Real People Real Trust: Transforming a Business from the Inside Out

Ron Prater has worked in government consulting firms for almost 20 years, including three years with Arthur Andersen LLP. In 2007, he set out with partner Alan Pentz to create a company that would apply real entrepreneurial curiosity to find new ways to solve the U.S. government’s biggest problems. The result is Corner Alliance. Find out how this organization, triggered by a crisis in its formative years, applied the principle of collaboration to devise a new and different kind of corporate culture.

Leadership Lessons

Ron and I have known each other through other people for years. A few months ago I was talking with Corner Alliance Director Sarah Agan, a mutual colleague and veteran consultant. I was intrigued by the unusual ways she described a recent all-hands meeting. “We practice ‘inner voice’ all the time,” she said. “And we have an explicit value to eat our own dog food.” Needless to say, I was intrigued by Sarah’s word choice and even more so by her animation. I wanted to find out more. So I set up some time to talk with Ron and Sarah together.

Ron explained it to me, “‘Eating our own dog food’ means we operate the way we advise our clients to—we follow the same processes and approaches we recommend to them.” “Essentially, we practice what we preach. It can be harder than it sounds when you’re trying to balance helping clients succeed while also trying to grow a sustainable business. And it hasn’t always been that way, even in our company’s short life.”

Learning the Hard Way

Corner Alliance had some growing pains in its early years. “We had a really tough time a few years ago when we lost a project that led to a serious financial struggle,” Ron confided. “I, along with my partner, Alan, and our Director of Operations, Brandi Greygor, responded in typical ways. Privately, we talked daily about how much money we had left in the company’s line of credit and what to do if we maxed out what the bank would loan us. Publicly, we sent a general message to staff that we all needed to ‘increase billability’ but we were afraid to state the full reason.

“We thought we were doing the right thing by keeping the true stress from our staff. The MBA books say it’s important to protect the people from the stress of running the business. And the HR consultants told us we had to follow proper procedures to avoid lawsuits if we did have to lay people off. So we kept things hidden.”

Going contrary to conventional business wisdom, Ron and the other principals listened to their own inner wisdom. “It’s not how our guts said to handle it. We faced a real inner conflict every day for months. How do you form a company of trust and transparency when it seems like all the advice you get—from grad school, friends, lawyers, and more—says to withhold information?

“Looking back,” Ron said, “I grew more personally from that very tough time than from every great year I had. While it was hard, the learning from those six months led to one of the most positive and significant turning points for Corner Alliance.”

Eat Your Own Dog Food

Out of the crisis came a big transformation for the company. “With cost-cutting, along with full transparency with our staff, we managed to stabilize our operations,” Ron said, “And we realized that, on the heels of such a hard and painful time, we had a real opportunity to fundamentally re-think and re-vision.

“So Alan and I announced to our staff that he and I would map out a new company strategy,” Ron elaborated, “including our top three strategic priorities. We told people at an all-hands meeting that we’d start by focusing on which clients to talk to and what to offer them. That message landed with a thud. Within the first few minutes of the meeting it was clear we had made a huge mistake and needed to rethink the approach.

“Our people said, ‘That’s not how we advise our clients to develop strategy. So why are we doing it that way?’”

That uh-oh moment led to a dramatically different plan to create the company’s strategy. “We realized we’d be stronger if we engaged the whole company in the company,” Ron continued. “And instead of starting with what we do and where we want to go, we started with who we are and what we wanted to stand for as a company,” Ron explained.


Put Values First

The group put first things first. “We focused first on our values, and to do that we created a conversation rather than creating a task,” Ron said. “We also found a way to make it a truly collaborative process, not just a collaborative process led by one person. We’ve never been about one-person trust—not at our core—so we found a way to define our values that would reflect that we all have to trust everyone else in the company.

“Since we’re a virtual company with staff in five different states, we selected an on-line tool to help us create the conversation. Everyone could contribute real-time, see each other’s inputs, make comments, and vote.”

Take Your Time

The process of defining yourself takes time Ron learned. “We allowed three weeks to generate ideas, and it took us about four months to solidify our values. If we had tried to get results in a one-day strategy session, our output would have been more generic—even with everyone participating,” Ron added. “People needed time to digest and think through what they stood for and then internalize that in relation to the company. The elapsed time allowed people to contribute at their best, and allowed the most important things to materialize organically.”

They ended up with 10 explicitly stated corporate values that are the foundation on which Corner Alliance continues to be built. Not surprisingly, “Eat our own dog food” was on the short list.

It’s a value that Sarah especially endorses. “We live that value even beyond our approach to strategy development,” she added. “Everyone takes turns running our internal meetings—everyone. We share leadership that way, and expand our capacity as leaders and facilitators at the same time. People get to experiment, practice, and learn in a safe environment, and they get real-time feedback. Just like the leaders we serve, we have to be willing to take risks and make mistakes to learn.”

Sarah continued, “It’s okay for things not to go well. What’s not okay is not learning from it. One of the greatest gifts we give each other is feedback. We are deliberate about creating a culture where we all recognize we’re both perfect and imperfect, where we can bring our whole selves—who we are and who we aren’t.”

