Why You Should Refer Your Competitors to Your Clients

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(I dug this out of the old chest; it still holds up).

Refer your competitors to your clients in the sales process.

Yes, I do mean it. This is not a sarcastic title, or a clever trick. But I’ll warn you: your motives will affect your outcome.

Step One—check your objective. Is it:

a. To get the sale, or
b. To do the right thing by the customer.

Now multiply by 10 times – the next ten similar sales opportunities.

  • If your objective is always “get the sale,” then well before number ten, everyone will know you’re in it for yourself, short-term. You’ll have a reputation. You’ll win about the same percentage as your market share—say, 30% for sake of discussion.
  • If your objective is to do the right thing by the customer, then well before number ten, everyone will know you’re in it long-term, to help them. You’ll have a different reputation. And (can you say “paradox”?), your own success rate will get better—say, 40% or higher.

Option b doesn’t mean you’re not in it for yourself—just that it’s not your primary objective, and you’re willing to trust a longer-term process.

Step Two—admit you’re not always the perfect choice for every customer. (If this feels hard, and your market share is less than 100%, consider the implications of believing you’re always the best: either your customers are very stupid, or you can’t sell a perfect product.)

Let’s review. Your objective is to help your customer (which also gets you better sales numbers), and you admit that your product isn’t always the best.

Step 3: Therefore: shouldn’t you offer your customer informed advice about other alternatives? Shouldn’t you refer your competitors as a possible alternative?

The best reason to do this is—because it’s the right thing. But there are ancillary reasons:

  • Being willing to refer a competitor is the most direct indicator of your having the customer’s interests at heart. It makes it look like you care (note: don’t try faking this). 
  • In those rare cases where you convince someone against their better interests to use you instead of someone better suited for them, odds are that everything will unravel and you’ll regret it. Take one small loss and consider it an investment in good will.

Think this is suicidal? Try forwarding this blog to your existing clients, saying how crazy I am, and that you would never be so stupid as to point them to anyone but yourself, because…because…well, you try and explain it.

If you agree with me, and you are a buyer of goods or services, consider forwarding this blog to your suppliers, asking them to educate you regarding choices in their industry. And see how they respond.

  • The best ones have already done so. The next best will meet the test and give you some great info—be good to those suppliers, they just took a risk to help you.
  • And those who tell you there’s no need to review because they’re the best—well, you know what to do.

How do you say the words? Try this:

“We both win if you make the best decision. Given my understanding of your situation, if you haven’t already done so, you should also be talking to X and Y. If you do so, it’ll help our discussions.”

Is it a trust thing? You betcha.

The Degradation of Trust in Marketing

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Think for a minute about the relationship between words and reality. In theory, we use words to describe reality. In practice, it goes the other way too. The words we use first affect our perceptions of reality, and then – through acting on our perceptions – reality itself.

Propaganda is the obvious example. But there’s a creeping, more insidious form of reality-distortion that has been playing out in the field of marketing in recent years.

Let me hone in on just three words: Content, customer, and relationship.

Ripped from the Headlines

Before and after AT&T’s recent US District Court victory in its pursuit of acquiring Time Warner, CEO Randall Stephenson stated on several occasions (e.g. here and here) the strategic rationale for the deal, basically:

We have direct relationships with over 120 million customers; data analytics allow us to match them to their preferred content, allowing maximum monetization.

I picked this example precisely for its banality. There is nothing incomprehensible about this statement; nothing logically or strategically wrong with it in business terms. We all understand what Stephenson means.

And yet – this statement, had it been made just 10 years ago, would have meant something entirely different. In fact, I’m not sure it would have been even comprehensible. That’s how far we have moved in terms of the meaning of words.

Content. Thanks to the cool Google Trends tool, I can tell you that interest in the  phrase “content marketing” as a search term grew by 1,400% in the 8 years from July 2000 to now.  With that growth came a change in meaning.

Way back then – ten years ago or so – the dictionary definition of ‘content’ was: “the substance or material dealt with in a speech, literary work, etc., as distinct from its form or style.” Synonyms included “subject matter, subject, theme, argument, thesis, message, thrust, substance, matter, material, text, ideas.”

That definition is now woefully out of date. Here’s how Wikipedia talks about content marketing:

“Digital content marketing, which is a management process, uses digital products through different electronic channels to identify, forecast and satisfy the necessity of the customers. It must be consistently maintained to preserve or change the behavior of customers.”

