A Contender for Worst Business Advice of 2008

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If your customers trust you, that’s good, right? Like, really good?

So suppose you wanted to ruin trust with your customers. What would you do to destroy trust?

• You might try lying to the client.
• You might try saying one thing and doing another.
• You could try keeping secrets from the customer.
• You could refuse to answer direct questions.
• You could actively prevent your customers from learning about cost-saving solutions.

Incredibly, these are specific recommendations made by a business blog, Drooling for Dollars (the name tells you something), in a post titled “A Successful Businessman Keeps Secrets From His Clients.”

In this post, the author offers nuggets like “never let a client know your hourly rate,” “tell your client that the work will be completed in 3 weeks although you get it done in 3 days,” and talks about “those irritating and annoying clients who ask too many questions before making a deal.”

It’s good to answer some questions, says the piece–it helps build trust. But don’t go overboard with it—trust could ruin you if those nasty competitors called “customers” find out too much.

The author summarizes: “There are pieces of information you should never reveal to your client, no matter how many times they ask or how much they insist you [sic].”

Uh huh? Really?

Anyone wanna help me shoot some fish in a barrel? The comment section is right below.

Study: Americans, Media Coverage and Trust

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You’ve heard stories before like this one from Harvard’s Kennedy School of Government:

“Poll Reflects Continued Mistrust of Media Election Coverage.”

Some statistics from the story:

"Most Americans do not trust what they hear or read in media coverage of the 2008 presidential campaign. Poll results just released by the Center for Public Leadership at Harvard Kennedy School and the Merriman River Group show that 62% of those surveyed are distrustful of campaign media coverage and that same percentage think that the media does a poor job of separating their own opinions from the facts in their reporting. The public’s trust has not improved since one year ago, when a statistically equivalent 64% said they did not trust the media’s election coverage."

And so on. The study concludes that the media has two grave options:

“One is to provide coverage that echoes the political views of a particular segment of the population, gaining their trust while alienating others. The other is to make a serious attempt to discover why so many viewers of all political stripes perceive bias, and to strive for political coverage that more viewers trust as objective.” (italics added).

No. This is not right. In fact–it’s very scarily wrong.

What if the problem lies not with the trustee, but with the trustor?

Americans and Media Coverage

What if the problem is not untrustworthy media, but partisan news consumers who have redefined “trust” to mean “I can trust them to dependably propagandize my preferred party line.”

Crazy? Not at all. The proof is right there in the survey.

• CNN [Cable news] and the Fox News Channel, are the clear leaders in Americans’ trust. 19.7% of Americans name CNN’s coverage as their most trusted and 13.9% name Fox as their most trusted.
• Those who trust Fox most support[ed] Senator McCain 86% – 6%, while those who trust CNN most support[ed] Senator Obama 55% – 27%
• 76% of those who trust Fox say they are conservative or very conservative, while 45% who trust CNN say they are moderate and 34% liberal or very liberal
• 76% of those who trust Fox say the media is too liberal, while 52% who trust CNN say the media is both, sometimes too liberal and sometimes too conservative and 23% say it is unbiased

Trust and Mainstream Media

The data suggest: the farther your views are from the mainstream, the less likely you are to "trust" mainstream views; and the more you interpret the absence of views as being "untrustworthy" because of the absence of overt support for your view.

The phrase “I trust XYZ news” used to mean “I believe XYZ has no overt political agenda which affects its reporting of the news.”

The phrase “I trust XYZ news” now means “I want XYZ to have an overt political agenda, as long as it’s the right one, i.e. the one I agree with. And it’s the wrong one, the one I don’t agree with, then I don’t trust them."

Chalk up another major hit on a relationship word from the forces of fear and suspicion.

Terms like “loyalty,” “relationship capital,” and “customer focus”—all words with ancient connotations of linking human beings—have been quietly subverted to connote separating people, to position people as mere means to corporate ends.