Tell It Like It Is

Financial transparency is another key value that emerged from Corner Alliance’s collaborative strategy process. “Alan was instrumental in moving us to open-books management,” Ron said. “We now share just about everything with all employees every quarter, the exception being salary information. We have bi-weekly company-wide calls where everyone sees each other’s billability, our revenue, where we are exceeding or falling short of revenue projections.  We don’t hide anything bad or anything good.”

Ron is clear that the effect is palpable. “It has made a massive difference in everyone understanding the business impact of their decisions,” he stated. “It also supports one of our other corporate values, which is sustainability. I believe the whole firm really understands the state of Corner Alliance and can see that we have a really strong foundation for growth right now.”

Be Bold with Clients

That kind of transparency also now extends to Corner Alliance clients—in a bold and differentiated way. The stated value “inner voice” is about people sharing their internal dialog as much as possible, recognizing that’s often where the truth lies. Corner Alliance staff is encouraged to not leave important things unsaid.

“This is definitely not easy,” Ron emphasized. “It takes a commitment to practice over time with our clients and with each other. We actually label it, as in, ‘Using my inner voice, I’d like to say I think there are serious organizational risks associated with what you are considering.’ This makes it easier to do and hear as the person listening now knows that the person speaking is taking a risk.

“Our people know they’ve got the organization behind them every time they venture into inner voice territory,” Ron affirmed. “As Alan points out about using inner voice, ‘It’s a personal risk to reveal what you’re thinking but not saying. It’s a risk to the organization if you don’t.’ But we all also recognize it’s important to apply this value wisely, appropriately, and thoughtfully.”

Perhaps the most unexpected result from this dedication to speaking the truth is that clients have begun to pick up both the practice and the lingo. Ron explained, “When our clients started saying to us, ‘My inner voice is saying xyz,’ we knew we were onto something bigger.”

Reap the Rewards

The list of indicators that Corner Alliance is onto something is long, and now includes growing staff, secure multi-year prime contracts in place, and work with key government executives who have budgets in the billions. “Corner Alliance is poised for an incredible year in 2012,” Ron said with pride. “Not only are we making a difference in the business of government, but we get emails from clients saying, ‘You’ve changed my life.’”

The focus for 2012? “Helping people thrive by doing creative, meaningful work, and living the life they want—not just the work life they want,” said Ron.

The Bottom Line

Ron feels very strongly that what Corner Alliance has created was not led by or done by one person. “Featuring me for this article is actually counter to our culture,” Ron stressed. “Corner Alliance has been led by a collaborative approach using values as our core, and that’s precisely what will lead us into the future.”

And a promising future it is.

Connect with Ron on LinkedIn.

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The Real People, Real Trust series offers an insider view into the challenges, successes, and make-it-or-break-it moments of people from all corners of the world who are leading with trust. Check out our prior posts: read about Chip Grizzard: A CEO You Should Know; Ralph Catillo: How One Account Executive Stands Apart; Anna Dutton: A Fresh Perspective on Sales Operations; Heber Sambucetti: A Learning Consultant’s Approach to Leadership; Janet Andrews: What Trust-based Strategy Consulting Looks, Feels, and Sounds Like, and John Dunn: An Entrepreneur Wins with Partnership.

 

Solving Knowledge Management with Speed Dating: Interview with Clay Hebert

Most corporate discussions about knowledge management (KM) are about databases, software, and IT. One mid-sized law firm I know took a different approach – getting partners to interact over lunch. It was very effective.

It turns out the 1-to-1 nature of speed dating is perfect for mega-companies that want to improve KM.

That’s the kind of insight Clay Hebert has come up with. I met with him recently in his coffee-shop office so far on the West Side of Manhattan it might as well be in the Hudson. Here are excerpts.

Charlie: We’ll get to the speed-dating thing soon; but first, how’d you get to this point?

Clay: The quick story? I spent ten years at Accenture, a massive consulting company. Even though I was surrounded by smart, hard-working people, the work wasn’t stimulating. I was a “Mac” soul stuck in a “PC” company.

In January of 2009, I had my big break. My business hero Seth Godin offered a unique and exclusive MBA program, and I was accepted. There were more than 500 applicants and I was one of nine who were chosen. For six months, nine of us sat around a table in Seth’s office learning from the marketing master (and each other). It completely changed my life. After that, there’s no way I could go back to corporate America.

Now, I’m building a technology startup called Spindows.com – an enterprise video chat platform that will change the way organizations collaborate and share knowledge.

Sharing Knowledge

Charlie: I hear collaboration, I hear video-chat; I can infer speed-dating, I think. But tell me more.

Clay: After a decade at Accenture, I only knew about 100 colleagues, 1/20th of 1% of the company. This is astonishingly inefficient when you think about the skills and expertise that should be shared across the organization.

The single most valuable asset for most companies is the knowledge of its employees. Most companies understand this, but their current KM solutions consist of clunky file-shares and databases.

It’s a tremendous opportunity wasted.

