Dealing with Pricing Objections: Podcast with Charles H. Green on TotalPicture.com

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When I talk about trust-based selling, the question closest to the surface for most listeners is:

"What do I do when my client says to me, ‘your price is too high’?"

I sat down with Peter Clayton, of TotalPicture Radio to talk about just that.  If you want to settle back and listen, you can hear that conversation in the totalpicture.com podcast interview that resulted. 

If you prefer your experience visual rather than aural, you can click below the "Listen to the Podcast" box to read the transcript.

Here’s a taste, beginning with Peter’s intro:

"If you’re like most professionals, you’re not comfortable with selling. It’s not easy fighting the feeling that hyping yourself is somehow inappropriate. And it’s worse when you have to deal with objections, doing presentations, and getting rejections — or waiting for the phone to ring." — Charles H. Green

Welcome to a Success Strategies podcast on TotalPicture Radio, with Peter Clayton reporting. When I came across Charles H. Green’s article in RainToday (a fabulous sales and marketing resource), I immediately contacted Charlie and asked him share his insights with us. He is founder and CEO of Trusted Advisor Associates based in West Orange, NJ.

Charlie is the author of Trust-based Selling and co-author of The Trusted Advisor. Centering on the theme of trust in business relationships, Charles works with complex organizations to improve trust in sales, internal trust between organizations, and trusted advisor relationships with external clients and customers. He is a speaker and executive educator on trust-based relationships and trust-based selling in complex businesses.

We’re all in sales today. And for sales adverse people such as myself, learning how to present yourself, and your expertise using positive, "deal winning" sales skills has become a matter of survival.

Listen to the Podcast Now

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Innovation: The Critical Link to Trust

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You know how sometimes you hear a theme every once in a while, and you don’t make much of it? But then you hear it five times in a week, and suddenly you say whoah, something’s going on here!

That’s how it is for me with trust and innovation. I have now seen enough about their connection that I notice it.

Got problems with innovation? R&D not giving you much bang for the buck? Suffering from same-old service offerings? Product un-differentiation got you down? Read on.

Observation: Pessimists Don’t Innovate, Nor do they Trust

In Why Victims Can’t Invent Anything, Michael Maddock and Raphael Louis Viton suggest a simple test for the ability to innovate: the old glass is half full, half empty test. If you are optimistic, you are a creator.  If you are pessimistic, you are a victim. Guess which one wildly out-innovates the other?

Now marry that up with the profile of trusting and non-trusting people from Eric Uslaner, arguably the world’s leading academic expert in trust. Paraphrasing, high-trusting people believe that life is good, and that they are in control of their lives. Non-trusting people believe life is fundamentally unfair, and that other powers are in control of their lives.

You want to increase innovation? Hire optimistic, high-energy people; shun conspiracy theorists. And why does this work? Because they trust each other.

Diagnosis: More Trust Yields More Innovation

Let’s follow this logic further. Trusting each other means people are open to each others’ ideas. Robert Porter Lynch explains the link. 

Creativity happens, he says, very little by sitting around contemplating. Rather, it comes about from our interaction with others. In particular: people different from ourselves, who think in fundamentally opposite ways from the way we think.

If we’re not open to others—if our fundamental approach to others is fear-based, if we come from anger or ego or fight/flight responses—we shut ourselves off from the creative forces that come through sharing those different perspectives. We see them as threats.

The bridge is trust. If we can trust the other person, then we can hear and consider their perspectives, as they do ours. Net: communication, creativity, new ideas, innovation.

Trust and Innovation: Does It Work in the Real World?

Forget the thinkers: who does this? One who can speak to this directly is Ross Smith at Microsoft.  When in charge of the Windows Security Team, Ross and wingman Mark Hanson realized they had some incredible talent on the team that was under-utilized. They needed to innovate. As Ross studied innovation, he began to realize trust was the key to getting there.

Does it work for Ross? He’ll answer a resounding ‘yes.’