Nowadays, “loyalty” is no longer earned–it is suborned. The meaning of the word is turned inside out.

And when “trust” gets the Big Lie treatment, it’s particularly dangerous.

Many people who say the media can’t be trusted in fact have their own agenda—to force the media to become competing propagandist outlets–something that used to be synonymous with “untrustworthy.”

Partisanship is the new trust. It means the opposite of what it used to mean. Black is white, up is down.

If it doesn’t scream “fraud” at such efforts, the media is complicit in its own mugging. For “trust” must at its heart mean relationships between people—not objectification, fear, suspicion, and competition between people.

Here’s how depressingly easy it is to get suckered in. The very author of the cited study himself, Seth Rosenthal, is showing signs of infection. By characterizing one industry option in this way:

“to provide coverage that echoes the political views of a particular segment of the population, gaining their trust while alienating others”

he has already conflated “particular political views” with the phrase “gaining their trust.” That is: in his own words, he equates “trust” with partisan political views.

No, no, Mr. Rosenthal! The zombies are coming to bite you–wake up, wake up!

 

 

Effective Prospecting – The Red Velvet Rope Policy

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Going forward, TrustMatters will begin sharing blog postings by all Trusted Advisor Associates. This should increase the variety and perspective of original material that we provide you. Today’s post is by Mark Slatin.

The paparazzi encircle the limo-toted movie stars as they prepare to grace the red carpet for the premier screening of their latest blockbuster. Ah, but this isn’t an open-invitation event. Only the select few with the proper credentials may enter past the red velvet rope that swaggers between vigilant chrome uprights.

In today’s competitive business landscape, many sellers offer "general admission" tickets to their theater. Scarce few define credentials for entry. Admittedly it’s counter-intuitive. After all, why would you want to limit your audience?

"The red velvet rope policy", as described in Book Yourself Solid by Michael Port, suggests narrowing your focus. It requires you to shed the "all things to all people" shotgun approach.

Although written primarily for entrepreneurs and independents, its principles scale to any size organization. It’s rooted in a deeper-than-surface-level introspection of YOU. What do love doing, what inspires you and what are you most passionate about? Then, it asks you to look outside and consider what types of customers you should gain entry past your red velvet rope.

Admittedly, this advice will cut across the grain for many sellers. You might say, Mark, how can you ask me to turn away potential customers in a fiercely competitive market? Let go of a prospect…are you kidding?

The red velvet rope policy dares to view prospecting differently. Like a movie premiere, it restricts admittance to those with the proper credentials. Consider two categories by which to define credentials:

Internal:

• Expertise – What’s your track record/experience?
• Interest – What areas pique your curiosity?
• Passion – What do I genuinely get excited about?
• Talents – What are our/my natural talents?

External:

• Financial – What are their revenues, profits, ability to pay, etc.?
• Size – How many employees, lawyers, patients, students, etc.?
• Culture – Do their core values, beliefs and value proposition fit with ours?
• Market – What’s their geographic, vertical, team, product/services, etc.?

Instead of casting your net widely at all fish, first look introspectively and ask, "What kind of fish do I want to catch"?

Ask yourself – which of your customers do you enjoy spending time with and why? Do you have customers that drain you, deplete your energy, and drag down the troops?

Look at your prospect list – are the fish too small or too large for you to do an outstanding job for?

Do you love working in a particular market, such as healthcare, legal, religion, government, education, seniors, children, minorities, etc.?

What do people say you’re really good at?

Here’s the formula in a nutshell:

• Determine what inspires you >
• You’ll love what you do >
• You’ll do a better job at it >
• You’ll create more customer value and satisfaction >
• You’ll build a foundation of more loyal and profitable customers

The red velvet rope policy also demands tough decisions about customers already inside the rope without proper credentials. When I worked at Boise Cascade, we had one customer who demeaned and ridiculed our employees. Our disdain grew and the account depleted our team’s energy. We came to dread interacting with them.

