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Why the Talking Stick Creates Trust

The morning news is celebrating a minor triumph of civility in the United States Senate. Senator Susan Collins helped broker a (very) short-term deal by using a talking stick – a centuries-old example of early social engineering from Native Americans.

What’s interesting here is not the agreement itself, but how the use of the talking stick creates trust.

The Nature of Trust

Interpersonal trust is a bilateral, reciprocating relationship based on risk-taking. Let me unpack that in simple English.

Trust requires a trustor, and a trustee. The trustor initiates the relationship by taking a risk. The trustee then responds, or not, by being trustworthy. The players than reciprocate roles – it becomes the trustee’s turn to be the trustor. And so on.

As a visual metaphor, think of a simple handshake; one person extends their hand – the other (usually) responds in kind. A minor social ritual, but of the type that plays out dozens of times a day in simple respectful, reciprocating gestures. It is the stuff of etiquette, among other things.

The Critical Role of Listening

Trust formation follows the rule of reciprocity – but what is the currency of that reciprocity? A powerful component of it is very basic – listening. As in, “If you listen to me, I will listen to you.”

This is a familiar proposition to all of us. In sales, we have “I don’t care what you know until I know that you care.” In fields as diverse as hostage negotiation, terrorist interrogation, and suicide hotlines, we know the critical nature of listening in order to ensure the other person feels heard. (In the field of relationships, you’ve probably been on one end or the other of the familiar line, “Would you stop trying to solve the problem, I just want you to listen to me.”)

I’m not talking about “active listening,” or listening to find out the other person’s position, or to formulate a value proposition. I’m talking about something much more basic and fundamental – listening so that the other person feels heard, validated, understood. This is primal stuff.

The Talking Stick

What the talking stick does is to ritualize this fundamental human truth. The only person allowed to talk is the one holding the stick. The result – even though everyone ‘knows’ that it’s an artificial constraint – is that it works.

We are hard-wired to appreciate the civility of listening – and to respond in return. The talking stick is a physical reminder of a basic rule of trust creation: the critical role of listening. If you let me talk about my issues, I will then let you talk about yours.

It’s a rule all humans seem to respect; and a clever vehicle, even if transparent, for drawing on our better natures to create trust.

 

Leadership, Trust and Intangible Services

Where do you draw the line between general best practices and vertical industry-specific applications? The answer, of course, is it depends. Specifically, it depends on the best practice, and on the industry. But what does that mean in the general case of leadership, and the specific industry of complex intangible services?

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Think of all the books on leadership in business. Now think about the leaders those books routinely cite as examples. Jamie Dimon may come to mind. Other names might include Jeff Bezos, Neil Armstrong, Ray Kroc, Pat Reilly, Steve Jobs, Walt Disney, or Jack Welch.

Now take this simple test. Imagine Jack Welch running a consulting firm. Imagine Jamie Dimon as CEO of an accounting firm. Ray Kroc running a law firm? Bill Belichik at an actuarial firm? Steve Jobs a commercial banker?

If these combinations sound a little “off” to you, there is a reason. Leadership is not a one-size-fits-all proposition. Most writing on leadership assumes a single definition of “business.” But leaders in certain businesses look decidedly different. Among those distinctive businesses, I would suggest, are retailing, high technology – and complex intangible services.

Intangible services firms often waste considerable time and effort in management development – and in management itself – by focusing unduly on leadership themes that are not business-relevant. Why? Because of the unconscious belief that there must be leadership “best practices,” and therefore what’s best for Apple/IBM/Amazon/Goldman must be best for everyone else as well. But the truth is, if Jeff Bezos is king, it’s only of one particular kingdom.

For complex intangible services, relative to industry at large, some leadership traits are more important – and some less important. The relatively more important themes are trust, coaching and values. Among the relatively overrated are vision and rewards systems.

GALP (GENERALLY ACCEPTED LEADERSHIP PRINCIPLES)

The list below shows the results of an unscientific quick scan of the business leadership literature. There are fifteen topics, arranged alphabetically. Most if not all these topics fall within four components of leadership identified by Warren Bennis, probably leadership’s top guru – vision, communication, trust, and personal characteristics.

LIST OF LEADERSHIP TRAITS: VARIOUS SOURCES

  • Charisma
  • Coaching
  • Credibility
  • Expertise
  • Implementing consistent systems
  • Inspiring people to greatness
  • Integrity
  • Leading by example
  • Organizing for flexibility and responsiveness
  • Personal development
  • Story-telling
  • Team-building capabilities
  • Trust
  • Vision
  • Values

The two “biggies” in leadership for industry at large may be vision and alignment. Vision is critical for leadership in many businesses. Without the compelling vision of an original leader, what would have become of Apple, Microsoft, McDonald’s, Amazon, and WalMart? Roberto Goizueta, as Coke’s CEO, gave a perfect example of leading by vision when he spoke of “a time when every faucet is used as God intended.”

Alignment is the other major leadership theme – alignment of message, rewards, incentives, measurement, and examples of leadership behavior. This focus on alignment is similar to the focus on vision in one respect – each is about the relentless reinforcement of a single, central theme, critical to the organization and its strategy.

Pick your metaphor: leadership in industry at large is like a) turning an aircraft carrier, b) being trail-boss on a cattle-drive, c) playing 3-dimensional chess, d) all the above. Leaders combine high-level direction-setting with the coordination of tactical complexities – relentless reinforcement of a theme.

Are all those key? Yes – for industry at large.

WHY LEADERSHIP IS DIFFERENT FOR INTANGIBLE SERVICES

By contrast, the dominant metaphor for intangible services businesses is widely accepted – it’s herding cats. And that calls for very different leadership.

