How to Increase Trust in Organizations

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Increasing Trust Within Your OrganizationI was grocery shopping Saturday. It was 2PM, 96 degrees out – pretty hot for New Jersey – and I was in the checkout line. The cashier had started sliding my purchases through the register, when suddenly I noticed a bag left over from the customer before me. She had left and gone to her car.

The woman doing the bagging noticed it at the same time. She grabbed the lady’s bag and dashed out into the heat. She was making pretty good time for a woman in her 60s, and we all could see her out the window as she finally caught up, handed over the bag, and started back.

Then the cashier suddenly exclaimed, “Omigosh, she left two other bags as well!” Looking quickly at me and the woman behind me in line, she said, “Will you two please excuse me for just a minute? I’ll be right back.” And she too took off after the forgetful lady, with two bags in tow. She was in her 20s, and made very good time.

It occurred to me I could slide a few groceries over the line and into my bag and escape without paying. (I don’t do such things, but the idea did show up in my mind). Then the elderly woman behind me in line said, “You know, I don’t mind one little bit waiting for someone who’s doing a good deed like that.”  Neither did I, I said, neither did I.

When the cashier and the bagging lady came back, we both complimented them, and they blushed a bit and said thank you. (I sent a complimentary email to ShopRite’s HQ later that night with the store number, employee name and cash register number, all of which were on the receipt).

So my question is: how do you get employees to behave like that? I mean generously, based on principle, willing to take certain risks, confident to act in the moment. How do you keep from getting sullen employees who talk about “career-limiting moves,” who won’t lift a hand or take a risk to help another?

How Do You Induce Values-based Behavior in an Organization?

Earlier that same day, I had the opportunity to briefly visit a Sears store, a Macy’s store, and a Bed Bath and Beyond unit. Sears was awful – employees keeping their distance from customers, 100 feet away, pretending not to notice. Macy’s was a little better, but still sullen, under-staffed, and radiating not-helpfulness.

BB&B was a huge contrast. Several employees, busy doing other things, asked me if they could help. I asked two for help, and they both went out of their way to do so.

How does this happen?

The standard answer in most businesses, I’m afraid, is to focus on the wrong things: typically  incentives, communications, and procedures.

The more I see of business, the more convinced I become that the single most powerful way to create values-based behavior is none of the above – it is to do it yourself, and to talk about it with others.

The Usual Suspects

Incentives appeal to the individual’s rational economic or ego-satisfying needs. Fine and dandy, but if you’re trying to incent selfless behavior, the concept of rewards is just a tad self-contradictory.

There is probably (I’m guessing) more money spent on communications than on any other “solution” to issues of trust, ethical behavior, and customer-focus. Companies love to pronounce their values to their customers, and reinforce them internally in posters, newsletters, and blogs. The problem is, impersonal companies communicating about personal relationships is some kind of category mistake.

And procedures? The whole point of values-based behavior is that the employee extrapolates from principles in the moment. Rehearsing and drilling doesn’t help extrapolate values, it replaces that process with rote memory.

Role Modeling

Think of how we learn from our parents. Think of the sports or public figures we admire (there are still a few). In all cases, we are influenced by what they do – not by what they say they will do, or did do, or wish they’d done.

When it comes to values, I suspect BB&B has leaders in their operations organization who both walk the talk, and talk it too. People who lead by example, and who are convinced that values like customer assistance are valid only if kept sharpened by use.

I suspect Angie the cashier at ShopRite was hired partly because she exhibited values. I suspect that the folks managing her store make a point of being helpful and customer-focused, and engage customers about values like that. I suspect it didn’t occur to her that she shouldn’t take the risk of leaving her cash drawer and my groceries unattended – because her leadership would have trusted their customers and done the same thing – and she knew it.

We have overdone the behavioral, incentives-based, needs-maximizing best practices model of human resources. We have under-estimated the human power of changing humans. After all, the business of relating to other people is personal.

Destroying Trust with Just a Verb

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The Associated Press decided to drop the term “illegal immigrant” from its reporting. Their point: the term ‘illegal’ should be applied to actions, but not to persons. It’s the immigration equivalent of, “hate the game, not the player.”

Of course, that’s red meat to a lion for some. Senator John McCain said, “You can call it whatever you want to, but it’s illegal. There’s a big difference…I’ll continue to call it illegal.” And so the battle is joined. Where one side sees respect, another sees absurd political correctness.

This is a worthless, useless, and totally unnecessary argument. It is also typical of a great many pretend arguments – full of energy and fury, truly signifying nothing.

