Meeting Your Customers’ Value Metrics

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This weekend I read two things. Each influenced me, but the combination kicked me hard.

One was a post by Chris Brogan on website best practices. In it, he critiqued his own website, concluding that he had some work to do.

In my experience, most good professionals have good things to say, though they (we) are not very good at persuading their clients to listen to them. And the toughest client for all of us to convince is—ourselves. We are great at diagnosing issues in others; not so good at seeing the pattern in the mirror. Bravo Chris.

The other piece was by Jeff Thull. I’m honored to be one whom Jeff asked to review the 2nd edition of his classic Mastering the Complex Sale. I was impressed the first time I read it, and reading it on a plane ride Sunday brought on that same rush of ‘oh wow’s yet again.

To grossly over-summarize: Thull has written the book on how to sell (and buy, and manage) in an era where needs identification itself is too complicated for the buyer alone to determine.

Brogan plus Thull: what a combination. And that got me on the subject of value metrics and customer benefits.

What My Customers Ask Me: and What I’ve Been Answering

Most of my customers ask me ‘can you point to results of increased trustworthiness in your client organizations?’ And reading Brogan and Thull today, I had to admit: I’ve done a poor job of answering that question.

First, if I’m honest, I generally don’t raise the subject. If it does come up, I have as often as not steered the discussion elsewhere. “Trust itself doesn’t even have a universal definition, how can it be measured,” I say. “Over-measurement of trust can destroy trust; metrics are overdone; and if the trust is working, you’ll know it through some major metrics like revenue, cost and speed.”

Yeah, I know. All true; but I wouldn’t find it too satisfying either. It sounds defensive. What it isn’t, is collaborative and useful.

Ouch: hey Chris, was it this hard for you to admit your website could be improved?

What I Should be Answering

Great insights, I have found, are usually simple: rarely easy, but usually simple. Jeff Thull’s Big Insight is that most sales these days assume the client knows what’s wrong, and largely how to solve the problem. Hence most sales processes aim at teasing out needs statements from clients.

That is profoundly wrong, and has been for some time. David Maister said years ago that ‘the problem is never what the client said it was in the first meeting.’ The problem definition has to be developed collaboratively. And problem definition is just the barest beginning. Thull’s work is the mental and process roadmap for redesigning supplier-buyer relationships in their entirety.

In my simple small example, what I need to do is to engage my potential clients in discussions about how they measure value; what their metrics are; and whether (or not) my service offering affects those metrics. If there’s no match, it’s my job to explore with them whether the issue is their metrics or my service offering—all done with an attitude of curiosity and a willingness to be agnostic about the outcome.

So, one of the battlegrounds is measurement. I’ll start by getting rid of the ‘battleground’ metaphor and remember this is all about a joint exploration of how to fix the world, one little product and service offering and organization at a time.

Thanks Jeff for the structured big-picture thinking, and Chris for the cold water in the face. Once again, I have met the enemy and it is me.

To present, past and future clients of mine: let’s talk about how you think about the value of trust.

Collaboration: Trust Matters Interview with Brandon Klein

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I first met Brandon Klein when we were swamped processing people at the outset of the Trust Summit in NYC October 23. Some very nice guy came over and, simply, offered to pitch in and help. Which he then proceeded to do, and most ably.

That was Brandon, and it turns out, that was characteristic of him. He doesn’t just collaborate, he does collaboration. In particular, he’s something of an expert in the practical ways of organizing gatherings of human beings in ways that maximize output. That includes social dynamics, ergonomics, technology and psychology.

Since collaboration is one of the four Trust Principles, it’s of interest to us both.

CHG: Let’s start big: how do you define collaboration?

BK: Collaboration is repeating the assumed and then stating the unspoken. It is envisioning what success can be and then understanding how to work together to make it happen. It is sometimes best understood by stating what it’s NOT: It is not about latest social media software (chasing the shiny new thing), it’s not more meetings about meetings or guessing games/”strategizing” about what the boss might be thinking. Collaboration is defining and aligning on a common objective as a group of stakeholders and then openly, selflessly, working towards achieving it in a fun, social, interactive, barrier-less way.

CHG: How did you come to be involved in this sort of thing?