The list below itemizes differences between industry and intangible services. Leadership in industry, of course, focuses on tangible “things” – markets, products, technologies, competitors, market shares, brand images, placement, positioning.

But intangible services are about abstractions, and about managing relationships to get there. They’re about process, not endpoints. The focus must be more on client service than on market share or competitive triumph. Every product/customer experience is non-trivially unique. Perfection is not about zero-defects, but about unbounded excellence – and excellence has no upper limit.

The relevant sports metaphor is not football, but solo sports like baseball or basketball. Professionals are, by and large, more driven, intellectual, internal, needy, hard on themselves, abstract, aloof, sensitive, and neurotic than their general management brothers and sisters.

In industry, strategy generally drives organization. In complex intangible services, strategy is as much driven as driver. An accounting firm may “decide”  to invest in M&A work; but the real driver behind the “plan” is inevitably a partner or two who have a personal passion for the work.

Visionary leadership is great for a Coke, GE, et al. “Be number one or number two in every business we are in” means something in a business like jet engines, where the top player of 3 may have 50% market share. It’s less useful in consulting, banking or law, where there are hundreds of competitors, where the professional is the product, and every client/professional experience is unique.

COMPLEX INTANGIBLE SERVICES: DIFFERENCES

  • No physical product
  • Smaller organizations
  • Far greater individual autonomy
  • More matrix or practice management
  • Higher average salaries
  • Professional/staff, not non-exempt/exempt
  • Fewer direct reporting lines
  • Lower levels of industry concentration
  • Certification driven expertise (CPA, JD, etc.)
  • Less history of branding
  • Apprentice system of personal development
  • Less functional specialization re selling
  • More fluid, ad hoc teams
  • No upper limit to quality (e.g. no 6-sigma)

DEVELOPING LEADERS FOR INTANGIBLE SERVICES

In complex intangible services, visionary leadership is overrated. The best leaders inspire not by the relentless reinforcement of a theme, but by demonstrating a passion for client service. A vision is an idea – client service is an attitude. Visions are about goals; client service is about mindsets.

Leaders in industry capture attention; leaders in intangible services celebrate paying attention. In this one respect, intangible services businesses are more values-driven than other industries. I don’t mean social virtues, but values like client focus and collaboration.

Measurement systems also matter less. When every client situation is unique, the apprenticeship model applies; leaders must focus less on refining measurements, and more on getting the right people to do the right things – often despite the measurements, not because of them.

Leadership is less systemic and more personal. Cats are un-herdable – that’s the point of the joke. But they can be led, precisely by appealing to their cat-ness. Great leaders help people to grow, to replace their fears by cultivating curiosity, to subordinate their egos to client service, to dare to be great and constantly challenge themselves – to gain the ability to trust, and earn the right to be trusted.

Finally, leadership in intangible services is mainly about personal growth. That is not a platitude. In a business where every client/service delivery event is unique, personal growth is a strategic sine qua non. Not growth as a generic leader – growth as a human being.

A leader of cats can’t just be the Greatest Cat: (s)he has the be the one who best understands cat-ness.

A Better New Year’s Resolution

Eleven years have passed since I first wrote the following thoughts on New Years resolutions. Frankly, it was good. And frankly I haven’t been able to write a better one. Next year, maybe.
So, apologies to those who have read it year after year—though I suspect some of you won’t mind.

Happy New Year.
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My unscientific sampling says many people make New Years resolutions, and few follow through. Net result—unhappiness.

It doesn’t have to be that way.

You could, of course, just try harder, stiffen your resolve, etc. But you’ve been there, tried that.

You could also ditch the whole idea and just stop making resolutions. Avoid goal-failure by eliminating goal-setting. Effective, but at the cost of giving up on aspirations.

I heard another idea: replace the New Year’s Resolution List with a New Year’s Gratitude List. Here’s why it makes sense.

First, most resolutions are about self-improvement—this year I resolve to: quit smoking, lose weight, cut the gossip, drink less, exercise more, and so on. All those resolutions are rooted in a dissatisfaction with the current state of affairs—or with oneself.

In other words: resolutions often have a component of dissatisfaction with self. For many, it isn’t just dissatisfaction—it’s self-hatred. And the stronger the loathing of self, the stronger the resolutions—and the more they hurt when they go unfulfilled.  It can be a very vicious circle.

Second, happy people do better. This has some verification in science, and it’s a common point of view in religion and psychology—and in common sense. People who are slightly optimistic do better in life. People who are happy are more attractive to other people. In a very real sense, you empower what you fear—and attract what you put out.

Ergo, replace resolutions with gratitude. The best way to improve oneself is paradoxical—start by begin grateful for what you already have. That turns your aspirations from negative (fixing a bad situation) to positive (making a fine situation even better).

Gratitude forces our attention outwards, to others—a common recommendation of almost all spiritual programs.

Finally, gratitude calms us. We worry less. We don’t obsess. We attract others by our calm, which makes our lives connected and meaningful. And before long, we tend to smoke less, drink less, exercise more, gossip less, and so on. Which of course is what we thought we wanted in the first place.

But the real truth is—it wasn’t the resolutions we wanted in the first place.  It was the peace that comes with gratitude.  We mistook cause for effect.

Go for an attitude of gratitude. The rest are positive side-effects.

Santa Does Trust-based Selling

Some of you are partaking in the annual ritual of watching Christmas movies – most notably the perennial It’s a Wonderful Life. This is not about that movie.

Instead, I want to remind you of an interesting lesson from the seasonal also-ran, Miracle on 34th Street.

Nominally a cute tale about the existence of Santa Claus and the power of belief (featuring a starry-eyed 6-year-old girl, and the comic relief of the US Post Office dragging in all those letters to Santa as proof-of-existence), it has a hidden gem buried within about the power of trust-based selling.