Today’s “content” (new meaning) is literally “content-free” (old meaning). (See how hard it is to talk about this stuff?).  The relevance – and even the substance – of today’s “content” lies solely in its ability to generate changes in behavior.

“Content” no longer means “the substance or material dealt with…as distinct from its form or style.” Instead, it is precisely the ‘form or style’ that has become the arbiter of quality. If they click on it, it’s good quality; if not, it’s bad content.

Anecdote. I get about two inquiries per week from “marketers” offering to write “content” for this blog, including clickable links, for which they offer to pay me.  About two thirds of them literally have spelling or grammatical errors in their (vastly impersonal) emails. Such a low bar, and yet the majority fail.

I invite the minority who can hurdle that low bar to feel free to take a shot, but that they actually have to demonstrate some knowledge of the subject of trust.

Most of them take me up on the offer to send a sample – and every single time, the drivel they send is massively content-free (old definition). It is banal, un-insightful, trivial, showing no interest in the subject matter –  little more than clickbait, cadged from other people’s “content.”

The word “content” has been stripped and flipped. Not only does it no longer mean what it meant – in the case of “content,” it has arguably come to mean the opposite – what we might have called “content-free” in another era.

Customer. This word grew only 300% in relevant Google search interest in the last decade. In the same time period, the word “consumer” actually declined by 50%. I’d like to suggest that today’s “customer” is what we used to mean by “consumer.”

Merriam Webster defines the difference thusly:

Customer: An individual usually having some specified distinctive trait: “a real tough customer”

Consumer: One that utilizes economic goods: “Many consumers make purchases on the internet”

In other words, one is an individual, a person, a human. The other is an abstraction, a datapoint, a statistically refined category.

Back in the 1990s, Martha Rogers and Don Peppers foresaw a brave new world of “One to One Marketing,” in which an organization fine-tuned its responses to address the unique needs of customers, ultimately at the individual level. They talked about “Interacting with customers” individually through “mail, phone, or online communication.”

Let me ask you: If you’re one of Randall Stephenson’s 120 million “customers,” have you recently tried “interacting” with AT&T through “mail, phone, or online communication?” Do you feel like an “individual?” Or like one of many ‘consumers?’

The word “customer” – just like “content” – has been stripped of its common meaning of only a decade ago. It has become bloodless and transactional. [Note: there’s a lot to like about this: I assure you I love buying online and having interconnected CRMs that learn my desires. But I don’t confuse it with having a ‘relationship.’]

Relationship. Google Trends tells us that the popularity of “relationship” as a search term has roughly doubled in the last decade. The Cambridge dictionary suggests “a relationship is the way two or more people are connected, or the way they behavior toward each other….A relationship is also a close romantic relationship between two people.”

That is so last decade.

For Randall Stephenson (and I’m not picking on him alone, it’s true for any BigCo these days), a “relationship” means a billing relationship, i.e. we send them invoices and they interact with our billing system, in accordance with complex fine-print clauses contained in contracts.

Or it can mean “Amazon may want to construct a more seamless relationship with its millions of customers.” Hmmm…ever tried to talk to an Amazonian?

A “relationship” is at the heart of CRM software, the “single largest area of spending in enterprise software” by 2021. Yet said “relationship” is conspicuously devoid of much in the way of interpersonal connection, the essence of the old definition of relationship.

Adding It All Up.

I didn’t call out Stephenson’s last word: monetization. But it speaks volumes for itself.

For all too many companies, monetization has become the goal, the objective, the point. And if your goal is simply and solely to monetize the customer-content relationship, you will end up cheapening the relationship – precisely the opposite result of what (supposedly) was intended. This is no different from shareholder-wealth-maximizing companies of the ’80s. Treating profits as goals rather than outcomes not only ruins relationships, but ultimately ruins profits as well.

Listen, I’m not trying to make a Luddite case. I am all in favor of most things tech and business. I’m trying to point out, however, that when we subconsciously appropriate old words for new realities – and fail to notice the shift – we end up adrift.

Is it any wonder we hear so much about declining customer loyalty? Unfulfilled young people’s real-world relationships? Angst, anomie and anger in social interactions? Reversion to tribal political connections? Lowered institutional trust ratings?