Charlie: You’re right, it is an astonishing waste; every big company I know reverts to massive databases then worries about incentives to get people to load the data, or hires support staff to do it.  Lately, they’re all trying various social media. But it’s still kind of artificial, or time-consuming, or just not interesting.

So, what’s the answer?

Clay: Well, I’m hoping Spindows will be at least part of the answer.

There are three main problems with the current KM process:

    1. You need high quality information
    2. You need that information input into a system in a timely manner
    3. Other employees need to be able to find it.

In short, the KM process is broken due to quality, speed, and search. Here’s an example of each:

    1. Quality – Here’s a common KM scenario: the lowest level analyst or intern gets assigned the task of uploading project summary documents to a database or file-share. There is limited correlation between these often-insipid documents and the true learnings from the project. The KM process itself is treated like an administrative burden instead of a golden opportunity.
    2. Speed – This process often happens at the end of a long project. If anyone does find the information, it’s outdated at best. In our fast-paced world, knowledge transfer should happen in real-time, or close to it.
    3. Search – The search algorithms to find the knowledge are woefully inadequate. I recently heard that one big consulting firm actually outsourced these searches of their own KM systems to an outside vendor. Think about that for a second. The search algorithms are so bad that they pay a third party to help find their own internal information. Now that’s broken.

Spindows cures these three problems, through a video speed-networking platform where you rapidly meet relevant people in your own organization via a series of quick 1-on-1 video chats.

First, everyone fills out a user profile with simple attributes (tags) that describe their knowledge and skills as well as things like their title, industry and personal interests.

A Spindow is a completely new kind of meeting. Instead of inviting people, you invite these tags or attributes. Anyone matching these tags is invited to attend the session.

In the Spindow itself, the 1-to-1 video interactions are rapid and timed, say 4 minutes each, so at the end of a one-hour Spindow, you’ve met 15 relevant colleagues. By attending just one Spindow per week, over the course of a year, you can meet everyone in a 780 person division.

Spindows reduces friction and increases serendipity by being the easiest way to find and connect with relevant colleagues.

Charlie: Wow, very cool indeed! Where do you stand in terms of status? Have you gotten written up? Funded? Testing?

Clay: Spindows has received some great press from Business Insider, and excellent feedback from events like Startup Riot, Startup Camp, and Under 30 CEO’s startup pitch event, where we scored second place.

We’re thrilled. Right now we’re working with a minimum-viable product (MVP). It’s functional, and we’ve done some testing.

Going forward, we plan to invite a select group of early enterprise customers to try the product at discounted pricing. This is win-win because the early adopters will be allowed to take advantage of this great new technology before it’s available to the public. And it’s great for us because that early customer feedback will allow us to shape the product direction and roadmap.

Trust Works

Charlie: Let’s talk about why this makes so much sense. In my view, it’s allows super-high bandwidth – human interaction – in a socially acceptable casual wrapper. You can be ‘promiscuous’ with your interactions, and still get far deeper than if you just relied on databases and social media. You’re talking to real people. This has tons to do with trust.

Clay: Exactly. You’ve nailed it. I believe people will be more open and trustworthy when talking directly to their colleagues. We’re combining high bandwidth human interaction with big data and analytics. Companies will be able to track how many Spindows someone has participated in, who they have met and, who they still need to meet.

We’re working with PhD’s at Wharton to design valid tests to track how quickly the expertise tags are spreading throughout the organization, effectively proving that trust leads to better KM.

Charlie: Speaking of trust: you’re a heavy user of Airbnb, a Sharing Economy business whereby you rent out your apartment to others, and vice versa. Do you worry about people trashing your apartment? How do you prevent that?

Clay: It’s all about trust. Before they arrive, we establish a personal bond with the people who use our place. Before they come, we ask them what DVD’s they’d like us to get for them on Netflix. We leave a bottle of wine and neon Post-It notes all around the apartment encouraging them to drink the wine, read our books, surf the internet, etc.

We write notes to people on our white board and they always leave us notes when they leave, usually describing what they did on their trip. Airbnb is extremely safe in general, but these extra steps make the interaction inescapably, richly human.

Charlie: This is great social proof of “the best way to make someone trustworthy is to trust them.” Trustworthiness and trusting-ness are intertwined –

Clay: – You get what you give –

Charlie: – and each is both cause and effect.

Clay: – and you want to give what you get.

Charlie: Clay, no wonder you’re a leader in some of the new social media arenas. Next time we’ll talk about your experiences in some of the New York incubator labs for new technologies.

Clay: Can’t wait!

Attract! Attract! Why Attract is the New Retain

The mantra of “attract and retain” has been around the HR community – and its general management constituency – even longer than the unfortunate rush to refer to people as “talent.”

It used to make sense. But it doesn’t anymore and the implications are significant.

Why Retention?

It’s been awhile since anyone dusted off the basic retention rationale, so let’s review the bidding. Here are some commonly stated reasons why companies should pursue employee retention:

  1. It costs more to hire than to retain people
  2. The more experienced the hire, the more it costs to retrain replacements
  3. Experienced employees know the ropes, the lingo, how things are done
  4. Experienced employees form deeper relationships with customers
  5. Retained employees are motivated, which helps customer relationships.

