Day 5 of 5: Trust-based Business Development in a Recession: Principle 4, Transparency

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This is Day 5 of 5 in our week-long series of selling in a recession using the Four Trust Principles. Today’s principle is Principle 4—make transparency your first instinct, except when being transparent is illegal or hurtful to others.

Transparency helps business development in a recession in three ways.

First, it gives information to your customers, suppliers and partners so they can generate new ideas about how to work with you—to cut costs, create new service offerings, or alter their own practices to align with your products or services.

Second, emotional transparency enables empathy—always important to selling, but especially now. Empathy deepens personal relationships, which build better business relationships. And relationships formed under times of stress are the strongest.

Finally, transparency is the antidote to suspicion. In a recession, bad behavior goes up. Buyers are more suspicious of sellers’ motives. Transparency eases their mind about the motives behind your actions, your words, and your intentions. Transparency helps your sales.

As you read through today’s suggestions list, you’ll probably notice that the main reason we don’t practice transparency is fear—fear of being taken advantage of by competitors, by employees, and by customers. Now is the time to remember the adage “the best way to make a man trustworthy is to trust him.” You receive the behavior you expect.

Try trusting your customers by being transparent.

Here are 16 ideas for improving sales in a recession by being transparent. Please add your own—on this post, and on all five of the days’ posts.

1. Once you develop your plans for addressing the recession, share your information and concerns with key customers, including how your plans could affect the relationship. This can create an intense, positive discussion.

2. If you have layoffs that affect customers, let them know immediately, together with succession plans for customer contacts. And don’t try to shut off customers from dialogue with their former contacts in your firm; give closure room to work. If you’re afraid of what the employee will say, then you have bigger problems to work on—trying to hide it will only make it worse.

3. If you come up with an approach to the economy that could help other companies—yes, even competitors—share it publicly. Be the company that cares enough about people to share the innovative ideas that could help pull us all out, or reduce the pain that individuals will bear.

4. Share your cost structure with your customers. This will eliminate any suspicions they have about your pricing. They will also appreciate your candor, and come to trust you more.

5. Don’t BS your customers about where your own company stands—financially and otherwise—because you’re afraid of looking bad or making your clients/partners worry. Tell it like it is. They can handle the truth. Leave spin control to the ordinary companies out there. When fear rules the land, truth-telling serves as an anchor to those who don’t know what to think.

6. Share personal information about your staff with potential clients. Pictures and bios make it far easier for customers to know who they’ll be working with, or who they’ll be speaking with on the phone. Human to human. It makes it all personal. If you’re holding back because search firms might poach good people, remember—in a recession there’s not a lot of hiring going on. Right now, making customers feel safer is more important than holding rare hiring raids at bay.

7. In sales conversations, compare your product or service to others. Include all relevant information—the good, the bad, and the ugly—to help your customers make informed choices. Do not even think of spinning it—you cannot spin and be transparent at the same time. Realize that some buyers will go with your competitors as a result of what you’ve shared. Deal with it. You’ll end up with more and better in the end.

8. During your next client visit, ask yourself, is there an elephant in the room? A hidden objection, a pricing concern, a weakness, a broken promise? Take the risk; do the counter-intuitive thing and say something like, “Hey, I might be way off-base about this, but if I were in your shoes, I might be wondering … Is that an issue/concern for you?” You have to unlearn some old bad habits to be transparent. But there are few faster ways to build trust.

9. Now is the time to ask for feedback from your clients. Honest feedback. Really honest feedback. Now is also the time to offer feedback for your clients. Honest feedback. Really honest feedback.

10. Tell the truth about your own emotional reality. If you’re stressed/worried/anxious … saying so will build intimacy. We’re not advocating a public panic attack; we all have to manage our emotions well during tough times. But to an extent we’re all in a similar boat right now and being real about it has its own rewards. Not the least of which is you are far more likely to get the straight scoop from your client about his/her reality, which puts you in a much better position to be of service.

11. Consider sharing information about your backlog, prospective orders, or plans as they affect vendors and suppliers. In a recession, having advance, non-binding discussions about the future is invaluable to those who sell to you. Help them, and they will help you. Clam up and refuse to discuss, and you just frustrate them. We normally avoid this kind of disclosure out of fear for losing some competitive edge. That fear is vastly over-stated, and more than compensated for by the supplier loyalty you engender by being willing to open with those who serve you.