Part of the answer, I believe, is that in our haste for the brave new world, we neglected to provide names for some of the old virtues and values. Yet without names, we can’t talk about them.  And if we can’t talk about them, we forget them, and create a reality devoid of those same virtues and values.

Words – or their absence – really do affect the world we live in.

 

Tackling Trust in the Tech Sector

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(I’m attending #CODECON this week). Trust in digital technology is a nascent hot issue. The headlines are a target-rich environment for emerging trust issues: from GDPR to autonomous vehicles to fake news to ad tech to AI to cyber-hacking. Tech leadership is scrambling to stay out in front of the EEC, the Justice Department, and – most of all – public opinion.

Trust is not yet the crippling threat that we see in financials or pharmaceuticals; brands are still strong, the sector is relatively regulation-free, and money is being minted. But the clouds are on the horizon.  According to Edelman PR, “Trust in technology is showing precipitous decline.”  Smart leaders know not to ignore the canaries in the mine.

The usual solutions are – to be kind – all over the map. They include governance, “best practices,” re-skilling, communications efforts, transparency initiatives, compliance programs, and mission statements.

If you feel these “solutions” are all vaguely unsatisfying – you’re right. What they all lack is a fundamental understanding of the basics of corporate trust, as applied to tech.

At the root of it all: people trust people more than organizations.

Trust – the Basics

Consider three basic, commonsensical tenets of trust:

  • Trust is a dynamic relationship between trustor and trustee;
  • Trust is created when a trustor takes a risk, to which the trustee responds (or doesn’t), creating higher levels of trust (or not);
  • The strongest trust is between persons; trust in organizations by contrast is pale, or ‘thin.’

Here are a few counter-intuitive corollaries of those basic principles:

  1. Working directly on the perception of corporate trust – through PR, advertising, reputation management – is pushing on a string. Corporate messaging urging you to trust the corporation is impersonal, viewed skeptically, and weak by nature;
  2. Risk mitigation doesn’t help trust, it destroys it. All trust begins by a trustor taking a risk; no risk, no trust.
  3. The best way to create a trusted organization is to create a Trust-based Organization: one in which all persons are trusting and trusted by all those they encounter, in all their interactions.

The failure of corporations to articulate coherent approaches to trust can be traced to their failure to fully appreciate that trust is primarily personal, that it requires risk, and that it is driven by employees interacting with others based on core trust values.

A positive (or negative) personal interaction with a Lyft driver does more to create (or destroy) trust than a revised TOS agreement, ad, or app feature. Ditto for an Airbnb host, a Google technical service rep, or a Salesforce account exec.  Corporate trust is created by the aggregation of personal interactions at the platform/customer interface.

Trust Basics Applied to Tech

The tech industry, like most, has a few peculiar wrinkles. For one, tech inherently deals with inanimate, impersonal ‘things,” whether that be iPhones or algorithms. It’s an uphill battle to personalize trust.

Another signature trust challenge for tech is scaling. This typically means data capture, digitization, and algorithms-cum-procedures. Trust can also scale – but through values, not algorithms. Corporate trust ultimately rests on personal trust, which rests on personally-demonstrated values:

  • Southwest Airlines’ reputation emerged unscathed from recent disasters that would have sunk United, because its demonstrated emphasis on deeply personal interactions inoculated it against the impersonal “big company” image;
  • Facebook has a great trust advantage in that its core subject is personal relationships. But it gained a reputation as being “creepier” than Google because, once hacked by fake ‘friends’, our sense of personal betrayal is far greater than for a flawed algorithm about buying preferences.

Transparency in tech is big – but often misunderstood. Transparency per se is not key – it’s how open you are about what you’re being transparent about. Ten pages of “disclosed” Terms of Service is like the small print at the end of your bank statement – more a cause for suspicion than a gesture of openness. Tech customers – like all people – will accept a wide range of behaviors as long as they feel you’re being intentionally open about them.

What is To Be Done?

The answer is simple, albeit not easy. Create a Trust-based Organization.

As noted above, that means an organization in which the cultural DNA is rooted in individual relationships, in which people know how to be trusting and trustworthy in all their personal interactions, and in which the organization supports such traits through some specific shared values.

