So, You Don’t Have Time To Be a Trusted Advisor?

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One of the more frequent comments I get in talking about being a trusted advisor is this:

“We’d love to practice all the things you talk about, Charlie, we agree with them all.  But, we just don’t have the luxury of the kind of time it takes to get there. There are too many other demands, and we just can’t spare that kind of time.”

True or False: It takes more time to be a true trusted advisor than it takes to do just a very good job of service delivery.

Just to be clear where I stand: that statement is as false as a three dollar bill.

Trust Doesn’t Necessarily Take Time

First of all, the old truism that “trust takes time” isn’t necessarily true. Only one of the four trust equation components necessarily takes time, and that’s reliability – because by definition reliability requires a track record.

The other trustworthiness components – credibility, intimacy, and low self-orientation – can be, and often are, assessed in a few moments.  We all form very strong first impressions of people about whether they are truthful, competent, paying attention to us, of high integrity, and so forth.  Furthermore, we’re generally pretty right in those impressions, or at least we tend not to modify them greatly.

But that’s only about a single instance of trust establishment. Let’s look at trust over time.

Trust Saves Time

The fact that trust can be established quickly is only the beginning. What happens after trust is established?

Most would agree that having a trusting relationship means that things go more quickly from then on; your word is taken as bond; your advice is heeded; processes proceed more quickly; there is less double-checking, and so forth.

So, do the math. Let’s say you’ve got ten interactions with a client, and in the first one, you establish a great deal of trust. The next 9 interactions will proceed more quickly, with deeper results, than if you did the dance of distrust every time you interacted. The aggregate amount of time spent is almost certainly less, not more, in the trustworthy case.  Trust doesn’t require more time, trust saves time.

In other words, even if trust took time up front, the investment is more than paid off in future interactions by a host of benefits. But even that’s not the end.

It’s Trust Quality, not Quantity, that Counts

If you had to invest time to create trust, the ROI created would typically be very positive; it drives lower costs of sales, better time to market, and so forth. But you don’t have to invest much time. Not if you are qualitatively excellent.

Imagine two equally competent and good-willed professionals.  Over the same period of time, one does high quality client work, displays excellence, and offers good value.  The other one does the same – but in addition, becomes highly trusted. If time were the only variable, then this scenario makes no sense – given equal time and equal everything else, they should be equally trusted.

But we all know that scenario is actually quite common – one professional is frequently more trusted than another, often with even less time invested. Why is that?  What are those highly trusted people doing?  Ask yourself that question about the highly trustworthy professionals you know.

Let me suggest they don’t get there by logging more hours – they get there by higher quality trust creation. They are authentic. They take emotional risks. They pay attention. They don’t focus on driving clients toward their own desired outcomes. They go where the conversation takes them. They freely admit their blank spots. Their goal is client service, not account profitability. Their highest calling is to make things better for the client.

They are fearless, humble, generous, curious, and other-oriented.  Those are the qualities that make them trustworthy – not how many basketball games they took the client to.

You don’t have the time to be a trusted advisor? In the aggregate, there may be a positive correlation between high-trust relationships and time spent, but you’d have a hard time convincing me that time caused the trust. In fact, I think it’s more likely that trust drives the length of time.

You don’t get to be a trusted advisor by logging hours. You get there by being more trustworthy. And not only does that not take more time, it actually takes less time.

Don’t let yourself off the trust hook; you can do it with quality, not time.

In Complex Sales, Time Is on Your Side

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What’s the relationship of time to sales?

Should we worry that “time’s a wasting?” Or pay more heed to “all good things in due time?”  It sounds like a trivial question, but it’s got some far-reaching implications.

In late 1964, an English group calling themselves The Rolling Stones got their first U.S. Top 10 record with a song called “Time Is On My Side.” It was a cover version of a song previously recorded by Irma Thomas, among others. The lyrics loosely proclaimed that “you’ll come running back” because “I’ll always be around,” and therefore “time is on my side.”

The Stones, it turns out, were talking about selling professional services – and more broadly, about consultative selling in general.

If you’re relatively new to business development (the preferred euphemism in services for selling), you’ve probably read several books or articles, seeking wisdom on how to better sell. And if you’re an old hand at selling (and have no time for euphemisms), you’ve probably read even more of the same.

Nearly all of those books and articles make one key assumption. It is an assumption so basic, so simple, that we don’t even notice it. It is baked into the studies, the definitions, and the very language we use to describe selling. And yet that one assumption is so profound that it affects nearly every aspect of how we approach selling.

It is the assumption that a sale is a transaction. It is a discrete event. It happens (or in any case is closed) at a point in time. It is singular. The plural of “sale” is a series of “sales,” where the whole is equal to the sum of the parts. Sales happen one at a time. And time, generally, is not on your side.

