Carnival of Trust for July, 2010

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Welcome to the July edition of the Carnival of Trust.

This month we are graciously hosted by the hardest working man in the compliance business, Doug Cornelius. Doug resides at compliancebuilding.com. He’s a Boston lawyer, with serious experience in real estate, private equity, knowledge management, and–of course–compliance and corporate ethics. He’s Chief Compliance Officer at Beacon Capital Partners, a real estate private equity firm, though the views expressed in his blog are his alone. Trust is a central subject matter for those in the compliance business, many of whom read Trust Matters. Doug is a consistently thoughtful observer of things trust-related, and I’m delighted to have him as host. The Carnival of Trust is a highly subjective listing of key blogposts related to trust. The choices are made by rotating hosts–Doug, in this case. They make the choices and write the commentary. This way you get a seasoned voice, other than mine, on the key subject of trust. Click on over to Doug Cornelius’ Compliancebuilding.com, and give a read of his selections and commentary this month. I assure you, you won’t be disappointed.

Upcoming Events 7/9/2010

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Whether it’s global warming or just a searing hot heat wave, this week has proven to be a hot one for those of us out here on the East Coast. Record temperatures aside, we’ve got bubbling items on our agenda and we hope you can join us for some. We’ve changed dates, included more details, and added events to our calendar below. Take a look!

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Thurs. July 29th          Singapore          Trip Allen

Preview trust-based skills and techniques that allow you to forge quicker yet long-lasting relationships, so as to increase your overall business. Trip will be speaking on Trust Edge: Trust-based Selling & Business Development at Marketing Institute of Singapore (MIS). 6:00–9:00PM. Open to the public. Fees: MIS  Student/Member-$20; Partner-$35; Non-member-$35. Venue: MIS Executive Club (51 Anson Road, #03-53 Anson Centre, Singapore 079904). For more information, please take a look at the brochure.

Tues. Aug. 10th      Global Access          Sandy Styer

Sandy Styer, the head of the Trusted Advisor Diagnostics group, will present the findings of  the largest study on trustworthiness ever completed: the Trusted Advisor Whitepaper entitled "Think Again", and the implications for business This research covered over 12,000 respondents. FREE. 10:00AM EST. 30 minutes duration. Contact: [email protected] to register.

Sat. Sept. 18th      Global Access          Charles H. Green

Charlie will be a presenter in the 2010 Mediation Business Summit webinar. He’ll talk about how the sales process is a powerful opportunity to create trust and how behaving in the a trustworthy manner during the sales process both creates customer trust and enhances the odds of getting the sale. He’ll outline the principles of Trust-based Selling(r) and discuss how to respond to the Six Toughest Sales Questions. Cost: $100 to attend entire event 8 speakers, via telephone. For more information and to register, visit http://mediationbusinesssummit.com/register/.

Tues-Fri. Sept 21-24th          Chicago          Andrea Howe

Andrea Howe, Director of Learning Programs, will be a Learning Team Leader for Linkage Inc’s 2010 Best of Organizational Development Summit and will be leading a session on "Client Relationships: Making Yourself more Trustworthy."

Tues. Sept. 28th          Washington, DC          Andrea Howe & Charles H. Green

Save the date for Trusted Advisor Associates’ foundational, core two-day program Being a Trusted Advisor: Walking the Talk; co-led by Andrea Howe and Charles H. Green. For more information or to register, please contact Tracey Del Camp at [email protected].

Can They Build a Robot You’ll Trust?

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From the Boston Globe, read about Nexi the Robot, in an article suggesting the robot may “furnish a lesson in human trust.” Partly yes; and partly no.

I find two things interesting about it. First, 21 of the first 22 comments on the article are strongly negative. Second, the gist of what the scientists are finding accords very well with commonsense.

Here’s Nexi’s experiment:

By controlling how 4-foot-tall Nexi interacts with people, scientists have a new and powerful way to study the signals that allow people to trust one another, or not, within minutes of meeting.

“There should be some signal for trustworthiness that’s subtle and hard to find, but [it is] there,’’ said David DeSteno, a psychologist at Northeastern University and one leader of the experiment.

Nexi offers advantages over using a human participant because people give off subtle gestures, or engage in unintentional mimicry, that can be hard to measure or control, and probably influence whether someone trusts them.  Nexi has many of the expressive abilities of a person, but researchers can tightly control every aspect of her behavior — allowing them to test what nonverbal cues might make her seem more or less trustworthy…

…so far, researchers believe that perceiving trust is not merely a matter of one person projecting a shifty eye or some other untrustworthy vibe; instead it is a complicated interaction in which people may unconsciously mimic one another, and through their own motions learn something about the other person’s internal motivations.

