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The business world talks a lot about competition, and not enough about commerce.  I mean commerce in the “old” sense of the word—like a century or so “old,” when it was pretty much synonymous with business.

Commerce, the way I’m using it, is about the interaction between producers and consumers, buyers and sellers. It’s as old as bartering at the bazaar. Commerce, not competition, is what Adam Smith had in mind in his Invisible Hand metaphor.

This interaction has been coopted in recent decades by a focus on competition.  Every commercial interaction has been re-cast in terms of competition. All aspects of business—selling, recruiting, design—get discussed in terms of how they can most profitably contribute to sustainable corporate competitive advantage.

That miscasting has been particularly insidious in sales, where the “us-them” mentality has gotten enshrined.  Most of what is written about selling is aimed at getting them to buy from us, while studiously avoiding saying it’s so.  At it’s best, this approach  says the best way for us to get what we want is to help them get what they want.  True—but not a full picture.

Along comes Jeff Thull to bring us back to the future—a truly commerce-based way of viewing selling.  Jeff heads PrimeResources, and is author of three books, including Exceptional Selling.

Tom Peters says, “I am a Jeff Thull fan.”  So am I.  Briefly, here’s why.

Jeff comes off as a humble guy, but he makes a pretty bold statement: all sales approaches thus far can be lumped into two Eras:

Era 1: getting the buyer to do what we want
Era 2: finding out what the buyer wants, so we can give it to them.

Jeff includes in Era 2 pretty much all the big current programs: SPIN, consultative selling, et al. So what’s wrong with Era 2?

What’s wrong is that solutions these days are complex; so are the environments they go into. The dirty little truth is—the buyer these days honestly doesn’t know what his needs truly are.  That’s Era 3.

A doctor wouldn’t let you self-diagnose heart arrhythmias; but Era 2 selling does just that, by presuming the customer knows his own needs. He doesn’t. Not anymore. Nor does the salesperson know the customer’s environment.  Neither can succeed without the other.  Era 3 recognizes this.

This was always true—but it’s way more true now. The level of interdependency in the business world is way higher than it was just ten years ago.   That’s the new reality.

I call Thull’s approach "back to the future," because that’s what commerce used to be about—an interaction between parties who can be of use to each other.

The right approach for sales in the future is not based on getting the sale, or on achieving sustainable competitive advantage for the selling company. It’s about tearing down the boundaries between organizations, collaboratively helping each other to figure out the best thing to do for both.

It requires customer focus for the customer’s sake; collaboration; a focus on the relationship instead of the transaction; and on transparency.

Those happen to be the Four Trust Principles I talk about in my own book Trust-based Selling.  Coincidence?  Hardly;  we’re both talking about how commerce is done in a relational world.  Selling is about relationships—again.
 

Payback is a bitch.

Last blog, I suggested that many business academics were naïve for not noticing the level of fear in the corporate world.
Well, apparently I’m beyond naïve when it comes to legal billing practices.

I was shocked—not in the Claude Rains sense, but honestly, shocked—to read the Wall Street Journal’s Law Blog of May 1, Study Suggests Significant Billing Abuse.

William G. Ross, a professor at Samford University’s Cumberland School of Law…polled 5,000 attorneys from various walks of life throughout the country, and 251 responded…

Two-thirds said they had “specific knowledge” of bill padding ─ a finding virtually identical to one reached by Ross in a 1995 billing survey. Also, 54.6% of the respondents (as compared with 40.3% in 1995) admitted that they had sometimes performed unnecessary tasks just to bump up their billable output.
Ross says that bill padding involves invoicing a client for work never performed — or exaggerating the amount of time spent on a matter—- while unnecessary work is that which “exceeds any marginal utility” to a client.

…the percentage of attorneys who admitted that they had double billed rose from 23% in 1996 to 34.7% in 2007. And only 51.8% regarded the practice as unethical in 2007, as compared with 64.7% in 1995.

I spent 20 years in the large general management consulting firm business. I’ve consulted to Big 4 firms for several years (that’s not double-counting). I’ve worked with a dozen or so law firms and internal law departments. I should not be surprised.

But I am. I don’t recall ever invoicing a client for work I didn’t do. I’m not saying I didn’t, but I don’t recall it. More importantly, in 20 years in consulting, I don’t recall ever hearing of anyone in that business charging for time not spent. I’m not saying they didn’t—but I don’t recall it.

As for accountants, it’s hard to get them to bill actual time, they’re in such a rush to discount.

I’m aware that lawyers are different. Many charge you for their secretary’s time drafting up the retainer agreement they hit you with when you walk in the door. Ridiculous hours get billed. I know that.

I also know some work is charged at a flat rate, which can occasionally cost less than the “standard cost” of that product. I know that.

But this—half the industry with its thumb on the scale? Half the lawyers in the country think it’s not unethical to charge the same hour to two clients?

I just do not get it. Am I hopelessly out of date? Do consultants and accountants do this too nowadays? Or is it really true that There’s Something About Lawyers?

The ethical principles I lived by still seem fine to me:

1. Envision it on the front page of the Times.
2. If the client saw this, would (s)he be okay with it?
3. If another client saw this, would they be okay with it?

When the night lights were on in consultants’ offices, consultants were working—but often not billing beyond the standard 8-hour day.  We called it the quality variance, and it went to the client. At law firms today, if the lights are on, are they charging time-and-a-half plus utilities?

I hate being naïve, but I clearly am. I just didn’t know this was going on at such scale.