Of course, a few of these tenets were always subject to qualification – number 5, for example. Longevity can just as easily drive complacency and myopia as well as it can drive motivation.

But that’s not the Big Story. The Big Story lies in the assumptions underlying all five of those beliefs. Those assumptions are:

  1. the benefits of retention increase in direct proportion to longevity, and
  2. the pace at which new employees become productive is relatively fixed.

Both beliefs are looking a lot less true these days.

What’s Changed?

Two things have changed: work and people.

Work. Work has become outsourced, modular, plug-compatible, horizontal, contracted, bite-sized, for-hire, project-based. Employers shun fixed costs and value flexibility.

This is partly because they can: technology has made work-sourcing a global phenomenon, freed from space and time. It’s also partly because they have to: global sourcing means competitiveness is also global. The global economy has undergone a massive make/buy analysis and has come down heavily on the “buy” choice. If you’re not working with the world’s best/lowest cost doer of some key task, then you’re at a disadvantage.

The nature of work has shifted from a “job” focus to a “project” or “task” focus. Employers no longer need “someone who can do…” but rather “someone who has done, and will do…”  The new work model is not semi-permanent vertical employer silos of people; it is the model used by the film industry and by consultants, a constantly shifting nexus of tasks and resources.

Recruitment comes to resemble an ongoing speed-dating event.

People. I think we’re finally past decrying the lack of employee “loyalty;” it’s so last millennium.  People are “loyal” to their professions, their technologies, maybe their customers – but not to the constantly morphing corporate entities that sign their paychecks.

The skills of the new generation have evolved to fit the new workplace. The Facebook generation, adept at mass-scale peer relationships, doesn’t relate well to authority, no matter which side of the relationship they’re on. Geography? Twitter is everywhere and while not every 20-something can afford time in Europe, they all know someone who can and does, and can all Skype it and tweet it 24-7 in the meantime.

The oldsters may not like the verbal promiscuity of “friending,” but it fits perfectly with the new workplace. While society may pay a price in the dearth of deep, vertical relationships, the market place is demanding breadth.

Attraction and Retention Redux

Let’s put these trends together. What the economy needs, and what people are organizing to offer, is the ability to form relationships at the speed of transactions.

To companies, the attractive employees are not those with deep potential; they are those who can hit the ground running in a plug-compatible world, instantly connecting with thousands of like-minded peers within the company and without.

To people, the attractive employers are not those who offer long-term “commitments” (usually just relationship-disguised transactional offers anyway) but those who offer the ability to be instantly productive, while offering personal growth opportunities in the form of autonomy and new activities.

There is an obvious match here. What is no longer obvious is the relevance of “retention.”

Why would an employer want to retain people when the changing market requires ever-changing skills that can be bought quickly with precision rather than trained over time with generality?

Why would an employee want to be retained, when (s)he can find ever-changing opportunities to gain experience in a world thousands of times bigger than one employer alone could ever hope to offer?

Attract! Attract! Three New Strategies for Companies

The above are massive trends. The trend is your friend. The challenge is to ride the trend, not fight it. Here are three strategies for doing so:

1. Aim for zero cost onboarding and training. Zero works well as a stretch goal, but it’s not enough. How can you get people to pay you to join your company? (This is not as crazy as it sounds: how much do people pay to go to Harvard? So, become the “Harvard of YourNiche.”)

2. Reverse-hire search firms. Tell Russell Reynolds you want every employee to get one bonafide offer from an outside firm every year to keep them motivated. If they stay with you, they have re-upped, and become re-attracted. If they leave, you can choose either to recalibrate your attractions program, or wish the employee well and let them tell the market how employee-dedicated you are. (This is not as crazy as it sounds; Tony Hsieh already does a version of this at Zappos, paying people not to take a job offer).

3. Up your knowledge management game. Tenure is such an expensive way to gain company knowledge. Figure out how to make it available to every employee, from day one.

And don’t assume that means AI and databases. Try the same thing that works in the outside world: massive horizontal networking. Invent intra-LinkedIn and Intra-Tweet. (This is not as crazy as it sounds; Clay Hebert is working on SpinDows)

Attract and retain? That sounds like a motto for a roach motel. The new mantra is Attract! Attract!

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

25 Warning Signs You Have a Low-Trust Organization: Part 5 of 5

If your customers and clients tell you they don’t trust you, things have gotten bad. But you could have seen it coming. There were many early-warning signs of low trust in your organization.

This is the last in a series of five. The other posts address warning signs of low-trust organizations coming from:

How Your Clients and Customers Tell You You’re Low-Trust

It’s almost inconceivable that a high-trust organization will have low-trust relationships with its clients or customers. And that works in reverse: low-trust buyer relationships are a tip-off that something is amiss internally as well. Sometimes it’s easier to read the external signals, so here they are:

1.    Your colleagues speak disparagingly of your customers.

  • “They’re trying to pull a fast one on us; we can’t let them get away with it.” Whoa, simmer down. People who ascribe negative motives to customers’ actions without data, will generally do the same within the organization.  With all due respect to Andy Grove, paranoia is rarely a good corporate value to promote.
  • “I’ll believe it when I get it in writing.” If your people insist on contractual, legalistic relationships with customers, they’ll do the same internally. And since trust greatly reduces time and costs, that attitude is costing you dearly, internally as well as externally.