  • Trusting. The key skill of trusting is intelligent risk-taking. This is less about risk-aversion, and more about knowing how to be personally vulnerable and emotionally connected. The skills of empathy, listening and transparency are, to paint with a broad brush, not widely practiced in tech – but they are as key to trust as anywhere else.
  • Trustworthiness. The Trust Equation lists the four factors of personal trustworthiness: (Credibility + Reliability + Intimacy) / Self-orientation. Tech people love the equation-based formulation, but tend to focus overwhelmingly on the two ‘rational’ components of Credibility and Reliability. Yet our research shows that, in fact, the single most powerful factor driving personal trustworthiness is Intimacy. Again, not a core strength in most of tech.
  • Values. The Four Trust Principles – Collaboration, Relationships over transactions, Transparency, and Other-focus – offer a values-based beginning point for cultural transformation. There are many things an organization can do to become trust-based, but chief among them are conscious role-modeling on the part of leadership: in particular, role-modeling of the virtues of trusting and being trustworthy.

(It’s worth noting that the traditional tools of change management – metrics, KSFs, incentives – are not only not very helpful in trust, but can even be counter-productive: we don’t trust others if we think they’re incentivized to appear trustworthy just to gain personal advancement).

In sum, people don’t trust YourCo. They trust the people in YourCo, and they do so based on how those people interact with them and with all others.

If you’re serious about improving trust in your company, don’t lead with your communications department – lead with your leaders. Personally.

 

Acquiring Soft Skills: You Gotta Practice the Scales

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I’ve led a fair number of trust-building workshops over the years. I’ve even written a book or three on the subject of trust. One thing hasn’t changed much: I still hear the same question, no matter who I’m speaking to, no matter what country I’m in.

“Do we really have to practice the soft stuff?”

It’s inevitably followed up with some variations of “I get it, but this isn’t going to help me close the big deal I have on deck,” or “Yes, but it’s different here,” or the classic, “This is so basic, why are we wasting our time?”

Let me answer that.

—

You’ve heard this one.

The New York tourist asks the cab Lyft driver, “How do I get to Carnegie Hall?”

“Practice, practice, practice,” comes the answer.

The joke is well known – but sometimes we forget how broadly it applies.

Students of classical and jazz piano and guitar often don’t like doing the scales; but most have to do them nonetheless. I remember learning to play all seven modes (Dorian, Phrygian, Lydian, etc.) starting from all four fingers from the same starting fret; then moving up a fret and starting over again.

My guitar teacher told me that the next step was to do the same cycle for minor, major seventh, dominant seventh, diminished and augmented scales. “This is the point,” he somberly told me, “at which all the jazz greats picked up heroin.”

Suppose a music student tells the music teacher, “Scales are boring; I get the concept, that’s all I need. Doing scales just cramps my style and inhibits my improvisational skills.” What does the teacher say?

They typically smile and say, “Yes, the scales are boring – but you’ve gotta do them anyway. Do you know how to get to Carnegie Hall?” Etc. etc.

But what about soft skills training? Suppose a corporate training student tells the trainer, “This role-play stuff is boring. I get it, OK? It’s simple. I don’t need to do repetitive drills – it just makes me sound phony.”

What does the trainer say? What does the trainer’s boss say? What do the training department’s clients say?

We Do Muscle Memory Exercises in Music: Why Not in Soft Skills Training?

It’s my experience that, sadly, corporate soft-skills trainers’ responses are not the same as those of music teachers. Faced with resistance, the trainers are more likely to say, “Well, OK, if you say so.”

In fairness to the trainers, it’s not usually their fault. And I don’t think it’s the fault of the client organizations either. I think the blame  lies mainly with L&D organization leadership itself – for not pushing back hard enough, even for partly buying into the clients’ rationalizations that somehow you can cognitively understand your way into learning soft skills behaviors.

The truth is, there is no substitute for realistic “muscle memory” activity when it comes to learning soft skills. You simply can’t “think your way into” skills like active listening, much less empathetic listening. You can’t just memorize a set of canned “answers” to a buyer’s “objections.” You can’t just write sentences ahead of time and think you will be able to give acceptable feedback. (Go re-watch the movie Up in the Air for an amusing example of cognitive vs. muscle-memory learning).

The equivalent of scales in soft-skills training comes in several forms – role-plays, video replays, case discussions. For my money, nothing beats a “fish-bowl” role-play; two volunteers role-play a case in front of a room. When something happens – and it always does – everyone sees it, and knows it. There is no escaping the real-ness of what just transpired.