BK: Like most, I was incredibly frustrated by the amount of time that was wasted at work. Though most workplace environments boasted a team approach, I couldn’t accept that collaboration meant spending 95% of my day sitting in a cubicle and/or conference room. In searching for a better way, I was lucky enough to be one of the original people to learn the collaborative process known as a DesignShop™- in my opinion, the best off-line collaborative methodology in existence today.

CHG: Why do you think collaboration is ‘hot’ these days?

BK: The proliferation of web-based tools has definitely made the concept of collaboration more top-of-mind. Everyone can now be “collaborative” with a couple clicks of the mouse (or cell phone). It’s similar to the effect of television on sports. Once upon a time, you either had to play the sport or plan in advance to make the journey to the stadium to cheer for your team and interact with the fans. Now, you simply need to press a button on your TV’s remote. Fan bases have increased dramatically, but so has their average weight!

We’ve managed to make online collaboration hot and successful, but we have quickly forgotten what it means to collaborate in person. We can comment anonymously online, but can’t say why we are so ineffective at work. We can “Reply All” to make it look like we are involved, but can’t cut a meeting short that isn’t going anywhere.

CHG: Your focus is primarily on people getting together, isn’t it? Is technology changing that?

BK: Even with using Cisco’s Telepresence (which is awesome) it is very difficult to say that technology has changed ‘getting together’ yet. Yes, online conversations are fantastic and improving everyday. However, I focus on meetings with 12 to 120 people in the same room. Technology has little effect on face-to-face meetings, and in most cases makes them worse. This is because although we have created new tools and ways of working online, we haven’t developed ways of interacting better in person. It is commonplace and therefore acceptable to sit behind a conference table and read your blackberry, while calling the meeting successful and collaborative. It is crazy!

CHG: Let’s talk about conventional meetings; what’s the biggest mistake people make?

BK: Agendas, PowerPoint and WMD’s (Weapons of Mass Distraction ie phones/crackberry’s) are the 3 most unproductive tools on the planet when it comes to meetings. Additionally things most people don’t even consider such as tables, tardiness and tight-lips, are pretty bad too. Here are the quick reasons:

  • Agendas mean people know when to check out or worry/dread what comes next. Don’t publish agendas to more than 3-4 of the key people responsible for the output of the entire project/strategy etc.
  • PowerPoint puts people to sleep. Unless you are good enough to speak at TED, just don’t use it. Tell a story. Have a discussion about the main points instead. Put the bullet points in large all caps letters on a flip chart. Or better yet, create a visual to represent everything.
  • Technology in the pocket. Humans can’t multi-task. Seen the statistics on text messaging and driving? 23 times more dangerous than being drunk. You don’t want your meeting attendees drunk do you?
  • Tables. If people don’t need to eat lunch or take incredibly copious notes and have stacks of paper in front of them, why put a barrier between every person?
  • Tardiness. This could be replaced with excuses. If you show up late, everyone has to catch you up… wasting everyone’s time.
  • Tight-lips. Water cooler talk is the essence of a company and the harbinger for the success of the project. Bring it out into the open and every meeting and project will succeed.

CHG: How about big-group seminars and shows and conventions; do you see a few big things happening there?

BK: Unfortunately, there hasn’t been enough change. The ‘sit and get’ model is SAFE and so it is almost always what you see. Large-scale collaborative events of any kind are really quite rare. People are afraid to foster interactivity, or to relinquish control. A giant PowerPoint screen is a sense of comfort and power.

CHG: What’s the role of technology? Are twitter feeds good or bad? Is cloud computing affecting things?

BK: I love all of this technology. Twitter Feeds, Google Waves, Live-Blogging, etc, they are all great additions to any group gathering. Their popularity means they are being included by default right now, which can often be more distracting then useful. Their incorporation needs to be strategically designed. Unfortunately, just throwing out features doesn’t produce collaborative, successful output.

CHG: What’s your view of collaboration and how it fosters trust? Or do you see it the other way ‘round?

BK: Perhaps this is the classic case of the chicken and the egg. People must trust in order to collaborate better. And true collaboration will lead to stronger trust. But collaboration only works when people share openly and honestly. In the end, companies, managers, employees need to be willing to change the status quo in order for foster true collaboration… they need to trust each other.

