discover trust and integrity. But in mainstream economics trust is treated in an offhand way. It’s typically an assumption on which an intellectual superstructure is then constructed. I’m saying something new: integrity is an asset, and therefore has the property of quantity. Not easy to measure, but still a quantitative subject. We can create it, invest in it, and diminish it as we choose. What I’m saying is that integrity is not just related to, but integral to wealth.

CHG: Are you using the terms ‘trust,’ ‘integrity,’ and ‘virtue’ to mean largely the same thing, or do you see particular relationships between them?

AB: I make a distinction between integrity in its colloquial sense and integrity as an economic asset. In ordinary conversation, integrity is a personal quality. That suggests personal ethics and morality, desirable and virtuous qualities in anyone. When I talk about integrity insofar as it relates to the economy, I am talking about relationships of trust.

In economic terms it doesn’t matter how pure your soul is if nobody knows about it. But if somebody respects you and trusts you, then you have something valuable. So I use the word integrity to describe a relationship of trust between persons or institutions. That trust is an economic asset and it’s very valuable. It underlies everything we do.

CHG: You write that the recent financial crisis was first and foremost a crisis of integrity. To what extent do you think we—government, business, the public—have learned this lesson (or not)?

AB: I think a lot of people recognize that what I’m saying makes intuitive sense. The issue for many people, and the reason I wrote the book, is that they don’t have the tools and concepts they need to think deeply about the problems we have experienced with integrity and about the solutions we need to go forward. It’s not going to cut it anymore to say that we need to deregulate financial markets and encourage financial innovation. But what is going to replace the rhetoric of deregulation? I think my book has some pretty good answers.

CHG: You’re a fan of disclosure in financial markets; how far can disclosure along take us? What else has to happen to increase trust in financial markets?

AB: Disclosure is probably the single most crucial step we can take. But it can’t happen in a vacuum. If there are no norms and guidelines, disclosure becomes an exercise in futility as enormous quantities of irrelevant information obscure what’s really going on. We need to get the important and relevant information out there in a fast, organized and convenient way.

But look at the tools we have now. The internet is the greatest tool ever invented to get this job done. And once we have norms and guidelines, we need to have accountability so that they aren’t just ignored. It’s a big job, no doubt, but the payoff is even bigger. We simply can’t go back to where we were before the crisis. It’s a broken system.

CHG: You’ve written recently about our health care situation, and the recently-passed legislation. If legislators had read, and absorbed, your book (it’s a hypothetical, I know), what would they have done differently?

AB: Just about everything, I’m sorry to say. There are a couple of key points that are hidden in plain view.
First, our existing system is grossly inefficient. On the whole we are paying way too much for health care and we’re not getting results. Second, our system is grossly unfair. Everybody is getting care, but not at the right time or place and certainly not at the right cost. That’s actually making people less well than they could otherwise be.

And along the way, a minority of people are being bankrupted or severely burdened financially in a way that literally adds insult to injury, while others–including caregivers, taxpayers and local communities–are bearing inappropriate burdens.

Every other developed nation—every one—has a better system. There are existing, proven, tested, popular solutions that are being ignored. The biggest travesty of the whole legislative process was the calumnious abandonment of single payer.

Only single payer moves us significantly forward. Everything else, no matter what desirable features it has (and there are a few positive things in the legislation) further entrenches a bad system and endangers not only our future health but our economic prosperity. The only thing I like about the recent law is that it is proof that change can happen. But it wasn’t the change we need.

CHG: I’ve often thought of brands as the corporate equivalent of personal trust. What is, in your view, the relationship between personal trust and corporate, or systemic, integrity? Can you have systemic trust without personal integrity?

AB: Personal integrity is a building block for corporate integrity. Of course you can imagine a situation where someone has a defect in personal integrity but it doesn’t affect their institution because it isn’t relevant to the institutional context. However, I don’t tend to think that’s the norm.

CHG: You talk about the DNA of integrity. Is integrity born, or can it be made? Can we develop integrity, or must it come with mother’s milk? How long does it take?