Trust is About Relationship

It may sound trivially obvious, but trust is inherently about relationship. The way we establish trust is by interacting–and seeing how it feels. The mimicry referred to above is science-talk for whether we ‘get’ each other. 

Repeating a phrase, a gesture; it’s what shrinks do too, when they continually ask, “So, does that make you feel ___?” 

Some of you may recall an old computer game called Eliza; programmed in Basic or Fortran, it would announce itself to you as a therapist. It would solicit your input, then spit it back to you with a prefix phrase like, “So, how do you feel when you CHR$YourInputHere$.” (For a typical Eliza session, click here).   Basically, the program just repeats your phrases back to you; yet it gives us the feeling of being listened to.

Over at the NYTimes, another robot story; this one about Paro, a robot modeled after a baby harp seal: 

It trills and paddles when petted, blinks when the lights go up, opens its eyes at loud noises and yelps when handled roughly or held upside down. Two microprocessors under its artificial white fur adjust its behavior based on information from dozens of hidden sensors that monitor sound, light, temperature and touch. It perks up at the sound of its name, praise and, over time, the words it hears frequently.

It’s been successfully used as therapeutic for patients with dementia. It appears to work. No surprise there: it responds. Mimicry again—finding ourselves to be the cause of a reaction by another is essentially affirming. It means we matter. 

What’s Not Amazing About Robot Stories

I find there are two tones struck in most articles about this sort of subject. One is the idea that we have gotten “closer to explaining” some core element of humanity. The other is it’s somehow amazing to discover “how things really work.” As one economist in the Nexi study says, “What’s interesting to me is how mechanical the process of interacting with another being turns out to be.’’

Please. There’s nothing mysterious about it. 

Trust is about becoming related. So are friendship, sex, and politics. We can describe virtually any human activity in physical-chemical terms (see for example the oxytocin-trust effect); but that doesn’t imbue it with meaning, or ‘explain’ it, any more than saying adrenaline drove World War II.

So, people respond to robot baby seals or blue-eyed blinking machines. How is that different from children playing with dolls, men finding some mannequins attractive, people finding panda bears more attractive than snakes, finding one automated GPS voice more friendly than another, or forming very strong bonds with pets? Why do we give cars names, why do we anthropomorphize mice on TV, why was it a snake that Eve spoke to? Because they mimicked engagement with us. And we responded.

Can our feelings be manipulated by machines? Sure; it’s why Thomas the Tank Engine has a smile on his ‘face.’ And if a locomotive can cause us to smile, is it any wonder that a Bernie Madoff can cause us to part with our money?

Not really; our mechanics are quite simple. Knowing the “how” doesn’t take anything away from the mysterious “why” that will always be at the heart of wonder.

Upcoming Events 7/2/2010

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Today marks the start of the World Cup Quarter Finals along with the celebrations of the USA’s Independence Day and further jubilations from Canada Day (yesterday)! What a weekend this will be!  But amidst fireworks, barbeques, and cheering fans, we hope you take some time to mark your calendar for some of our events that are creeping closer with each passing day. Also, please note there are only a few days left to sign up for our early bird discount for the September Open-Enrollment Program in DC–see below for more details on how to register.

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Fri. July 2nd          Singapore          Trip Allen

Trip Allen will be speaking on Trust-based Selling at the Marketing Institute of Singapore (MIS) Members’ Night–Top 20 Sales Pitches of the World. The event is exclusive and complimentary to all MIS members. 6:30-10:30PM. Venue: MIS Executive Club (51 Anson Road, #03-53 Anson Centre, Singapore 079904).  For more information, please take a look at the brochure.

Thurs. July 8th          Singapore          Trip Allen

Preview trust-based skills and techniques that allow you to forge quicker yet long-lasting relationships, so as to increase your overall business. Trip will be speaking on Trust Edge: Trust-based Selling & Business Development at Marketing Institute of Singapore (MIS). 6:00–9:00PM. Open to the public. Fees: MIS  Student/Member-$20; Partner-$35; Non-member-$35. Venue: MIS Executive Club (51 Anson Road, #03-53 Anson Centre, Singapore 079904). For more information, please take a look at the brochure.