CHG: Many thanks, Brandon, and let’s pursue some of this further another time.

 

For more information on Brandon Klein and the collaboration information he and his colleagues provide, check out his website at CollaborationKing.com

Can Trust Replace Contracts?

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SafeToo often trust is thought of as a nice-to-have but vaguely soft, squishy, liberal sort of relationship thingy. Not often enough do we realize it also holds the key to reducing costs and time, and to fostering innovation and new value creation.  It also mitigates risk.

It’s true: trust is highly profitable. Consider how Warren Buffett acquired McLean Distribution from Walmart. By deciding to trust the management team at Walmart, Buffett reached an agreement in a matter of days and at minimal cost, saving months and many millions in cost.

You may be saying, ‘Fine—but who’s going to double-cross Warren Buffett? It’s different for him.”

I don’t think so. Let me add my own small lesson.

To Sign a Contract? Or to Trust?

In addition to speaking and writing, I run a seminar business. I’ve spent this week training a half dozen worldwide potential trainers, sharing with them all the training manuals, approaches, ideas and concepts that I have developed over the years.

Normal procedure would be for me to have them all sign a non-disclosure agreement to protect my intellectual property, which is, after all, the source of my livelihood. Such agreements can be more or less complex. If violated, they give me the legal right to pursue redress in courts in various countries should one of my licensees/coaches/contractors abscond with my materials or be found to be using them for their own purposes without properly getting my approval or compensating me appropriately.

I could have done that.

Instead, I explained to them that I would prefer to trust them to do the right thing. We went through a 60-second ceremony. All of us raised our hands and, looking at each other, pledged two things: to respect my intellectual property in the commonsense way they felt was right; and if there was any question about what that meant, to talk to me and the rest of our team about it.

No papers. No contracts. Nothing written. Not enforceable in any court of law.

Where’s the Enforceability in Trust?

I feel more protected by this oath than I do by any legal agreement I might have signed. Why? Certainly not because it’s enforceable in a court of law.

Rather, because it’s enforceable in a higher court; the one of their conscience. Conscience is triggered by conscious, collaborative relationships between human beings.

I have no doubt that this group of people, with whom I have worked closely over several days and for months preceding this gathering, will honor the pledge. I trust them. This is partly because of who I know them to be, and also partly because I trust them.

Trust is not something you work on directly; trust is a result. It is the result of two parties interacting: one who trusts, and the other who is trusted. You can practice both trusting and being trustworthy. Probably the fastest way to make people more trustworthy is to trust them first.

Is it risky? Of course.  But I think it is less risky than relying on the rather impersonal and tenuous threads of trademark law. My recourse to legal violations is courts, which are costly, time-consuming, and generally manufacture ill-will in the pursuit of their justice.

By contrast, trusting my business relationships itself increases their trustworthiness, which also lowers my risk–and at near-zero cost. My means of enforcement is pre-installed within them in the form of their consciences.

It’s a win-win. Except maybe for the lawyers.

And frankly I think there’s room for lawyers to gain from this too. But that’s another blog.

What Introductions Can Teach Us About Trust

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parachute jumpersI’m in Washington, D.C. this week, giving a Being Trusted Advisors training session along with the rest of our staff. There is an exercise I like around introductions.

Rather than the usual ‘let’s go around the table and introduce ourselves,’ we ask people to quickly state their company (or title/role if it’s an internal training), followed by two questions:

1. Tell the group how many months you’ve been with (company name), and
2. Tell the group an interesting tidbit or factoid about yourself—something a little bit unusual, quirky, interesting, not an every-day business fact about yourself.

I ask everyone in the room in random order to quickly answer the two questions. The debrief is then: why do you think I asked us to take X minutes doing this?

The usual answers are to establish a group identity, to begin creating trust, to get people focused in on the room. True, true, and true.

Then I’ll stand behind one person and ask the group: “how many months was Joe here with his company?” A few people remember; often they remember different numbers.

I’ll then ask, “What was Joe’s interesting tidbit or factoid?”

The whole group responds immediately: “Arrived late to his own wedding,” or “chickened out parachuting last weekend,” or whatever.

We have a good time with that one, talking about why we remember personal tidbits more than we remember data. But what’s really interesting is: so what?

What should we do with the observation that people remember personal quirks and stories and anecdotes more than they do objective data?