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The “real” Santa (a kindly old man who is or is not deluded) is employed by Macy’s in its flagship store as, of course, Santa. Santa is nearly fired by a numbers-driven Type-A middle manager for suggesting to a shopper that she buy the toy from Gimbel’s across the street.  (The cynical shopper confounds the manager by congratulating him on “this wonderful new stunt you’re pullin’.”)

This “stunt,” of course, is the Acid Test of Trust-based Selling: the willingness to refer a customer to a direct competitor, if that is the right thing to do for the customer. But it doesn’t end there, with a whimsical sappy Santa.

Macy’s President happens along and instantly realizes that Santa’s customer focus is far more effective for Macy’s than the conventional approaches to sales.  He announces:

…not only will our Santa Claus continue in this manner…but I want every salesperson in this store to do precisely the same thing. If we haven’t got exactly what the customer wants, we’ll send him where he can get it.

No high pressuring and forcing a customer to take something he doesn’t really want. We’ll be known as the helpful store, the friendly store, the store with a heart, the store that places public service ahead of profits.

And, consequently, we’ll make more profits than ever before.

Exactly.

If you focus relentlessly on the customer, you-the-seller will do just fine. Even better “than ever before.”

The good news is you don’t have to believe in Santa Claus to do this. You just have to follow the Four Trust Principles:

  • Customer focus for the sake of the customer
  • Long- not short-term timeframe
  • Transparency
  • Collaboration

Sometimes we view this as a paradox: relentlessly focusing on the Other ends up serving You as well – but only if you do it genuinely, rather than as a means to an end.

Paradoxical yes, but a Truth well-known to most who delve into human relationships. You get back what you put out. Do unto others. Pay it forward. Be the change you want. And so forth.

Truly a message for the season. And not just for sellers.

Is it Ever Trustworthy to Go Around Someone to Get to the C-Suite?

Today’s post is by Trusted Advisor Associates’ own Andrea Howe and Stewart Hirsch.

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We just led a webinar on how to take a trust-based approach to building C-suite relationships. (We decided in the moment that we should call it the Hirsch and Howe Show.) There was a great question asked that we didn’t have time to adequately address, so we’re taking a moment to share our thoughts here.

For context, our webinar proposed three fundamental steps to building trust-based C-suite relationships:

  1. Get your “why” right: Your reason for pursing a relationship affects everything.
  2. Get your “what matters” right: Look thoughtfully and expansively at what would motivate them to engage with you.
  3. Get your “how” right: Follow trust-based best practices for (a) getting and (b) navigating the CXO conversation.

The question came up in our discussion about getting your “how” right:

What if your client below the C-level exec is blocking your access to develop a new relationship with the exec—do you ever go around him or her?

The short answer is possibly, but IF AND ONLY IF, two conditions are met:

  1. You have a darned good reason.
  2. You then do it very skillfully.

First, the darned good reason part.

The hardest work to do with this situation may not actually be the difficult conversations that are required should you choose what we’ll call a “go-around,” but rather the mental prep required to assess the situation in a trustworthy way in the first place.

What’s key is making sure you’ve asked yourself WHY you want access to the C-suite person (step 1 above), and that you’ve arrived at a good answer from a trust-building standpoint.

Let’s pause here for a quick poll: What are good reasons, in general, to pursue a C-Suite relationship? Choose all that apply:

  • So we can show them our capabilities
  • Because <insert competitor name> is in there
  • To show them we’re better than the competition
  • To secure a champion to help us expand our offerings
  • Because the lower levels aren’t listening
  • Because they’re the real decision-makers
  • Because we’re getting nudged/pressured/pushed to have more “eminence” by our colleagues
  • All of the above
  • None of the above

The answer that reflects the most trustworthy approach is … drumroll … none of the above.

Think about it: every other option is actually a demonstration of high self-orientation—sometimes sneakily-so. In other words, it’s you wanting something for your benefit, not for theirs. The same is true when it comes to go-arounds.

Going a little deeper, consider what’s often at the source of (and problematic about) each of these motives:

The Why The Source What’s Problematic
So we can show them our capabilities ·      The desire to be heard, which is often far greater than our desire to listen

·      Ego needs

·      A firm norm/assumption that this is the right thing to do

You’re leading with what matters to you, not them.

 

You become a hammer searching for a nail.

Because <insert competitor name> is in there ·      The desire to win/gain power <Competitor name> might be doing really well by your client. If you’re a true trusted advisor, you’ll celebrate that (gasp!).
To show them we’re better than the competition ·      The desire to win/gain power

·      Ego needs

If they’re happy with their current provider, they’re not going to believe you’re better. And you won’t convince them that you’re better by talking at them about your capabilities.
To secure a champion to help us expand our offerings ·      The desire to win/gain power While you care about expanding your offerings, it is highly unlikely that your client cares one iota about expanding your offerings. Leading with your desire to gain more share of the account/market because that’s what your annual goals state (for example) is all about you. Your needs aren’t their problem.
Because the lower levels aren’t listening ·      Avoiding rejection/embarrassment

·      Avoiding what might be hard work to improve these relationships

It’s possible they’re not listening because you’re not being effective, or because they don’t trust you—a go-around therefore doesn’t address the real issue(s), and might even exasperate things. Imagine if someone tried to go around you.
Because they’re the real decision-makers ·      The desire to win/gain power

·      Ego needs

Decisions are often left to—or strongly influenced by—those very people you are trying to go around. So the “go-around” could backfire, because the decision-maker and those in the client organization at your level are both annoyed.
Because we’re getting nudged/pressured/pushed to have more “eminence” by our colleagues ·      Avoiding rejection/embarrassment

·      Ego needs

This is a you-centric motive, not a client-centric motive. And it’s an internal issue to address, not a client issue to address.