Tues. Aug. 10th      Global Access          Sandy Styer

Sandy Styer, the head of the Trusted Advisor Diagnostics group, will present the findings of  the largest study on trustworthiness ever completed: the Trusted Advisor Whitepaper entitled "Think Again", and the implications for business This research covered over 12,000 respondents. FREE. 10:00AM EST. 30 minutes duration. Contact: [email protected] to register.

Sat. Sept. 18th      Global Access          Charles H. Green

Charlie will be a presenter in the 2010 Mediation Business Summit webinar. He’ll talk about how the sales process is a powerful opportunity to create trust and how behaving in the a trustworthy manner during the sales process both creates customer trust and enhances the odds of getting the sale. He’ll outline the principles of Trust-based Selling(r) and discuss how to respond to the Six Toughest Sales Questions. Cost: $100 to attend entire event 8 speakers, via telephone. For more information and to register, visit http://mediationbusinesssummit.com/register/.

Tues-Fri. Sept 21-24th          Chicago          Andrea Howe

Andrea Howe, Director of Learning Programs, will be a Learning Team Leader for Linkage Inc’s 2010 Best of Organizational Development Summit and will be leading a session on "Client Relationships: Making Yourself more Trustworthy."

Tues. Sept. 28th          Washington, DC          Andrea Howe & Charles H. Green

Save the date for Trusted Advisor Associates’ foundational, core two-day program Being a Trusted Advisor: Walking the Talk; co-led by Andrea Howe and Charles H. Green. For more information or to register, please contact Tracey Del Camp at [email protected].


Constructive Hypocrisy and Trust

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A stimulating conversation over on LinkedIn, sparked by Adam Turteltaub of the Society of Corporate Compliance and Ethics, leads me to explore the relationship of hypocrisy to trust, authenticity and truth-telling.

How can there by such a thing as “constructive hypocrisy,” you ask? Well, it’s a good term to describe how we handle the uncomfortable no-man’s land between the letter of the law and the nuanced nature of the world.

Example: The 55 mph speed limit. Enforcement kicks in at about 65. We say “about” because it has to stay loose, else it becomes the new 55. How can you justify people driving 57 when the limit is 55? You can’t. But we do all the time. Constructive hypocrisy.

Bill Bennett wrote about constructive hypocrisy as key to social functioning back in the 90s.  The brilliant (and outrageously controversial) Herman Kahn used the term to describe the social value of plausible deniability (“A rural American man doesn’t want his daughter to be able to buy pornography at the corner store; and if she does, he wants to be able to say he didn’t know about it.”)

But we don’t need no stinkin’ highfalutin definitions. Here are two that’ll do fine. Have you ever said:

“I’ll call you right back in 1 minute.” Which means between 3 and 5 minutes.

“Let’s do lunch,” which of course means ‘let’s don’t do lunch.’

If you’ve said those things, then you’re a constructive hypocrite.  Sometimes, anyway. Congratulations.

The Role of Hypocrisy

Constructive hypocrisy gives us breathing room from the constant cacophonous confrontation between the puritanical rule-givers among us, and the anarchistic forces just waiting to destroy civilization. 

·    What does the flight attendant do when the announcement says ‘turn off your cell phones now’ and the passenger covers up the screen to finish the email? Constructive hypocrisy (for a while).

·    What does the cop say when it’s a first violation and the person is clearly not a trouble maker, and the violation was narrow? I’ll let you off this time with a warning….Constructive hypocrisy.

·    What are sentencing guidelines for judges, except constructive hypocrisy?

Here are some situations where the world could use more, not less, constructive hypocrisy:

·    Gay marriage

·    Three strikes you’re out sentencing rules

·    Abortion (oh boy, I can see the emails now)

·    the Middle East

On the other hand, there are limits to constructive hypocrisy—at some point it becomes denial. Think of US immigration policy, for example, or municipal pension funding. Over a decade ago, don’t ask/don’t tell was constructive hypocrisy; as time passed, it became uncomfortable denial. The policy didn’t change; society did.

 Hypocrisy, Authenticity and Trust

On the face of it, you’d think trust can’t co-exist with hypocrisy. But on closer examination, I think they are complementary, maybe even interdependent.

Constructive hypocrisy is a socially acceptable way of agreeing to disagree. We both choose to look the other way, rather than insist on a constant confrontation of values. Done in the right proportion, it is the triumph of relationship over principle.  

Can I trust someone who’s being hypocritical? In many cases, yes, precisely because their willingness to be hypocritical rather than provoke a confrontation over principle means they actually value my relationship over one of their opinions. 