AB: Integrity can be created. And I think that’s what’s so exciting about it. I think a good example is eBay. From scratch eBay created an integrity system where buyers and sellers came together in a relationship of trust to create wealth. The more people heard about the good experience, the more people were encouraged to try eBay and it created a self-reinforcing system of integrity and wealth.
It can take decades to create integrity or it can literally happen overnight. It depends on whether the DNA of integrity is present (disclosure, norms and accountability) These three conditions together create integrity. They are present in eBay and they are present in other integrity systems like the NYSE.

CHG: Anna, it’s been a pleasure to have you share these thoughts with Trust Matters readers; thank you very much.

AB: Thank you!

This is number 6 in the Trust Quotes series.

The entire series can be found at: http://trustedadvisor.com/trustmatters.trustQuotes

Recent posts in this series include:
Trust Quotes #5: Neil Rackham
Trust Quotes #4: Peter Firestein on Trust, Character and Reputation
Trust Quotes #3: Dr. Eric Uslaner on the Nature of Trust

Career Limiting Moves: Are You Kidding?







Perhaps the most toxic thing you can hear in the arena of people management is “That’s not my job.” It should be grounds for firing. But at least it’s a declarative, first-person statement.

Unlike another leading candidate for management poison: “That’s a career-limiting move.” A passive-aggressive statement if there ever was one.

Let me be clear about my point of view on this: if you work in a company where “that’s a career-limiting move” is part of the vocabulary, you work in a career-limiting company. And if your company has acronymized it to CLM, then you probably have those stupid round-figured laughing cartoon characters saying “You want it when?” in the coffee room too. Bad signs all.

What “Career-Limiting Move” Really Means

In my experience, the term doesn’t get applied to dumb stunts like mooning the chairman or emailing your bookie on the company’s email server. It gets used when you’re talking about doing something very right, that feels personally risky. Things like speaking the truth about an abusive partner; or about taking advantage of a customer; or about skating on thin legal/ethical ice. 

Usually there’s just enough truth in “career-limiting moves” to make it a scary proposition. After all, whistle-blowers often do get fired. But that’s not usually the case. Usually, “career-limiting move” just means speaking the truth where most people prefer to let things be unspoken. And more often than not, truth-tellers are appreciated, not punished.

Why People Don’t Speak the Truth

Human beings demonstrably mis-assess risk all the time. We are more afraid than we should be of doing the wrong thing; and we are less afraid than we should be of failing to the right thing. We constantly avoid the clear and present discomfort of speaking some truth, in favor of the faint hope that maybe someone else will speak up, someday. Meanwhile, things get toxic because of our failure to speak up.

Why ‘Career-Limiting Move’ is a Disastrous Concept

Every time someone invokes “that’s a career-limiting move” to justify a failure to act, their company sinks a little deeper into the muck. It means an organizational shortcoming has been fed, not stopped. That shortcoming will metastasize, since the more you refuse to speak the truth, the harder it is to do so the next time.

It means someone has put their own perceived self-interest ahead of the organization, and selfishness is the death of collective behavior. It means a failure to lead. When “leaders” invoke “career-limiting move” to justify their failure to act, it makes hypocrites of their claim to be leaders. 

It means a stake in the heart for collaboration, transparency, and innovation, because it punishes the risk-taking that is the fuel of those virtues. 

I can hear some of you saying, “But Charlie, you don’t appreciate the real-world situation; people have families, they have to earn a paycheck, they can’t afford the high principles you like to talk about. Get real.”

Fair enough. But we all have to live with our consciences, too. And we each have to draw that line by ourselves, for ourselves.

Where’s your line? When would you invoke the CLM clause rather than speak the truth? And are you sure about that?

 

Peter Firestein on Trust, Character and Reputation (Trust Quotes #4)

Peter Firestein’s extraordinary career began in Indiana. He soon left for California, taught himself Spanish in a park in Mexico, learned commodities in Latin America, and has a unique resume, having worked for Michael Milken and advised the Brazilian Government on privatization of its national phone company.