What should a client relationship manager do with that observation? A salesperson? An accountant?

What should you do with that observation? 
 

A Story About the Power of Stories

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The power of stories is well-described in the business literature.  Some of the most famous are stories about story-telling: 1001 Arabian Nights, Dickens’ A Christmas Carol, and its American version, It’s a Wonderful Life.
The why of stories is also well-explained. One author suggests that stories are powerful because they plow common ground, create meaning, build community, and are memorable.
There is, however, another reason why story-telling is so powerful. Let me illustrate by, of course, a story (thanks to Charlie Ortman).
A man was shipwrecked on a desert island. Years went by. A decade. Then another. 

One day a rescue ship arrived. The rescuers found the man healthy and happy. “Is this your house?” they asked, pointing to a comfortable dwelling the man had constructed. “Yes,” he said.

“And this lovely hut over here?” 
“That’s my church,” the man said.
“And what’s this?” the rescuers asked, pointing to a somewhat disheveled, faded hut.
“Ah,” said the man drily, “that’s the church I used to attend.” 

I’ll resist the temptation to say what my interpretation was. Later, I realized it could have been interpreted in another way–at least one other way.

Stories Permit Influence without Rejection

It’s my observation that generally the worst way to get someone to do something is to tell them that they should do it—and then try to justify the advice. There is a human built-in resistance to taking advice, unless accompanied by a serious attempt to first hear out the advisee.

Stories provide a powerful supplement to the critical role of listening in this reciprocal dance.

There is something Teflon- and Rorschach-like about stories. In their telling, the fingerprints of the story teller are removed. The listener hears largely what (s)he wants to hear, without the usual baggage of resistance against the advisor. This is often true even when the teller’s intended meaning is clear. 

Consider the story of the shipwrecked man. 
What meaning do you hear in that story? 
Please add your comment below—so we can all see how our own meanings differ.   
 

Best B2B Sale of the Month: Selling by Doing, Not Selling by Telling

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I spoke recently with Craig Leach, CEO of Graham-Pelton Consuting. Graham-Pelton is a leader in the field of non-profit fund-raising consulting.

CHG: So Craig, tell me this story.

CL: It was a large potential client for us. We had discussions with several key leaders, but as is often the case in non-profits, the board wanted to be involved before significant commitments were made. That meant a presentation to the full board—about 30 people in this case.

I knew we were in the last time-slot of a four-firm dog and pony show afternoon for this group. It had to have been a long day for that many people.

I and my team had prepared well, but as I we headed down the hall to await being summoned at 4:30, just as the door opened and we were ushered in, I got a little inspiration. I channelled you Charlie and your approach to trust-based selling.

“I’m calling an audible,” I whispered to my team. “Follow my lead.”

We walked in to this long, vertical room with 30 stressed, tired faces jammed into the seats. You could hear pencils tapping, and could smell the low-grade tension.

“Good afternoon, ladies and gentlemen,” I said. “We’ve got another long presentation for you to sit through today, but I’m wondering—maybe we should do something else. All those in favor of junking the slides and just getting down to business, say Aye!”

Well some of them literally jumped out of their seats, thrusting their hands up and shouting Aye!

We had a great meeting. We talked about what they wanted, what their concerns were, and we listened—actively and attentively. They asked us for some opinions, and we gave them. Everybody felt great having that conversation.

Of course we got the job, and several people told me later that our approach was, while not the only reason we got it, certainly a differentiator and a real plus.

CHG: Congratulations, Craig, that’s a great story. What do you think it means? Is this a case of the last time slot wins?

CL: No, not at all. Partly we read the room right, and got credit for adjusting to it. But more deeply, it was what you had written about: selling by doing, not by
telling. There was nothing canned about what we did. It was a conversation in real time and therefore it became a consulting session rather than a sales pitch. Nothing up our sleeves. We brought game, not gamebooks. We just did what we do, and they could immediately see whatever they wanted to see—not just what we wanted them to see. That’s what really did it, I think.

CHG: I think you’re right. Congratulations again.

The Trust Reader Volume 3

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This post went out the day before Thanksgiving in the US.  Which means a fair number of TrustMatters readers may have had a few other things on their mind.   So with apologies for the repetition; here it is again.