If trainers know this is true, why then don’t they insist on it just as strongly as music teachers do? Music teachers have one advantage: they are typically older than their pupils, hence in a natural position of authority; whereas trainers are often junior to, and subordinate to, the line people in their sessions.

One trainer told me of being politely informed by an AmLaw 20 law firm that there would be no role-plays in the upcoming session. “Just discuss the technique,” the partner client said, “our people are smart enough to pick it up quickly – no need to waste time on faux drama.” Right.

The Real Reason for Resisting Soft Skills Drills

As is often the case with negative behavior, fear is at the root. No one, me included, enjoys doing role-plays. I also don’t like the taste of some medicine, but if I’m sick, I know to over-rule my taste buds.

In other words, participants just don’t want to do it. Of course, they don’t say that. They say it’s boring, they don’t need it, comprehension is enough, and so on. But it’s still the L&D folks who must not let them get away with it.

I find that each of the major staff functions has a generic effectiveness issue. For IT staff, it’s speaking in jargon and over-promising. For legal staff, it’s an inability to balance risk-minimization with general management perspective.

For HR staff – in my experience – the weakness is a desire to be accepted at the Big Table. Combined with the fact that HR people have no secret vocabulary – they speak plain language – this means that clients will predictably abuse them.

And so when the students resist doing what the L&D people know perfectly well they should do – the teachers don’t push back.

This is of course my pet theory, though it is based on my experience. What’s yours?

If your students ask you how you get to corporate Carnegie Hall, tell ‘em, “Role play, dammit!”

How Not to Create Corporate Trust

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In the past few weeks, one Southwest Airlines flight suffered the first US airline casualty in a decade, while another flight had to be diverted when a window ruptured. While there have been some notable exceptions, I think it’s fair to say that the media and public response has been pretty much crickets.

By contrast, imagine what the public and media reaction would have been had the airline in question been United. This despite the fact that the airlines are indistinguishably safe.

Question: Why does Southwest get a pass, where United probably wouldn’t?

Follow-up Question: How do you get your company to be perceived like Southwest?

I’m going to suggest a simple, unverifiable assertion: we trust Southwest more than we trust United. But what does that mean, and how can a company create corporate trust?

Where Not to Look

Don’t look to crisis management experts or plans. Don’t look to branding, or to reputation management. These are all second-derivative measures, aimed at direct manipulation of perceptions, rather than at fundamental first order causes. (And for heaven’s sake, don’t look to regulations and compliance).

You could say it’s all about corporate culture, and you’d not be wrong – it’s been said that Southwest’s culture is what creates our trust in the company. Or you could point out that Southwest continually ranks first in customer experience.

But culture is too vacuous a concept for serious managerial intervention. Culture is the end result of doing a whole lot of other things. You can’t act directly on culture, it’s a byproduct.

Customer service, while closer to tangible, is still the result of a thousand little things. How do you get a company to do those thousand things, and do them right?

Again, I think the answers come into focus when we reframe the question: How does one create a trusted company?

TrustProofing Your Company

Another assertion: most trust is at root personal. Robert Putnam talks about “thick” and “thin” trust, the first applying to close relationships, the second to indirect or reputational relationships. Corporate relationships are even ‘thinner.’ Tip O’Neill famously said, “All politics is local.”  In that same sense, “all trust is personal.”

We don’t trust Facebook, we trust Zuckerberg – or not. We sort of ‘trust’ Apple’s design, but we trust more those smart/nice folks in blue shirts at the Apple store.

What this suggests is that we don’t trust companies per se in any rich, thick, deep sense – we trust the personal interactions that we have with people at those companies. Let me call those companies “Trust-based.” And so, Rule 1:

Rule 1: A trust-based company is one in which all employees behave in trusting and trustworthy ways with all stakeholders.

Also, because trust is personal, it’s important to understand the basic dynamics of interpersonal trust. Trust is an reciprocating relationship between a trustor and a trustee. The trustor is the one who takes a risk; the trustee is the one who then proves to be trustworthy, or not. If the trustee is trustworthy, then the level of relationship trust is increased – and the trustor/trustee roles reverse. Rinse and repeat.

Rule 2: Employees must embody the virtues of trustworthiness: credibility, reliability, intimacy, and low self-orientation. 