12. Your company wants to purchase a complex piece of equipment, but it’s too expensive. Your vendor wants to sell it to you, but doesn’t know how to make it less costly based on your specs. If you are both transparent—why you need it, what it’s worth to you, what it costs them, and how they make it—then together you can find a way to make it cheaper. That’s collaboration—but what enables collaboration is transparency.

13. Share information about your product development plans. Amazon just got slammed on their own blogs for giving their customers no advance warning and no price break for the new Kindle. Amazon will do just fine, thank you, but who needs the bad publicity? Yes, that’s the industry norm in electronics—but that hardly makes it right to tick off your existing customers in a recessionary time.

14. When your client asks you a question such as, “Do you have experience in…?”, answer honestly and completely. If you aren’t right for a project, it’s ok. Put your scarcity mentality—which drives your fear of losing the sale—on the back burner. It’s better to address that up front, then for your client to find out later. You should always do this; but in recession-based times of fear and suspicion, the power of transparency in service to the customer is magnified.

15. It’s a naked world— can’t really hide anything anymore thanks to emails, meetings at Starbucks, cell phone records. You may be practicing transparency unintentionally. But “oops” moments make you look deceitful, especially in sales. So, don’t do that. Don’t say or write anything you wouldn’t mind everyone reading in the newspaper. Honesty and lack of spin in sales in suspicious downtimes is so refreshingly counter-intuitive that your sales will increase.

16. Shareyour product development plans with your customers before the products are ready for prime time. The software industry long ago figured out that the benefits of letting customers develop their beta releases vastly outweighed the competitive advantage accruing to a customer. People are more likely to buy what they’ve had a hand in developing—if you give them the chance. If you’re in professional services, sharing the early version of a new service offering with potential clients will give you invaluable insight, help educate your buyers, and increases trust. More importantly, your willingness to share your imperfections "early and ugly" says a lot about who you are.

 

That’s the end of this weeklong series of using trust to improve selling in a recession. Link back to the beginning of the series here. And feel free to add your own ideas throughout.

 

 

Day 4 of 5: Trust-based Business Development in a Recession: Principle 3, Long-Term and Relationship Focus

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This is day 4 of 5 in our week-long series about selling in a Recession using the Four Trust Principles. Today’s principle is Principle 3—Focus on the medium-to-long term, not the short term. This implies a focus on relationships, not transactions.

Even more than the other Trust Principles, this one is relevant to selling in recessions.

On Day 1 we suggested that the right trust-based attitude in a recession is to remember that down cycles are only half the story—and the half in which trust is most indelibly created. All strong relationships live by the motto ”for richer and poorer, for better and worse…”—and the test of the relationship is rocky times. The time to harvest trust is in good times; the time to build it is now.

You find out who your friends are when times are tough. You find out who really cares about you when they have to choose between self-serving and other-serving opportunities. And others find out how you make those choices. By choosing to defer self-aggrandizing activities in support of your customers—precisely when it’s hardest to do and takes the most courage—you increase your service to your customers the most, and earn their trust.

The suggestions that follow are built from that perspective. Please–add your own ideas to the list so that everyone can benefit. Here are 10 ideas to prime the pump:

1. Buy two tickets now for a major cultural or athletic event scheduled for mid to late 2010. Send one to a highly favored customer or client, with a note saying “We will get through all this, together, and I look forward to celebrating with you once we do. Keep this ticket in a safe place, because mine is the seat next to yours.”

2. Pick your top 3 clients, and strategize internally on how you can strengthen your relationship for the long run. Then go discuss those plans with those three clients, telling them exactly what you’ve done, and why.

3. Help everyone you know who has been laid off – provide advice, contacts, and/or just listen. These are people who are potentially great customers down the road; but don’t do it for that reason, do it because you care.

4. If you’re a consulting organization, now is a great time to establish your alumni network. And if you already have one, kick up the level of involvement. Host cocktail parties in various locations. Establish or update the directory. Get your alumni an intranet page, or a devoted Facebook group or other aggregation. Facilitate their networking.

5. If you’re a lawyer or consultant and not using social media to connect with your clients, now is the time for this type of investment– build your network and help your clients build theirs.

