Reputation Recovery

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When you are more virtuous than your reputation would suggest, you have a communications problem.

When your reputation for virtue exceeds the facts on the ground, you have a ticking business problem.

When Image and Reality Part Ways

When you have a communications problem, the communications team should hire a PR firm. Most firms do this.

But in the second case – where the reputation is better than the truth – most firms do not do what they should. They don’t even thank their lucky stars for having a better reputation than they deserve.

Instead, they begin to believe the hype.

Then one day, It Happens. The subsidiary defaults. The pipeline springs a leak. Animal byproducts show up in the food. Someone comes forward to testify.

Let’s be clear. These things just kind of seem to happen more often to the non-virtuous than to the virtuous firm. If the event truly is an anomaly, it doesn’t last on the front page. Acts of god don’t make good news for long.

But what about the non-virtuous firm?

When Disclosures Accelerate

When it turns out the smoke really did indicate fire, the non-virtuous firm all too often behaves predictably.  Having believed their undeserved hype about being virtuous, they then do what the virtuous firms did – they hire a PR firm.

Which is all too often the wrong thing to do – and hardly ever the main thing to do.

In an interesting display of PR sensitivity,  BP chose to hire Dick Cheney’s former campaign press secretary as head of PR, and a Wall Street PR firm as outside advisors.

Of course, there is a role for communications experts even in a crisis. With multiple constitutencies and tons of experience at keeping things secret, perhaps it made sense for Penn State to hire two outside PR firms.

But most non-virtuous firms aren’t looking for technical expertise; they’re looking to follow the lead of Muammar Gadaffi in seeking spin.

PR: a Delicate Balance

It cannot be an easy thing to tell clients seeking spin that the solution is to become virtuous. Clients want virtue now, and backdated if possible, thank you very much.

In such a milieu, the temptation for ambulance chasing is high. How can you keep on teaching virtue when the clients are paying you to shut up and stop the pain?

Yet that is what must be done. Arthur Page, the poster child for “good” public relations, had it right. He had a list of seven principles, the first of which was “tell the truth.” What a concept.

He also said that public relations is 90% doing and 10% talking about it. In other words, if you are virtuous, you’re not going to have much of a problem explaining crises.

Recovering Virtue

The fallen firm wants to know what they can do now to recover. After all, they always sought fast fixes in the past, and they worked. But there simply is no fast route to virtue recovery if you’re coming from a history of un-virtuous behavior.

At a personal level, it’s conceivable that someone could have an instant conversion and become virtuous, though I don’t think I’ve ever seen it – most conversions I have seen have come through pain and hard work.

And at a corporate level? Fuggedabout it. The fastest route to serious change is to change all the top leadership, and even then you’ve got habits, policies and cultures to change. Minimum 6-12 months, and I can’t off-hand think of an example where change has happened that fast.

Non-virtuous leaders who’ve been caught with their pants down don’t want to hear it, but the best way to handle crises is to prevent them happening in the first place. The best way to be trusted is to be trustworthy.

Spin is not the solution; spin is the problem.

You may not be able to change by tomorrow, but you can always start the journey today.

 

 

 

 

Find the Fear and Swim Upstream to Trust

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Fear is the root negative human emotion. Scratch the surface of other negative feelings, and you will find fear at the core.

Fear Drives Behavior

If you accept this description of fear, it means you can roadmap people’s emotions. It also means you can diagnose your own.

Fear is the main driver of dysfunctional human behavior. When you see people being passive aggressive, secretive, avoiding, combative, resentful, backstabbing, gossiping, or otherwise misbehaving, teach yourself to ask, “What are they afraid of?” This drives good consulting and coaching.

Fear is a major driver of organization behavior. A culture that uses negative norms (think “that’s a career limiting move”) to enforce compliance is an organization that is fear-based. Learn to notice negative norms, so you can  envision alternatives.

Fear motivates much buying behavior. B2B marketers are taught to “find the pain point.” B2C marketers know the desire to join the in crowd is trumped by the fear of being in the out crowd; “you smell” out-shouts “you can smell nice.”

Fear plays a huge role in politics, as the daily papers demonstrate daily.

In all these cases, fear is the enemy of trust. And trust is the antidote to fear.

Trust Drives Relationship

At root, fear is the fear of a bad relationship—an Other who will hurt us. The effect is to keep us out of relationship.