But personal virtue is not enough to make a corporate culture. Organizations have a large impact on people’s attitudes and behaviors, enough to bend and shape even individuals’ innate predilections. We also need what’s conventionally known as ‘values.’  Of course, merely having a list of values is worthless unless:

Rule 3: Organizations must systematically enforce and reinforce a set of trust-enhancing values that support trusting and trustworthy interactions. 

Pick your own, but we’ve found that four fit the bill nicely:

  • An instinctive focus on the Other
  • A propensity for collaboration rather than solitary or competitive action
  • A default to transparency, except where illegal or hurtful
  • A relentless focus on long-term relationships rather than short-term transactions.

My colleague Andrea Howe and I have written at greater length about this in Creating a Culture of Trust: Virtues and Values.

The Trust-Based Organization

Back to Southwest Airlines vs. United. Which is known for being personable?  And which for being institutional?

In the tech crowd, we ‘trust’ Amazon to run great algorithms and distribution systems; but it’s going to have to go to another level to get us to trust the “Amazon guy” who wants to put packages inside your door or your car trunk.

Facebook developed great trust because it fostered personal networks: until those networks  got infected with fake personal relationships.

What about your company? Are you trying to gain customers’ trust by focusing on written policies, social media outreach, or good PR? Are you focused just on data security, or customer service, or great privacy policies, or compliance enforcement?

You’ll be better off by focusing on building a trust-based organization: one that consists of people who are virtuous and skilled at trusting, and that supports trust-based interactions according to a set of values that encourages such relationships.

 

 

Yes Trust is Down – But Trust in What?

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New headlines daily grace the front pages (or screens) of our news outlets that make us question just how far our trust in (fill in the blank) has fallen. Whether it’s politicians or social empires like Facebook, it seems that as individuals we are now in a constant state of “well who shouldn’t I trust now?”

In many ways it’s very true, but it begs an even more important question – if trust is so far down today, what does that really mean?

—

You can’t throw a brick into the Googlenets these days without hitting some survey that bemoans the current low state of trust in society. And while there’s a lot of truth to those surveys, there’s also a lot of uncritical thinking and sloppy theorizing.

There are also some powerful ways in which trust has actually increased in recent times, and even more in which trust has stayed broadly the same.

Some Basic Trust Definitions

Much writing on trust neglects to make two simple distinctions. The first is that between trusting and being trusted; both are required for trust, and they are quite distinct. Trust requires a trustor and a trustee – they are different, and asymmetrical. One requires taking a risk, the other requires, broadly speaking, a moral virtuousness. “Trust,” properly speaking, is neither one of those things: it is the result of an interaction between the two of them.

The second distinction is between personal and institutional trust. Personal trust is by far the stronger of the two. You may trust Google to find a babysitter to interview, but you don’t trust Google itself to babysit your infant. And you’re a lot more likely to put your life on the line for your children than for your Coke/Apple/favorite brand. (A notable exception is national patriotism).

Most of the surveys that decry the decline in trust are talking about institutional trust. And it’s true: our “trust” in many, perhaps most, of our political institutions has declined. Ditto for most professions, the police, banks, retail stores, and established religion.

And yet…

If Trust is So Far Down, How Come—

  • you entered your credit card number online last week – at least once – from your mobile;
  • some of you use auto-complete on your mobile to fill in forms, perhaps even including your credit card number;
  • you share so much private information on Facebook (even after all the recent news);
  • you use Lyft, Airbnb, or another sharing economy app;
  • you paid your property taxes online;
  • you may have paid for Amazon to deliver via FedEx a camera that shows your front door.

These are all small examples of how the world has become far more linked. Many of us wouldn’t have considered doing these things ten years ago. These are small counter-examples of increased institutional trust. And, they are examples of trusting, the propensity to trust; at the same time, they suggest that we assign some pretty high levels of trustworthiness to other actors.

At the same time, there are many examples of both personal and institutional trust that have remained largely the same, without much fanfare. For example, you probably still:

  • Ask your neighbor to hold your mail for a few days
  • Fly on planes
  • Don’t look right or left when the light turns green (though you should)
  • Drink the coffee / eat the food at nearly every restaurant in the world without thinking
  • Ask a stranger at the beach to watch your stuff for a minute while you go to the bathroom.

In fact, an enormous amount of daily life consists of little examples of trust: mostly social and personal, but also institutional. Don’t let the headlines make you forget it.