6. If you are one of the many unfortunate individuals who has lost a job, don’t burn bridges in anger, hurt or frustration. You’re now selling you. Keep the long term in mind. Join the alumni network—or offer to help create one. Use social media. Begin networking ASAP. Leaders don’t like causing hardship—they prefer to help. How you act in the days after a layoff advertises your trustworthiness.

7. If a key customer is in the middle of an important job with you and they can’t afford for you to finish it, talk it over with them and offer to defer payment until such time as the customer can pay. That could be a long time. But if the relationship is good, this generous offer creates trust and greatly reduces the risk of nonpayment. And the cost of financing these days is very low. It doesn’t cost much to be generous; it lowers credit risk by creating trust and reciprocity; and showing a little faith and courage does wonders for the relationship.

8. Consider what you can offer your clients’ children. Seriously. A financial planner in Canada offered free investment planning education to a client’s 12 and 14 year old children. His co-workers chided him because there were no fees associated with it. His response was, “are you kidding? Their father loves me for it; that’s good for referrals. And someday his kids will inherit a lot of his wealth. I’m in this business for the long haul—my lifetime and the lifetimes of my clients.”

9. If you offer a client a special "one off" deal, be clear about why you’re doing it. For any deal you craft now, imagine doing the same deal 100 times under similar circumstances. Would you? Would your client? If you didn’t answer “yes” to both, go back to the drawing board. Don’t worry about what you’re going to “get” in the near-term, or even from whom. It all works out in the end when we’re willing to do what’s right. And the end is what matters when we’re living this principle.

10. If you’re a leader, be prepared to lead in a most personal way. The month after 9/11, Koh Boon Hwee, then-chairman of Singapore Air, described the US airline industry’s reaction to the drop in travel: “they laid off huge numbers of employees.” By contrast, at Singapore Air, Koh took a massive pay cut; his direct reports took sizable hits; and everyone took a significant but smaller pay cut. He laid off no one. It’s no wonder that travelers, employees and shareholders alike are loyal to such companies. They live the trust principle of long-term focus, and are richly rewarded for it.

Day 3 of 5: Trust-based Business Development in a Recession: Principle 2, Collaboration

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Monday we announced a five-day blogpost on developing business in a recession based on each of the Four Trust Principles.

Trust is paradoxical; as is the best approach to recessionary times.

Yesterday we offered ideas based on Trust Principle 1, Client Focus. Today we highlight Principle 2, Collaboration.

If trust is important to business development generally, it is particularly important in a recession. Collaboration is one of the four Trust Principles because:

Collaboration with existing clients cuts business development costs—selling to existing clients is far less expensive than selling new business.

Collaboration with others—including even competitors—offers scale economies.

Collaboration allows reconfiguration—of markets, production, services.

Most importantly, collaboration is inherently about relationships—and not about competition. In a recession, that’s the message you want to send—now is the time to strengthen relationships. You’ll reap the benefits later.

How to do it? Here are 14 ideas to prime the pump. Please: add your own. Let’s collaborate on generating a great list.

1. If you’re a consultant of any type: write your next proposal seated next to your client. Bring all your backup records, rent a conference room, and collaboratively proceed to write a joint proposal. Rather than deal with issues after the proposal has been written and sent and it shows up as a disagreement in the final sales meeting—raise it in joint meeting.

2. If you’re a speaker or trainer, put together a speaking tour, or a combined webinar, of like-minded people–including those you used to think of as competitors. 

3. Does your company outsource key processes? Is the recession causing strains in the relationship? Have an offsite meeting with key leaders of each firm, with the agenda of “where can we collaborate more, and argue with each other less?”

4. Answer the question the customer asked you: not the one you wanted to answer. The customer is not your competitor–collaborate with the customer by talking straight.

5. If you’re a B2B manufacturing salesperson, call a key customer. Suggest the two firms sit down together offsite for a day and discuss “what could we do better together to make things cheaper, faster, or more profitable for both of us?” Be prepared to share your manufacturing process, costs, and profit margins, so you can figure it out together.