And who’s the culprit? A verb. To be precise, the verb “to be.” I’m not kidding.

The Tyranny of the Verb “To Be”

In Spanish (and other Romance languages, I think), the English “to be” actually has three forms: estar, tener, and ser. Estar refers to a temporary condition: he is tired, she is in Europe, I’m sick. Tener refers to “having” a passing state – I have hunger, you have thirst, he has luck. Ser, the third form of “to be,” has to do with permanence: he is a man, you are virtuous, she is from the US.

In English, all those forms translate into one word, to be: I am, you are, he is.

Why is that a problem? Consider these interactions:

“The new Bond movie is great.” “No it isn’t, it stinks.”

“He is always negative.” “No, he’s just realistic.”

“You’re not serious.” “I am totally serious!”

“He’s an illegal.” “How can you be so judgmental?”

Because we have only one verb in English to cover so many situations, we end up bludgeoning each other. Since we can’t distinguish our several meanings, we assume others mean the same thing we do.  And when it turns out they meant something else, we chalk it up to obtuseness and  bad will on their part.

Which explains why I always have good intentions – but you! You’re always working some angle.

The American Burden

We’re not about to add two new verbs to American English (I can’t speak for the British or the Strines). But it’s not like we’re handcuffed. All we need is a little clarity of thinking.

1. Distinguish between actions and actors. The AP had this one right. You can still morally condemn people if you want – just don’t be sloppy about your definitions of morality.

2. Distinguish between your preferences and the other’s characteristics. I am not annoying – you are annoyed.

3. Avoid using personal pronouns with “to be” except for “I” and “it.” We have a right to say “I am __.”  We don’t have the same right to say “you are __” or “he is __.”  Only a rocking chair is oblivious to the difference.

I am fairly confident it’ll work for you. Unless you’re seriously pigheaded, that is.

The Five Levels of Customer Focus

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One of the Holy Icons of marketing is the concept of customer focus. It’s almost always used to signify a good thing, and something that is self-evident – that doesn’t require a lot of explanation. Of course, in reality things are a little more shades-of-grey.

Here, then, is a guide for distinguishing between Five Levels of Customer Focus.

1. Target Identification. Also known as the customer focus of a vulture. At this level, customer focus generally means follow the smoke to the fire, find the decision-maker as fast as you can, screen out the low-probability leads. In short, find that target so you can zero in on the bullseye.

2. Target Optimization.  At this level, customer focus means to find the ideal overlap between the customer’s need and your product. Find that need and feed it; find that pain point and pressure it; get the customer slavering for a solution, and pitch your product as the Filler of (that) Need.

3. Target Outreach. Reach out and touch someone the buyer. Get along with them, be friendly. Teach them how to buy, how to sell your product internally, how to be your ally within the customer company. Because that way you get higher share of wallet, higher ROI for the seller, better KPIs. Mo’ money for you, big picture.

4. Target Development.  Customer focus at this level means adding perspective to the customer’s view of their own business, challenging their belief systems, jointly developing product needs for the future and metrics to manage them by. You get longer client retention, lower sales costs, higher ROI for you both.

5. Post-Target Focus.  Get rid of the “target” metaphor entirely. Don’t see customers mainly as sources of profit; they are not means to your end – they too are ends. They are people and organizations with whom you spend time, helping to make them better. By this view, sales and profits are  byproducts – not the goal itself.

This taxonomy is of course arbitrary. You may have one of your own you like better, and that’s fine. In this particular view of things, things get better as you move from 1 to 5.

What do I mean by “better?”  Thanks for asking.

a. The seller’s profit goes up as you move up the scale. This is counter to the knee-jerk reaction that you make more money by being more rapacious.  You don’t, not in anything but the shortest of time-frames and the narrowest view of reputation.

b. The buyer’s profit goes up as well as you move up the scale. At level 1, one plus one equals two (actually less, because rapacious behavior leads to long-term system breakdown). As you move higher, efficiencies go up, effectiveness goes up, trust goes up, and so forth.

c. Economic utility gets maximized. Not only do seller and buyer each make more money, but the total benefit of the system is increased as you move up the scale. Costs go down, quality goes up, employment goes up, suppliers succeed, and so forth.

d. Social utility goes up too – not just economics. The world is generally happier when people get along than when they don’t. Suspicion and pessimism are unfortunate traits in business; trust and optimism are not only their own rewards, but are self-fulfilling prophecies.