2.    You haven’t gotten a new referral client in 6 months.

  • This is such a key concept that it has been quantitatively refined (brilliantly) in the Net Promoter Score first developed by Bain’s Reichheld and Markey. At its heart: the single metric that best correlates with success is your clients’ tendency to promote you.
  • If you have great referrals, you almost certainly have delighted customers and energized employees. And that rarely happens without great levels of trust within the organization.

3.    You’re losing customers and don’t really know why.

  • Look at your customer list: is it basically growing or shrinking? Come on, you know the answer, pick one.
  • Now ask yourself: do I really know why that is? Or do I have a list of anecdotal, seemingly unrelated reasons? The CEO left; that guy’s a complete jerk; they decided to go with the low-price provider; they’re rationalizing suppliers.
  • That is not an unrelated list, after all. The common denominator is, they don’t trust you. And if your customers don’t trust you, the odds are remote that you live in a high-trust organization.

4.    You’re being asked to submit bids and respond to RFPs for long-time clients.

  • We don’t want to be dogmatic about this one: there is a long-term, secular trend toward professional procurement. That trend is not Evil incarnate; the procurement people are your new clients. Treat them as such, respectfully.
  • However: if YourCo seems to be singled out for this treatment, if it’s not a slow trend but a landslide for you, then maybe the market is telling you something. It’s telling you you’re not trusted. If you were trusted, you’d be seeing many fewer RFPs, you’d be getting sole-sourced where reasonable, you’d be getting in to define some RFPs, and you’d be getting some very personal coaching from the customer about how to operate in the new procurement world.
  • That’s not happening? Then odds are, your customers don’t trust you. They’ve never been shown the difference between genuine concern and manipulation. They’d prefer to deal at arms-length, with professional buyers who are immune to emotional bullying and enticement alike. They prefer to deal on price, because they haven’t been shown any good reason to deal on any other basis.
  • And if you’re quoting on price, using self-oriented sales tactics with your customers, then you probably don’t respect your own products, value and organization. Sounds like low-trust.

We hope you’ve enjoyed this little series on warning signs of a low-trust organization. Writing it has reminded us of two things:

1.    Trust is infectious. A high-trust organization is highly correlated with high performance on so many dimensions: innovation, people, leadership, products, and markets.

2.    Trust begins at home. Correlation is not causality, but causality is clearly at work in trust. Furthermore, it flows more in certain ways than in others. In very broad terms, the five factors we’ve discussed move in the following manner to create a high-trust organization.

It generally starts with leadership; but that’s a different series for another time.

 

25 Warning Signs You Have a Low-Trust Organization: Part 3 of 5

Low-trust organizations can be spotted in many ways.  This is third in a series of five. In this one, we explore warning signs from leadership. Previous and future posts address warning signs from:

  • Employees
  • Teams
  • Leadership (today’s post)
  • Products and Services
  • Clients and Customers

Leadership Warning Signs of a Low-Trust Organization

Look at the leadership in your organization. Does it have some of the following characteristics? If you’re a leader yourself, think hard, you might be contributing to a low-trust organization. These issues all arise from leadership choices, after all.

1. The Cult of the Corner Office thrives.

  • Do you have corner offices that are not conference rooms? Do they come with extra appointments, more square footage, better desks? Are there criteria for who gets them? You may have an issue.
  • If you have sanctified real estate, the odds are you have other visible symbols of class status and rank. With one exception, class systems detract from trusted relationships in an organization.
  • The exception: you’re intentionally running a business that connects meritocracy and materialism. Some trading operations fit that description. But you’re not likely to confuse them with high trust environments anyway.

2. The highest performer is a values-offender.

  • Name the 2-3 smartest, highest-bonus, most successful persons in your organization.  Does at least one of them get there by thumbing his or her nose at your avowed corporate values? Then you have a problem.
  • Values mean nothing if they are not enforced. Very few values statements have exceptions clauses (“…unless you can make a really profitable sale..”). What part of “team player,” “integrity,” or “client-focused” do you think rhymes with not showing up at team events, obfuscation, or self-aggrandizing?
  • Nothing shoots holes in values statements like blatant hypocrisy.

3. Blame is an art form.

  • Blame is the opposite of responsibility. If leadership means anything, it means taking responsibility. If the first words out of leaders’ mouths in the face of difficulty are to blame the situation or another person, what you have is the absence of leadership.
  • Don’t confuse an explanation with an excuse. Explanations are important; they help us know what to do differently next time. They do not, however, let anyone off the hook. Leaders can’t be let off the hook; that’s part of the definition of leadership.
  • Blame and its twin “inability to confront” corrode trust. They both try to disconnect responsibility from the truth. Leaders don’t do that.