In the course of the next month, you’ll be hearing from several of these people: Eric Uslaner, Robert Porter Lynch and Ross Smith in particular, as well as others. I think you’ll enjoy reading what they have to say.

For now, let’s just notice what they all agree on: the road to innovation goes through trust.

 

Metrics: Overmeasuring Our Way to Management

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Contrary to the popular saying (“if you can’t measure it, you can’t manage it”), the ability to manage is not dependent on the ability to measure. 

In fact, overmeasurement has some serious downsides.

TrustMatters readers have heard this theme before, but I’m happy to say this time it’s being published in the Management Channel at Businessweek.com. 

Read the full article at: Metrics: Overmeasuring Our Way to Management

And have a great Wednesday.
 

Financial Planners Who Sell From Trust

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The banking and financial services industry has recently plummeted into the "least trusted groupings" of industries. And not without reason, as this blog and others have pointed out.

But of course, that’s not true of everyone. There are some interesting examples of trustworthy and successful behavior in the financial sector. Here are two.

A Long-term Perspective: Hanson McClain 

One of the Four Principles of Trust is to adopt a long-term perspective, focusing on relationships rather than transactions. What would you think of a financial advisory business that invests in new clients five years before seeing a return?

That is pretty unusual for the financial advisory business. Normally, the focus is much shorter term. In addition, garden variety wisdom in financial advisory is that you look for high net worth clients, because the typical compensation structure for the business varies with asset levels. What would you think, then, of an advisory business that focuses on lower net worth individuals?

Hanson McClain has adopted both these heretical approaches, and married them to a narrowly defined and specialized target segment — retirees from the telecommunications and public utilities industries. The results are striking.

That segment has been relatively stable, with excellent retiree benefit plans, and has a disproportionately high percentage of its workers due to retire in the not-too-distant future. It also has some arcane aspects to its retiree plans.

But this isn’t just smart segmentation and targeting. If the common short-term orientation and focus on “big is better” had been applied to this group, the advisors would not have generated the tremendous referral network they have. The effect is to lower cost of sales, since existing clients identify and market to new ones, which also then increases sales yield rates. 

Trust is key to it.
Making Business Personal: Design Underwriting  in Grand Rapids, MI

Ed Thauer, Jr., runs a full service financial agency. He started in insurance 34 years ago, and branched out. He has gotten his business to Top of the Table status in the Million Dollar Round Table system. (That means he’s done very well).

Ed attributes his success  to a variety of things, but one of them stands out. 

Ed still does all his own enrollments. That means he personally does a job that is all-too-tempting to parcel out to others—initial data collection.  

Not everyone does this; automating and delegating is an obvious way to make your time more efficient—right? So why does Ed do it?  

As a mentor Ed cites once said,
“You dress up and show up and see the people, see the people, see the people. Nothing happens unless you see the people.”

Ed is also partial to a particular sales model for his industry—but clearly the model hasn’t gotten in the way of his central view of personal connection as key to the customer relationship.

Yes, there is trust in systems. Reliability, accuracy, comprehensiveness are all trustworthiness-enhancing variables. But their impact is less than the softer sides of trust—intimacy and low self-orientation; a sense that the seller actually does care about you.
I haven’t met Ed, but I think he gets that.
 
 
 
 
 
 
 
 
 
 

Acquiring Soft Skills: You Gotta Practice the Scales

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You’ve heard this one.

The New York tourist asks the cab 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 do them nonetheless. I remember learning to play all seven modes (Dorian, Phyrigian, 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 for it lies with training organization leadership itself—partly for not pushing back, and partly for buying the clients’ rationalizations that somehow you can cognitively understand your way into learning soft skills.

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 have given acceptable feedback. (See the recent 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? In part, of course, it’s because music teachers are typically older than their pupils; 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.”

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 will 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 the HR folks who let them get away with it.

I find 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.

And 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, this means that clients will abuse them. They are too needy, and have no ritualistic skills to protect them from bullies.