For months we struggled and put up with what felt like abuse. We felt an unwritten obligation to persevere; perhaps it came under the "customer is always right" mantra. (More likely, we felt the pressure of replacing the business. ) On the day we said enough is enough, we felt liberated. It left a big hole, but the cloud was gone. Eventually, we replaced the business.

Done rightly, this can be empowering–giving the seller an equal right in defining the relationship. No longer do they feel compelled to satisfy everyone.

Caution: avoid the trap of dropping a prospect just because they aren’t rolling out their red carpet for you. If they possess your required credentials, adopt a long-term focus – making the relationship your goal, not the short-term sale.

The movie premiere is yours, the red velvet rope credentials can be set by you. Are you ready to decide who’s on the invite list?

(Visit this link for a free "Red Velvet Rope Policy" worksheet, a guide to help you develop your Red Velvet Rope Policy).

by Mark Slatin

 

 

November Carnival of Trust is Up

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The November Carnival of Trust—hosted this month by Jim Peterson—is now up for your reading pleasure. Check it out at Jim’s site Re:Balance.

The Carnival of Trust features rotating hosts, whose job it is each month to choose the Top Ten blogposts from the entire blogosphere which are related to the subject of trust.

Jim’s choices this month doubtless reflect his interests in institutions; a US trained lawyer, for years he worked ex-US in a Big 4 accounting firm. But I have noticed the blogosphere is also serving more material on trust in this arena than ever before.

Trust is “hot,” especially trust themes in finance, business, and government. Jim has picked some dandies. For example:

• The role of trust in lending in a sovereign South American country
• The relationship of trust and regulation
• The linkage of trust to the economy
• How financial institutions can regain trust (not via advertising)
• Trust in small business marketing

and many more.

Congratulations to the chosen few, and thanks to those who submitted but didn’t get the gold this time. Don’t be disheartened—try again.

next month’s Carnival of Trust, Stephanie Westallen of Idealawg

Next month’s Carnival of Trust will be hosted by Stephanie Westallen of Idealawg.

Submit entries for the next carnival here.   

For past Carnivals of Trust, go here. 

And many thanks to Jim Peterson for hosting this month’s Carnival.

The Trust Recession

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We are in a trust recession.

That has two meanings. Most evident is that the level of trust has fallen among constituents—customers, consumers, voters.

Less evident is that the fall in trust is a direct result of the reduced trustworthiness of providers—sellers, financial and other businesses, and government.

To paraphrase Obama: whoever thought that “trust” was fluffy; whoever thought it inconsequential; and whoever thought trust had long been superseded by risk models—today’s trust recession is your answer.

Following is a small list of what’s been lost to the trust recession:

• Banks no longer trust other banks’ balance sheets, freezing interbank loans;
• Investors distrust most financial asset classes outside of US short-term treasury notes, driving those rates down toward zero;
• US voters don’t trust their government to handle a bailout competently, openly and fairly;
• Financial asset managers don’t trust risk models–neither do investors;
• The investing public doesn’t trust accounting firms to identify shareholder risk (I know, it’s arguably not their job…);
• Financial asset ratings agencies’ trustworthiness has been gravely wounded;
• Municipal and non-profit agencies have lost trust in hedge funds and 30:1 leveraged business models—with good reason;
• CEOs have lost trustworthiness when they say their companies are healthy;
• We no longer believe that lenders wouldn’t lend to un-creditworthy consumers–because they did;
• Regulators (SEC, FHFA, FEMA) lost significant trust because they failed to regulate;
• Other regulators—FDA, FTC, EPA, et al—lose trust as a knock-on effect from the others’ failures;
• Consumers who believed markets would self-generate trust lost some trust in that idea;
• The unemployment rate is rapidly increasing in many countries, because employers do not trust they’ll be able to sell;
• The specter of deflation got mentioned in the NYTimes — deflation being endemic mistrust so bad that people hide money in mattresses;
• Roosevelt could rely on trust in government when he came to power in a time of crisis, hence could propose bold ideas–Obama does not have that luxury.