Sales as Events

Consider the implications of that viewpoint. It suggests that a sale is an event with a beginning and an end. It suggests that we can understand sales patterns by averaging the sales events. It suggests that someone who is good at selling is good at making transactions happen. And it suggests that processes for managing sales will track these events through a sales process, attaching probabilities and sizes to each sale as the leads pass through the process.

That’s pretty much every modern-day CRM program, most sales metrics and sales management processes. The defining characteristic of those systems is that they’re built around discrete, separate events. In fact, we’ve talked ourselves into a mode of thinking such that we can’t conceive of managing sales without conjuring up behavioral, trackable events. If you can’t list an action and put a date on it – it doesn’t exist.

The sale event begins with a lead event, an initial contact. It proceeds through various exchanges of questions and answers. At some point there is a more or less formal proposal made by the seller. The end of the event comes when the proposal is either accepted, rejected, or ignored. At that point, the event is considered “closed.” The buying company, unit, or person may show up again, and they may go on a contact list. But when they show up again as a buyer, the seller will consider it a separate event.

When we think of sales as events, time is generally not on your side. Time is money. Time is the denominator in measures of efficiency. Time is what’s a-wasting when you’re spending your time unproductively, i.e. not selling. Time is the unit that determines your bonus, and it is what your manager is talking about when he says, “What have you done for me lately?”

Viewed that way, the world of sales is a series of discrete events. To borrow a metaphor from subatomic physics, the modern view of sales sees sales particles, not waves.

And yet—as in physics—we don’t have a complete understanding of things unless we view things from the “wave” perspective, as well as the particle perspective.

Sales as Patterns

Sales as events may sound blindingly obvious, but consider an alternative. What if a sale didn’t describe a discrete event, but a pattern of events, or a state of relationship, or a condition? What if a sale happened over time, with no particular event being more significant than others? What if a sale were about a relationship, not a transaction? What if it were an adjective, not just a noun or a verb?

We would view selling not as about executing isolated, separate transactions, but as relationships.

We would talk mainly about the quality of the relationship with a customer. Individual sales transactions would be seen as indicators of relationship success, not as the sole driving purpose.
Relationships and transactions would trade places as ends and means. CRM systems would actually measure relationships, not just transactions, thus finally living up to their name. Sales managers would coach people on furthering customer relationships, not on check-boxing behavioral events and driving transactions through the customer organization.

Is Time On Your Side?

A critical difference between the transactional and the relationship view of sales is the role of time. Transactions happen at points in time; relationships wax and wane over time. How you spend your time varies:

  • If you view sales as transactional, then you’ll want to maximize transactions over time and view relationships as a means to that end.
  • If you view sales as relational, then you’ll want to maximize relationships over time and trust that transactions will come about as a byproduct.

Note: in the long run, the metrics converge. The longer the timeframe, the more relevant is aggregate dollar sales. The critical question is this: do you maximize long-term sales by focusing on short-term transactions, or by focusing on long-term relationships?

For some businesses, long-term revenue pretty much equals the sum of the short-term results. Possible examples are convenience stores, Wall Street trading businesses, and online ad revenue. Here the transactional view of sales works just fine.

But for many other businesses – especially professional and intangible services, and complex and high-ticket B2B sales – the reverse is true. You don’t succeed by micro-focusing on transactions, by relentlessly improving efficiency, or by scrimping on time.

Instead, you succeed by focusing on the qualitative – by improving relationships, by nurturing the conditions that lead to repeat business, loyalty, deep customer knowledge and intimacy. In the not-very-long run, that focus actually produces better results than focusing on the transactional.

The Stones were right: time is (largely) on your side. If you are prepared to be consistent, trustworthy, focused on the greater good of your client, and not blinded by the shiny object of the Next Transaction, time becomes your friend. Your customers will indeed come running back—at least as many and as often to make it a superior sales strategy.

An Open Letter to Timothy Ryan, PwC’s US Chairman Re: Oscars and Trust

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Mr. Ryan,

Some days as Chairman must be fun. Others, like the Oscars the other night – not so much.

I recognize you, in fact, know a lot about trust.  There are probably particular circumstances that make the Oscar boo-boo a unique event. You may also have taken some steps like those I suggest below.

But this is such a teachable moment for the area of trust recovery that I hope you’ll forgive my suggesting Three Steps that someone in your position should consider – on principle – taking.

 

Step One. Offer to resign the Academy account. Do so unreservedly and genuinely.

  • If they accept your resignation (they probably won’t), it looks better than being fired; and hey, it did happen.
  • If they reject your resignation, you will look gracious. (And why should they let you resign – look at all they just invested in training you!)

Step Two. Tell the Academy precisely what went wrong, and precisely what you’re going to do to ensure nothing of that type, flavor or category will ever happen again.

  • Then fund somebody to start writing a paper on what implications this event has for improving audit industry practices at large.