And so the students resist doing what the HR people know perfectly well they should do—and the HR people don’t push back.

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

And if you’re an HR person who’s been annoyed by my use of “training” in this blog, let me suggest this: you’re not going to be called “learning and development” by the client people until you start asserting what you know to be right. Go on, stick it to ‘em. Don’t ask for respect until you’ve earned it.

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

Lessons in Strategic Communications from an Admiral

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You may have missed it. The Chairman of the Joint Chiefs of Staff gave a clinic in communications, public relations and sales. It was in late August–perhaps that’s why you didn’t hear of it.

Of course, it was also cleverly disguised as a critique of the US government’s communications policy with respect to the Muslim world. But no matter, it was a clinic nonetheless. Here is Adm. Mike Mullen:

"To put it simply, we need to worry a lot less about how to communicate our actions and much more about what our actions communicate…

…most strategic communication problems are not communication problems at all," he wrote. "They are policy and execution problems. Each time we fail to live up to our values or don’t follow up on a promise, we look more like the arrogant Americans the enemy claims we are."

What constitutes good communication? According to Adm. Mullen:

"…having the right intent up front and letting our actions speak for themselves. We shouldn’t care if people don’t like us. That isn’t the goal. The goal is credibility. And we earn that over time.

[our messages] lack credibility, because we haven’t invested enough in building trust and relationships, and we haven’t always delivered on promises."

Clearly Mullen is confusing his skillset with that of a communications expert. What else does he think good communication requires?

"It’s not about telling our story," he stated. "We must also be better listeners."

You may think Mullen is out of his league. Then again, if you are reading this blog, you probably recognize his wisdom. But let’s pile on some more anyway.

Communication is a Two Way Street

The heart of influence lies not in our fancy powerpoints or elegantly crafted talking points. Ironically, paradoxically, it lies in listening before we talk.

Thomas Friedman articulated this well in his commencement address at Williams College a few years ago:

The most important part of listening is that is is a sign of respect. It’s not just what you hear by listening that is important. It is what you say by listening that is important…

Never underestimate how much people just want to feel that they have been heard, and once you have given them that chance they will hear you.

The Psychology of Communication

Communication is a dance, not a diktat. The establishment of trust requires communication, in an ascending exchange of reciprocal acts of listening.

Being right is an overrated virtue. In fact, being right too soon has the effect of pissing people off. There is a time for every season, including stating opinions. And that time is after you have listened.

Not all truisms are true, but this one is:

–People don’t care what you know, until they know that you care.

That simple little sentence, phrased in an intentionally corny manner so as to increase the odds of remembering it, is very sound psychology.

Communications, influence and trust have a few very simple rules: one is, first you listen.

  • Shrinks know this.
  • Good salespeople know this.
  • Good diplomats know this.

Apparently, so do Admirals.

Thanks for the clinic, Admiral.

 

 

 

 

 

 

Get Your Trust Matters App–and Your Own Too

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You’re a reader of this blog, TrustMatters. How do you receive it?

Do you subscribe to it in your e-mail inbox?

Do you look at it through an RSS reader?

Do you click on a link and read it in a browser?

Well, now you can be the coolest kid on the block. You can download an iPhone app for TrustMatters. It even looks pretty cool; see for yourself.

No more lengthy waits for your phone browser to load; no more typing in too many letters for the small screen. Download the app, and voila–one touch TrustMatters. Dozens of recent blog posts, available at the touch of your index finger. How cool is that?

How to get it: go to the iPhone appstore, search on Motherapp, then scroll down to Trusted Advisor; the screen image is the one you see above right. (It’s on about the 4th-5th screen).

Of course, the really really cool thing is that you too can have your own app. Not only that: you can get it for free. This comes courtesy of the good people at Mother App. In their words, they are "the industry-leading provider of cross-platform mobile applications." Not just the iPhone platform, either.

I am happy to promote them, because they have given me something of value, and I like the way they do business–sample selling, giving without attachment in order to receive.