This Saturday in Heathrow Airport the currency exchange window person declined to exchange either my dollars or pounds for Brazilian Reais. “We haven’t been doing that for about a week now,” the person told me, and not very apologetically either.

I’m seeing massive increases in the number of articles and blog posts on the subject of trust. Mostly this is because the evidence of low trust is becoming manifestly solid, economically real, and hard to ignore.

Let’s take this learning opportunity and note that where there’s smoke there’s fire. The desire to trust is wired deeply into our genetic make-up. When trust fails, it is generally because trust was abused. Those who would/should be trusted weren’t.

For the most part, it takes time to rebuild trust. It also takes a willingness to notice from whence the fall came, and to learn from it.

 

 

Does Academic Tenure Stifle Learning?

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Is academic tenure an outdated haven for non-performing professors stuck in narrow, irrelevant silos, crying out for the clear air of market discipline?

Or does the onslaught of “pay for performance” in academia just encourage “teach to test” and degrade intellectual curiosity?

Not much of a choice, is it? And have you stopped beating your wife?

Before diving in, take a look at this (astonishing to me) statistic:

“The most recent data indicate that 68%–more than two-thirds—of the professoriate [in the US] were contingent, that is, ineligible for tenure, and an additional 10%, although tenure-eligible, had not yet achieved it. Only 22% were both full-time and tenured.”

In 1998, according to the AAUP, just ten years ago, that 68% number was only 58%. In 1969, only 3.3% of full-time faculty were on a non-tenure track. By 1998, that proportion had grown to 28.1 percent. This is what a trend looks like.

Moving right along, in yesterday’s Financial Times, Peter Lorange, former President of IMD Business School, beats this dead horse in an article called “No place for tenure in today’s business school.” I knew Lorange slightly many years ago when he was at Wharton and I was at the MAC Group. He is smart, decent, and principled; but, on this issue, I find us at odds.

Lorange indicts tenure for two sins. The first is that it discourages cross-disciplinary teams, when collaboration is the new business imperative.

“the peer process of evaluating candidates…is typically subjective and highly political…reviewers make judgmental assessments based on their familiarity with a narrow disciplinary area. In the end, the process leads to a binary outcome—yes or no…leading to fragmentation and polarization…in contrast to the team approach which is vital to attacking today’s problems.”

In short, tenure mitigates against team behavior. Fair enough.

The second sin, he suggests, is that tenure hinders performance.

Lorange’s prescription—which he himself followed at IMD—is rigorous annual review. “Every professor was assessed, and every professor—both senior and junior—had to justify a place within the institution on an annual basis.”

Would this discourage professors? Lorange makes his bias clear:

“There will be some professors who will have to leave because of less-than-satisfactory performance, but this puts positive pressure on those remaining to do a good job. Tenure should not be a shelter.”

In other words, the market will flunk those who deserve it. And those who get flunked deserved it.

Lorange is absolutely right that business schools need to teach teamwork, and get rid of silos. But he’s far from convincing me that tenure needs abolishment rather than reformation to accomplish this.

But his second argument is more insidious. For a few decades now business has preached the gospel of short-term metrics and fragmented processes. “Break it down, measure it, evaluate it, incent it” is the mantra. Lorange see the danger of non-integration in departmental silos–but fails to see the same issue in governance.

If we contract professors one-year-at-a-time, with continued employment contingent on the most recent year’s performance, then we suborn short-term politicking, brown-nosing, teaching-to-test, and self-promoting schemes for “customer” satisfaction (“customers” here meaning students and administration). Integration and holistic views take a back seat to self-preservation. Which is exactly the kind of non-integrated, selfish, siloed behavior that Lorange decries regarding disciplines.