Step Three. If anyone dares to suggest firing the poor gentleman at the heart of this most unfortunate event, tell them what the Academy will hopefully tell you: “Why would we ever let go someone in whom we just invested so much in training?” He just became one of your most valuable future cautionary story-tellers.

One of the many paradoxes about trust is that trust recovered can often end up stronger than trust unchallenged.

I’m rooting for you.

 

 

 

 

Credibility, Trust and Ignorance

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Being right is vastly overrated.

Now, that doesn’t mean that lying is a good strategy. What it does mean is that in the business world, we all too easily conflate trust with credibility, and credibility with expertise.

You don’t have to look too far to find big-name sales trainers and gurus who insist that it is expertise and insights that drive sales success and trust.

I first heard this mantra back in the 70s (and if I were older, I’m sure I’d know of earlier instances).

Well, here’s some truth. People don’t trust you just because you’re smart. And they definitely don’t trust you because you’re a smart-aleck.

In fact, smart is not even a necessary condition for trust – much less a sufficient condition. Further, the role of expertise and insight doesn’t come temporally first in selling – it plays a role in marketing, and then later a role nearer the middle of the sales process.

Credibility, insight, expertise, smarts – all these things do have a role. It’s just not what you may think.

Let me explain a bit further…

——

I long ago attended a sales call with my boss. When asked by the client, “What experience do you have doing this [narrowly defined] kind of work?” he shocked me by saying, “None that I can think of; what else would be useful for us to talk about?”

How is it that we come to influence other people’s ideas? How do we more effectively get others to take our advice? How do we sell more successfully?

The overwhelming answer in the corporate world seems to be, “By getting people to see that we have the right insights and answers.” But that response is very often wrong.

“Being right” turns out to be vastly overrated. Sometimes, even an admission of ignorance is actually a better strategy.

Misconceptions About Trust – How to Gain Credibility

Most of us think something along these lines: “They’ll take my advice (or buy from me, or be persuaded by me) if they think I’m credible. They’ll think I’m credible if I look smart, have great ideas, and have experience. Therefore I’ll tell them about myself, my bright ideas, and my track record at being smart.”

Clients contribute to this subornation by asking us to talk about precisely that (not because they care about the answer, but because they just don’t know what else to ask and don’t want to take the risk of looking foolish themselves).

But credibility isn’t the only element driving trust. And experience and smarts aren’t the only ways to get credibility. Think of the arrogance implicit in saying “let me tell you why I’m the best” before the customer feels you even know their situation. (This is a description of 98 out of 100 cold call emails you get from email “marketers”).

For example, consider humility. Being willing to acknowledge obvious ignorance creates rather than destroys credibility.  The ability to say, as my boss did, “I don’t know,” is an astonishing comment. It communicates ignorance, yes – but it also communicates radical honesty (who is about to doubt an admission of ignorance!).

  • It communicates a sense of self-confidence (“I am secure enough in my worth and my value to admit exactly what I do and don’t know”).
  • It communicates a clear customer-focus – it says, “You asked a good question, and you deserve a straight, no-spin-control answer. Here it is.”
  • It communicates a focus on the long-term – it says, “If this particular piece of knowledge is key, then I may not win this job; but by being always transparent about what I do know, clients will always know they can trust what I say.”

By contrast, leading with smarts alone just says, “I am a database with a protein user interface.”

The Role of Truth

The point is not to adopt a profession of ignorance as a tactic. Nor is it to pursue ignorance as policy. It’s to tell the truth. Your credibility is not just a function of expertise: it’s a result of a complex set of calculations made by someone when they decide whether to believe and trust you when you say something.

Even if people believe you—credibility—that isn’t enough to get you trusted. They must also trust your motives, your understanding of their situation, and your ability to empathize—as they see it.

True credibility comes from letting people see you as you are—not as you would wish they would see you. Transparency trumps expertise. The more you insist on how much you know, the less we believe you: “the lady doth protest too much.” The more willing you are to honestly admit your limitations, the more we believe you. It’s a paradox thing.

No one expects an advisor or salesperson to be perfect—we just want to know where their biases or blind spots lie, whether they know their own biases – and whether they’re capable of admitting them.

That way we can make up our own minds about how much to trust them.

Letting our clients make that decision is, itself, a driver of trust.

Selling from Inside Your Client’s Shoes

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You know the phrase, “Walk a mile in someone else’s shoes.” It’s short for empathy, understanding the Other so well you can intuit what it feels like to take a long walk—wearing their footwear, no less.

Let’s adapt that idea to selling. What if you could understand your client so well that you could intuit how it feels to be sitting in their seat in a sales meeting, sensing every nuance along the way?

Shall we give it a try?