6. If you’re a professional services provider, sit down with your client and see which portion of your services could be performed more cost effectively by the client, or how your costs could be reduced. For example, if preliminary research needs to be done, ask if the client has someone who could do it, and get approval to rely on it, or use it as a base. If you charge for materials, let the client make the copies and produce the the books. When you travel for the client offer to use the client’s travel service if the client can get a better price on travel.

7. If you’re professional services firm with underemployed staff, offer to swap similarly underemployed staff with a client. Both will gain valuable perspective and experience without being taken off critical work. The employees involved will feel grateful and challenged. And the linkages between the firms will be strengthened. None of which would easily happen in good economic times.

8. If you’re in a business where sales are large and take time, then at the next sales presentation meeting, have a client individual co-present with you. And make a point of it, saying “working collaboratively with you is what we believe in, and it’s even more important in tough times like these.” Actions speak louder than words.

9. If you’re in a functional department of a large company (HR, legal, IT), identify 3-4 of the same departments in other large companies in your geographic area. Create a collaborative work group across the companies that meets (within bounds of legal agendas) to share best practices and work opportunities.  

10. Give your receivables clerk a budget to buy flowers or chocolates for the payables clerk at your most important customers for Valentine’s day (you’ve still got a few days).

11. If you’re in sales or customer relationship management, go find who, if anyone, is handling innovation for your firm. Ask them if they would like to collaborate on that innovation work with Customer A, Customer B and Customer C?

12. Ditto in reverse. Ask your key customer whether anyone is handling innovation in their firm—and if they would appreciate the chance to work with your innovation people.

13. Look over your professional services providers. Is there anyone with whom you can work a barter arrangement? (Remember to check with your accountant on the tax issues, even if you don’t want to be appointed by the President).

14. If you’re in sales, go talk to your customers’ salespeople.  Share best practices and success stories; also share horror stories about how each organization treats salespeople from other companies (including how theirs treat you). You will gain perspective and insight about your customer’s company, and they may even put in a good word for you with their company’s buyers.

There’s our list. How about you? In the spirit of collaboration, please add an idea of your own. We want to hear from you.

Day 2 of 5: Trust-based Business Development in a Recession: Principle 1, Client Focus

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Yesterday we announced a five-day blogpost on developing business in a recession based on each of the Four Trust Principles. Trust, we suggest, is paradoxical. That’s exactly how we must meet recessionary times.

 

Today we offer 22 specific ideas based on Principle 1, Client Focus: Focus on the Customer for the Customer’s Sake, Not Just the Seller’s Sake. 

Recessions drive us to self-centered fear; but they are simply the down cycle in a long-term relationship. Client focus shows dramatically that you are in business relationships for the duration, not just for while they’re convenient.

Our hope is to prime the pump with specific ideas.  Please add your own ideas, appropriate for your own organizations, in the comments. Let’s make this a resource for all.

1. You’re a staff strategist or a line marketer. You have one mandate: Focus. Downplay new lead generation– recessions are time to dance with the one who brung you. Good strategists know saying yes to one means saying “no” to others. Resist the temptation to go RFP-hunting. Let your #1 customers know who loves them, and show it.

2. You’re a financial planner. You fear client phone calls in a recession—they mean withdrawals. Do the opposite—call them. Give them life advice, like “next year is not the time to retire after all.” In times of fear, those who reach out to hear the pain are those who gain later.

3. You’re an accounting firm. It’s tax season. Everyone thinks you’re busy. Surprise them with a 2-3 hour clinic for your clients’ kids who are now college graduates on how to do their own taxes.

4. You’re a CPA firm. Offer to “spotlight” your client’s human interest / charity / goodwill story on your firm’s blog or newsletter.

5. You’re a restaurant owner. You know who your good customers are. Surprise them next visit by picking up the tab. Quietly. After the meal.

6. You sell insurance but don’t track your clients’ payment status because you already got the commission. Start tracking them now. In a recession no one wants unintentionally lapsed LTD or long term care policies.

7. You’re majority owner of a private company. Take off your shareholder hat and put on your investment hat. This is when you grow share by growing trust. Draw down on the shareholder account to invest in the employee, customer and supplier relationship accounts.

8. You provide tech support to home businesses. That green stuff about lowering electrical costs is a lot more interesting to customers than it was 6 months ago; bone up on it.

9. You’re a doctor, and recessions mean more scrambling for less insurance money. When you have good test results for a nervous patient, don’t wait for the next visit. Call and celebrate with the patient for a few minutes.