4. “Need to know” is your catchphrase – and you’re not in the military.

  • The military, and military contractors, legitimately operate on a “need to know” basis. Not too many others do. It’s an easy rationalization that leads to low trust.
  • If I say you don’t need to know something (outside the military), it means you can’t be trusted with the information. Maybe you’re incompetent, maybe you’re a blabbermouth, maybe you’ll misinterpret it; there can be many reasons for low trust. But they’re all low trust.
  • If I don’t understand or accept why I have no need to know, then I will resent you telling me. Resentment leads to all kinds of avenues, none of them good, and all of them low-trust at heart. Need-to-know erodes trust.
  • None of them above is any different because it’s a policy: a policy to withhold the truth systemically just means you have a systemic approach to withholding the truth. Now you have a whole organization that is untrusting.

5. The need to “have a positive outlook” trumps the need to tell the truth.

  • Many a leader has said, “We need to keep people’s morale up, make sure they hear this the right way, don’t let them get depressed.” That way lies trouble. Because the truth has a way of getting out.
    • Most people in most situations would prefer to hear the truth, to make up their own minds. They don’t trust people who assume they know better.  Remember Colonel Jessup in A Few Good Men, yelling, “The truth! You can’t handle the truth!” Don’t be that guy.

In the next post, we’ll explore 5 ways in which products and services can indicate a low-trust organization.

Story Time: How One Conversation Changed Everything

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 told a tale of risky business. Today’s anecdote zeroes in on the importance of being willing to interrupt the status quo.

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 shifting from tactics to strategy. It demonstrates how simple it can be to dramatically alter the nature of a working relationship, and pave the way for delivering far greater value.

From the Front Lines: Upping the Ante

Sarah Agan tells us about the conversation that changed everything with her client, John.

“I had just joined a new consulting firm and was asked to take over as the engagement manager for a project that I soon learned was in dire straits. My client John was happy—he was responsible for a high-priority government-wide initiative with the potential to catapult his career, he had a high-end strategy firm by his side (that was us), and he was getting everything he thought he wanted—a well-documented plan identifying key investments required to guard against terrorist attacks.

“The problem was this: my team was very unhappy. Imagine a group of super-bright, creative, energized young graduates, well-trained in strategy development and execution, assigned to a high-visibility project, sitting in a windowless conference room formatting Excel spreadsheets. It was a troubled project that everyone in my firm had heard about and no one wanted to work on.

“While it was tempting to step in and make a dramatic move, I bided my time. I focused first on developing my relationship with John, understanding his interests and priorities. In several of our initial meetings he made reference to our team as his ‘administrative support.’ At first, I just filed it away. He was happy with the arrangement. He had no idea what he could or should expect from us.

“I also made a point to find out more about how our company had ended up in this predicament. We had fallen into the trap of being seduced by a lucrative long-term contract, doing whatever it took to keep the funding coming.

“One day when John referred to us again as his ‘administrative support,’ I decided it was time to speak up.

“I don’t recall being particularly nervous at the time. I just spoke from the heart: ‘John, this is at least the third time I’ve heard you refer to us as your administrative support. If that’s what you truly feel you need, let us help you find someone who does this as a core competency at a fraction of what you are paying us. If you’re interested in doing things more strategically, I’d love to have that conversation.’

“From that moment, everything shifted. The nature of all our conversations changed. The team began to bring ideas to the table, like helping John host a national workshop—with representatives from across the government, academia, and private industry—so that John could engage all his stakeholders in a way that they would have some ownership for the nationwide plan. It was an extraordinary workshop John’s successor is still talking about years later.

“Now we were positioned to deliver the kind of value we were truly capable of. The project that no one wanted to be on became a project people wanted to be part of.

“The biggest lesson for me in all of this was the importance of being willing to interrupt the status quo and say what had been left unsaid for too long in order to focus on what really mattered to John. Looking back, it was a pretty risky move. It was also the right one. Nothing ventured, nothing gained.”

—Sarah Agan

What’s been left unsaid for too long in one of your relationships?

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Read more stories about trust:

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

 

25 Warning Signs You Have a Low-Trust Organization: Part 1 of 5

Low-trust organizations are petri dishes for low growth, profitability, and ultimately survival. Yet the signals are easy to ignore.

The canaries in the low-trust coal mine fall into five groups: we’ll devote one blog post to each of:

  • Employees (today’s post)
  • Teams
  • Leadership
  • Products and Services
  • Clients and Customers

Employee Warning Signs of a Low-Trust Organization

Look around your offices. Do you see the following five signs? Then you might be a member of a low-trust organization.

1. The copy room bulletin board has those round smiley cartoon figures laughing and rolling on the floor saying, “You want it WHEN?!”

    • Humor is revealing. This particular cartoon pokes fun at the internal customer. Allegedly. When is it a good idea to make jokes about the customer?
    • What it really indicates is insecurity on the part of the copy room staff. What it really says is, “Please don’t blame me, I feel un-validated around here. And besides, all I want is to follow simple rules that I don’t have to think about, why are you making my life so miserable with all your requests?”
    • And when you see those cartoons, it isn’t just about the copy room. They’re a canary in the company mine. It means you’ve got insecure employees reporting to people who can’t give clear feedback, and a culture of entitlement. Good luck trying to get things done around that place.