Peter ended up counseling mega-global companies on corporate reputation and Investor Relations. His book ranges both wide and deep; you can’t summarize Peter’s insight and wisdom briefly. But I do try to pick out a few themes in this interview.

CHG: Peter, Let me put the onus on you: what strikes me most about the book is perhaps the role of personal character and of relationships in dealing with mega-corporate institutional relationships. It’s tough to summarize such a broad book, but how do you see it?

PF: You’ve actually done a pretty good job with your question, Charlie. I try to suggest in the book that the job of leading a significant company these days requires involvement of the whole person, not just the part of the person trained to analyze, fix, and build businesses.

People who’ve reached the point of development where they’re considered capable of leading companies are attuned to making decisions on the basis of metrics. You don’t get there unless you understand return on investment, for example. That’s always been true, and it’s never been more important than today.

But the world requires something more of you now. Modern information technology makes enormous amounts of intelligence on businesses available to anyone who can use a search engine. For companies, there’s no longer any place to hide. In addition, having information conveys to any citizen a sense of entitlement to register opinions and organize opposition to companies whose actions seem out of line with common values.

The good news: any manager with sufficient maturity to run a company also has enough life experience to understand how people outside the company feel themselves affected by its actions. But too many otherwise competent corporate leaders don’t understand that these two sides of life are not only connected—they’re inseparable.

That’s what I mean when I say that, in the end, it’s all personal. In a post-modern world where everyone seems not only to have an opinion, but the eloquence to express it, being the boss doesn’t make you immune; it makes you vulnerable. The moment you take that to heart, you’ve made your first step toward resolving conflicts with your antagonists. Leading is, first of all, listening.

CHG: One thing that struck me was the insistence on reputation as being built inside out: the only sensible strategy is to be the company you want your stakeholders to see.

PF: One of the book’s early titles was “The Glass House,” meaning, of course, that you can’t fake things for very long any more. Just thinking about the failed obfuscations attempted by some big corporations in recent years can bring actual, physical pain.

When I say you have to “build reputation from the inside out,” I mean that managers have to create reporting and communications structures that not only disseminate values throughout the organization, but absorb the workforce’s on-the-ground experience all the way to the top. Every action the company takes, therefore, represents its core value system. And the workforce’s day-to-day reality informs senior decision-making.

I call this “vertical communication,” and I think it reduces the likelihood that a CEO will wake up some day to find that a regional manager has been found to have bribed a government official, or a sub-contracted factory is discriminating against female employees, or an accidental dump of toxic waste has disappeared from company records somewhere down the line.

There are few small failures in big business. In fact, the depth of failure often presents a mirror image of success that preceded it. True vertical communication that extends throughout the organization helps you spend your life thinking about other things.

The legal disclaimer on any financial offering warns that past performance does not indicate future results. With human beings, it generally does.

CHG: Since this blog focuses on trust, please tell TrustMatters readers how you see the relationship between trust and reputation?

PF: If there’s a difference between high trust and strong reputation, I’m blind to it. Both trust and reputation—whether high or low—are expectations of future experience based on what is known about the past. That’s how people differ from markets. The legal disclaimer on any financial offering warns that past performance does not indicate future results. With human beings, it generally does.

CHG: You provide a very real-world example of exactly how a big company should go about recovering from a reputational slip, and what impressed me about it was your recommendation of aggressive, pro-active engagement. Say more about that?

PF: Here’s how pro-active you ought to be. You start preparing for the next crisis five years before it happens. And you don’t need a crystal ball for this. If you’re a multi-national company of scale, it’s impossible to avoid reputational mishaps. Some day, somewhere, someone will—intentionally or by neglect—commit a reputation-compromising act in your name. The inevitability must be an integral part of your thinking. So, you have to have a culture in place well in advance that enables you to respond appropriately to events that never crossed your mind before they happened.

People call it crisis communications, but it’s much more than that. Communications, by itself, never fixed anything. People also call it crisis management. But the crisis has already occurred, so the opportunity to manage it is past. You could call it management of the aftermath, and the only way to manage the aftermath effectively is to participate in it.