Sales Meeting Time T-minus-10

It’s 10 minutes before meeting time. You arrive early, and the receptionist ushers you into the conference room and offers you coffee. You nervously drum your fingers on the laptop you brought to introduce yourself and your firm to Claudio and Taciana. They are CEO and COO, respectively, of the relatively new marketing automation firm C3PX. You spoke by phone with Taciana to set up this meeting. You’re optimistic, marshaling your nervous energy as you mentally rehearse your key points for the nth time.

Claudio. Meanwhile, Claudio wonders if he has time to call his 19-year-old daughter at college. Actually, whether to call her at all. Things are not well between the two of them—they haven’t been since he and his wife divorced last year. Teenage girls can be so—difficult. And it seemed like she so often took sides with her mother.

Meanwhile, C3PX is doing well—sometimes too well. Claudio just signed another line of credit extension. The good news was the firm’s credit was good. The bad news is he wants to pay down some debt, but there was always a need to invest in some new software or process. The meeting in 10 minutes may be another example—a necessary expense, but not welcome in terms of cash flow.

Claudio hopes Taciana can take the lead on this. He’s been leaning a lot on her lately. Is he holding up his end of the bargain? Or is it welcome to her—a chance to grow into the business? But what if she’s growing too fast and taking over some of Claudio’s roles as CEO?

Taciana. Taciana is running late. She’s just finished a meeting with HR, and she is concerned the experienced hire recruiting program is short of target. She wonders if she’ll need to postpone the ops team call this afternoon until tomorrow, though she did that last week as well. Is she getting a little overloaded? Does it show?

Taciana has mixed feelings about this meeting. On one hand, she genuinely liked the phone call she had with you. She felt you sounded sharp, competent, and confident. But she can’t help worrying about your service offering.

Does C3PX really need your kind of service at this point in its growth? You offer some great services, but with them comes another level of complexity. Are the benefits worth it? Should they get along for another 12 to 18 months? What if some new technology comes along and leap-frogs your offering?

Also, is this going to be yet another Taciana-solo project? “Sure, I’m the COO,” she thinks, “but that doesn’t mean I have to do everything. Am I leveraged enough? Will Claudio think I’m empire-building if I try to delegate? But if I don’t, how am I going to get time to spend with my husband? We’ve been trying to get more time together; he has a demanding job, too. I hope Claudio takes the lead in this meeting.”

Sales Meeting Time T = 0

It’s time. You take a last look at your phone just as the door opens. In walk Claudio and Taciana.

You all smile and shake hands, then pass out business cards. You each reject offers of more coffee and strategically settle into your chairs, all the while smiling and uttering meaningless phrases in non-committal tones.

The meeting commences.

Like all meetings, it commences on multiple levels. There is the overt agenda to be discussed. There are first impressions, flooding each of you as you quickly take into account the others’ appearance, sound, bearing, and manner. Are you who they expected? What’s different? What does that mean?

And are they who you expected? What did you misjudge? What did you get right? Can you afford to focus on that and pay attention to what’s being said? Do they seem a little rushed? What does that mean? Are they going to sit through your deck, or should you skip it? When should you bring up price?

You can ask them to tell you a bit about their situation, but you can’t do too much of that. These days no one has time for someone who hasn’t done their homework. Yet neither can you waste time proving you’ve done your homework. What does it mean that they placed their iPhone next to them? And so on.

Behind the Scenes

The internal dialogue is endless—and that’s just yours! What about the dialogue inside Taciana’s and Claudio’s heads? How important is this inner cacophony? And what should you do about it? Ignore it? Address it? If you choose to address it, how do you do it?

The truth is those internal dialogues are not trivial. They are important. You need to address them. Most of all this is a great opportunity cleverly disguised as an awkward social moment. You can dramatically affect the whole sale, and the whole relationship, by how you conduct yourself in the first few minutes regarding these internal dialogues.

Small Talk Isn’t Small

The idle chit-chat we engage in is a potent social ritual. The point is not to find out that you both went to Ohio State or love basketball or have kids. Those are proxies.

The real issue at stake is whether they can trust you—in a very specific sense of that word. It’s what we call “intimacy” in the trust equation. Do they feel safe being who they are in your presence? Do you laugh at the right moments—with the right kind of laugh? Do you wince at the right statements—like when Taciana mentions meeting overload? When they say, “Tell us about yourself,” do you remember that mostly they’re just being nice and then turn the conversation to them?

Do you have the emotional courage to raise your eyebrows when Claudio says, “Teenagers—am I right?” and invite further comment should he choose to go there? When one of them raises price concerns, do you respond with curiosity and say, “Tell me what’s behind that concern?” Or do you reply with a canned defense of your value-for-price? Do you have the nerve to say, “I’m sensing a little bit of stress from each of you. Is this decision a source of concern to you?”

This isn’t about your value proposition. It isn’t about proposing challenging questions or asserting your qualifications. But it’s critical. The buyer/seller interaction is many things, but it’s first and foremost human. First impressions matter, and not just about clothes and looks.