2. People email others on the same floor way more than they talk to each other.

    • Sure, email provides an invaluable record of communication. And yes, it’s efficient. And no, I’m not going to say you have to be more empathetic and caring in all your relationships – that’s your call.
    • But email is for transactions. An organization that kids itself that it can reduce all decisions to transactions is an organization that can’t tell forests from trees.
    • Interactions that are overweighted into transactions become poor at executing  strategies (despite their attention to detail), because strategies require frequent strategic-level thinking.
    • A culture that over-celebrates impersonal transactions is likely to be non-innovative, because innovation thrives on the trust that allows people to challenge each others’ ideas.

3. Blame stalks the halls.

    • One of the worst sayings is, “No one ever got fired for hiring [IBM, McKinsey, etc].” It may not be bad for IBM or McKinsey, but it means that business decisions are being made by employees based on personal risk-aversion, rather than on the organizational good. That makes for some very bad decisions.
    • Behind blame lies fear. Employees driven by fear will never properly value risk. They will avoid people and decisions based on their personal fears; this avoidance increases inefficiencies and lowers innovation. Ironically, it ultimately also raises risk.
    • Blame is captivity, as Phil McGee says. When blame reigns, you can’t tell who’s responsible. When you’ve got no responsibility, accountability is meaningless. Blame leads to ineffectiveness; and that means you can’t make decisions, respond to markets, or do positive things.

4. People talk about each other.

    • People talking frequently about each other suggests gossip, which usually means talking behind people’s backs. This signals an inability to confront real issues. This means politics replaces truth telling.
    • Ask someone where they work in an organization. At a great company, it might be “in bubble memory technology.” Or, “in the semiconductor division, in R&D.” In a low-trust organization, the answer will be, “In Robinson’s group.”
    • The cult of leadership is just another cult. Steve Jobs may have been revered (or not), but he knew the desired obsession was not about personality, but the business. Celebrate, but don’t idolize.

5. People complain.

    • Complaining is wrong because it is wishing, not doing. If you didn’t win the lottery, you’ve no business complaining if you didn’t buy a ticket.
    • And if you bought a ticket and are complaining about the odds, you don’t understand the lottery.
    • If you bought a ticket, understand the odds, and are still complaining, you have no sense of your obligation in this organization, which is to do something about it. Go make a better lottery.
    • Complainers suck out the air in the room. They are self-oriented, they drag down productivity, and slow results. If you don’t get rid of them, it’s probably because you’re fearful (see #3, above).

These employee behaviors are warning signals of low trust in an organization. Low trust threatens your economics, innovation, speed to market, cost position, overhead structure, employee turnover, and customer indifference or worse – and a whole lot more.

For some ideas on how to improve trust, see Three Strategies to Improve Business’s Trust.

In the next post we’ll explore Five Warning Signs in Teams that suggest a low-trust organization.

Lying is to Trust as Kryptonite is to Superman

That may sound self-evident. But lying isn’t the only way to kill trust. It’s useful to review the bidding, in order to realize just how potent lying is.

Then too, there are green kryptonite and red kryptonite forms of lying.

Read on.

Four Ways to Destroy Trust

Using the trust equation as a checklist suggests at least four generic ways to destroy someone’s trust in you:

  • Develop an erratic track record. That leads to a reputation for being flakey, undependable, that you can’t be counted on. Soon enough you’re losing the big jobs, then the little ones. All because you’re unreliable.
  • Abuse others’ confidences. Develop loose lips. Tell secrets. Make hay on inside information. Laugh at others’ misfortunes, or just be emotionally tone-deaf. The invitations will stop soon enough.
  • Use others for your own ends. Do unto others before they do unto you. Always be closing. Find the competitive advantage at every turn. Don’t let your guard down, and don’t be a chump. It’s better to receive than to give.
  • Put distance between yourself and the truth. There are white lies, bald-faced lies, lies of omission, half-truths, partial truths, packs of lies, and lies of convenience. They’re all kryptonite.

Which is the worst?  It’s hardly a walk-away, but I say the last one–lying.

Cold, Flat-Out, Straight-up Lies

Robert Whipple told me of the experience of being lied to, to his face, with full eye contact. That degree of trust destruction is strong enough to take effect instantly. Let’s examine why.

Obviously, if someone lies to you, you can’t believe what they’ve told you. Which means the next thing they tell you has to be suspect as well. Being lied to immediately ruins the speaker’s credibility.

But that’s just a start. Lying also infects reliability. Because if you tell me you’ll do something, but you’ve lied to me before, then I don’t know if I can trust you’ll do what you’ve said you’ll do.

Lying also affects intimacy and confidences. If you’ve lied to me, your motives are suspect. I’m not about to share confidential information with someone who’s been dishonest with me about their motives.