10. You’re a one-person consulting shop. Recessions drive changes in customer needs. Can your firm change on a dime to meet new client needs? Of course you can, you’re a one-person firm. Figure out what those new needs are, then go talk to the client.

11. You’re in corporate sales and your funnel has slowed to a crawl. Do your research, then offer your prospect three ideas that can reduce costs in the next quarter without any extra work.

12. You’re anyone. In a recession, customers are more worried and self-focused than usual. Go take that course on listening and empathy you’ve been putting off; it’s twice as important now, and you’ve no longer got the excuse of being too busy.

13. You’re a practice area head in a professional services firm; project or client relationship managers report to you. When was the last time you visited the top 3-4 clients? Go visit, with your client manager. Your agenda? “Just wanted to hear what’s new with you. Besides our own services, what can we do for you?" And don’t even think about charging the time.

14. Your customers are in retail (or chemicals; or telecom–whatever). Ask yourself what’s changed, new, and critical to them because of the recession. Now ask what you can do to help. (“Increase sales” and “cut price” don’t count). Then redesign your offerings.

(Example: for us, professional services firms are big clients. They are cutting back discretionary travel and training. The “obvious” answer is webinars. But as one client says, “There’s only so much webinar you can take stuck in your cubicle from 9 to 5. We’re being webinar-ed to death.” Our solution? The Onsite Offsite(TM). The best of offsites, minus the costs, but without the compromises of conventional one-way datapipe solutions).

15. You’re a consulting firm. Don’t succumb to the“hey, we’ve all got to pitch in here, can’t you lower your rate for us” argument. Pitch in, yes. Make strategic investments, yes. Re-tool your offerings, yes. But don’t lower your rates. It just says you had “padding” before. And an insolvent consultant is no help to clients.

16. You’re a law firm; offer a series of brown-bag talks given by partners on recession-relevant topics. Invite your existing clients.

17. You’re a development director for a charitable organization. Your donors are your customers. Instead of asking them for money, turn the tables; ask how a particular donor is affected by the recession. How can you add value to his or her life? With whom can you put them in touch?

18. You’re a systems firm. Your tech leaders need speaking training. Invite three clients to join so they can learn too.

19. After a long day at the office a longtime client contact calls to tell you he’s been laid off. You have to leave, but offer to speak later that night, to help out in any way you can.

20. Some of your customers sell to other customers of yours. Make introductions; then make more.

21. You’re an accounting firm. Hold topical lunchtime 60-minute phone calls for five of your medium-sized clients’ treasurers on recession-relevant topis. You run the logistics and line up the topics. And don’t wait until after tax season, they’re hurting now.

22. Just to practice Principle 1, Client Focus, go drop dimes in someone’s parking meter, or pay the toll for the guy behind you. It’s cheap behavioral training for client focus. And it makes two people feel good.

There you go; 22 ideas based on Principle 1, Customer focus.

What did you learn from other businesses that might work for your own?

Tune in tomorrow, when we list specific business development ideas for Principle 2, Collaboration. And please–add your own ideas in the comments section below.

 

Trust-based Business Development in a Recession

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We at Trusted Advisor Associates try our best to practice the Trust Principles we espouse. We have found they work for business development, as well as in other aspects of business.

We believe they are particularly relevant in a recessionary environment. That’s why we’re devoting Trust Matters this week to selling in down times.

Today’s post will set up our perspective—and the next four days will deal with business development ideas based on the Four Trust Principles, as follows:

Monday Thinking about sales from a trust perspective
Tuesday Principle 1: Client / customer focus
Wednesday Principle 2: Collaboration
Thursday Principle 3: Medium-to-long-term perspective
Friday Principle 4: Transparency

The Trust Perspective. Trust is a paradoxical thing. It requires risk-taking when we’re risk-averse. It requires doing the opposite of our first instincts.

Recessions are the same. The thing consumers want to do—stop spending and save—paradoxically drives the recession deeper. The one thing businesses want to do—cut costs, squeeze suppliers and customers, and scale back plans—paradoxically drives the recession deeper.

Trust is about relationships, not transactions. Thinking of downtimes per se is transactional thinking. Thinking of downtimes as one half of a business cycle is relationship thinking. And it’s what you do in tough times that determines how others trust you in the good times.