What buyers want is to feel at ease, trusting, and confident they can be authentically themselves with you and not have to look over their shoulders when dealing with you.

Buyers make up their mind about this subconsciously, and they do it very quickly. Trust in this sense doesn’t take time; it takes courage, connection, and empathy. Don’t be afraid to let your guard down. Doing so shows others that can do the same with you from the get-go.

This article first appeared on RainToday.

Read Part Two of this post, here. 

Trust Takes a Long Time to Create, a Short Time to Destroy. Not.

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There are two kinds of mistakes we make with trust. One is to trust mistakenly – the other is to fail to trust at all. One is a failure of commission, the other a failure of omission.

The former gets all the press – but it’s the latter that is the bigger problem.

Let me explain.

——

One of the bigger myths about trust this one: “Trust takes a long time to create, but only a moment to destroy.” There’s no need to name names here, but you can see examples of it here and here and here and here.

Here’s why that myth isn’t merely annoying, but positively harmful as well.

The Truth.

Let’s start with the truth. Most human relationships, like most emotions, take roughly as long to get over as they took to develop. Marriages or friendships don’t end overnight. There may be a flash point, a straw that breaks the camel’s back. But we cut slack for people we trust. We don’t dump them abruptly.

If trust were lost in a minute, many victims of relationship abuse would leave their abuser at the first incident; but things are often a little more complicated than that.

If trust died quickly, the SEC would have investigated Bernie Madoff when Harry Markopolos first lodged charges against him. If trust died quickly, the steady drip drip drip of evidence at Penn State, Enron, and Wells Fargo would have ended at the first drip.

Most examples of “trust lost quickly” turn out to be either just the last drip in a long series of drips – or a delusion about trust’s existence in the first place (you don’t “violate the trust” of a subscriber to your email list by sending them a worthless referral; the relationship you have with a name on your email list may be many things, but “trust-based” is probably a stretch).

Trust formed quickly can be lost quickly; trust formed at a shallow level can be lost at the same level.  But trust formed deeply, or over time, takes deeper violations, or a longer time, to be lost. The pattern looks more like a standard bell curve than a cliff.

But, you might say, so what?  Why is that harmful? What’s the big deal? 

The Harm.

If you believe that trust can be lost in a moment, then you likely believe you must be cautious and careful about protecting it. You are likely to think about trust as a precious resource to be guarded against being tarnished. You are inclined to institute rules and procedures to protect it and to give cautionary lectures about the risk of losing trust.

Yet these are precisely the kinds of behavior that result in trust lost.

I don’t trust the man who talks with me while pointing a gun at me‬ – partly because he looks threatening to me, but also because he clearly does not trust me.

Trust, at a personal level, is like love and hate: you tend to get back what you put out. You empower what you fear. Those afraid of getting burned are the most likely to get burned.

This works at a corporate level too. I remember vividly the convenience store chain that gave monthly lie detector tests to store managers to prevent theft – and then wondered why the theft kept on happening.

I recently heard from a company wanting to modify the Trust Equation by “toning down” the component called Intimacy to something more bland, like affability or good manners. Why? They didn’t want to be seen as encouraging employees to have sexual liaisons with customers. This falls in the same category with multi-paragraph email signature caveats, and the fine print on retail customer receipts. Fear of trust not only doesn’t save trust – it actually causes low trust.

Trust is a Muscle.

Thinking of trust as something you can lose in a minute makes you cautious and unlikely to take risks. But the absence of risk is what starves trust. There simply is no trust without risk – that’s why they call it trust.

If your people aren’t empowered, if they’re always afraid of being second-guessed, then they will always operate from fear and never take a risk – and as a result, will never be trusted.

Trust is a muscle – it atrophies without use. And the repetition of the mantra “trust can be lost in a moment” just tells people not to use it.

Turns out the stupidest, craziest trust is the trust you never engaged in because you were too afraid of losing it. The smartest trust is the trust you create by taking a risk.

Building the Trust-based Organization, Part II

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In last week’s “Building the Trust-based Organization Part I,” I suggested that approaches to trust at the organizational level fell into several categories. Like the parable of the blind men and the elephant, all captured some part of the puzzle, but none grasped the entirety of the issue.  The five categories I listed were:

1. Trust as communication
2. Trust as reputation
3. Trust as recipe
4. Trust as rule-making
5. Trust as shared value.

I suggested a holistic approach would have a Point of View, a Diagnosis, and a Prescription.  Here is my attempt at offering such an approach.

Organizational Trust: A Point of View

Trust relationships are asynchronous – one party, the trustor, is the one who does the trusting, and who takes the risks. The other party, the trustee, is the one whom we speak of as being trustworthy (or not). “Trust” is the result of a successful interaction between these two actors.