Where Trust Really Is Down

That said, trust really is down in a few areas, and it’s important to be clear about just where.

First, there are indeed some ways in which people are less inclined to trust institutions than we used to be. But even here, read with a grain of salt. When people say they don’t trust Target (for example), they often mean something like “I don’t trust Target’s IT systems to ensure that my credit card doesn’t get compromised.”

Note this is an issue that didn’t even exist a decade ago. Also, it’s an issue affecting pretty much any large organization involved in financing. Also, and most important, check how many people stopped shopping at Target because of concerns about credit cards.

Saying “trust is down” without specifying “trust to do what?” is akin to a non sequitur. You might as well say “love is down” without grounding the statement in divorce rates, dating sites or something else concrete.

The most important way in which trust really is down is in what Eric Uslaner calls generalized trust. As measured by the General Social Survey for 50-some years, it basically asks, “By and large, do you think people mean well, or can’t you be too careful?” In other words, it is a generalized propensity to trust strangers.

On this measure, there is indeed a very gradual, but nonetheless real, decline over the years. High levels of propensity to trust have been linked to education and optimism. Low levels of propensity to trust have been linked to pessimism and low exposure to out-groups.  It is a true, important, and sad, statement that trust in this sense has indeed declined in the US, and in most western world countries.

And that is indeed something to be concerned about, far more than whether “trust” in the financial industry is down x points on a survey last quarter.

Santa Does Trust-based Selling

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

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

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

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

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

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

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

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

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

Exactly.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

First, the darned good reason part.

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

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

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

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

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

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

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

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

·      Ego needs

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

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

 

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

·      Ego needs

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

·      Avoiding what might be hard work to improve these relationships

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

·      Ego needs

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

·      Ego needs

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

 

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

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

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

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

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

That’s it.

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

How do you go-around skillfully?

We came up with at least three best practices:

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

What are some viable alternatives to a go-around?

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

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

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

Kind of like the nature of trust.

Trust & Leadership

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

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

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

So tempting; and yet so wrong!

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

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

1. Start with Intimacy

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

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

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

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

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

2. “Check your S”

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

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

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

3. Build positive momentum with reliability

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

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

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

4. Be honest

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

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

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

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

Dealing with the Honest Majority and the Dishonest Minority: Tales from the auto industry

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This is a guest-post by Matti Kurvinen, a former Accenture partner, now an independent consultant focusing on service strategy and operations and warranty management. We welcome him to Trust Matters.

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This blog has recently addressed what to do when someone abuses your trust. Of course, most of our business partners are fully honest and trustworthy. Still, if you don’t know which one is which – how can you trust your partners?

The issue is not hard to frame for individuals. But what about at scale? How can you establish systemic trust-based business relationships, when you can’t directly assess the trustworthiness of every relationship at all times?

The Case of Automotive Warranty Service

A case in point is manufacturers who outsource their warranty service to external service agents – for example, automotive dealers. An automotive OEM rightfully sees dealer productivity as a key route to effective end-customer service, and dealer satisfaction as a route to end-customer satisfaction. As the OEMs put it, “It is our role to support our dealers in serving our customers and not burden them with unnecessary controls.” (The same applies to white goods, IT, mobile devices and consumer electronics in relation with their authorized service vendors).

The problem is, an OEM with thousands of service agents globally will quite likely have tens – maybe even hundreds – who will take advantage of any holes the OEM has in its warranty control.

Hence the dilemma: how to enforce trust, positive incentives, support and frictionless procedures with the honest majority of your business partners, while at the same time having adequate control and discipline to deal with the few dishonest exceptions?

The Ugly Truth about Warranty Fraud

Warranty cost is a significant factor for manufacturing companies, typically ranging from 1 to 4 % of company sales, and 5 to 25 % of company profits (sometimes enough to make the difference between profit and loss).

Most companies see warranty costs as driven mainly by product quality, and secondarily by service network efficiency. However, there is another factor to be considered  – warranty fraud. This kind of fraud ranges from opportunistic small-scale overbilling to industrial-scale fraud perpetrated by organized crime. Estimates suggest that from 3 to 15% of warranty billing is fraudulent, making it a billion-dollar issue in the USA alone.

The warranty chain is no different from any other field of life or business. For some small fraction of people and companies, the opportunity for financial gain, weighed against the likelihood and consequences of getting caught, is a calculus that leads them to take advantage of loopholes in warranty control.