What about authenticity? Only in a narrow sense are they in conflict. For me to indulge in constructive hypocrisy doesn’t mean I’m being inauthentic about my beliefs; it means I’m being authentic about the balance of my principles and the need to get along with others in the world. 

Alfred Hitchcock knew that imagination trumped vision (the shower scene in Psycho); other directors know that a bit of clothing is more erotic than pure nudity.  In the same sense, a bit of hypocrisy lubricates social interactions better than does undiluted truth.  

If you’d like to talk more about this concept, maybe we could do lunch?  

Trust Capital

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Sometimes we in business think of trust as a soft skill. A nice-to-have at best, a wussy distraction at worst, compared to the ‘hard’ realities of the competitive, market-driven bottom line out there.

Nothing could be further from the truth.

The truth is, trust is the most fundamental form of capital. 

There is of course financial capital: the retained earnings on the balance sheet, the asset strength, the bond ratings you earn. But financial capital is just an end result of other forms of capital.

Brand equity, for instance. Or human capital. Or customer loyalty. Or your company’s reputation. Now those, many people would say, are the true sources of capital.

Yet, think again. 

·      Brand equity minus trust is just name recognition.

·      Human capital without trust is mere contract labor.

·      Customer loyalty absent trust is no more than convenience.

·      Reputation without trust is just notoriety.

Trust isn’t incidental to capitalism, it’s the key ingredient. Capitalism without trust is just a floating flea market at best, a weakly regulated casino at worst.  

Soft skills? Wussy? Not if you’re interested in the creation of long-term economic and social well-being.

Loyalty Programs Shoot Selves in Foot

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I have for some years now followed a UK newsletter called the Wise Marketer, which does a pretty thorough job (or so it seems to me) of covering the world of loyalty programs. 

Loyalty programs are generally thought of as having been invented in the 1970s by the airlines (particularly American Airlines, I believe—someone confirm?). They have always had a dual purpose: to reward and encourage exclusive buying behavior, and to provide a source of data about buying behavior.

They have also generated a new approach to marketing, one aimed at tapping a latent desire for status among many consumers. An anthropologist would be fascinated by the psychology and behaviors of, say, management consultants around the airport gates and airline clubs. Certainly companies have spent a great deal of money on these programs, trying to make their program distinct in their ability to confer status and prestige.

So this paragraph in the most recent newsletter made me raise my eyebrows:

Clearly, the loyalty market has reached a state of maturity in the airline, hotel and car rental industries, with very few such loyalty programmes today being able to claim genuine competitive differentiation. Simply matching the proposition offered by the competition is not enough to create lasting customer loyalty. When all programmes within a sector are basically the same (e.g. they all have online enrolment, an award chart, a welcome bonus, double miles promotions, and so on), customers tend to react with indifference. 

This isn’t really new; I remember hearing ‘customer loyalty in the airline business is about 20 minutes,’ 15 years ago. But it’s jarring nonetheless, because if one of the primary purposes of a marketing program is to differentiate the company, and the net result of several decades of that program is to eliminate differentiation among the companies—well, that’s a marketing poster child case for foot-shooting, isn’t it?

Michael Porter pointed out something similar years ago: the tendency to seek out industry ‘best practices’ is anti-strategic. That’s because even if the practice is ‘best,’ if everyone does it—then no one is strategically different. And part of the essence of strategy is to be distinct.

I’m a little bemused by all this, because the term ‘loyalty’ has long been abused in business. ‘Loyalty’ implies an intensely personal relationship, and what ‘loyalty programs’ have devolved to is anything but personal.

Ironically, the one thing in today’s business world that truly is differentiable is also that which is truly personal. You can copy someone else’s programs, policies and procedures—but you can’t copy their relationships. Those are sui generis, unique. 

Back in the early 1990s one of the truly prescient business books of our time was published: The One to One Future, by Don Peppers and Martha Rogers. It made the very sound observation that technology would allow us to combine scale and customization, at the individual human level. Market segmentation would max out—at a one-to-one level.

I remember being very excited to hear that insight. This was around the same time that Loyalty was being talked about by Fred Reichheld and people at Harvard Business School. Connecting the dots back then would have suggested that the way to successful companies would be to create great relationships, which then resulted in loyal feelings, behavior, etc.

What’s happened, of course, is not that at all. We have succeeded instead in publicizing the private, trivializing the profound, and pretty much turning the potential of one-to-one relationships into a cacophony of mechanical, status-climbing must-haves. Think platinum cards, ring-tones, ‘how’m-I’-doing’ online CSR surveys. 