Trust is largely an interpersonal phenomenon. Trustworthiness is mostly personal, though we do speak of ‘trustworthy’ companies as having a track record or being reliable. Trusting, however, is a completely human action, not a corporate one.

Risk is necessary to trust: if risk is completely mitigated, we are left only with probability.

It follows that the most powerful meaning of “organizational trust” is not an organization that trusts or is trusted, but an organization that encourages personal trust relationships:

A trust-based organization is an organization which fosters and promotes the establishment of trust-based relationships between various stakeholders – employees, management, shareholders, customers, suppliers, and society.

Organizational Trust: Diagnosis

What is needed to create a trust-based organization? Since ‘trust’ is such a broad concept, it’s clear that themes like communications, regulations, and customer relationships will have a role. But to avoid a mere laundry list, what’s needed is some kind of primus inter pares relationship; or perhaps some necessary vs. sufficient distinctions.

My nomination is simple: an agreed-upon system of Virtues and Values. Virtues are personal, and represent the qualities sought out in employees and managers. Values are organizational, and reflect basic rules of relationship that ought to govern all relationships within the organization.

Some typical trust-based virtues include: candor, transparency, other-orientation, integrity, reliability, emotional intelligence, empathy.

I have suggested elsewhere Four Trust-based Organizational Values. They are expressed below in terms of customer relationships just to be specific, but they apply equally to relationships with suppliers, fellow-employees, and so forth.

  1. Lead with customer focus – for the sake of the customer. Begin interactions with other-focus rather than self-focus.
  2. Collaboration rather than self-orientation. Assume that the customer is a partner, not in opposition to us.  We are all, always, on the same side of the table.
  3. Live in the medium-to-long term, not the short term; interact with customers in relationship, not in transactional mode. Assume that all customers will be customers in perpetuity, with long memories.
  4. Use transparency as the default mode. Unless illegal or hurtful to others, share all information with customers as a general principle.

Advocates for Values.  I am not alone in citing Values as lying at the heart of the matter.McKinsey’s Marvin Bower put values at the center of his view of business, and McKinsey for many years was run from his mold. As Harvard Business School Dean McArthur said of Bower, “What made him a pioneer was that he took basic values into the business world.”

In 1953, Bower said, “…we don’t have rules, we have values…”

In 1974, he wrote, “One of the highest achievements in leadership is the ability to shape values in a way that builds successful institutions. At its most practical level, the benefit of a managed value system is that it guides the actions of all our people at all levels and in every part of our widespread empire.”

Bower’s biographer noted that Bower believed that “while financial considerations cannot be ignored, business goals must not be financial; if they are, the business will fail to serve its customers and ultimately enjoy less profit.”

The alumni of McKinsey – some, anyway – learned well. Harvey Golub said, “[values are] a powerful way to build a business…it worked for McKinsey and it worked for IDS and for American Express.”

IBM’s Lou Gerstner said: ‘“I believe that I learned from [Marvin] the importance of articulating a set of principles that drive people’s behavior and actions.”

[Note: McKinsey itself had some noticeable hiccups post-Bower. In my view, this is not an indictment of values-based management, but a sad example of how it requires constant values-vigilance].

The Case for Values.  The use of values as the basis for management is well-suited to the subject of trust, and this advantage shows up in numerous ways.

  • Values scale, in a way that performance management systems never can do.
  • Values are about relationships, in a way that incentives never can be; this makes them highly suitable to the subject matter of trust.
  • Values are infinitely teachable, in a way that value propositions or communications programs alone cannot aspire to.
  • Values are among the most un-copyable of competitive advantages.

Organizational Trust: Prescription

Managing a values-based organization will center around keeping the values vibrant. This is pointedly not done mainly through compensation and reward systems, corporate communications plans, or reputation management programs. Instead, it is done through the ways in which human beings have always influenced other human beings in relationship.  To name a few:

  1. Leading by example: trustworthy leaders show the way to their followers by their actions, not just their words
  2. Risk-taking: trusting others encourages them to be trustworthy, and, in turn, to themselves trust others
  3. Discussion: principles undiscussed are principles that die on the vine. Discussion, not one-to-many communication, is key to trust
  4. Ubiquitous articulation: trust principles should underpin many corporate decisions and actions; trust-creating leaders seize the opportunity for teaching points in every such case
  5. Recognition: Public praise for values well-lived is intrinsically motivating
  6. Confrontation: Trust-building leaders do not hesitate to overrule business decisions if they violate values, and to do so publicly in ways that teach lessons. Values, not value, are the ultimate arbiter of all actions.

To sum up: it’s a simple concept. Trust in a corporate setting is achieved by building trust-based organizations. Trust-based organizations are built to consciously increase the levels of trusting and of trustworthiness in all organizational relationships. The best approach to creating such an organization is values-based management and leadership. This is different from most approaches to management and leadership in vogue today.