We use this model elsewhere—elementary school teachers and Congressmen come to mind (the latter every two years). That may be OK for teaching second-graders arithmetic, but PS 32 is not the college campus. As for the perpetual campaigning of congressmen—well, congressmen rank below car salesmen and lawyers on trust surveys. ‘Nuff said.

The dominant business ideology of “measure and motivate” occasionally produces perverse results. A salesperson expects to be judged well within a one-year timeframe; applying that timeframe to a CEO or a fund manager is just silly. Ditto, I suggest, university faculty.

As to motivation, the annual threat of unemployment is like hammering a nail with a sledgehammer. It works so well it smashes the nail.

The great thing about tenure is it permits a team-based, integrated view of things because it lasts more than a year. There’s a limit to how short you can make a meaningful relationship and still call it a relationship. It’s ironic that “modern” business insists on applying a single ancient pagan harvest-based unit of time to all things temporal. Why not change tenure to 6.43 years?

This is one case where the “cure” does more harm than the disease.

Sadly, in a system where two-thirds of faculty are already outsourced on an annual pay-for-performance model and heavily part-time, Lorange is beating a dead horse. Stop, Peter, you’ve already got the sale.

Vote for the One You Trust?

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You could make a case that the best candidate to vote for is the one you trust. Personally, I think it’s a better rationale than:

The one you’d want to have a beer with
The one with the most experience
The one with the most moral clarity.

Of course, trust is a personal thing. Then again, so is voting.

So I’ve given you a little checklist below to assess your level of trust in each candidate in that little election they’re having tomorrow in the US. It is based on the trust equation, originally printed in The Trusted Advisor in 2000. It suggests trust is a combination of Credibility, Reliability, Intimacy, and low Self-Orientation.

(Not a US citizen? No problem. Here in the state of TrustMatters we accept your comments regardless of your citizenship!).

Tell us whether what follows is useful.

I trust ___ because is he the most credible, meaning:

• He is honest, means what he says
• He’s got the most relevant expertise
• He’s got the best credentials for the job
• He’s really good at what the job takes
• He speaks accurately—tells the truth
• He speaks completely—tells the whole truth
• Other relevant people recommend him.

I trust ___ because is he the most reliable, meaning:

• When he says he’ll do something, he does it
• I have more experience with this person than I do with the other
• He seems more consistent and predictable to me; no bad surprises
• He handles the details well; things work nicely around him, so that you can depend on him to get things done

I trust ___ because is he the most intimate, meaning:

• He’s the most likely to appreciate my personal experiences
• He “connects” with me—speaks about things that I deeply agree with but that don’t usually get articulated
• He’s the most open about things, no secrets with him
• He “gets” who I am, is empathetic, understands me

I trust ___ because he has the lowest self-orientation, meaning:

• He’s in it to serve others, not himself
• He hears criticism well, doesn’t get offended easily
• He really listens, without his agenda getting in the way of hearing
• He works on issues, is not preoccupied with self

What do you think? Do these criteria fit with what you think is important? Do they help you articulate your choice?

Do you think “I trust him” is a valid reason to vote for someone? Or not?

 

November Carnival of Trust: Submissions Due

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Carnival of Trust

The Carnival of Trust is delayed one week by the US elections. The deadline for submissions is next Thursday, November 6. Submit your post at this address:

What? You don’t know about the Carnival of Trust?

It is a monthly roundup of the Top Ten Best Trust-related blog postings in the world. It is guest-hosted monthly by some of the leading blog-minds of our time. You can see past editions here.

This month’s guest host is Jim Peterson, whose blog Re:Balance  regularly displays his unique perspective. An American in Paris, a lawyer-litigator for a Big 4 accounting firm, and a former columnist for the International Herald Tribune, we’re looking forward to his take on things trust-related for the past month. And the last month has surely been rife with trust-related events for him to review.

Would you like to see your own blog posting make it to the Top Ten? Well, you can’t win the lottery if you don’t buy a ticket. Submit your post here and who knows? You could gain worldwide fame yourself.