The irony is: at a time when every loyalty program looks alike, when ‘personal’ service is mechanized, and when everyone is a VIP—that’s the very time at which truly personal, one-to-one relationships really stand out. They are even more differentiable than ever, because most companies have forgotten what that really means.

Dare to be real. You might be shocked to find out how much your customers like it.  

Upcoming Events 6/25/2010

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Fri. July 2nd          Singapore          Trip Allen

Trip Allen will be speaking on Trust-based Selling at the Marketing Institute of Singapore (MIS) Members’ Night–Top 20 Sales Pitches of the World. The event is exclusive and complimentary to all MIS members. 6:30-10:30PM. Venue: MIS Executive Club (51 Anson Road, #03-53 Anson Centre, Singapore 079904).  For more information, please take a look at the brochure.

Thurs. July 8th          Singapore          Trip Allen

Preview trust-based skills and techniques that allow you to forge quicker yet long-lasting relationships, so as to increase your overall business. Trip will be speaking on Trust Edge: Trust-based Selling & Business Development at Marketing Institute of Singapore (MIS). 6:00–9:00PM. Open to the public. Fees: MIS  Student/Member-$20; Partner-$35; Non-member-$35. Venue: MIS Executive Club (51 Anson Road, #03-53 Anson Centre, Singapore 079904). For more information, please take a look at the brochure.

Sat. Sept. 18th      Global Access          Charles H. Green

Charlie will be a presenter in the 2010 Mediation Business Summit webinar. He’ll talk about how the sales process is a powerful opportunity to create trust and how behaving in the a trustworthy manner during the sales process both creates customer trust and enhances the odds of getting the sale. He’ll outline the principles of Trust-based Selling(r) and discuss how to respond to the Six Toughest Sales Questions. Cost: $100 to attend entire event 8 speakers, via telephone. For more information and to register, visit http://mediationbusinesssummit.com/register/.

Tues. Sept. 28th          Washington, DC          Andrea Howe & Charles H. Green

Save the date for Trusted Advisor Associates’ foundational, core two-day program Being a Trusted Advisor: Walking the Talk; co-led by Andrea Howe and Charles H. Green. More details and official registration information to come.

Handling the Risk of Trusting Others’ Motives

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I ran across this the other day:

I am not a victim of others, but rather a victim of my expectations, choices and dishonesty. When I expect others to be what I want them to be and not who they are, when they fail to meet my expectations, I am hurt.

When my choices are based on self-centeredness, I find I am lonely and distrustful. I gain confidence in myself, however, when I practice honesty in all my affairs. When I search my motives and am honest and trusting, I am aware of the capacity for harm in situations and can avoid those that are harmful.

A friend said something similar:

When I meet people, I bring an implicit contract. In that contract, I agree to treat them with the utmost respect, in ways that I would wish to be treated. And in return, all I ask is that they treat me with the utmost respect, in ways that I would wish to be treated.

Frequently, I find they end up in breech of contract. Of course, I haven’t presented them with the contract for them to read. And so it goes without saying, they haven’t signed it. D’ya think there’s something wrong with my contracting procedures?

Looked at from this angle, to trust someone is a unilateral decision to seek a bilateral relationship. When the other responds, then you’ve got a basis for something joint—or you don’t. 

But at the outset—when the trust-risk is first taken—there is no obligation. There is thus no basis for dashed expectations, disappointment at outcomes, or resentment that people didn’t do what we had wished they would do.

Most of the time, trust offered gets reciprocated. But not all of the time. That’s why they call it trust, it always and by definition comes with risk. To expect a particular outcome in a particular instance is to insist on changing the laws of probability. You can bet that 5000 coin tosses will produce roughly 2500 tails. But if the very next coin-flip turns up heads—how crazy is it to be upset? 

This is the meaning of “an expectation is a pre-meditated resentment.” 

Competitive Theory and Business Legitimacy: BusinessWeek.com Article

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Rather than write two posts today, I’d like to point you to my article at Businessweek.com on Michael Porter, competitive theory and business legitimacy.  Or rather, on how business can regain its legitimacy, which is at generational lows.

The issue of business legitimacy was raised in Businessweek.com by my old (and very distinguished) professor Michael Porter, who suggested that legitimacy has to be regained not through charity but by having part of businesses core purpose be to do good.  I think this is correct, as far as it goes, but I suggest taking a long term perspective may be more successful than his way.

Click on over to BusinessWeek.com and read today’s post there.  Let me know what you think, because it’s about more than just legitimacy, it’s about how and why we run our businesses.