The quotes about Marvin Bower were taken from:
Edersheim, Elizabeth Haas (2007-12-10). McKinsey’s Marvin Bower: Vision, Leadership, and the Creation of Management Consulting. Wiley.

 

Building the Trust-based Organization, Part I

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Last week, I wrote about why organizations don’t teach trust.  Now let’s move from diagnosis to prescription – let’s delve into how to build a trust-based organization.

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Let’s start by behind honest: do your eyes glaze over at a title like “building the trust-based organization?” Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So, I set out to tighten up the perspective.

Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. But more frequently it’s a “blind men and the elephant” scenario: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

The following is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into the following five categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.

Trust as Communication.

“Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”

This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.

However, the communication approach begs one huge question – the content being communicated.

Trust as Reputation.

The Edelman PR firm’s annual Trust Barometer has been a major communications success.  A sample statement:

Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the [2012] Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.

This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee – think Wells Fargo, if you want a succinct example of the danger.  It is also inherently corporate, and therefore impersonal.

Trust as Recipe.

There are probably more approaches that fall into this camp than any other.  It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.

A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language.  They offer  four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.

Trust as Rules-Making.

In a Harvard Law blogpost titled Rebuilding Trust: the Corporate Governance Opportunity, Ira Milstein points out the critical roles that can be played by boards and shareholders in increasing trust.

A similar point is made from an Asian perspective. In Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.”

While these views may appear slightly narrow, they’re part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.

The strength of this view lies in its linkage of business to society – the implicit statement that there is no Natural Law that says business has any right to stand alone outside a broader social context.

Trust as Shared Value.

In Michael Porter and Mark Kramer’s notable 2010 HBR articleCreating Shared Value, Porter performs an eyebrow-raising reversal of his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.

Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. (Incidentally, this view reclaims Adam Smith from the clutches of the Milton Friedmans and Ayn Rands who suggest competition is purely about survival of the fittest, and restores to him a sense of Smith’s broader views as reflected in his Theory of Moral Sentiments).

They are not entirely alone. The Arthur Paige Society some years ago published The Dynamics of Public Trust in Business, which similarly stated:

…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.

Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.

Seeing the Elephant Whole

All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”

So what would constitute a good answer?  It must have three parts: a Point of View, a Diagnosis, and a Prescription.

Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.

In Part II of this post, I offer my suggestion for how to best answer the question across all three dimensions.

 

This post first appeared on TrustMatters.

Why Your Clients Don’t Trust You – and How to Fix It

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Politics has sucked up most of the oxygen surround trust recently. Now, trust in politics turns out to be a complicated matter – by comparison, trust in business is a relatively simple business. So – what about your business?

Hopefully your clients trust you more than the trust ratings of both the US presidential candidates.  But – do they trust you enough?  And if your clients don’t trust you enough – are you willing and ready to address that?

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Do your customers trust you? (Be honest, now, this is not an in-house survey). Do they believe what you say? Will they cut you a break if you goof up?  Are they happy to share information with you? Do they go out of their way to refer you?

Can you honestly answer ‘yes,’ to yourself, in the dead of night, to those questions?

If you’re trying to sell your services, you already know the value of being trusted. Being trusted increases value, cuts time, lowers costs, and increases profitability—both for us and for our clients.

So, we try hard to be trustworthy: to be seen as credible, reliable, honest, ethical, other-oriented, empathetic, competent, experienced, and so forth.

But in our haste to be trustworthy, we often forget one critical variable: people don’t trust those who never take a risk. If all we do is be trustworthy and never do any trusting ourselves – then eventually we will be considered un-trustworthy.

Because to be fully trusted, we need to do a little trusting ourselves.

Trusting and Being Trusted

We often talk casually about “trust” as if it were a single, unitary phenomenon—like the temperature or a poll. “Trust in banking is down,” we might read.

But that begs a question. Does it mean banks have become less trustworthy? Or does it mean bank customers or shareholders have become less trusting of banks? Or does it mean both?

To speak meaningfully of trust, we have to declare whether we are talking about trustors or about trustees. The trustor is the party doing the trusting—the one taking the risk. These are our clients, for the most part.

The trustee is the party being trusted—the beneficiary of the decision to trust. This is us, for the most part.

The trust equation is a valuable tool for describing trustworthiness:

The Trust Equation

 

 

 

 

 

But where is risk to be found? How can we use the trust equation to describe trusting and not just being trusted? How can we trust, as well as seek to be trusted?

Trust and Risk

Notwithstanding Ronald Reagan’s dictum of “trust but verify,” the essence of trust is risk. If you submit a risk to verification, you may quantify the risk, but what’s left is no longer properly called “trust.” Without risk there is no trust.