Trust is based on being willing to put the other’s needs first. But in a recession, the instinct to take care of Number One has the same trust-destroying effect as selfishness does in personal relationships. And it hurts business development in both the short and long run.

Trust and Business Development. We’re going to offer a few specific ideas based on these principles during the week.

What do we mean by specific ideas? Here are a few starters:

• Pick a local charity or non-profit organization; make a significant donation to them. It will be completely unexpected, very needed, and very appreciated. Don’t worry about publicity—word will get around.

• Pick a few important existing customers—you can’t help everyone—and do an important project for them, one that would normally have trouble getting done because it’s long term and visionary. And do it for free.

• Increase your severance package benefits. Now.

• Use collaboration as a form of innovation. In our business, we are working with clients to develop the Onsite Offsite, a way of delivering distance seminars at in-house costs, packaged innovatively to go way beyond traditional webinars.

Finally, one of our Trust Principles is Collaboration. We’d like to share our ideas with as many people as possible. We invite you to pitch in and make this a truly collaborative week by adding in your own comments and ideas.

Stay tuned to Trust Matters this week.

 

 

I Screwed Up

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Thanks go to President Obama for timing his first major Presidential misstep to coincide with my delivery of a “Being a Trusted Advisor” workshop.

In class, we had been talking about human nature and the gravitational pull to avoid admitting culpability and generally looking bad when—voila—there appeared the perfect teaching point on the front page of the New York Times.

Whatever your politics, there are two key lessons to be derived from the “I screwed up” message that President Obama delivered on the heels of Tom Daschle’s withdrawal from consideration as the next secretary of Health and Human Services:

1.  Take full responsibility. He pointed his own finger at himself. He didn’t say “I regret the unfortunate circumstances and misinformation that led to the selection of Mr. Daschle.” He didn’t hitch his wagon to Daschle’s admission of his own mistake. No, Obama said, “I screwed up.”

2.  Keep it simple. He used plain talk. Three simple words. I told workshop participants to use no more than ten words when there’s a hard truth to be told. Obama came in seven under.

Telling the truth when the truth makes you look good (as in, “Mr. Client, I have 20 years of experience solving the kinds of problems you are facing right now”) increases your credibility by demonstrating your expertise.

Telling the truth when the truth makes you look bad (as in, “I screwed up”) is a trust trifecta: your honesty boosts your credibility, your humanity creates intimacy, and your willingness to subordinate your own ego lowers your self-orientation. 

It’s another part of the trust paradox: doing what makes you look bad (telling the truth) makes you look good.  As long as you really mean it.

 

SubText Messaging

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Recently I had a conversation with a friend. He asked me what I thought about a marketing piece he sent me the day before. After our conversation,which was tedious, we analyzed it. Here is part of the conversation we had, and the same part of the one we didn’t have:

Sam: What did you think of that piece I sent you yesterday?

Subtext: I’m looking for your big picture thoughts

Me: I liked it

Subtext: Uh. Oh. He wanted me to give him comments.

Sam: Well – what did you like about it?

Subtext: Please give me a little more – your big picture comments.

Me: I didn’t read it that carefully – I did think it looked good

Subtext: I feel really badly. He looked at something for me and gave me exactly what I asked for. I should have done more.

Me: [getting defensive] – I didn’t realize you wanted me to provide comments – I can do that. Isn’t it out already?

Subtext: I really would like to fix this – and I still feel badly – maybe he’ll give me another opportunity to make it right.

Sam: Yeah – it’s out already. Never mind.

Subtext: All I wanted was a couple of thoughts, and he’s trying to make a whole project out of it.

After another couple of minutes of this conversation that went nowhere, we stepped back and I asked what he really was asking. I asked him for the subtext. And I told him mine.

We quickly reached an understanding, and avoided further misunderstanding. He didn’t care that I hadn’t really read it. He just wanted a little more of the big picture comments.

I had felt badly that I hadn’t read it and given him deeper comments, and he didn’t even want them.

How much easier it would be if all our conversations were the subtext, rather than the text. If we were simply transparent and said what
we really meant.

When I do role plays in workshops I facilitate, I often will stop the action and ask: "What do you really want to say?" That gets to the subtext.