Trust is the hope of a good relationship. It inclines us to seek relationship with an Other, so that we can gain the benefits of relationship.

You create self-trust by facing and overcoming your own fears. You create trust with Others by trusting them – by being the one willing to first face the fear.

You create interpersonal trust by taking a risk, encouraging the Other to reciprocate. You create organizational trust by creating an environment that encourages emotional risk-taking, dissipating fear.

Trust in politics comes from uniting, not from dividing. Trust in government comes more from principled policies and sharp enforcement than from finely detailed procedures, prohibitions and protocols.

Trust in a culture comes about by ten thousand daily acts of etiquette, courtesy, and generosity, each taken with no calculated return on investment aforethought – and each returned in the same spirit.

Trust in all these relationships rests on an ability to directly confront and speak the truth to each other.  Not speaking truth is the functional equivalent of lying; it feeds fear and alienation, and is the first step to trust-rot.

(Thanks to Seth Godin for jogging my brain on this one)

Real People, Real Trust: Our Magnificent Seven

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Over the past year, I’ve offered an insider view into the challenges, successes, and make-it-or-break-it moments of seven men and women who are making their mark by leading with trust—every day. In case you missed any of them, or want a fresh dose of practical advice (not to mention inspiration), here’s a recap.

  •  “I asked him what would make him feel like we addressed the situation to his satisfaction.” Learn how Chip Grizzard’s nonprofit marketing and fundraising agency retained a long-term client even after mistiming their direct mail campaign.
  • “I have never had someone say, ‘I wish you hadn’t told me that.’” Find out how Anna Dutton, Sales Operations Director, finds the courage at her educational tech company to be genuine, tell the truth, and say things that others might not agree with.
  • “My life philosophy is there’s plenty of everything—customers, money, everything.” Take a tip from entrepreneur and former bed and breakfast owner John Dunn on collaboration…and learn how he joined forces with other B&Bs.

The themes across these stories: transparency, humility, courage, and true customer focus.

Many thanks, once again, to these magnificent role models.

Good Things Happen When you Swing the Bat

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At a talk last week, new friend Petter Østberg told me an old story with a new twist. It takes a great sports metaphor for achievement – and steps it up a notch to leadership.

First, the metaphor at Level One.

If You Don’t Do A, You Can’t Get B

You’ve heard this one before as, “If you leave the putt short, you are 100% guaranteed to miss the putt; never leave it short of the hole.”

Or maybe you know The Great One, Wayne Gretzky: “You miss 100% of the shots you never take.”  It’s not just about scoring percentage, in other words, it’s also – very much – about shots on goal.

You also know, “No pain, no gain.” “You’ve got to pay to play.” One of my favorites is the thundering voice from heaven that comes down to the whining loser who is kvetching about never winning the lottery: “Do me a favor – first, buy a ticket.”

All these metaphors remind us of the need to take risks. In our misguided efforts to avoid the risk of doing the wrong thing (call that Type 1 error), we end up not doing the right thing (call that Type 2 error). And in life, as in nearly every sport, it is that Type 2 error that ends up being the Big Bomb.

To not take a risk is the biggest risk of all.

Petter’s story started out this way. A deceased dear friend of his helped run the Little League programs in their town. One of the lessons he taught kids was, “Good things happen when you swing the bat.” If all you do is “take” the pitch, you’re likely to end up striking out.

(Apologies to the non-baseball countries out there, but you get the idea).

Good, good. The youngsters are being taught this Big Truth as well, all’s joy in Mudville.

Getting People to Take Risks

But as David Maister points out powerfully in Strategy and the Fat Smoker, the trick is not cognitive. Just realizing you’re fat and shouldn’t smoke doesn’t mean you’re going to stop gorging and emulating a chimney. Would that it were that simple.

The failure of most corporate training programs (not to mention the people who take them) is to believe that cognition implies action. Entire classes of professions (lawyers come to mind) believe that if they can simply understand something, they have acquired the only thing they need to act upon it.

When it comes to algebra, fair enough.  Maybe even learning a foreign language.

But when it comes to altering substantive human behavior, that belief is So – Not – True.

So it is with golf, hockey, baseball, and I’m sure with cricket and futbol. Armchair athletes from the business world nod sagely as they receive this wisdom from Tiger, the Great One, His Airness, you name it.