Which means, to some degree, participating in the emotions of those you have harmed. Referring to a person in the CEO position, the corporation becomes the person, and vice versa. If, as an individual, you have empathy toward a family who’s lost a father or a mother, you have to show that same empathy as a corporation.

Beyond this, the best piece of advice available on the subject is to resist the temptation to let your lawyers protect you. They can’t. There’s a short list of companies that have come out of disasters with stronger reputations than they’d had before. In all cases, they did so because they were able to identify with those who were angry with them. Enlightened leadership means understanding there’s no Plan B.

CHG: Let me challenge you on one small item: you assert that the most important constituency is investors, though you also advocate systematically managing a wide variety of stakeholders. Isn’t investor turnover increasing radically these days? Does that diminish your point?

PF: The building of reputation can’t be about anything but what motivates management – and that has to do with investors’ willingness to value the shares at higher levels. Turnover? If someone’s selling, someone else is buying.

There’s no altruism in business, nor should there be. But the cold fact these days is that sustainable behavior means supporting legitimate social interests. You don’t have to like it, and you don’t have to take a “nice” pill to do it. It’s just business, but business has changed. Here’s where investors’ interests enter the social sphere: A company facing a social and regulatory headwind is likely to have higher capital costs and less-than-certain chances of strategy execution.

Investors don’t like that. It’s not the job of a corporation to address social interests—except where doing so is the only avenue to making business successful. And that’s already become the normal condition in most industries. I just read a wonderful quote by a Canadian union official named Stephen Hunt who, in a speech about social responsibility in mining, could have been referring to any industry when he said: “A mining company is only as good as its opposition.”

CHG: You’ve dealt with dozens, maybe hundreds, of CEOs. What has been the most common blind spot or weakness you have seen regarding good reputation management?

PF: It may be my sunny disposition, but I can’t remember at the moment meeting a business leader who wasn’t driven by earnest good intentions. Sure, I’ve known my share of indicted folks; but I liked them, too. There’s something about giving yourself over to a goal that’s not that different from love of family. It’s personally attractive.

I had the great good fortune to grow up in the Sovereign State of Indiana, and it wasn’t until I was in my thirties and working in a New York trading company that I came to realize that high intelligence in a person does not necessarily equate to noble intentions.

Because you are using the world to build wealth, the way you treat that world will follow you.

The most common blind spot (since you asked) is a lack of balance, which I guess can be closely associated with laser focus on a goal. Perhaps a better way to describe it is to call it a lack of context. Because you are using the world to build wealth, the way you treat that world will follow you. It wouldn’t hurt us to remember once in a while that American native populations held profound respect for the game they had to kill in order to live.

I once sat down to a dinner meeting between a CEO and equity analysts in an elegant New York hotel. The CEO was among the most prominent European industrial titans of the last half century (a client). His dozen or so guests were invited there to eat and ask him questions. He opened the conversation this way: “My father taught me,” he said, “that to make a living, you have to rub other people.”

He was assuring them of his accessibility. There was no imaginable reason for him to endure their earnest self-importance had he not wished to. He didn’t need them. But hosting them reflected his idea of how the world worked. There was no amount of esteem or money that could free you from the need to engage.

CHG: You have a fine sense of the historical about you. We’ve been through this kind of business reputation downturn before, certainly in the US. What’s different this time? What should we learn from the past?

PF: The past can be a deeply misleading subject because there isn’t much that hasn’t happened in it. If we’re talking about the past experienced by those of us who have come of age since World War II, in which America emerged triumphant in an otherwise devastated world, there’s a strong argument suggesting that’s the most unrepresentative of all the pasts available for our consideration.

One thing we’ve learned from the past is that the notion that things are different this time provides an assured road to ruin—as does a sense of invincibility and the belief that we’re smarter than those who have come before.