Check them out, at their website.

What is an App?

I am not a techie, just a curious dabbler. If you already understand the app’s deeply, much less every programmer, please stop here before you embarrass me.

To me, the experience made me understand a little better just what constitutes an app. In a sense, it is nothing more than a customized URL. Its first cousin is a bookmark in a browser; or, more accurately a tabbed URL in a browser. It sacrifices a small part of your screen in return for convenience in accessing a site.

You can already create your own app for segments of certain sites. For example, I made my own app of the op-ed page in The New York Times.

There was a practical limit to how many apps any of us can accommodate, after which we need another meta-tool to search among the apps. But at the level of several screens of apps, which seems to be the most common among iPhone users, it is a valuable trade-off for several highly trafficked destinations.

And until everyone suffers from app over-load (perhaps not that far off), I just think it’s pretty cool to have your own app.

I like mine, hope you do too.

 

Three Little Words

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My mother always told me that bad luck comes in threes. At the risk of pushing my luck, I’m going to disagree with her–at least when it comes to trustworthiness. Here are three phrases, each three words long, that are an essential part of any Trusted Advisor toolkit: "That makes sense," "Tell me more," and "I don’t know."

"That Makes Sense"

Charlie speaks this phrase all the time and it’s remarkably effective. I say "speaks," rather than "uses," because it’s not a tactic; it’s a genuine expression of empathy.

When said from the heart, "That makes sense" is an incredible intimacy-builder. It’s no accident it also happens to be what relationship guru Harville Hendrix teaches couples to practice saying with each other when working through tough personal issues. Simply put, it’s validating. In a business context, "that makes sense" is particularly disarming in response to an opposing viewpoint…or something you don’t really want to hear.

Note that saying "that makes sense" is not the same as saying "I agree." With "that makes sense," you’re simply looking at the world from the other person’s vantage point and seeing how things might be pieced together. And unless you’re speaking to someone whose mental faculties are completely compromised, I promise you things do make sense over there, and there’s a way to see it, somehow or another.

"I see you’re concerned about investing a lot of money and time without being sure of the return. That makes sense."

"Sounds like it’s imperative to have the right executive sponsor in place before we move forward. That makes sense."

"It makes sense to consider all the options before you decide which firm you want to hire."

"Tell Me More"

"Tell me more" is a simple and elegant way to invite someone to share information with you. Distinct from a targeted, intellectually-impressive question, "tell me more" implies an absence of time pressure, agenda (as in motives), and a desire to show off. Its subtext: "The agenda is yours, my time is yours, and my focus is devoted to you, not me." Its beauty is in its simplicity and its other-orientation.

"I Don’t Know"

I’ve been in and around the consulting industry for close to 20 years and know very few consultants who are comfortable not knowing an answer to a question (myself included). On the contrary, we’ve convinced ourselves that clients not only want answers, they want the right answers…right away.  (See The Point of Listening is Not What you Hear but the Listening Itself.) Which leads to a lot of well-intended bad behavior, like ever-so-slightly exaggerating what we do know in order to fill in the gaps.

The alternative is having the courage to say "I don’t know" when you don’t know–being forthright in a way that appropriately conveys your overall confidence (so high, in fact, that you’re OK to admit what might be perceived as a weakness) and your commitment to find the most accurate answer. As counter-intuitive as it may be, "I don’t know" actually builds credibility (and therefore your trustworthiness) because it shows you are honest. ( For more about how the things we want to say the least usually build the most trust, read Trust and Golf: How Neither Makes Sense).

The Proof

Of course, we could add "I love you" to the list of word triplets, but then things start to get a little too squishy. (Or do they?)

I’ll end with this instead: intimacy, other-orientation, and credibility increase trustworthiness. "That makes sense," "Tell me more" and "I don’t know" improve your score on each. Therefore, three little words really can make you more trustworthy.

Quod erat demonstrandum.