Greetings, and welcome to Edition 3 of the TrustReader. The TrustReader series announces the publication of new articles on the Trusted Advisor website.

Get the Trust Reader volume 3 here

In this edition of the TrustReader there is a common theme: the idea of applying principles to business. One applies principles-based thinking to tactics–the issue of pricing. The lead article applies principles-based thinking at a functional level–in this case, Sales. And the final article, which originally appeared in BusinessWeek.com, is about principles at the core of the way business is conducted. Please enjoy reading:

I welcome your comments, and hope your holiday season is enjoyable.

Intimacy 201

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At first blush, intimacy is a strange word to use in a business context. "What, I’m supposed to intimate with my clients?" In the sense that being intimate means being familiar, informal, and emotionally connected…yes, indeed.

Intimacy is one of the four components of the Trust Equation and it usually gets the short-shrift. For most, it’s more natural to build trust by increasing credibility and reliability. And yet, without intimacy, business transactions are just that–transactions–and the "safe haven" experience that is the hallmark of Trusted Advisor relationships is a pipe dream.

Here is a Top 10 list of intimacy-builders to help answer the question, "How do I build intimacy with my clients?"

Caveat: While the three  groupings (Be Positive, Be Personal, Be Bold) are relatively universal, the specifics underneath are written from a U.S. orientation (mine) and should be adapted as appropriate to fit different cultural norms.

Be Positive

1. Tell your client something you appreciate about him. Don’t just think it; say it. "Amal, before we dig into our agenda today, I just wanted to say I really appreciate how you handled the meeting yesterday. You were clear and direct while also listening to the concerns that were raised. I think it made a difference for the staff."

2. Celebrate successes together. Give the tendency to be a Task Master a little reprieve. Suggest meetings, coffees, lunches–whatever–that are specifically focused on reflecting on/toasting a job well done.

Be Personal

3. Use your client’s name when you communicate with him/her. They say your own name is the sweetest music to your ears. Address your client personally in your emails, voicemails, and conversations.

4. Use colloquial language. Check the consulting jargon and multi-syllablic words at the door. Practice human talk. Simple. Straightforward. To the point.

5. Be empathic in all your interactions. Empathy creates emotional correctedness. Stop to demonstrate that you’re really tuned in to what your client is saying (both the words and the "music") before you ask your next question or make your next recommendation. "It’s clear this is a stressful situation, Frank" or "I can appreciate the difficulty in that" or "That sounds like a victory worth celebrating!" (see #2)

6. Be willing to express your own emotions. They’re legit too. "Gee, Johannes, I must confess to feeling pretty frustrated by what you just said" or "You have no idea how happy I am to hear that."

7.  Share something personal. The next time you’re doing the Monday morning how-was-your-weekend-fine-thanks-yours bit, don’t let it stop at a superficial exchange. "My weekend was great, Surita, thanks for asking. My parents were in town and Sam and I really enjoyed the built-in babysitting. We got a much-needed break."

Be Bold

8. Acknowledge uncomfortable situations. Caveats are conversational jewels: "Wow, this is awkward…" or "I wish I had better news…" or "The timing with this is embarrassing…"

9. Say what needs to be said. Practice doing it in 10 words or less. "We’re not going to make the deadline" or "We just don’t have the executive sponsorship we need" or "Jim is leaving the team." The direct approach works especially well in combination with caveats (see #8).

10. Take responsibility for mistakes. Yeah, it’s risky. It’s also human (we all make ’em) and refreshingly real. "Janet, part of the problem here is that I dropped the ball."

Of course, none of these "techniques" creates intimacy if they’re forced or disingenuous or robotic. It’s okay (and perfectly natural) to be a little awkward and unpolished–in fact, that just creates more intimacy.

HBS’s Bill Sahlman on the Financial Crisis: Why it Happened, How to Fix It

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Few people are more qualified to explain what went wrong in the financial industry than Harvard Business School’s Bill Sahlman.  His resume covers just about every aspect of the industry.

In an HBS Working Knowledge paper titled Management and the Financial Crisis (We Have Met the Enemy and He is Us …)  he gives us a very special view of what happened—broad and deep, and holistic to boot. He also gives us an idea of what should be done.