 

If some of what’s in the table above seems harsh, well … our language may be too strong to apply to you. Or maybe not. Consider that you can be a well-meaning person of high integrity who likely still falls prey to some variation of what we’ve sketched out simply because you’re a card-carrying member of the human race. The mindsets we describe are actually common, and we’ve heard them from many humans.

Also consider that, in general, everyone’s first “why”—in other words, your rational reason for a go-around—is almost always wrong.

So, what are some good reasons for a go-around?

We brainstormed, and so far we have come up with only one clear, unambiguous reason:

The project, organization, or CXO her/himself is at serious risk—either because the lower-level person is incompetent or is sabotaging (perhaps consciously, perhaps not).

That’s it.

If your situation meets the criterion above, read the next paragraph. If not, jump two paragraphs down.

How do you go-around skillfully?

We came up with at least three best practices:

  1. Talk to people inside your firm about your plans so that you understand how other firm relationships with the client will be affected. You need a full understanding of just how much risk the go-around implies. The stakes could be high. A go-around that backfires, and upsets the CXO enough to call the firm’s relationship into question, could be very costly. Buy-in from your colleagues is worth seeking.
  2. Be transparent with the person you’re going around, either before the go-around, or immediately after, with one exception. The exception: if the person is a “bad actor”—i.e. someone whom you truly believe, based on evidence, is likely to act in an unethical way.
  3. Name It and Claim it with the CXO. Use caveats to show your sensitivity to the situation. Acknowledge that you’re taking this risk because you wholeheartedly believe it’s in her/his best interests, rather than yours. Let it be known that you’ve been (or will be) transparent with the person you’ve just gone-around. In other words, handle it with an “all cards on the table” kind of approach that belies your own sensitivity and vulnerability in the matter.

What are some viable alternatives to a go-around?

We brainstormed this, too, and came up with two for starters. Note they are not mutually exclusive:

  • Take yourself out of it. If a relationship with “the boss” is the right thing to pursue for the right reasons, but your current relationship(s) are creating a barrier, then look for someone else in your firm who could work that C-level relationship instead of you. If it’s really about what’s best for the client, then you, personally, are not all that important.
  • Work the relationship with the person who seems to be gatekeeping. This may be the hardest of all the options—maybe even harder than the go-around. Dare to put the gatekeeping issue on the table. Find out why she or he is hesitant or concerned or just plain obstructive. What’s missing in your relationship? In what ways might you not seem trustworthy enough for that person to take a risk on you? An honest dialogue could open many doors wide—including the one leading you directly to the executive. You might also discover ways to make the gatekeeper look good for being the one to bring you in to the CXO.

Now you have the Hirsch and Howe point of view on the matter. And now you know why we couldn’t adequately answer the question in the two minutes that we had on the webinar. It’s complex, with a lot of nuance, and requiring masterful mindsets as well as skill sets.

Kind of like the nature of trust.

Do You Trust Your Customers? Do They Trust You?

It’s popular to claim that “trust is down.” Mostly, that’s true. It’s definitely true that trust in government in the US has declined. It’s a bit less true of big business, but not enough to be proud of. Edelman basically has it right: trust is broadly on the decline.

This is mainly a business blog, so let’s focus there. My clients have lots of questions about trust, ranging from what to why to how. But most of them have one question about all others: How do we get our customers to trust us?

It’s the wrong question.

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A long time ago, at least as we remember it, we all had more control over our businesses and our lives. Not everything we wrote would appear instantly on the Internet. We didn’t need to mention price until we had discussed value. We largely controlled our public image.

Back then, it wasn’t hard to trust our customers. After all, we held all the cards. And our customers more or less trusted us because we appeared trustworthy.

That was then; this is now. Information now is drastically, radically free. Copyrights and trademarks are losing their protective power, and first-mover advantage lasts a nanosecond. Your brand image is determined by forces outside your control.

Nowadays it’s hard to trust our customers. They can integrate upstream, threaten us with reverse auctions, switch suppliers in a heartbeat, force us to deal with procurement, and screen us out of every advertising and promotional channel we can think of. Worst of all—they trust us less than ever before. The ingrates!

In such an environment, the natural response is to tighten control. That is precisely the wrong response. The right response is not to stand in front of the wave, but to get out your board and surf it. And ironically, the best way to get our customers to trust us may be to trust them first.

Ways We Control

Given the volatility in nearly every aspect of business over the past decade, we don’t need more scary headlines. We are all overly conscious of terrorism, intellectual property theft, out-of-control jury awards, computer hacking, identity theft, and unscrupulous business practices. The fear factor is more than adequately taken care of just by reading the headlines (online) or watching the evening news (cable, delayed so as to strip ads).

We have responded with controls. We put screens and filters on our email, phones, and social networks. We use password protection programs. We instruct our lawyers to include non-compete clauses. We require our subcontractors and customers to indemnify us against all conceivably imaginable negative events. We engineer our CRM systems to include sub-routines to cover all possible downsides to the sale.

AI and Big Data are bringing new dimensions to this dynamic. We no longer have to trust our customers to tell us what they want: we can discern it from their behaviors, from scraped data. Increasingly we can divine intentions, rather than having to trust what our customers themselves say.

We do all this to manage risk. But when we expend so much energy on the negatives, we tend to mistrust everyone—customers, employees, subcontractors, strategic partners. And the result of all that mistrust is—mistrust handed right back to us. Trust is, after all, reciprocal: what you put out, you get back.

All the stats about the decline in trust tend make us think we’re seeing a decline in trustworthiness. Often that’s true, but it also implies a shift in our propensity to trust. We have become, as a business culture, less willing to take the risks that are necessary to building a trust relationship. And when we trust less, we get less trust back.