The reputation of business—as cyclical as anything else—will continue its descent until a new ideal appears to propel it upward again. Perhaps the last ideal that floated the reputation of business involved the building of the industrial world and the opening of the West. Dust from the explosion of that ideal is still settling around us. Perhaps the next upswing will come from the ideal of restoring the environment—in other words, from respect for the same earth the last ideal wrecked.

It is certain that we don’t get to decide these things for ourselves. In trying to come to terms with the cycles of sentiment, I have taken comfort in a phrase coined by New York Times Columnist David Brooks. The term is “epistemological modesty” and refers to the inescapable fact that, no matter how hard we try, we really don’t know very much. Everyone’s familiar George Santayana’s saying: "Those who cannot remember the past are condemned to repeat it." Not being much of a comedian, Santayana forgot his punch line: “So are those who can remember it.”

CHG: Let’s imagine this blogpost got forwarded to 50 CEOs. On the whole, on the average, what are the top 2-3 things CEOs need to hear?

PF: Sir or Madam CEO: I have nothing but good news for you. It is this: You have more control over the fate of your company, your reputation, and your career than you imagine.

Do you look at your critics—the trigger-happy media, activists with a bone to pick, investors and analysts who just don’t get it—and tell yourself that not one of these people has ever run a company for a day? So, how could any of them understand what you’re trying to accomplish?

In their lack of fairness lies your advantage. During the latter part of the 20th Century, when anti-tobacco activists tried everything they could think of to put cigarette makers out of business, their nearly constant companion was a Philip Morris public affairs executive named Steve Parrish. He spoke at their conferences and kept in close touch with the principals of organizations that opposed him.

While absorbing all their slings and arrows, he offered them a continuous flow of new information about the manufacture of smoking products, including the companies’ efforts to reduce their deadliness. He discussed regulation of the industry, which eventually came to pass. The result was that—whether we like it or not—tobacco companies survive as a highly-profitable business.

Parrish’s strategy was to increase his adversaries’ knowledge of the tobacco industry—a counterintuitive approach if there ever was one. The byproduct of this flow of information was that he continually moved the goal posts on them, preventing closure of the argument despite an extraordinarily hostile environment and an enormous consensus against him.

CEOs have at their disposal one of the modern world’s most powerful weapons: Information. Gifted corporate leaders will use it to engage adversaries, induce them to invest in dialogue to the point that it cannot reasonably be abandoned, and, by that route, achieve a workable consensus. If companies whose products kill you can do this, why can’t anyone?

CHG: How much difference can individuals make?

PF: Excluding natural disasters, change comes from nowhere but individuals. Historical forces, wars, financial trends, market bubbles and collapses, the discovery of penicillin, and the invention of cheap global digital communication as well as post-modernist art can all be summed up in single word: Behavior. Even mass behavior has to start with an individual—a notion that may lead us to one definition of leadership.

CHG: In your book, you carry on an extended discussion about how very good companies, at least for a period of time, seem to lose direction. Merck during its Vioxx episode is one example you explore. You also suggest a concept called “Structural Corruption.” What’s this about, and what insight can you offer about the mechanism by which some companies seem inexplicably to turn south?

PF: I use Merck as an example because it was a fantastic company for over a century and is a truly admirable one today. But Merck’s Vioxx interlude, during which it seemed to want to overturn the last 400 years of the scientific method by subordinating disclosure of pharmacological research to the desires of its marketing department, shows how even great companies can become confused when they allow commercial factors to cloud their judgment.

The scientific method says you base conclusions on observed fact. Merck hid harmful side effects of its drug in order to sell more of it. I maintain that the people inside the company would never have behaved this way in their private lives. Their judgment suffered from an insularity within the company that distorted their frame of reference. There was a kind of “echo effect” at work in which people gradually talked each other into highly inadvisable actions—and many inside and outside the company suffered.

I came up with the term “structural corruption” to describe an impossible situation in which managers sometimes find themselves when their industry’s fundamental business model goes illegal. This describes parts of the insurance industry a few years ago when Marsh & McLennan enrolled its competitors in a scheme to rig bids for big institutional contracts and pay out illegal commissions. You couldn’t compete unless you played the game.