Where do you and your business fit on the Customer Focus spectrum?

Hitting a 7-Iron from the Tee Box

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This weekend I joined a dozen school buddies for an annual golf outing. Now, I took up golf late in life, which explains why I’m pretty much the worst player in the group.  At least, that’s what I tell myself.

Nobody minds much, except for me; everybody respects everyone else’s level of play. After all, that’s why handicaps exist. That said, once per outing, I will ask one good player for some advice. This time, I got some great advice from Dave.

“Charlie, your drives are too erratic. When they’re good, they’re as long as anyone’s, but much more often they end up in the woods on either side. Put away your driver club and just hit a 7-iron off the tee. You’ll give up 100 yards in distance, but you’ll always be in the fairway.”

An Insult? Or a Challenge?

As golfers know, on the face of it, that’s a bit of an insult. A 7-iron is made for much shorter shots than the driver.  Telling me to use a 7-iron from the tee is like telling a cyclist to use training wheels, or a poet to go work on rhyming. But I know Dave, and he knows me, and I knew he was just trying to challenge my thinking in a creative way. And thinking is at the heart of the matter.

All sports are about one’s mental state to some degree; but no other sport can touch golf in the attitude-to-performance linkage. How can you miss a two-foot putt? Easy – start worrying about missing it.

For most golfers (me included), the tee shot leads the list of stress-inducing moments. There are a thousand ways to think wrongly about your tee shot – and every one of them can make for a self-fulfilling prophecy. The trick is to leave your thinking behind when you finally approach the tee, and let the habit of your muscle memory take over. Over-thinking is the root of all evil in golf.

Over-thinking: a Metaphor for Life

There was no way I was actually going to hit a 7-iron from the tee – these are my buddies, and I’m not all that ego-free! But I realized Dave had given me a gift. All I had to do was envision the result of a 7-iron from the tee – and duplicate it with the driver.

Mechanically, that meant slowing down, dialing back the swing, not trying to kill the ball. Mentally, that meant feeling relaxed, staying within my comfort zone, not pushing the limits – and especially not fearing all the bad things that could happen .

The result was powerful. I gave up some distance (less than 100 yards, though) but stayed within the fairway much more often. Result, better scores.

The Tee Box of Life

How often do you invite failure – because you’re pushing the limits on a dozen variables, living in fear of missing on one of them? Does it happen in sales calls? Client progress meetings? Presentations? Performance reviews?

Maybe you should try hitting a 7-iron from the tee box. Dial back the rough edges; stay within yourself; be very clear about the core message, the core values, the core parts of the relationship. Find your swing, and learn to trust it. Be clear and simple about what you’re doing. You may not make the occasional spectacular shot; but you’ll miss a whole lot of disastrous shots, and improve your score.

Trustworthy Occupations

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Quickly now – which are the least-trusted professions and occupations?  If you think about it a moment, you’ll probably make pretty good guesses.

Now for a tougher one: which profession is the most trusted? This one, I find, less than half of respondents get right.

Your Profession Conveys an Image of You

The annual Gallup poll of Honesty and Ethics in Professions came out this past November. First, let’s get the fun stuff out of the way.

The next-to-least trusted profession is (drumroll…envelope please) – Members of Congress! Only 10% of respondents rate congressmen as high or very high.  And the big prize for absolutely least-trusted profession? Car salespeople. Aw, and it was so close; they came in at 8%, just two percentage points behind Congress. In fact, last year they were tied.

Well, that was easy. But who was most trusted? Engineers? A respectable 70 points, but not highest. Doctors? Tied with engineers at 70. Pharmacists outperformed doctors, with a rating of 75%.

But the profession that takes the cake for most trustworthy – for about the 13th year in a row – is nursing.

That’s right, nursing. And it makes sense, if you think about it.

Why We Trust Nurses the Most

The Trust Equation breaks trustworthiness into four factors – credibility, reliability, intimacy, and low self-orientation.  In studies we’ve done on the four factors, it turns out that Intimacy has the strongest correlation with high aggregate levels of trust.  That is, we tend to put more weight on that one factor than on the others.

Think about which of those four traits nurses most clearly represent.  It is intimacy – the sense that we can share our most open, vulnerable selves to another.  More than anyone else, we are willing to stand naked – metaphorically as well as literally – before nurses.  It only makes sense.

The same data suggest that women – on the whole and on the average, though not person by person – are more trustworthy than men. And almost all of women’s better scores have to do with higher scores on the intimacy factor. Need I mention that nursing is primarily a female profession? Again, it just makes sense.