“Yup,” they say, “that’s just how it is in my world; you gotta take that risk.”

But they don’t. They really, really don’t.

So: how do you get people to take risks?

Leadership and Role Modeling are Key to Change

Answer: you do it through role-modeling, and you do it young.

Back to Petter’s story.

The Little League coach didn’t just encourage his team to swing the bat. He told the kids’ coaches and the kids’ parents to tell their kids to swing the bat, and with the passing of this dedicated coach just before this year’s baseball season, you now hear his mantra – “Good things happen when you swing the bat” – echoed on every playing field in his town.

The kids got the message, but here’s what he told the coaches:

Look, guys. I know you all mean well. But when a kid swings at a pitch a foot over his head, what do I hear you tell him?  “Lay off the high cheese,” you yell, gesturing with your hand high above your head, “wait for a good one – wait for your pitch. ”

And that is just wrong. These kids look up to you. You’re their leader. This is one of the few remaining times in their lives they’re going to listen to someone, and it’s you they’re listening to now.

These players are very young, and they’ll get more coordinated, that’s nature, but they won’t become better batters unless they swing the bat. There are plenty of other people who will teach them over and over the dangers of taking a swing; don’t you add to that.

Because if they wait for life to serve them up “their” pitch, they’ll lead wasted lives, waiting for that pitch. In life, that pitch rarely comes.

Don’t do that to them. Instead, teach them that if you swing, all things are possible. If you don’t, nothing is. Don’t you wish someone had taught you that?

I know I do. Thanks Petter for that story, and lesson.

Greed, Love, and a Portrait for Sale

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The news is much about greed. Greed dominates the headlines, not to mention the content, of what we read in all media. Are we perhaps at the point where the truly sensational stories are ones of generosity and relationship-building?

You be the judge.

Love and Life

Phil and Sue met in 1969 – on Valentine’s Day.  They were near-instant soul mates, marrying 4 years later.  They hired a photographer to shoot a photo of Sue for the newspaper wedding section.

It was a good photo. The photographer enlarged it and hung it as an example in his studio. But being young and broke, Phil and Sue couldn’t buy a portrait-sized version for themselves.

Life ensued. Phil and Sue moved away, and lived a full life around the world. Sadly, after 38 years of marriage, Sue succumbed to cancer.

A few months later, in 2012 – on Valentines Day – Phil returned to their old town, and to that studio, hoping to find the wedding portrait of Sue, and to buy it.

The portrait was still on the wall.  Next to it was a portrait of man who was the Bishop at the time Phil and Sue married.  The shop had a new owner, whom Phil recognized from high school as the original photographer’s daughter.  She was willing to sell the portrait to Phil –but only with her 95 year-old father’s permission.  She agreed to ask him.

A Signpost?

While Phil waited to hear the decision, he went for lunch at one of his and Sue’s old haunts. As he ate, he wondered whether the Bishop was still alive. And as he wondered – the Bishop himself walked into the luncheonette.

Phil was moved. After all these years, it was wonderful to see the bishop. At the same time, it reminded him of the loss of his wife.

A coincidence? A sign?  Whatever, it gave Phil hope that he’d be able to get the portrait.

The Portrait and the Loss

When Phil returned to the store, the old photographer had given his permission. The photographers – both generations – knew Phil’s story.  She could have charged him anything for the portrait and he would have paid it. Instead, she charged him almost nothing.

Lessons Learned

There was no greed in this story, only generosity.  There were relationships that transcended years.  There was the empathy – that of the store owner, and the others in his life – and now me.

I first met Phil about 25 years when we worked together at Hills Department Stores. He was the risk manager, I was a staff lawyer. We haven’t seen each other in over 15 years, though we reconnected on LinkedIn, and now stay in touch a couple of times a year. Yet he shared his story with me without hesitation.

There are lots of Phils in our lives. They each have stories. They can be colleagues, friends, clients, even family. Taking the time to listen can strengthen the relationship and bring people closer. And yes, it can also lead to deeper friendships and business opportunities. Because often people like to help those they feel close to.

I am touched that Phil shared his story with me, and that he allowed me to share it even further. Among other things, we are also enhancing our business relationship.  Phil is now a senior executive at a large company and has been a valuable resource for my own clients and friends.