So, imagine a manager who’s invested his or her life in building a career in that sector, and has done so by behaving ethically, and then has to contemplate giving it all up in order to maintain a hard-won reputation. Imagine a similar manager trying to win a contract in a foreign country in which he or she is competing against a company domiciled in a place where the government winks that the payment of bribes to win business.

The concept of “structural corruption” is useful in distinguishing the dynamic in which even managers with the highest standards of conduct can become victimized by secular ethical trends. The questions people face in such circumstances can be life-changing. One secular ethical trend lies behind the Great Recession that began in 2008 and whose end is not yet convincingly in sight. But that’s another story.

+++++

CHG: It’s been a real pleasure meeting and talking with you; anyone interested in buying Peter’s book, which I recommend can find it here: Crisis of Character: Building Corporate Reputation in the Age of Skepticism

This is number 4 in the Trust Quotes series.

The entire series can be found at: http://trustedadvisor.com/trustmatters.trustQuotes

Recent posts in this series include:
Trust Quotes #3: Dr. Eric Uslaner on the Nature of Trust
Trust Quotes #2: Robert Porter Lynch on Trust, Innovation and Performance
Trust Quotes #1: Ross Smith of Microsoft

Trust and the Standard Deviation

Those of you who regularly read Trust Matters have probably heard something about the Trust Equation, a formula for figuring out your own individual trustworthiness.

It looks like this:

Where:

T = Trustworthiness
C = Credibility (words)
R = Reliability (actions)
I = Intimacy (safety)
S = Self-orientation (whose agenda are you working?)

You can read more about it in this article:

From this equation, Charlie Green developed the Trust Quotient assessment–20 questions which yield powerful information on not only a person’s overall TQ, but also her or his areas of strength and – let’s be forthright – weakness when it comes to creating trust.

And the Trust Quotient Assessment Says…

Over the past two years more than 10,000 people have taken the TQ quiz. And what a rich and delicious trove of aggregated data that has given us – the largest study of its kind ever done on personal trustworthiness.

One of the key findings is this: in building trust, consistency matters.

The data show that the more consistent a person is across all four areas of the TQ (credibility, reliability, intimacy and low self-orientation) the higher that person’s overall TQ score will be.

Put another way, the higher the standard deviation among the four components’ scores, the lower will be the overall Trust Quotient number. Science has now shown what intuition has always told us. We trust people more when they display all four key factors evenly, when they act consistently. In some ways, this is what we mean when we say ‘integrity’—a sense that we are seeing a whole, that this person walks the talk, there are no secrets, what we see is what we get.

In less mathematical terms …

Imagine that you scored very well on credibility (you really know your stuff), on intimacy (you relate to others on a human level, and are open with them), and on self-orientation (you really listen to other people and want to understand how you can help, not just how you can make a sale.)

BUT–with all of this going for you, if you miss deadlines, show up late or not at all for meetings, and fail to get your part of the project done, no one is going to trust you.

Will they tolerate you? Maybe, if you are the super-expert they need on the job, or the total charmer who makes even wacky excuses sound plausible. But trust you? No. You’re a brilliant or charming flake. You can’t be relied upon.

Does the TQ Contradict Strengths-based Management?

On the face of it, this may appear to contradict the strengths-based approach to management championed by Marcus Buckingham, who argues you’re generally better off working from your strengths than fixing your weaknesses. Because if a charming flake can improve her or his score on reliability, she or he can improve their TQ trust score.

In fact, we don’t think it contradicts Buckingham’s basic proposition; if your natural strength lies in intimacy, for example, you’d do well to use it.  But what if people can’t see it for the strength it is?  What is your flakiness obscures it?

As is true so often, trust may be a bit of a special case. If the appearance of dis-integrity (flakiness, perhaps) is keeping people from seeing your natural strength in intimacy, then improving reliability is a way of enhancing your strength, rather than just shoring up your weakness.

This is just a peek into the tent of our findings from the survey data. Stay tuned to read more in future blogposts.