Instead of texting each other, maybe we should start subtexting.

Trust, Trust, Trust

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There’s a major bear market right now—in trust.  Or so it seems reading the papers, blogs and broadcast media.  The only bull market to be found is the bull market in talking about the bear market in trust.

So it’s very appropriate for this blog to have a point of overview.

First, a sampling:

This Tuesday, Henry R. Kravis said trust is the"The Single Biggest Factor" in the economic crisis:

Both the Economist and the NYTimes agree that trust is a Big Deal at Davos this year.

Paul Krugman says trust is a big part of the problem.

Robert Reich agrees with Kravis, that what we are facing is "a crisis of trust.”

Edelman’s Trust Barometer dropped precipitously across institutions this past year.  As the FT’s John Gapper  points out, Edelman’s survey suggests “only 49 per cent of Americans, living in the country of capitalism and free enterprise, thought the free market should be allowed to operate independently.” 

So—what does all this mean?  Above all, it means two Big Things:

1.    we are facing a Big Opportunity cleverly disguised as an economic crisis;
2.    at the heart of all trust is personal trustworthiness.

A Big Opportunity Cleverly Disguised as a Trust Crisis.  The academic research on trust is staggering in the breadth of definitions of “trust.”  We trust stoplights, Amazon book reviews, the kindness of (some)strangers, some businesses more than others, neighbors, those we know, those with similar names or facial features or religions—and we trust each in different ways.

How curious that, despite our inability to provide a concise dictionary definition, we nonetheless know from context pretty much what is meant when we use the word.  Which means, to say “trust is down” is not meaningful without context.

Other statements requiring context include “trust takes time,” “trust takes years to build and only a moment to destroy,” and “trust but verify.”   All are true in their place—and not so true outside that place.

Context is critical.

Most trust-talk these days is about institutional trust—the SEC, the institution of business, trust in the media.  Interestingly, it doesn’t take long for attitudes about institutions to change—a charismatic leader (a Pope, a President) can rather dramatically affect trust levels.  (By contrast, it takes much longer to change cultural attitudes toward trusting “others,” or toward strangers.)

All of which means getting the context right is critical.

Trust is Personal.  Former House Speaker Tip O’Neill famously said, “all politics is local.”  So is trust, in the sense that if is unlinked from people, it loses its breadth of meaning. We don’t say we “trust” that the sun will rise in the East, or that the law of gravity will work every time.  We may depend on or predict based on laws of nature; we “trust” people. 

We cannot afford a society based on 18th century models of a competitive state of nature.  We cannot even rely on "the rule of law"–society is too complex.  We cannot afford social constructs based on the suspected evil of others–we need models based on values and standards to which we demand people aspire.

This is a fundamental truth about trust.  In all the debates about institutional trust and the need for regulation, we ignore this truth at our peril. 

At the risk of using the same quote twice in a week: Samuel diPiazza, CEO of PricewaterhouseCoopers, and Robert G. Eccles, a former HBS professor, wrote, in Building Public Trust:

…even transparency and accountability are not enough to establish public trust. In the end, both depend on people of integrity. Rules, regulations, laws, concepts, structures, processes, best practices, and the most progressive use of technology cannot ensure transparency and accountability. This can only come about when individuals of integrity are trying to “do the right thing,” not what is expedient or even necessarily what is permissible. What matters in the end are the actions of people, not simply their words…without personal integrity as the foundation for reported information, there can be no public trust.” 

If there is any common message about trust, this should be it.  The "trust issue" is not fundamentally about disclosure, or process regulations, or even transparency: at root it is, as it always has been, about the personal integrity and trustworthiness of human beings in relationship to each other.

 

Why Attraction is Worth More Than Retention

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The phrase “attraction and retention” is so entrenched in business-talk that a Google search with quotes around the terms turns up 306,000 hits.

That’s a lot. But it’s dwarfed by the active-voiced “attract and retain,” with 2.07 million hits.

If memory serves, the phrase comes out of the “war for talent,” initiated in 1997 by McKinsey.

Was that war ever won? Apparently not. In 2007, Bob Sutton was announcing “The War for Talent is Back.”

In fact, as of just a few months ago, McKinsey was announcing The Return of the War for Talent  (“It’s Baack!”).