He gets an A+ for the explanation; for the recommendation, maybe not so much.

My summary cannot do his paper justice; but to whet your appetite, I’ll touch a few bases.

Managerial Incompetence Was the Driving Factor

Black swan theory fans notwithstanding, Sahlman argues this meltdown was not unique except in scope and scale. What we had was a massive failure of five largely managerial systems: Incentives, Control and Information Technology, Accounting, Human Capital, and Culture.

Sahlman also flatly says “Greed played a role but the bigger problem was incompetence.” What he means by competence largely comes down to managers. I find this hugely commonsensical, and rare at the same time. In other words, I think he’s very right.

He is inclined also to give a bye to some of the usual suspects: accounting firms, boards of directors, and regulators, to some extent. His reasoning is hard to argue with: the complexity of the products engaged in ran far beyond the relatively meager abilities of those in the aforementioned roles.

Sahlman singles out Goldman Sachs and JPMorgan Chase’s Dimon as examples of good managers who clearly avoided most of the damage caused by their inept competitors.
His diagnosis, refreshingly, puts the blame squarely at the feet of business itself—particularly management. A management that runs the company through over-leveraging and over-optimism is a management team that is grossly incompetent. Even they wouldn’t have generally wanted the results they ended up with.

What I also like about Sahlman’s view is that it treats impersonal tools like incentives not as exogenous dehumanizing variables, but as things completely within the realm of management—and he makes management squarely responsible for their use. As far as I’m concerned, this is the best of HBS talking; the old-school HBS that assumes managers have a responsibility to run organizations holistically, for the long run, and in the interest of stakeholders–not slavishly to a few slanted metrics.

The Solution–an Overseer?

After such a great analysis, I’m left a little cold with Sahlman’s solution. It is to have a sort of outside observer—not a government interveener, since Sahlman is not sanguine about government intervention, but a new kind of monitor. This monitor would have a scope to cover the five broad areas Sahlman outlined at the outset.

The problem is not with having a holistic view; I’m all for it. And while Sahlman is rather vague about the statutory authority of the “monitor,” I figure that could be figured out.

My concern is that, in the end, Sahlman sounds like the consummate insider; his specific knowledge of the situation runs the risk of blinding him to the system’s flaws.
In this case, the one flaw that worries me is the belief that one more systemic overview will finally get it right. It’s the idea that our problem is the lack of a comprehensive enough model; that if we just had a little more data and a better model, we could finally model the world.

Here I have to agree with Taleb’s Black Swan theory: the problem with models is that they never model what hasn’t been envisioned. And while you won’t get a better dose of commonsense in business than what Sahlman serves up, I’m still sceptical about this part.

A Different Idea: Management by Values

So do I have a better idea? Well, I do have another idea. And it lies in the one area Sahlman puts least emphasis on—culture. While Sahlman talks about ethical cultures, he seems generally to mean a focus on long-term risk management and an aversion to illegality. Necessary, but not sufficient, for a good culture.

Those traits are jacks for openers. We need to be cultivating belief systems, not just management control systems.  We need mental models that talk about relationships, that actually live out the idea of long-term relationships instead of relegating them to the thin air of risk management managers.

We need baked-in beliefs about the role of business in society, that get promulgated not by monitors and smart managers, but by high school teachers and b-school profs, by bloggers and journalists and marketing managers and bankers alike, and in the most mundane areas of business. That’s a culture: a set of beliefs that people unconsciously share about ‘big’ things like fairness, relationships and the value of one’s word.

One of the best insights I ever got from HBS could easily have been articulated by Sahlman himself, I suspect: as things get more complicated, you’re better off managing by values than by policies.
 

The Trust Reader Volume 3

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The Trust Reader Volume 3

Greetings, and welcome to Edition 3 of the TrustReader. The TrustReader series announces the publication of new articles on the Trusted Advisor website.

Get the Trust Reader volume 3 here

In this edition of the TrustReader there is a common theme: the idea of applying principles to business. One applies principles-based thinking to tactics–the issue of pricing. The lead article applies principles-based thinking at a functional level–in this case, Sales. And the final article, which originally appeared in BusinessWeek.com, is about principles at the core of the way business is conducted. Please enjoy reading:

I welcome your comments, and hope your holiday season is enjoyable.