The Dynamics of Trust and Trusting

We sometimes forget that a relationship of trust requires two players: one to do the trusting and one to be trusted. Those roles are very different, and the players have to switch back and forth between them.

All the risk lies with the trustor, the one doing the trusting. By contrast, the one being trusted (the trustee) has a largely negative task: to not appear untrustworthy. But, if all the trustee does is appear trustworthy, and never take any risks, eventually the trustor will become suspicious: “Why am I always taking all the risks here?”

Healthy trust relationships are composed of an ongoing ever-reciprocating pattern of trusting and being trusted, with the roles frequently shifting. I reach out my hand in a gesture of greeting, risking your disapproval, and you return the gesture by shaking my hand. You share some important information with me, risking my abuse of that information, and I return the gesture by ensuring that I will treat the information appropriately. It is the back and forth that forms the pattern of trust.

Trusting Customers and Trustworthy Customers

Henry Stimson is credited with saying, “The only way to make a man trustworthy is to trust him.” Other pieces of received wisdom echo the same principle: “Whether you expect good or ill of someone—that’s what you’ll get.” “No pain, no gain; no risk, no return.” But what does all this have to do with customers?

Plenty. Let’s take buying. In the old days, we controlled the information and doled it out when it suited us to suit our sales process. Buyers know they no longer have to put up with that; they can put together almost all the information necessary on their own if they have to. They now resent having to deal with salespeople to get information that should be available on the web.

So, trust your customers. Put all your information out there on the web for your customers to see. Don’t force them to wade through salespeople to get it. Instead, use those salespeople to respond to intelligent questions from customers who arrived informed on their schedule.

Don’t force your “customer service” on customers. They no longer believe “your call is very important to us” or “our menu has changed,” and they can’t stand having to repeat their problem at every step of a convoluted process built because you don’t trust your employees and reverted to low-cost automation. Instead, invest in educated, empowered, always-available support.

Don’t hold back on price until value is established. Get price out in front; trust your customer to be smart enough to ask you value questions to determine whether the trade-off is good. Don’t try to “close” your customers. That’s just another form of control. Instead, trust them to make an intelligent decision, and help them by providing useful questions.

Don’t force your customers through returns hell. Take their word for it that the jacket didn’t fit, it wasn’t the right book, or they already paid for the software.

And while you’re at it, trust your employees. Don’t start the employer/employee relationship by threatening them with lawsuits if they ever leave and try to work for a competitor. Don’t sue people who “steal” clients from you (what do you mean “your” client, anyway?). Above all, listen very carefully to them. They’re the ones who can tell you what customers are talking about.

Back to the Most Common Trust Question – How do we get our customers to trust us? By changing the question. Channeling Stimson: the best way to get customers to trust you is to first trust them.  Try focusing instead on asking, “How can we find ways to trust our customers?”

It’s not the latest insight. In fact, it may be the oldest. But it still works.

Trust & Leadership

Lisa McArthur, one of our esteemed consultants, tackles the topic of Trust & Leadership and provides practical, actionable steps you can take today to start improving both.

Into every leadership journey a little rain must fall. At some point, numbers start to head south; that key project begins to miss critical milestones. It happens to all of us. And when that rain does fall, remember that as a leader, you are defined not by your challenges – but by your response to them.

For many, missed targets or milestones trigger the instinct to micro-manage. After all, the only way to make sure you’re on top of everything is to put it all under a microscope and leave no stone unturned. Only a clear command-and-control style of leadership can help right the ship. Right?

So tempting; and yet so wrong!

The solution is not to overrule your team, it’s to get it working. Trust improves teamwork. Full stop. More reports and checkpoints will may provide more data, but chances are it is breakthrough ideas and approaches that will get you back on course. You need your team to focus on new possibilities and collectively take calculated risks.

To put it simply, they need to trust each other. Sounds simple, but as a leader, what does this mean? How can you build trust within your team? The trust equation, normally a descriptor of personal attributes, has something to add to team analysis:

1. Start with Intimacy

For those not familiar with the trust equation, intimacy is about creating safety and building a safe environment. Put yourself in a team member’s shoes. They have an idea that could help bring things back on track. Should they take a risk and offer the idea up to the group? What kind of reaction will they face? In a safe environment, new ideas are welcomed and become the seeds that can germinate true breakthough thinking.

Be honest. How does your team measure up? Are new ideas welcomed and used as building blocks or are they generally dismissed? If suggestions are met with a “we’ve tried that before” or “It’ll never work”, ideas will slowly stop coming.

As a leader, how are you building a “safe” environment to ensure that your team’s ideas are heard? At your next team meeting, try starting from a place of vulnerability. Talk about the issues at hand and your role in them. By taking a risk and being vulnerable you are showing your team that it is safe for them to take risks too!

Next, ask for help. We often resist asking for help for fear of appearing weak – but paradoxically, asking for help shows vulnerability, equality and a desire for collaboration. You’ve taken a risk (again) and shown your team that it is okay to do.

The plus – most of us are hard-wired to respond to honest requests for help. Get the brainstorming started and then listen. Really listen! Ask engaging questions, clarify and let the team build on each other’s ideas. New and innovative solutions are far more likely when everyone is fully engaged and feels safe to contribute.

2. “Check your S”

The “S” in the denominator of the trust equation is self-orientation – and a high number is not good. As a leader, you have to model low self-orientation. Are you focused on what YOU need – to report on a project’s progress or the latest operational results – or are you focused on what the TEAM needs? Even those leaders with the best intentions can find this difficult.

Acting as an “I”, we start directing and stop listening. How often have you asked for the latest sales results or project update only to then provide clear and specific direction on what you think is required?