P.S. By the way, with the new year upon us and so many of the usual resolutions already long-forgotten, it’s worth checking out Chris Brogan’s recent blog post, My 3 Words for 2010. Trusted Advisor Associates’ three words for the year (in draft) are Community, Rich-Soil, and Starpower. My personal ones are Leaps, Delicious, and Gravitas. And you?

 

 

 

Johnson & Johnson: The Corporate Tiger Woods

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The pharmaceutical industry has had more than its share of ethical challenges. It is not viewed by most people as harshly as the financial services industry, but most trust surveys will show it ranks near the bottom of industries in terms of trust.

I find this particularly ironic, because a great number of employees of pharmaceutical companies are genuinely and sincerely committed to bettering the lives and well-being of patients, and of supporting the physician and hospital markets. Some of them are self-deluding, but not all; and they have much data to back up their beliefs.

At the same time, the geography of the pharmaceutical industry is fraught with slippery slopes. When does supporting research cross the line into suborning favorable opinions? When does patient education become patient brainwashing by TV ads? Where is the dividing line between quoting opinion leaders and wining and dining them while soliciting the quotes?

These questions are every bit as challenging as questions about marking to market in the absence of transactions, or about the line between consumer choice and engineered addictive foods. In Pharma, it is never easy to distinguish where the plain ends and the mountain begins.

Johnson & Johnson Made it Look Easy

Which is why Johnson & Johnson, for so many years, made it look easy. First of all, they are not primarily known as a pharmaceutical company. Instead, they are known for two things: baby powder, and the iconic Tylenol response. They still teach cases in business schools about J&J’s quick and forthright response to a case of Tylenol tampering at the retail level umpteen years ago.

Second, and more important, they are known for the Credo–a set of beliefs articulated by Robert Wood Johnson in 1943, frequently quoted, and posted in front hallways of the company’s buildings in hometown New Brunswick, New Jersey (and I believe elsewhere as well).

I and many others have cited it as notable for making shareholder rewards the result of, rather than the purpose of, serving customers and community. J&J got corporate social responsibility and customer focus literally decades before other companies did.

That Was Then, This Was Now

Then, things changed. Or to be more clear, it suddenly became apparent that things had already changed.

First, the company announced another recall, including Benadryl, Motrin, and–again–Tylenol.

Problem is–the recall was a result of complaints starting 20 months prior. This was the exact opposite of the promptness for which Johnson & Johnson had become known in Round One.

But that’s not all. On the same day, the Justice Department filed charges against Johnson & Johnson for a fairly simple, in-your-face, kickback scheme. The federal case joins a whistleblower suit filed by two former employees of Omnicare, the company to whom the kickbacks were paid.

Whistleblowers, Justice Department, kickbacks. Say it ain’t so, Joe.

What’s it Mean When a Leader Falters?

It is troubling when the pharmaceutical firm with the most clearly positive image for ethical and consumer-friendly behavior gets serious egg on its face.

It is even more troubling that the nature of these offenses directly contradict the reasons for the previous good reputation: namely, transparency versus subterfuge, and timeliness versus foot-dragging. This is not a PR problem, at least not in the main; it is a contradiction of values. This is the corporate version of Tiger Woods.

But most troubling of all, to me at least, is the besmirching of the Credo. That was as well-written a document as I am aware of in the corporate world. I know people at Johnson & Johnson who speak about the importance of the Credo; I know others who know the firm more directly, and who are much more outspoken about the values-driven nature of the firm.

Now I feel stupid, and those others look like dupes. This incident has ramifications well beyond the negative press for Johnson & Johnson. It is a failure of culture, and has to call into doubt the sincerity and the power of other companies’ programs for values-based leadership. It fosters cynicism, an emotion already in serious oversupply in and around business.

And absolutely worst of all: I’ll bet big bucks that nearly all the wrongdoers on the J&J side don’t see anything wrong with what they did. I’ll bet we’ll hear phrases like "technical distinctions," "reasonable people can differ," and "narrow definitions of the law." Sometimes it looks dark out not because it’s night, but because your head is stuck where the sun don’t shine. And that’s a form of blindness that is catching.