Is Industry Destiny?

Are we doomed to low trust if we’re a lawyer?  A politician? A marketer? Male?  Conversely, are we guaranteed high levels of trust if we graduate from pharmacy school?

No. Trust is experienced at a personal level, and trustworthiness is primarily an individual, human trait. There are highly trustworthy salespeople, and an RN doesn’t guarantee trust.  But there’s no doubt that you have two strikes against you if you’re in a low-trust profession, and you’re spotted more than a few points if you’re in a highly trusted profession.

In the end, though, trust is personal. You have to live up to the world’s expectations – or confound them, as the case may be.  It’s up to you.

A Better New Year’s Resolution

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iStock_000014342439XSmallI wrote a good blog post at this time six years ago, and haven’t improved on it yet. Here it is again.

Happy New Year.

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My unscientific sampling says many people make New Years resolutions, but 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 being 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.

 

Financial Advisory Services: Interview with Mark Barnicutt, CEO Highview Financial Group

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The term “financial advisor” covers a wide range of activity, from insurance sales to asset manager to broker to financial planner, and many more. Both providers and consumers of financial advisory services are well advised to get some perspective about this business.

To help, I chose to interview Mark Barnicutt, a well-respected member of the industry in Canada. I first heard Mark speak last year, and was impressed with the breadth and common sense nature of his perspective.  With no shortage of issues, I tried to keep it big picture focused.

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Charlie Green: Mark, give us just a bit of background. How do you come by your viewpoint?

Mark Barnicutt: I was the COO for the High Net Worth business of one of Canada’s Banks. I have also been a private banker, an investment counsellor, ran a US SEC-regulated advisory business, and now run Canada’s second largest family wealth/fiduciary management firm. I have an MBA and a CFA.

Charlie: For the non-Canadian readership, how does your experience in Canada compare with that of the US, the UK, and Australia?

Mark: I think that the issues in Canada are the same as those around the world today. With the growing concern amongst many investors about meeting their future funding obligations, many clients are seeking truly independent and objective advice in which client interests are truly placed first and the costing of all services are made fully transparent.

Charlie: Mark, what are the biggest issues facing your business today?

Mark: The biggest is the movement toward fiduciary management, for which we’ve prepared ourselves. It’s happening globally.

Charlie: OK, we can’t avoid definitions. Help us out?

Mark: A Fiduciary Manager (also known as an Outsourced Chief Investment Officer) is a securities registered investment professional who typically has no proprietary investment product to offer clients; instead, their sole focus is on being the architect of client portfolios in order that they truly match each client’s investment objectives and tolerances for risk. The implementation of each portfolio is done through the research & due diligence of specialized money managers, who are contracted through the Fiduciary Manager, for the benefit of clients.  As a result, there is complete objectivity and transparency of advice.

Charlie: Who has been governed by fiduciary standards and who hasn’t? How big a deal is it to change, culturally, for firms who haven’t been?

Mark: As in the United States, the issue of ‘who is’ an investment fiduciary exists in Canada. Typically, those investment professionals who have ‘discretion’ over client portfolios are recognized as investment fiduciaries, while those who do not have discretion – i.e. brokers – are not considered investment fiduciaries and are typically held to a lower standard of care (i.e. Duty of Care).

The cultural issues for firms that have operated under a Duty of Care Standard to move to a Fiduciary one are huge.  It’s a monumental shift – especially for firms who simply ‘sell products’ to clients – as it is a cultural shift that impacts the whole organization when one decides to become an investment fiduciary.

Charlie: You say this is happening globally; is it more evident, or does it have a stronger momentum, in some countries more than others?

Mark:  I understand from studies in recent years (Casey Quirk) that the Outsourced CIO industry is almost a $500 billion industry.  In Canada, it’s much more niche, but those few firms in Canada who are fiduciary managers are experiencing solid growth (according to our anecdotal information) given the ongoing challenges that so many investors are facing today.

Charlie: What’s driving this move? What’s been the customer experience of the financial advisory business over the past 30 years? The past 10?

Mark:  For investors…it’s all about working with someone who will truly place their interests first. They are tired of having ‘investment product’ pitched at them and then watching as the many promises rarely materialize. They are also tired of being gouged for excessive fees, which so many times are not transparent, but often times are embedded in various financial products.

Charlie: What do you see as salient now?

Mark: The objectivity and transparency of advice and services.