Change your focus to “we”. Instead of the “I”, ask what the team needs to be successful – and then whatever it is, do it quickly. By changing your focus to the team, your actions will show your commitment to their success. Your commitment to the team’s success, and only the team’s success, lower’s your self-orientation. Done authentically, your team will respond in kind, re-committing themselves personally to the task at hand.

3. Build positive momentum with reliability

The biggest part of Reliability is, simply stated, do what you say you are going to do. We are all familiar with Newton’s first law of motion; “An object at rest, stays at rest. An object in motion stays in motion until acted upon by an external force.” How can you, as a leader, get the ball rolling?

Start small. Have the team set small, incremental targets. It’s important that the targets are set on the team’s terms, not yours. Make sure the targets are attainable and then celebrate each success. Suddenly, you have shifted the focus from what the team can’t do to what they can accomplish. With each small win, the team builds positive momentum and once you’re moving, no one will want to be the reason things come to a halt.

At the same time, resist encouraging sandbagging, or in its more polite form, “under-promising and over-delivering.” It’s just another form of lying to your clients, and it undercuts reliability, since it literally trains your clients to expect a disconnect between what you say and what you do. Which was the whole point in the first place.

4. Be honest

As a leader, your words have power. Now is the time to focus on clear, concise messages that your team will understand and take to heart. Now is not the time for nuanced explanations.

Words matter. If you are not sure of an answer – say so (in fact, “I don’t know” is one of the most credibility-enhancing things you can say – no one will suspect you of lying about that!). You can always go get the answer, but you won’t always get another chance to prove your honesty.

In environments where things get tough or are moving quickly, even tiny errors in facts or judgments can create large ripples in the team and create that ominous “spin” that suddenly brings all activity to an abrupt halt.

Life is full of ups and downs and rainy days; leadership is no different. Strong leaders understand how to build trust and foster an environment that encourages each team member to contribute to their fullest potential. The next time your team struggles, remember – don’t take over the job yourself – instead, lead with trust!

Trust, Inc.

Walgreens, the venerable (116 years old, second largest) US drugstore chain, has announced a new tagline as part of a new brand positioning strategy.  No longer will it be “At the corner of happy and healthy” – the new mantra is “Trusted Since 1901.

Well.

I wish Walgreen’s nothing but the best, and don’t doubt their good intentions. Nor are they necessarily wrong on the facts. And, Walgreens is hardly alone in wanting to trumpet their levels of trustworthiness, or their trusted relationships with customers.

However, the use of “trust” in corporate branding is problematic on at least three dimensions. Walgreens provides a good opportunity to explain why.

Cognitive Dissonance

I always tell people not to call themselves a ‘trusted advisor,’ and certainly not to incorporate the phrase into their advertising. It’s like saying “humility is my best quality.”

Trustworthiness is something of a virtue, and calling yourself virtuous just explodes the claim. It’s wonderful when other people use trust to describe you or your relationship with them – as long as it’s them saying it. (“Trust me” may be the two most trust-destroying words you can say).

Calling yourself ‘trusted’ is also different from calling yourself innovative, or respected, or high quality. Walgreens might want to take note that none of the ”Top 10 Most Trusted Brands” brands incorporate trust itself into their taglines.

They might also take note of how it’s worked our for “The Most Trusted Name in News,” whose tagline allows Donald Trump a convenient foil.

Risky Business

Claiming to be trusted is a bit like the Gary Hart strategy – daring the press to find otherwise. It’s like a red flag to a bull.

How many people will manage to dig up the fact that Walgreens made a substantial amount of money and growth during Prohibition by selling (legally) whiskey? Or that the pharmacy business managed to quickly carve out a very liberal interpretation of “medicinal purposes” during that period? Sorry, Walgreens, it’s what you’re setting yourself up for.

History aside, stuff happens. Ask BP about oil spills, or the old Union Carbide about explosions. Or, closer to home, J&J about Tylenol redux. Mis-steps are magnified, and stay in the press longer, for those who claim to be trustworthy in the first place.

Corporations are Not People

This is the biggest one. “Trust” is a word with much contextual nuance of interpretation. But one thing we can say for sure: personal trust is richer and stronger than corporate trust.

We trust people on an emotional level. We trust people based on our views of their intentions, their transparency, and their willingness to trust us.

By contrast, corporations’ intentions are usually very much self-oriented; transparency is little-practiced; and rare is the corporation without legal disclaimers governing their customer relationships. That’s not a criticism (well, it is a little bit); but it’s mainly just stating the difference between protein-based and legally-based entities and the ways we trust them.

Most corporate executives would probably agree with this in the abstract – but they ignore the implications in the particular. If they really believed it, they would be spending money on becoming more trustworthy, rather than on PR campaigns to be seen as more trustworthy, or on reputation management to change perceptions rather than underlying reality.

So What’s a Company to Do?

A company that is serious about being seen as trust-based would start by recognizing – it’s personal.

Trust is not created by spin, advertising, PR, or taglines. It is created by the collective personal behavior over time of corporate employees interacting with customers, suppliers and each other.

This means corporate trust is a culture-and-values issue – not a process-and-marketing issue.

A company that is serious about trust will, among other things:

  • figure out how to trust its customers and suppliers, often by taking some form of risk (because trust is reciprocal – we trust those who trust us);
  • invest in customer service by focusing on effectiveness, not efficiency; by using ROI, not budget variances, to measure success;
  • hire, train for, and role-model best practices for interpersonal trust, including emotional intelligence, strict truth-telling, and vulnerability;
  • consistently prioritize long-term, relationship-based behaviors over short-term, self-aggrandizing behaviors, in its compensation and promotion policies;
  • focus on ways to establish deeper relationships with stakeholders, rather than focusing on issues like NDAs, non-competes, or arbitration clauses;
  • make heroes out of people who model trust-based behavior.