But, as of two weeks ago, according to search firm Morgan McKinley, the War for Talent is Over.

The War for Talent has had more comings and goings than Cher has had farewell tours. So it goes with business concepts that mean whatever you want them to mean.

(For a really wonderful read on the abuse of “war for talent,” read Malcolm Gladwell’s article The Talent Myth.)

But I digress. The WFT is fought on two fronts—finding talent, and keeping it. Despite the eerie parallels with roach motels, the language "attract and retain" has stuck.

“Attract” has taken a back seat to "retain," and it’s not hard to see why. Consider the well-established economics of customer loyalty. Employees form relationships and gain hard-to-replace skills, referred to in distinctly non-human terms as “relationship capital.”

Yet, just as the best defense may be a great offense, the best retention strategy may be a great attraction strategy.

For one thing “retention” often lives down to the very behavioral language used to describe it. Think handcuffs, golden or otherwise; do-not-compete clauses; hands-off clauses in search firm contracts. More benignly, flex time and use it or lose it vacations.

But more importantly, think what a really fabulous, unbelievable attraction proposition does for retention. Suppose you had an extraordinary new-hire offer. Tons of money, social good, ambience, benefits, advancement, work-life balance, cachet. Maybe like Google a couple of years ago.

Why would someone leave such a place? Not for money, or promotion, or lifestyle. More typically it’s because their life goals had simply changed.

It happens. Twenty-somethings have kids. Project management loses its appeal after being the meat in too many sandwiches.  You cannot “retain” people whose life goals have shifted. And if you keep only the employment contract, they lose their enthusiasm.

But what about the greatest attraction pitch of all—"We Care about YOU."

If you could believe a firm really cared, if they could prove it to you—wouldn’t you want to join that firm? And stay there, until they were simply incapable of meeting your changed needs?

I’m saying yes, of course you would. They catch is, why would you believe it?

Well, suppose the firm paid a recruiter to hire you away from them? Suppose they paid you massive severance packages should you decide to leave? Suppose they developed alumni programs, like universities with “graduates?”

The really fine consulting firms—Bain & McKinsey, for example—truly value their alumni—you are a lifetime member, you’re just working the client side as an alum.

But even more sharply, think Zappo’s. Here’s one more great Zappo’s article, from Fortune’s January 22 issue 

Zappos bribes trainees to leave.  Few do.  When Zappo’s recently had to lay off 140 people, they were extra-generous in terms of severance. They offered 6 months of paid COBRA health care. And so on.  Remember, these are not people Zappo’s is trying to retain–these are people they’re letting go.

eBay gets it. "How you treat the leavers has a strong impact on how the stayers feel about the company," says Beth Axelrod, eBay’s SVP of human resources. 

Exactly.  How these companies attract—a values-based culture that actually values customers and employees, not just their abstract corporate-finance-centric “relationship capital”—directly drives their success at retention.

Don’t focus on retain—that’s about the company. Focus on attract—that’s about the employee. Then live the values.

It’s the paradox of trust. If you actually set someone else’s priorities above your own, you get back boatloads of what you want.

But only if you’re willing to put your motives second. You actually have to care.

February Carnival of Trust is Up

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The Carnival of Trust for February, 2009 is now up at Ian Brodie’s most excellent blog, Sales Excellence.

As you may know, the Carnival of Trust chooses the Top Ten trust-relevant posts of the preceding month–and provides trenchant, bite-sized commentaries on the posts themselves.  The result is a limited set of highest-quality content.

As host Ian notes, this has been an auspicious period for trust.  He could easily have feasted on scandals and backlash alone, but he has wisely included a mix of inspiring, cautionary and insightful comments along with the Madoff lessons.

Click through to the Carnival and read Ian’s picks-of-the-month on trust.  They range from Dan Rooney (Steelers’ coach), to NLP, to counseling, to Buddhism–to a fine Madoff piece.  All woven nicely with commentary by host Ian Brodie, to whom we are most grateful.

If you’ve got a blog post you’d like to see in that Top Ten list, feel free to nominate it.  The carnival comes out once a month, on the first Monday of each month. The deadline for submissions (see http://blogcarnival.com/bc/submit_1693.html) is always the prior Thursday.

Thanks again to Ian for hosting; pop in for some good reading.