I find that all pretty depressing. I welcome comments in particular from TrustMatters readers in the pharma industry. How are you feeling about this?

 

 

Employment Law: When Solutions Make Problems Worse

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Continuing this week’s theme of highlighting the role of the personal in business.

I was at a reception the other day, and ended up at a table with doctors and an employment lawyer. The lawyer specialized in advising corporate clients about equal opportunity employment law.

This partly means advising clients who have been sued. I asked him whether clients also invited him to make themselves lawsuit-proof, or whether the bulk of his practice was after-the-lawsuit defense. "Once they’ve been sued, they get religion and invite me in to design policies," he said.

"And it’s a helluva business. I worried at first that it would die out, but it turns out it’s the law practice that keeps on giving."

Maybe I was being a little feisty, I don’t know. But that’s where the fun started.

Managing People, or Managing Process

"It would seem to me," I ventured, "that the best way to prevent EEOC lawsuits is to be really good at basic people management: telling people the truth, face to face, about the role they are expected to play, getting great at giving and receiving feedback about how well they are or are not doing it."

"Oh, no no NO NO NO!" the lawyer responded. "That’ll get you killed in court. You have to have processes, document those processes, train on them, document that you’re training on them, and do everything short of tape-recording every conversation with every employee you have to make sure that no one’s saying something that could be interpreted wrongly.

"I tell all my clients a simple story–a small off-color joke. They laugh at it and it helps them bond with me in my presentation. Then I tell them how that joke could cost them a million bucks. It puts the fear of God in them. Employment law is the gift that keeps on giving."

When to Talk, and When to Blog

I am gradually, over my many years of experience, learning when to pick fights, and when to walk away from them. There was no point in arguing with someone I’ll never meet again over an issue I’ll never convince them about. (I was reminded of this wisdom by Judy kicking me under the table). 

On the other hand, it’s a great topic to blog about, and I hope it’ll stimulate some conversation. So let me be very blunt about my point of view.

That lawyer is the kind of pompous bureaucrat who gives bureaucracy a bad name. His intentions are not bad; not at all.  But he is a highly paid content-expert who is sowing discontent, alienating people, and creating inefficiency, all the while believing he’s contributing to our great system of private enterprise.

Harsh?  Well, here’s a few caveats.  First, not all lawyers agree with him. Second, this is an issue hardly unique to employment law. Third, there’s nothing wrong with processes per se.

But still: what I said.

Why Good Management Mitigates the Need for Process Management

I worked for two consulting firms. One had detailed employee contracts outlining things like intellectual property and non-competes; it got sued a couple times per year. The other had no such clauses and its employment contracts were 20% the length of those of the first firm. It had no employee lawsuits in 20 years.

The reason is simple: one managed by process and contract, the other by people. The latter obviates much of the need for the former.

If you treat people as objects to be controlled, they will oblige by meeting your (low) expectations. If you tell entire industries that they’ll be managed by regulation and laws, they will stop behaving ethically and do what they please until you make it illegal.

If you start making process compliance the guts of employment law, you lose the very human relationship that makes employment work. The problem lies not so much in the law as in ignorance of how human relations work.

Lawyers have no training in management. No fault there, neither do doctors or rabbis or engineers. But managers do. They are supposed to manage. When they default their management tasks to lawyers, they get what they deserve–employees who are suspicious of the motives behind their communications. And the employees are not wrong to feel that way.

Managers abdicate personal management at their own risk. The cost of running bureaucratic compliance operations to compensate for a failure in basic supervision is massive.

The answer is not more bureaucracy–it’s more truth and honesty, transparency, and responsibility-taking.  Don’t treat people like caustic assets who might sue you unless you insulate yourself with processes.  Instead, treat them like human beings who can be developed through good management, and who will serve you well in return.