We trust those more who do not protest how much we trust them.

 

How to Build Trust Within a Cross Functional Team

Today’s guest post is from Rick Lepsinger, President of OnpointConsulting. They are long-time friends of ours, and leaders in the field of leadership development. Rick addresses a key application for trust in the business world – cross-functional teams.

Trust is the foundation of any organization. On cross-functional teams, where collaboration between members of different functional units is a core part of effective day-to-day operations but when no one has direct authority over anyone else, trust is critical. However, it can be more difficult to build in a multi-functional team especially when team members are geographically dispersed.

Building trust among multi-functional team members is a key part of enhancing the overall productivity, profitability, and functionality of these teams.

Recognizing Trust Issues

Recognizing the signs of trust issues is crucial for diagnosing problems as well as guiding any trust-building efforts. Some of the danger signs of low levels of trust on a team include:

  • Lack of Involvement. When team members do not share information or involve colleagues in decisions that may affect them.
  • Lack of Interpersonal Interactions. When every conversation between team members is “strictly business” and team members do not connect on a personal level.
  • Talking Behind Each Other’s Backs. When team members talk about the mistakes of others to everyone except the person who made the mistake.
  • Focus on Functional Rather Than Group Goals. When team members are in it for themselves rather than helping one another meet goals for the good of the whole group.
  • Team Members Avoid Asking for Help. When team members take on too much themselves and avoid asking for help because they believe that they cannot rely on others.
  • Everyone Deflects Responsibility for Their Mistakes. When team members blame others rather than accept responsibility for mistakes or missed commitments.
  • Micro-Managing. When team leaders, and even team members, scrutinize the work and progress of others and start to tell people how to do their work.

Odds are that if trust is lacking, then you may notice several of the above symptoms among your team members. So what can people do to build trust and increase the perception of their trustworthiness?

The 4 Essential Elements of Trust

Many of the aforementioned symptoms of a team with low levels of trust can be attributed to the lack of one or more of the following components (ref the Trust Equation):

  • Credibility. How much team members believe what a person says.
  • Reliability. The extent to which team members “follow through” on commitments.
  • Intimacy. The extent to which team members empathize with others and feel they can confide in one another.
  • Self-Orientation. How much a team member thinks that someone else has his or her best interests at heart.

Actions to Build Trust

Trust takes time and effort to build on any team. Although not always easy, some methods for building trust in a cross-functional team include:

  • Arranging Face to Face Meetings. At least once early in the team’s development, arrange a direct, face-to-face meeting so everyone can put a face to a name. In addition, host online video-conferencing to replicate the characteristics of face-to-face interactions. This provides opportunities for team members to connect and build relationships.
  • Partnering Team Members. Have team members at various locations work closely together on different projects. Then, rotate the teams so that everyone will, eventually, be partnered with everyone else at least once. This provides team members with opportunities to establish credibility (by demonstrating competence), demonstrate reliability (by meeting commitments), and build relationships and demonstrate intimacy.
  • Clarifying Shared Goals and Common Ground. Self-orientation is greatly improved when the entire team is focused on the same objectives. Common ground creates a situation where it is no longer “your” goals or “my” goals but rather “our” goals, which makes cooperation and collaboration desirable.
  • Using Action Plans. Actions plans outline who is responsible for what activity and when that activity is targeted for completion. They can be seen as “contracts” that document agreements. As a result, action plans improve reliability — they increase the likelihood that commitments are top of mind and that people will deliver on their promises.
  • Celebrating Wins as a Group. Whenever a team member or the team as a whole has a major accomplishment (meets a particularly tough deadline, makes a big sale, solves a big productivity challenge, etc.), celebrate that win as a team. This provides a forum for team members to recognize the contributions of others and can enhance the perception of credibility and reliability.
  • Encourage Team Members to Voice Their Concerns. If a problem is ignored, then it won’t get fixed. Such problems eat away at productivity and erode trust over time. Creating a culture where it is expected and safe for team members to voice their concerns and complaints—and acting on them when feasible—is a major part of improving self-orientation and intimacy among the team. When concerns are constructively raised and addressed, team members will feel that they can confide in others without fear of retribution and that their interests are being taken into account.

Using these methods, it is possible to increase trust between team members on a multi-functional team.

Monitoring Team Trust

It’s important to be on the lookout for the danger signs of low levels of trust. But, identifying specific issues can be difficult for team leaders who are not co-located with all or some of the team members and for Human Resources experts who may not be active members of the cross-functional team.

One way to monitor team trust is to use OnPoint’s GRID survey to collect insights and feedback from cross-functional teams. The survey includes questions on elements that impact trust, such as shared goals and clear roles, as well as questions specifically designed to address the quality of relationships and trust among cross-functional team members to help identify problems so they can be corrected.

For more information and advice about building trust within a matrix organization, contact OnPoint Consulting!

Can You Trust Bitcoin?

In a word – no.

But the reason why is not the usual critique. Let me explain.

Origins in Distrust

Bitcoin was born of distrust. Its original fan-base was an amalgam of nerds, futurists, libertarians and survivalists. They were enticed by several features of the new crypto-currency:

  • a decentralized network, beyond the control of governments and regulators
  • a secure payment system, guaranteed by blockchain technology
  • a fixed supply (fixed by innate technological design), preventing inflation by printing press.

All of these features were and are attractive to those who distrust central authority (on some level, all of us). But while the first two features are indeed truly intriguing, the third one turns out to be a poison pill in sheep’s clothing.