Funny how that works. When there’s no greed about it.

Chemical Trust and the Science of Explanation

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The Wall Street Journal this weekend scored a lot of views with an article on Oxytocin titled, “The Trust Molecule,” by Dr. Paul Zak.

Dr. Zak makes one critical, powerful point about trust – its reciprocal nature.  Unfortunately, the article is seriously flawed in its approach to what it calls “the new science of morality.”

Science, schmience.

But let’s start with that one good point.

Reciprocal Trust

In discussions about trust, people frequently forget a very simple fact: like tango, it takes two to trust. One party does the trusting, the other party is the one trusted. Risk is taken by the one doing the trusting, and the one who is trusted is the source of that risk.

Critically, the interaction between the trustor and the trustee is reciprocal. One influences the other.

Dr. Zak says, about how to trigger this reaction:

…all you have to do is give someone a sign of trust. When one person extends himself to another in a trusting way—by, say, giving money—the person being trusted experiences a surge in oxytocin that makes her less likely to hold back and less likely to cheat. Which is another way of saying that the feeling of being trusted makes a person more…trustworthy. Which, over time, makes other people more inclined to trust, which in turn…

So right! But where Zak goes wrong is in thinking that by identifying the role of oxytocin, he’s actually explained something.

Chemistry as Explanation

Zak says flat out in the article that oxytocin is an explanation for a variety of human phenomena:

“Research that I have done over the past decade suggests that a chemical messenger called oxytocin accounts for why some people give freely of themselves and others are coldhearted louts, why some people cheat and steal and others you can trust with your life, why some husbands are more faithful than others, and why women tend to be nicer and more generous than men.” (italics mine)

It is no such thing.

For example, Zak hardly discovered the reciprocal nature of trust.

More than half a century ago, Henry Stimson said, “The only way to make a man trustworthy is to trust him.” Before that, Ralpho Waldo Emerson said, “Trust men and they will be true to you.” I doubt either knew of oxytocin.

Much more importantly, calling oxytocin an explanation for trust is like saying you can explain water by translating the word into the French eau.

What Makes For an Explanation

Philosophers (and good scientists) have for millennia suggested that good explanations fit certain criteria. A good explanation might put things in a larger context, as Darwin did with evolution. Or it might suggest a causal link, like tying cigarette smoking to cancer, or lack of hand-washing to sepsis in hospitals. Or, it might shed light on motives, as does the ending of any good TV crime drama.

What Mr. Zak has done is nothing of the kind. He has merely “translated” pieces of wisdom that humans have known for ages into the language of chemistry.

There is a nearly infinite number of ways we can describe any particular phenomenon. I can use the “languages” of poetry, reporting, drama, song, chemistry, and Freudian psychology – all different ways to describe the same underlying phenomena. None have a monopoly on telling the “why” – they are only variations on “how?”

The only relevant question to be asked among these choices is – which is more useful for the task at hand?

Yet Dr. Zak seems to believe he’s on to something. As he puts it:

“After centuries of speculation about human nature and how we decide what is the right thing to do, we at last have some news we can use…many group activities—singing, dancing, praying—cause the release of oxytocin and promote connection and caring.”

The idea that prayer can promote connection and caring, for example, is hardly new.

I fear that Dr. Zak is but one example of the current faddish approach to things neurological. Putting “neuro-” in front of a topic seems to generate groupie-like behavior in business. Hence we have neuro-marketing, neuro-advertising, neuro-leadership – the list is endless.

But like the Emperor’s new clothes, there’s not much ‘there’ there. Not all description deserves to be called an “explanation.”

Though whatever language you say it in, trusting someone does cause them to be more trustworthy

Trust Me, I’m Your Doctor

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We all hear about health care. Usually it’s through the microcosm of someone’s illness, or the macro-view of dueling pundits and politicians. Frequently it’s adversarial, or negative.

Thanks to long-time Trust Matters’ own trusted advisor Shaula Evans, I met Dr. Craig Koniver. He brings a fascinating perspective to the topic, as you’ll see.

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Charlie Green: Craig, you’re a doctor in South Carolina. Are you a native?

Craig Koniver: No. I grew up in Delaware, went to one year of undergrad at Johns Hopkins, hated it, and transferred to Brown. I then went on to medical school at Jefferson Medical College in Philadelphia. So I did end up being a doctor, mostly in Arizona, and recently moved here.