Some companies take this very seriously; others are not even aware of it. Still others believe it may be an issue, but “not for us.”  Stanford professor and trust scholar Roderick Kramer states in his HBR Article Rethinking Trust: “… people underestimate the likelihood that bad things will happen to them, and detecting the cheaters among us is not as easy as one might think.”

I have witnessed this several times, with comments like, ”Yes, the numbers from this dealer look really peculiar – but I can’t just go and accuse them of being dishonest, now, can I?”

Most participants in the warranty chain are honest – but not all

The good news is that most participants in the warranty service chain are normal, honest people and companies. But this makes fraud control tricky; how to have control and discipline for the dishonest minority, while enhancing trust, positive incentives, support and frictionless procedures with the honest majority?

The same issue, of course, can be found in many other areas: think on-line commerce, credit cards, mobile payments. The challenge is to make processes fast and easy for the honest people, yet still have adequate controls and fraud prevention processes.

Both false positives and negatives are undesirable. It’s inconvenient to have your credit card refused because of a false alarm. But it’s at least as troublesome to see payments go through with stolen credit cards or identities.

Enforcing trust while managing the dishonest minority

In my experience, there is no single silver-bullet solution. However, by applying the following five principles to your business, you’ll improve the odds considerably.

  1. Trust your partners by default. The business relationship between the OEM and the service agent must be based on mutual trust. The OEM assumes that the service agent doesn’t do warranty fraud, and the OEM accepts that the service agent is entitled to earn a share of the profits for serving the end-customer. The alternative – a default assumption that the service agents are dishonest – is corrosive of all trust. Even good service agents can turn bad if you consistently suspect them of being so.
  2. Set a culture and expectation of high integrity and honest work. This should be enforced and communicated upfront – along with clear consequences of breaking the rules.

Some of our clients have been puzzled when catching fraudulent vendors – “What do we do now?” One leading automotive OEM sends a very clear message to their dealers: “We trust you, but if you violate that trust, you are out!”

This is consistent with Kramer’s advice of sending strong signals on willingness to trust others, coupled with strong promises to strike back if that trust is abused. This not only attracts other desirable trusters, but also deters potential predators, who can sniff out easy victims who send out weak and inconsistent cues.

  1. Keep core operations simple and effective. In daily operations and service vendor management activities there should be no excessive control points; the focus should be on smooth operations and minimal administrative burden for the service agent. You trust the service agent enough to let them be the interface with your end-customer – let that trust also be visible in the back-office, and help them to serve customers with maximal productivity.
  2. Use analytics and audits to support warranty control and rule-based claim validation. Use extensive analytics to detect service agents with suspicious or fraudulent behavior. But analytics alone are not enough; they should be augmented by regular operational reviews and more detailed audits – executed randomly, or as a follow-up based on the analytics findings.

It’s important to keep the human touch and judgment alongside the analytics. Beware of taking drastic actions before you are sure of the findings, and don’t settle for anomalies or suspicious cases where you don’t understand the underlying reasons. 

  1. When necessary, take determined action. Occasional sloppiness and over-charging is best dealt with directly with the service agent, with a clear expectation of corrective actions. In the case if direct fraud or several suspicious elements, take determined action according to the upfront stated policies, such as:
    • Enforcing tighter process controls. You might require additional process control points from service agents with suspicious cases or too many cases in the gray area. Be very clear about this.
    • Claiming back the over-charges. Typically, it is easier to prevent over-charges than claim them back. The circumstances and time-frames for that should be stated in the service contract.
    • Do you still feel you can trust your business partner in the future? What are your other options for warranty (and non-warranty) service? Consider having a case for contract termination or even going to court.
    • Companies are often reluctant to let others know they’ve been a victim of fraud. However, communicating the issue and the consequences enforces the message that your control processes work and you don’t tolerate wrongful behavior.

In many cases we hear clients say, “We don’t have warranty fraud, we know our service agents and we trust them,” or “We are the market leaders, our dealers don’t have the guts to cheat us.” Still, we have seen the whole spectrum from occasional sloppy procedures and over-charging to systemic criminal activities and truly large-scale fraud.

Those who dismiss this as a non-issue typically have a very expensive issue about which they are just wishfully ignorant. Those who have a clear approach without overly burdening their service agents can save a lot of money and simultaneously have a more satisfied and effective service network.