Success of Bitcoin

Bitcoin has been a wild success story by most metrics, certainly including its exchange rate, which has been meteoric (see graphic). Many analysts and investors are dazzled by its success, most recently including the famed Motley Fool investor newsletter, which has just jumped on the Bitcoin Bandwagon. A few cynics, most famously Jamie Dimon, have called it a ‘fraud’ or a bubble.

But no one that I’m aware of has pointed out a fundamental contradiction at the heart of Bitcoin – one which ultimately makes the doomsayers right.

(Note: I’m not at all criticizing the underlying power of blockchain, of which Bitcoin is merely one instantiation; blockchain has immeasurably great opportunities to transform the world in powerful and positive ways).

The Role of Bitcoin

The most basic argument for Bitcoin is that it will revolutionize the world of currencies, for the reasons stated above: decentralized, secure – and that third item, a fixed supply of Bitcoin.  Never mind the side arguments about gold and international currencies – its stated value is its power as a currency.

At some point in the future, the argument goes, Bitcoin will become accepted massively as a medium of exchange. Note: the value of Bitcoin does not rest on a nation’s economy, or a valued good (like gold); it rests on its future value as a preferred medium of currency. Period.

But what if its  value as a currency is, literally, unachievable?

Read on.

The Underlying Value of Bitcoin

The proponents of Bitcoin – this Nasdaq article is a good example – will tell you that Bitcoin has value because of “the network effect.” The more people use it, the more valuable it will become. The massive volatility that exists in Bitcoin right now will settle down and stabilize as it becomes an accepted means of currency exchange around the world.

Sounds plausible, right? We’ve seen the network effect in technologies as simple as the telephone and as complex as Facebook.

But there is one massive problem, which everyone I’ve seen who writes about it tends to skate right by.

Is Bitcoin a Currency, or an Asset Class?

Most fans will tell you it’s both – and they don’t see a contradiction between the two. But there IS a contradiction, because of one of the core features of Bitcoin – its limited-by-intent supply of Bitcoins (currently 16 million, and capped by design at a maximum of 21 million).

What you want from a currency is a stable level of purchasing power. What you want from an asset class is an appreciating price.

  • An asset that has high volatility and a growth rate of 500% is called a great investment opportunity;
  • A currency that has high volatility and an exchange rate variation of 500% is called hyper-deflation.

The fact that Bitcoin is limited – by design – to 21 million bitcoin means that, by the immutable laws of supply and demand, the more popular it becomes, the higher the price is going to be. Until it is less popular, when it will drop like a rock.

In other words, the limited supply aspect of Bitcoin guarantees that it will behave as an asset class – and not as a currency.  Note this is not seen as a bug – this is pitched as a feature.

A currency that is by nature volatile is a currency that will attract only speculators – and the more volatile, the more that is true. After all – if you expect Bitcoin value to rise, why would you ever use it to buy a car, or to settle debts? You would only be incentivized to hold on to it.

And if you expect Bitcoin value to drop, why would you ever want to hold on to it? You would only be incentivized to short-sell it – or to unload it on a bigger fool. (And as any trader can tell you, the latter is better: the market can stay crazy longer than you can stay liquid).

The only exceptions are, as Jamie Dimon pointed out, international thieves for whom short-term volatility costs are outweighed by the chance to conduct illicit business and not get caught.

Bitcoin is Not a Ponzi Scheme: It’s Worse

The term “Ponzi scheme” gets overused. Technically it’s a situation where the later investors buy out the early investors at inflated valuations. This is not exactly the problem with Bitcoin.

Bitcoin is more akin to the original tulip craze. But even there, everyone saw tulips as an asset class, and the smart money either stayed out or schemed to unload an over-valued asset to the greater fool.

This is worse than tulips.  Here the scam is based on a fundamental confusion between assets and currencies. To put it simply, it’s closer to being a little bit pregnant:

You simply cannot be both a currency and an asset class.

Muddled-thinking Bitcoin fans are fond of citing gold as a counter-example. It’s not. Unlike Bitcoin, the supply of gold is not fixed; it varies with price, as known deposits become more or less economically viable. (The term “Bitcoin mining” has had the unfortunate effect of metaphorically linking Bitcoin to precious metals). Gold even has some serious industrial uses; about 10% of it is used in industry of various types. Bitcoin, by contrast, has no stated utility other than as a currency.

To those who say there are traders in all currencies, and there are ebbs and flows of price, yes – but nowhere near this order of magnitude. Currency traders swoon over volatility of a few hundred basis points. And if things were to get really out of hand with your dollar or your renminbi, you can always print more of them to stabilize the price. Not so if your currency supply is fixed, forever, by design.

The Trust Scam: Bitcoin as Snake Oil

Nearly all the talk about Bitcoin lately has been about its stellar performance as an asset class, precisely because that’s how it’s being treated. And, as I’ve argued, it always will be.

The ultimate vision of Bitcoin – the argument that Bitcoin will reach its true value as a currency – is little more than snake oil. It can never function as a currency as long as the supply is statutorily limited, because it will always be subject to the whims of supply and demand; which in turn makes it unsuitable for the most basic function of a currency, which is to serve as a vehicle of exchange. Bitcoin is a trader’s delight – a digital volatility machine – and therefore a currency user’s nightmare.

In the end, Investopedia has it right: Bitcoin only has value “because it is popular.” It may not have a central bank behind it, which some see as a plus, but it also has no economy behind it. Because of its internal poison-pill design, it is doomed to forever be treated like an asset class, based ultimately on how many people have bought into the fiction that a limited-supply currency can ever be anything other than a vehicle for speculation of the greater-fool variety.

 

It’s ironic that a high level of distrust in national currencies gave rise to the enthusiasm for  something so massively more untrustworthy.