Charlie: You say you practice “organic medicine.” How did you come to that?

Craig: First of all, I am a “regular” doctor, board-certified and all that, but I also came to believe in a certain approach to medicine. The transformative event in my life was when our daughter was colicky.

The pediatrician said what I’d been trained to say, but since it was our daughter this time, we were wholly unsatisfied. We went out and found unconventional approaches to the issue. And once you’ve seen behind the curtain, it’s hard to stop.

Charlie: What is behind the curtain?

Craig: The standard routine is label, diagnose, prescribe medicine or surgery. Repeat, repeat, repeat. The paradigm of modern medicine is medicine-based, which is to say, pharmaceutical – pills and chemicals.

100 years ago this was not the case; the doctor had a relationship with the patient. But today, the doctor is trained to see the patient as a series of chemical pathologies.

Charlie: So, on a practical level, what do you do differently than other doctors?

Craig: I am interested in helping the patient reach optimal health through natural means. I am not against prescription medicine, but I think they are highly over-utilized by doctors not interested in pursuing alternative/ natural modalities.

So with my patients we look for the root cause of disease by running specialty lab tests and then use herbs and vitamins and nutrients to get their health back on track. I am a firm believer that there is a natural option for everything–we just have to look in the right place and be willing to try any different options.

Charlie: What’s the effect on patient health?

Craig: One telling study suggested that as many as 1/3 of prescriptions get tossed away on the patient’s way out of the doctor’s building. They want more than a prescription, they want a relationship and they want options.

Charlie: What did you do as this became apparent to you?

Craig: I finally decided to move to a holistic practice. That entailed moving away from insurance, and cutting my patient load from about 4,000 to about 400.

Charlie: Wow. Now, hang on a minute; that raises all kinds of interesting issues. What does that say for coverage?

Craig: It affects many people differently. First, there are a large number of people who are quite willing to pay for personalized, holistic healthcare. It is quite valuable to them!

In addition, remember that existing health insurance policies don’t generally cover doctors suggesting things like exercise and nutritional changes; as well, procedures like bypass surgery are reimbursed while time-tested acupuncture is not.

And I now get to spend real, quality time with my patients. I take as much time as I want and they want, and they leave satisfied feeling that I’m concerned about their whole life.  Which I am! A lot of people find this hugely valuable.

Charlie: What about those who can’t afford it?

Craig: Before we get there, there are number of people who may or may not be able to afford it, but don’t see the value in it. They’re used to thinking that a doctor visit should cost the amount of a co-pay. They can’t get past a more cost-based model.

Are there those who are left out by this? Absolutely there are and it’s a real tragedy because they continue to get the acute-based, chemical-and-surgery, impersonal kind of medicine that doesn’t help them.

Charlie: Ah, interesting. You’re not a selfish doc going off to serve well-heeled patients, there really is no choice.

Craig: That’s true. I’m not abandoning poor people, I’m abandoning bad medicine. And the existing insurance system simply cannot support the kind of medicine I like to practice. Is it tragic? Yes, and a real shame.

You pretty much cannot have a holistic medicine practice that operates within the existing high-volume insurance-based delivery method we have today. The choice is not which clientele to go after – it’s which kind of medicine I want to practice.

Charlie: Does the patient-physician relationship of trust affect health?

Craig: Yes. Again, if the relationship is pill-based, then it’s not personal; that is not a good basis for trust. Before too long, patients will stop trusting a physician because there is only that basis for the relationship.

In a holistic practice, where by definition the doctor is concerned about the whole patient, you have the basis for a personal relationship. That means you have the basis for trust. And with trust, patients share more with you, they take your advice, and there is probably even the positive placebo effect.

Charlie: One implication of what you’re saying is that our existing approach, based on insurance reimbursement of pills and surgery, is basically built to minimize trust.

Craig: Yes, I think that’s an accurate statement of the current situation. The health care delivery system is tied to the doctor-patient trust level. And not in a good way just now.

Charlie: Well, this has been enlightening indeed; thanks so much for spending time with us.

Craig: Thank you, Charlie.

A Separation: a Cinematic Tale of Truth and Lies

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

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

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

Relationships in Disarray

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

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

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

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

The Truth Shall Set You Free

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

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

A Tendency to Blame, and an Inability to Confront

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

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

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

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

What truth might be spoken by you?