Charlie: Let’s stay with customers: what are the biggest misconceptions that customers have about the financial advisory business?

Mark:  They think that just because someone is licensed that they have a legal obligation to place client interests first…say, like a doctor or accountant.  As I mentioned earlier, this is not the case unless they are licensed as a discretionary portfolio manager.

Charlie: Similarly, what are the biggest mistakes you see customers making?

Mark: Because there are so many different types of advisors in the marketplace today, clients really need to do their homework and find advisors who truly want to place their interests first. This is unfortunately easier said than done, but I have met several clients over my career who have developed a deep assessment approach for finding the right advisor for them.  As part of their search process, they’ve spent time researching how a potential advisor would actually manage their assets to meet their unique needs, as well as service them.

Charlie: What is the ultimate, best-case, customer value that a great financial advisor can provide? What does a client gain from a really great financial advisor?

Mark:  Becoming a true advisor/partner with clients in helping them actually reach their various investment goals (which are typically some form of current and/or future consumption) but within each client’s capacity and willingness for risk.

Charlie: Thanks very much for taking time with us to help clarify this emerging issue.

Mark: My pleasure.

 

An Unconventional Client Retention Strategy

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Most people usually don’t think of empathy as having much business value. In fact, you might think if you start empathizing with your clients, you’ll lose your edge; you’ll appear “soft;” you’ll lose business. Here’s a compelling story* about a global firm that turned that conventional wisdom on its ear and transformed a big loss into a big win.

The News No One Wants to Hear

Once upon a time, a Midwestern U.S. office of a global accounting firm was informed by one of its major clients that the audit work they usually did would be going out to bid. The partners were shocked. “We hadn’t seen it coming,” one partner said, “and they were very clear that this was final.” As a nicety, the client gave them the opportunity to bid.

They brainstormed about why the client could possibly be unhappy with them. What had they done to get the boot? What might have been said at the meeting that resulted in this decision?

Once they had a pretty good idea what the issues could have been, they did something dramatic.

Sometimes Not Risking is Very Risky

Instead of using their 90-minute time slot to do a conventional presentation, four of their partners acted out a skit for the four client executives. They role-played those very execs having that decisive meeting.

They said things like, “Well, those audit folks just haven’t showed us that they have what it takes.” “That’s right, they haven’t been proactive enough.” They humbly and genuinely gave voice to the critical thoughts they imagined the client was thinking.

Unexpected Returns

“We were prepared to get yanked out of there in two minutes,” one partner said. “And, in fact, after five minutes, we stopped and asked them if they wanted us to stop. But they were fascinated; they asked us to keep going. And we did, for nearly an hour. We just kept talking—as if we were the client—about the things that we had done wrong and should have done better. And the client listened.”

Here’s the extraordinary ending to the story: the client rescinded their decision to put the work out to bid, and the firm got the job back. Why? Because they had been able to prove they understood their client’s concerns—in an honest and effective demonstration of empathy. They showed they had finally been listening. As a result, they won the right to try again.

The Business Value of Empathy

Seeing things from the clients’ perspective requires more than just taking good notes, muttering “I understand” from time to time, or periodically pausing to summarize the content of their communications. It means taking the time to tune into the tone, mood, and emotion—the music—as well as the words. It means reflecting it all back accurately and frequently. It means differentiating yourself by not just being the smart ones, but the ones who really get it—not just during the tough times, but all the time.

Bring empathy to the table from the get-go and your chances of getting a nasty unexpected surprise diminish greatly. Pull out all the empathy stops when things go awry and you dramatically improve the odds that you at least salvage the relationship, if not the contract.

Add empathy to your business toolbox and see what it does to help you gain and retain clients for the long haul.

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*This and other compelling stories can be found in The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading with Trust

Story Time: Want a Relationship Breakthrough? Role-Play Your Client.

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Our Story Time series brings you real, personal examples from business life that shed light on specific ways to lead with trust. Our last story proved that good intentions won’t keep you from screwing up. Today’s story highlights the business value of taking time to see the world from another’s perspective.

A New Anthology

When it comes to trust-building, stories are a powerful tool for both learning and change. Our new book, The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading with Trust (Wiley, October 2011), contains a multitude of stories. Told by and about people we know, these stories illustrate the fundamental attitudes, truths, and principles of trustworthiness.

Today’s story is excerpted from our chapter on training for trustworthiness. It vividly demonstrates how a little role-playing—walking in your clients’ shoes—goes a long way.