In the trust equation, risk appears largely in the Intimacy variable. Many professionals have a hard time expressing empathy, for example, because they feel it could make them appear “soft,” unprofessional, or invasive.

Of course, it’s that kind of risk that drives trust. We are wired to exchange reciprocal pleasantries with each other. It’s called etiquette, and it is the socially acceptable path to trust. Consider the following:

“Oh, so you went to Ohio State. What a football team; I have a cousin who went there.”

“Is it just me, or is this speaker kind of dull? I didn’t get much sleep last night, so this is pushing my luck.”

“Do you know whether that was a Snapchat reference he just made? Sometimes I feel a little out of the picture.”

If we take these small steps, our clients usually reciprocate. Our intimacy levels move up a notch, and the trust equation gains a few points.

If we don’t take these small steps, the relationship stays in place: pleasant and respectful, but like a stagnant pool when it comes to trust.

Non-Intimacy Steps for Trusting

The intimacy part of the trust equation is the most obvious source of risk-taking, but it is not the only one. Here are some ways to take constructive risks in other parts of the trust equation.

  1. Be open about what you don’t know. You may think it’s risky to admit ignorance. In fact, it increases your credibility if you’re the one putting it forward. Who will doubt you when you say you don’t know?
  2. Make a stretch commitment. Most of the time, you’re better off doing exactly what you said you’ll do and making sure you can do what you commit to. But sometimes you have to put your neck out and deliver something fast, new, or differently.To never take such a risk is to say you value your pristine track record over service to your client, and that may be a bad bet. Don’t be afraid to occasionally dare for more—even at the risk of failing.
  3. Have a point of view. If you’re asked for your opinion in a meeting, don’t always say, “I’ll get back to you on that.” Clients often value interaction more than perfection. If they wanted only right answers, they would have hired a database.
  4. Try on their shoes. You don’t know what it’s like to be your client. Nor should you pretend to know. But there are times when, with the proper request for permission, you get credit for imagining things.”I have no idea how the ABC group thinks about this,” you might say, “but I can imagine—if I were you, Bill, I’d feel very upset by this. You’ve lost a degree of freedom in this situation.”

While trust always requires a trustor and a trustee, it is not static. The players have to trade places every once in a while. We don’t trust people who never trust us.

So, if we want others to trust us, we have to trust them. Go find ways to trust your client; you will be delighted by the results.

This post first appeared on RainToday.

Disclosure Is Not Transparency

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Transparency, most of us would agree, is a positive thing.  And disclosure is an obvious way to get there.

But transparency and disclosure are not the same thing. And confusing them can actually harm transparency.

So – what’s the difference between disclosure and transparency?

Transparency and Trust

Besides “able to transmit light,” the dictionary defines transparent as:

  • easily seen through, recognized, or detected: transparent excuses.
  • manifest; obvious: a story with a transparent plot.

In the simplest business terms, “transparent” means you can tell what’s going on.

If the link between transparency and trust isn’t self-evident, here are a few citations to help clarify it:

If I can see what’s going on, I know that I am not being misled. Motives become clear. Credibility is affirmed. Transparency is indeed a trust virtue.

Disclosure

Disclosure is a time-honored tool of regulators to achieve transparency. Food and pharmaceutical manufacturers are required to disclose ingredients, medical authors are required to reveal payment sources, the SEC frequently proposes disclosure as a tool, and so on.

Certainly you can’t find out what’s going on if information is actually hidden.  So disclosure is a necessary condition for transparency. But it’s hardly a sufficient one.

I don’t have much to say about the cost/benefit trade-off of greater disclosure in pursuit of transparency. Sometimes the benefit is obvious, other times not so much, sometimes not at all.

What’s more interesting to me is how the blind pursuit of disclosure can actually reduce transparency – even reduce people’s awareness of the distinction.

Over-Disclosure

Is it possible to have too much disclosure? So much disclosure that information gets lost in the blizzard of data?

On the face of it, disclosure is the handmaiden of transparency. But if disclosure becomes the end rather than the means, if regulators and consumer advocates become fixated on indicators rather than on what they indicate, then disclosure can actually become self-defeating.

Lawyers know that massive responses to discovery requests can overwhelm opposing counsel. Cheating spouses know that the best lies are those that disclose the most truth. Consumer lenders know to fast-talk the disclaimers at the end of radio ads, much like the small print on the ads and loan statements.

If disclosure isn’t accompanied by an ethos of transparency, it can be positively harmful. It is like crossing your fingers behind your back, taking movie reviews out of context, or word parsing a la “it depends on what the meaning of the word ‘is’ is.”

A trustworthy person, team or company will not settle for disclosure, but seek to offer transparency. A competent regulator will always remember that disclosure is just evidence, and partial evidence at that. And a wise buyer will always look for the spirit of transparency that may, or may not, underlie the act of disclosure.

Trust relies on both data and intent.