Trusted Advisor Inflation

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The term “trusted advisor” has undergone some changes since I first co-wrote the book by that title 11 years ago.  Three changes, to be precise:

  1. It’s amazing how many more people claim to be one;
  2. It’s becoming clear that not every industry needs one;
  3. In the industries and functions that matter, the concept is gaining headway.

It’s the third point that’s most important, and most promising.

1. Grade Inflation, Title Inflation, Trusted Advisor Inflation

The United States has taken to heart Garrison Keillor’s fictional Lake Wobegon, where “all the children are above average.” That’s got to be the only sensible conclusion from the data, which show in-your-face grade inflation at the college and university level.

A couple of years ago, the Economist proclaimed that “Inflation in Job Titles is Approaching Weimar Levels.” (In case you’re not down with economist jokes, read here, and I won’t tell anyone).

So I guess it’s no wonder that we have “Trusted Advisor inflation.” I’ve sat in on several corporate training programs lately where generally mid-level attendees were asked to indicate whether they were operating at the “trusted advisor” level with their clients.

About 70% said they were. That may not be Weimar territory, but it’s Lake Wobegon for sure. I will tell you from experience: that was not the case 12 years ago, even in the same industries.

My conclusion? Not much, actually. We live in a post-Warholian age of hyperbole. “Friend” doesn’t mean what it used to, nor do “authenticity,” “talent,” or “good audio,” for that matter.  But it’s OK: it means what it means, namely how people actually use the term. Definitions are living things, captured only momentarily in dictionaries.

2. Not Every Industry Needs a Trusted Advisor

I had dinner the other day with an old classmate, a very senior advisor to a Very Big private equity fund, who keeps tabs on a dozen global retail clients. “So Charlie, tell me what’s up with Trusted Advisor Associates these days,” he said.

It was clear from his tone that he was skeptical about the relevance of the concept to his businesses – mainly B2C consumer-level chains in things like pet foods, electronics and sundries.

I could tell that because he visibly relaxed when I said, “Gary, I don’t need a trusted advisor relationship with the counter-guy at Dunkin’ Donuts. I love that he knows my order when he sees me come in – but that’s quite enough. It would ruin everything if we ever got past, ‘hi guy, the usual?’ And ditto for Starbucks.”

It’s true. There are whole bunches of roles and industries that don’t need to have trusted advisor relationships. Most B2C retail doesn’t need it. Traders don’t need it. Marketers don’t generally need it. Most non-client-facing roles don’t need it. Manufacturing roles don’t generally need it.

That’s not to say all those roles can’t benefit from the basics of curiosity, good values and manners. But, as per point 1 – let’s not inflate that into Trusted Advisor Status.

3. Those That Do Need It – Are Starting To See It

The term “trusted advisor” originated in high-end professional services and wealth management relationships and it’s still valid and well-understood there.

The biggest shifts I’ve seen since the original The Trusted Advisor in 2001 have come in four areas: sales, internal staff functions, leadership and the financial industry. (One industry that’s still a work-in-progress – pharma).

Sales. In the last decade or so, the field of sales has undergone a number of changes. Some – like Salesforce.com, Sales 2.0, Google clicks – have often made the function less personal, and arguably less trustworthy.

But others – like inbound marketing, complex sales, and the amazing transparency machine called the Internet – have made selling more personal, and often more trustworthy.

I like to think my own book, Trust-based Selling, published by McGraw-Hill in 2005, played a little role in that too.

Internal Staff Functions. The Big 5 staff functions – HR, IT, Legal, Marketing, and Finance ­– have made large jumps in many companies to realizing that their internal client relationships have exactly the same needs. How to get invited in before problems arise; how to get your advice taken; how to add value – these are all critical functions for an internal staff function. More about those functions here.

Leadership. Tons of things have changed with leadership. Let’s sum it up by saying leadership has become more horizontal, less vertical. That moves influence, persuasion and trust way up the required skills list for leaders.  Rob Galford wrote about that in 2003 in The Trusted Leader; Andrea Howe and I wrote about it in last year’s The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading with Trust.

Financial Industry. Something is happening in the financial planning and wealth management industries. The line between brokers and fiduciaries is finally getting defined, and the balance of power seems to be shifting toward trusted advisor, client-focused relationships. (Some of you know this issue as fiduciary vs. suitability).