From the Front Lines: Role-Playing Pays Off

The value of role-playing couldn’t be highlighted any better than the example that one of our course participants experienced in real time at one of my (Charlie’s) sessions. The exercise asked a group of business leaders to play the role of one of their most challenging clients while a colleague held a typical meet-and-greet.

One male partner chose a woman who was then a presidential appointee at one of Washington’s largest government agencies. The partner was flummoxed by two aspects of the relationship. One, a number of her direct reports were using the services of his organization, so he had to be careful of jumping the chain of command. Two, she kept asking for feedback, and what others inside and outside the organization were saying about her, a question he didn’t feel he could answer without jeopardizing the firm’s relationship.

The exercise got off to a good start, but then the ‘client’ asked over and over: ‘How are we doing?’

The other executive in the role play finally said: ‘Why do you keep asking that?’

The ‘client,’ the senior partner, answered quickly: ‘I’m just looking for information.’

A light bulb went off: she hadn’t been asking about how her staff felt about her; she was looking for information outside her own glass bubble as a senior official.

The senior partner immediately shot off an e-mail asking his client to have coffee and catch up. She answered right away with: ‘I’ll buy.’

—Charles H. Green, about Greg Pellegrino (Global Industry Leader for the Public Sector Industry, Deloitte)

Connect with Greg on LinkedIn or read his blog.

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Read more stories about trust:

Flo and Progressive Insurance – How Not to Do Trust Recovery

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How does a nice gal like Flo end up in a nasty fix like this?

Flo is Progressive Insurance’s TV fictional character.  Flo’s twitter handle (come on, you knew Flo has to tweet) is @ItsFlo and “her” bio reads, “Progressive’s always-happy-to-help insurance expert. Lover of discounts, unicorns and tacos. Plays a mean air guitar.”

So this headline had to be a bit of an image hit for Progressive:

Progressive Insurance’s Response to the Fisher Scandal is a Textbook Example of a PR Catastrophe.

Yes, you could say that. Click the link for the long, sad tale: the (very) short version is that Progressive insured a woman killed in a car accident. Progressive refused to pay her family a claim of $75,000 on the grounds that it had not been proven she had not been at fault – even though the other driver’s insurance company did not dispute fault.

Through some bizarre twists of law and amazing judgment on the part of Progressive, the woman’s family was forced to sue the other driver – and the woman’s brother claimed that Progressive’s legal team had, in fact, actually ended up working for the other driver.  Get that: the dead woman’s insurance company, in court, on behalf of the driver who killed her.

That story got legs on FaceBook, Gawker et al. Progressive responded with a tweet, saying they’d investigated and were “within our contractual obligations.” They tweeted the identical message to dozens of complainers.  Of course, the carbon-copy tweets then got put together on another site, making Progressive look even more ham-handed and insensitive.

Progressive then explained that, in fact, “Progressive did not serve as the attorney for the defendant in this case.”  Rumor quashed.

Except that, one hour after that posting, the internet sleuths came up with court records showing a Progressive attorney had been granted an allowance “to intervene as a party Defendant.” It depends on the what the meaning of the word “defendant” is, I guess.

And then Progressive lost the case anyway. And it all ended up on the “real” news too.

What Not To Do

Ah, where to begin. Let’s start with the easy stuff.

  • If you’re accused of doing something bad, and in fact you’ve been doing something that looks like bad, walks like bad, and rhymes with bad – for heaven’s sake don’t try to get off on a technicality. Don’t do it anyway, but especially don’t do it at a time like this.
  • Don’t confuse the law with ethics. “But it’s not illegal” is the last defense of the morally lame, and will never win in the court of public opinion. How well does “I’m not a crook” go over?  Does “within our contractual obligations” sound any better?
  • Don’t think you can outrun the internet. You are naked out there, and everyone’s waiting for you to deny the truth.  Simple answer: don’t do bad stuff, and if you do, don’t lie about it. Karma has a deputy these days called “search,” and it’ll getcha.
  • Pay attention to backlash, for heaven’s sake.  You pay good money for market research to give you feedback. When you get it for free in the form of bad publicity, look at what the optics are telling you! D’ya think defending your client’s killer might not play too well? D’ya think that robo-tweeting might not be a great social media strategy?  D’ya think that doubling down against a viral human interest story might suggest a little more PR sensitivity?

I’m a firm believer that we learn more by failure than by success.  If this hasn’t happened to your company, go knock on wood, and then go to school on Progressive. Such clumsiness shouldn’t go to waste: someone should learn from it before it happens to them.