We look forward to your submissions.
 

Announcing the Trust Resources Library

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As well as having a bit a design facelift, trustedadvisor.com now features a great new resource on trust. Announcing: The Trust Resources Library, a new addition to the Trust Institute at Trusted Advisor Associates (The Trust Institute also contains the self-assessment Trust QuotientSM test).

Trusted Advisor Associates is dedicated to increasing trust—in the business world, and the world in general.

Trust is becoming more, not less, important because:

  • the world is getting more linked
  • horizontal external relationships are replacing vertical internal relationships
  • the same forces that link us also depersonalize those links.

Trust provides powerful tools for good in the face of these trends.

Yet our understanding of trust is limited, fragmented and hard to access. There is no library, website or other forum devoted to the breadth of issues surrounding the theory and practice of trust. Students, consultants, strategists, trainers, managers are forced to re-invent the wheel when dealing with trust.

Until now, that is. Introducing the Trust Resources Library.  It is value-adding, far-reaching, and recursive—it gets more valuable as you use it. It is also free—no strings attached.

Click on the link and you’ll get access to over 400 sources—cross-indexed, linked and abstracted with intelligent commentary—ranging from philosophic theory to business texts; from personal to political; from historical to current.

We invite you to use it—to research, to browse, to learn from.

And we invite you to help build it. Add your own citations, links, and abstracts. When you do, you are identified by name as a contributor (if you choose). (We will reserve approval and editing rights).

Go ahead—click. Take a spin around. Welcome to the Trust Resources Library component of the Trust Institute.

 

The Dilemma of Group Decision Making

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I love it when a writer manages to combine a simple, powerful and relevant theory with a commonsense example that embodies the principle. Malcolm Gladwell does this regularly. Paul Krugman, recent Nobel prize winner in economics, does it as well.

Recently Bob Frisch has done something similar in his HBR article, “When Teams Can’t Decide.”

Theory first. When a group must vote on a choice between three or more options, it is possible to get a circular, not a transitive, result. That is, choice A may result in a majority of people who would have preferred B over A; yet choice B may result in a majority who preferred C over B; and choice C could result in a majority who preferred A over C. Bye bye symbolic logic (If A>B and B>C then A>C); hello to legislatures, for one thing.

Worse yet, Frisch suggests, even a simple A vs. B decision often has a third option—do nothing.

Now for the practical application—this sounds an awful lot like corporate decision making, as well as politics. And the sub-optimal solution we have evolved has often been—the boss gets the tie-breaking vote. Which, given the circular possibility, makes “the decider” an often unpopular and unstable role.

So what’s the solution? Basically, redefine the problem. Which is often a brilliant idea—yet, equally often, unexplored. Frisch gives some specific rules, which seem “obvious” only in the theoretical rear view mirror. The truth is, they are infrequently observed.

One is to clearly articulate definitions. Don’t assume others understand an outcome to mean what you understand it to mean. (Clear definitions also ensures you’re all dealing with true outcomes, not indicators or milestones).

Another is what Frisch calls “testing fences and walls”–explicitly asking whether a given constraint is fundamental, or just presumed.

He also advocates transparency by getting instinctive opinions and biases out in the open sooner rather than later; one interesting approach is the formal use of a devil’s advocate role.

The purpose of all these techniques is to alternately expand and then contract the number of options so as to convert circular vote problem into more transitive patterns—before voting. In short, when you come to a problem—don’t vote on it until you’ve redefined it to improve the odds of majority acceptance.

Frisch positions this kind of organizational problem-solving as an alternative to “psychological” approaches like trust. Using his terms, I might redefine the “problem” of which alternative to choose until both approaches are seen to be integral parts of a differently-defined whole.

But whatever you call it, this is a nice piece of theory-meets-commonsense. It’s the kind of thing that made HBR special back in the day; I’m glad to see it’s still alive and kicking.