The issue is delightfully defined in a YouTube video about the difference between your butcher and your dietitian.  For more on this issue, read Michael Kitces, who writes well and often about it.

Just around the industry corner is Wall Street, investment banking, and the flap about Michael Smith’s Goldman resignation. Investment banking used to be a pure trusted advisor kind of business. People like Epicurean Dealmaker still speak eloquently about that part of the business.

But investment banks have more complex business models these days, and it’s far from clear (to me anyway) that all of those businesses should be built on the long-term, client-centric models required by true trusted advisors.

Conclusions:

1. Just because you think you’re a trusted advisor doesn’t mean you are one – Lake Wobegon is mythical, after all.

2. But neither does it necessarily mean you should be one. We don’t need trusted advisors on every street corner.

Sometimes a cigar is just a cigar, and we should leave it at that.

Trust and the Sharing Economy

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What if everyone could be trusted? And everyone became willing to trust?

Unrealistic? Sure, if you insist on all or nothing.

But if we moved directionally toward those goals, it’s not hard to envision significant improvement. Increased trustworthiness, and increased propensity to trust, would most likely lead to:

  • Fewer and simpler contracts
  • Fewer lawyers and lawsuits
  • Less transaction complexity
  • Lower insurance costs

This is not pie in the sky. There is an emerging part of the economy that does precisely this: it’s called the Sharing Economy, or Collaborative Consumption.

The Sharing Economy

The Sharing Economy is composed of assets which were previously owned by single entities (either persons or corporations), but which have been freed up to be used by many. Perhaps the best-known example of the concept is ZipCar.

In principle, the concept can apply to any asset used at less than its full capacity. That includes all manner of goods.  Airbnb has made a business of helping people rent out their homes. Couchsurfing is just what it sounds like.

This can sound like pure 20-something left coast social experimentation, but it’s also gotten the attention of General Motors. It’s not fundamentally different than when McDonalds figured out it could use its under-utilized real estate to serve breakfast.

In fact, the Sharing Economy is resurrecting some 19th century ideas like the Grange Movement that helped stimulate the Great Plains agricultural economy.

For that matter – remember libraries?

Trust: the Backbone of the Sharing Economy

The Sharing Economy is, pure and simple, about trusting strangers. How, in an age of global markets and internet-based communication, can we do that?  Or to make it more personal: what would it take for you to rent your house or apartment for a week to someone from France you met online?  And how, finally, can you make that answer scalable?

That, it turns out, is one of the fascinating aspects of the Sharing Economy.  It doesn’t make sense for each sharing business model to develop its own proprietary database, any more than it makes sense for every mortgage lender to develop its own creditworthiness database.

Hence, the race is on to determine who will develop the FICO score of trustworthiness, the most dependable metric, the database that will provide the underpinnings of a potentially considerable amount of economic activity.

Trust Metrics

I have written a White Paper on this subject: Trust and the Sharing Economy: A New Business Model. [I should add here – full disclosure – I am an advisor to and have a financial interest in one of those players, TrustCloud.]

The Sharing Economy is a microcosm for observing trust concepts I’ve been writing about for years. For example:

  1. Trusting vs. being trusted: If you have an apartment you’d like to rent out, you are the one doing most of the trusting; your question is about potential renters – are they trustworthy? So often missing in general discussions of trust (“trust in banking is down…”), the distinction is obvious and vital here.  What’s needed is trustworthiness ratings of the potential renters.
  2. Reputation vs. trustworthiness: It’s easy to mistake reputation for trustworthiness, and some previous online trust metrics have done so. The result is data that suggest Perez Hilton and Justin Bieber lead the pack in trustworthiness.  Does not compute.
  3. Trust comes in several flavors, and is all about context. Unlike digital recordings, some forms of trust don’t travel well (remember the game of “telephone?”). Or as I’m fond of saying, I trust my dog with my life – but not with my ham sandwich.

In the race to build trust metrics, it’s tempting to over-emphasize the technical aspects of the problem. But in the case of trust (as with knowledge management), the more important problem to solve is to correctly define trust and its indicators.

I’ll be writing more about this in future.

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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 @ [email protected].

For continued reading check out: Trust Is Not Reputation