Finally, that same issue of motives makes me profoundly suspicious of your intentions. We do not assume people have lied to us for our own good, but rather for their good. And we do not like that.

Green and Red Kryptonite Lies

As is well known, krytponite of all forms is debilitating or lethal to Superman, but red kryptonite is more harmful. To extend the metaphor, which is more lethal to trust: a bald-faced lie, or a series of veiled, half-truths? I suggest that the latter is worse.

A flat out lie has two elements of truth: transparency and completeness. It’s all out there, right away. When Shaggy sings It Wasn’t Me, it’s such an in-your-face lie you have to laugh. The band-aid is ripped off the scab all at once. If you trust after that, it’s entirely your own fault. That’s green kryptonite.

Then there’s the really bad stuff – red kryptonite lying.

Red kryptonite lying consists of half-truths, incomplete truths, truths not told at the right time. It is often justified on the grounds that it isn’t green kryptonite: “I didn’t actually say anything that wasn’t true.”

Red kryptonite lying is riddled with layers of bad faith. It leaves the receiver with nagging doubt. Why did he not tell me the whole truth? Why did she not bring this to my attention earlier? What about all the other questions this raises?

One trouble with red kryptonite truth is the nagging doubt it leaves you with – the lack of resolution about the issue at hand.

But perhaps the worst nagging doubt is about the nature of the liar himself. Is the liar incompetent? Or is he dishonest? Does the liar even know the difference? Finally – does the liar even know he is lying?

It is sometimes said that the best salespeople are those who can first sell themselves. Indeed, some high-selling salespeople have that ability; but I wouldn’t trust them.

The Evolution of Trust-based Leadership

In 2000, I co-wrote The Trusted Advisor, with David Maister and Rob Galford. At the time, it was aimed largely at external professional services advisors. The word “leadership” appeared exactly once in the book (I checked).

This month, Andrea Howe and I published The Trusted Advisor Fieldbook. The subtitle is, “A Comprehensive Toolkit for Leading with Trust.” “Leadership” occurs 19 times, and the l-word itself appears many more times in its various forms.

What changed?

Trust Didn’t Change

The dynamics of trust are the same. I’ve developed the Trust Quotient and the Trust Principles since 2000, but the fundamentals are the same. The Trust Equation, the ELFEC process for creating trust, the dynamics between trustor and trustee are unchanged.

That’s hardly surprising. Trust is a fundamental human relationship that’s been around since well before the written word.

The World Changed

My Trusted Advisor co-author Rob Galford was more prescient than I; he wrote The Trusted Leader way back in 2003. Or, maybe he was ahead of his time. In any case, by 2011, the world looked radically different than it did in 2000.

In particular, the business world is:

  • Flatter – more horizontally linked, less vertically integrated
  • More inter-connected: think Linked-In, outsourcing, offshoring
  • More wired – Windows XP was then; the cloud and iPad are now
  • More independent – Boomers ruled then; millennials rule now
  • More collaborative ­– YourCo against the world is DeadCo
  • More transparent – Facebook, data scraping, digitized everything
  • More networked – a competitor in one line is a partner in another.

Leadership Changed

In 2000, “leadership” conjured up images of #1 leader Jack Welch pacing the floor in front of high-potential candidates at Crotonville, violating the chain of command with exhortations for “boundarylessness” – as long as it stayed within the boundaries of the corporation known as GE, that is.

Today, “high-potential” sounds not just elitist but out of whack with reality. Just as everyone today is a salesperson, everyone is in customer service – so too everyone is a leader.

That’s not corporate double-speak; it has meaning. The leadership skills of today are persuasion, influence, collaboration, the ability to create alliances, to join forces, to create environments that encourage collaboration, the ability to play nicely together in the sandbox, to forge agreements, and to play long-term win-win rather than screw-your-customer to jack up the quarterly numbers.

Leadership Skills are Trust Skills

Those skills are trust skills. We don’t need fierce competitors, we need fierce collaborators. We don’t need to ‘win one for the gipper,’ we need to win one for all of us. We don’t need vertical skills, we need horizontal skills.

Certain leadership skills are constant: the ability to inspire, to create and articulate visions and stories, for example. But others have been replaced. Being good at vicious infighting to gain the top job is – on balance, in most companies – a lot more dysfunctional these days than valuable. Making “tough decisions” isn’t the virtue it used to be; sometimes it just reflects a failure of imagination.

Today organizations are less about being led and more about cultures that foster leadership throughout.  Such cultures are driven by what we call Virtues and Values.

But that’s another story for another blogpost.

Stupid Crazy Trust

Sometimes I get annoyed. Usually, that means I’m thinking like an idiot. Sometimes, however, it produces useful ideas.

Lately I’m annoyed by the constant repetition of a myth about trust. You know 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.

This time, my annoyance produced some good: I can now explain why that myth isn’t merely annoying, but positively harmful as well. Here goes.

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, battered women wouldn’t stay with the men who beat them; things are 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, Toyota, and Johnson & Johnson 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; 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 are you annoyed? Why is that harmful? 

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 totally 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.

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 get by taking a risk.