How many of you did? And what do you think of it?

How do people in Abraham Lincoln’s profession end up this way? I know some fine, exceptional people who are lawyers; even a good firm or two. I’d like to think there is a reasonable explanation for the results of this survey—other than the obvious one screaming at us.

Is there a reasonable way to explain this? Or is it really just simply, flat-out, plain and simple, a case of a money-grubbing, anti-client, unprofessional, unethical industry?

And if the latter—how did this happen?

I’ve got a few theories, but I’d far rather hear yours. Please speak up.

Western culture in general, and American business in particular, worship at the altar of what gets called “rational” thinking.

Data-driven; deductive; clear logic; structured thinking; hypothesis-testing; statistically significant; scientifically proven; supported by studies—that kind of thing.

In business, we prize rational decision-making, which is generally taken to mean “show me the pro formas,” or “where’s the data to support that conclusion,” or “what’s the IRR or the NPV on the EBITDA?”

But the dirty little secret we all know is—that’s often not the way it works. Very often. (New York City once did a study on corporate headquarter moves out of the city: nearly every move ended up within 25 miles of the CEO’s home).

Sims Wyeth delightfully and provocatively catalogs in White Crow, Black Swan some of the reasons it ain’t necessarily so. A few tid-bits:

We all would agree, I think, that measuring is a good idea because it will enable us to choose the best doctor and the best hospital when we get sick. But it turns out that when data is available, people ignore it and instead make their decisions based on the stories their friends and families tell them–even if the stories contradict the data.

…As John Kenneth Galbraith said, “Faced with the choice between changing one’s mind or proving that there is no need to do so, almost everybody gets busy on the proof.”

…there is the confirmation bias, which is our tendency to reject information that contradicts our beliefs and accept information that confirms what we already believe.…There is the narrative fallacy, which is our weakness for compelling stories; the problem of silent evidence, which is our failure to account for what we don’t see; the ludic fallacy (don’t you love these fancy terms??) which is our willingness to oversimplify and take games and models (remember LTCM?) too seriously.

It’s not just that sometimes our “rational” thinking gets us wrong. The point is we have lost track of the idea that there is more than one way to think.

The term “rhetoric” is considered a pejorative term these days, as in “empty rhetoric.” It lacked that connotation from the times of Aristotle to Lincoln, when it spoke to the art of communication.

More than a few philosophers, and nearly all poets, are familiar with dialectical thinking—thesis, antithesis, synthesis—whose greatest virtue is the generation of insight. Yet it’s considered—literally—nonsensical by the “rational” rules of today.

To do a better job of defining “rational” thinking, we ought to include a whole raft of non-cognitive themes: paying attention to one’s own or others’ emotions, for example, is what “emotional intelligence” is about.

The opposite of “rational” as we have come to use it is not “irrational.” Very few people behave irrationally, if you mean by that doing things against one’s own interest. Fleeing a murderer with a knife—we probably wouldn’t call that “irrational.”

Yet if someone makes a business decision “straight from the gut,” we sneer at it because it’s not “rational.” (Unless Jack Welch writes a book with that title, in which case it becomes a best-seller. Rational?).

Decisions are not better for being “rational” in the narrow way we have come to use it. A lot of what passes for “rational” is just “rationalization.”

We need a business vocabulary for the coming relationship-driven world that encompasses a whole lot more in the word “rational” than what we have let it dribble down to.

(And I didn’t mention decision-making on Iraq even once).

Peter Jennings, ABC TV’s recently departed news anchor, said (roughly), “I have never seen an issue on which everyone agreed. When I see a coin, I have to turn it over to see the other side.”

Dan Everett, a linguistics expert, spent 30 years with the Amazonian Pirahã people. The April 16, 2007 New Yorker story describes his gradual disenchantment with Noam Chomsky, the pied piper of linguistics.

Grossly simplified, Chomsky says the structure of language is innate in humans. He cites recursive speech, e.g. rather than saying “that man is tall,” and, “that man is walking,” we say “that tall man is walking.” Recursion is uniquely human, says Chomsky.

The Pirahã do not use recursive speech, says Everett. Nor do they refer to the past, nor count above about three. Their language lacks a perfect tense. Everett says they are remarkable for the degree to which they simply live in the present, accepting as real only that which they observe.

Everett says the Pirahã disprove Chomsky’s theory. Chomskyites beg to differ. Character assassination (disguised as academics) ensues.

(I will get back to Jennings.)

Other researchers visit the tribe to challenge Everett by proving recursion in the Pirahã. The data don’t seem to cooperate. That doesn’t deter the theorists—the data must be wrong.

Two other theorists accuse Everett of insulting the tribe by essentially calling them subhuman—stupid. After all, the logic goes, if they aren’t recursive—as Chomsky insists they must be, in order to be human—then they must be stupid. QED.

Everett insists they’re highly intelligent, one of the most savvy tribes in the region.

(See where Jennings is coming up?)

The author comically tries to explain insect repellent to a Pirahã; he mimics a buzzing fly landing on his arm, then slapping it. Everett translated. What? He hit himself? A plane lands on his arm?

Everett explains, and the main looks at the author with pitying contempt. “You told him bugs bothered you,” explained Everett. “But bugs are part of life. How could you be bothered by them?”

The Chomskyite explanation of people who don’t fit their theory is—they must be less than people. The Parahã, to be clear, are exactly the same: they show no interest whatsoever in the outside world, considering themselves superior. Those insect repellent fools? They must be less than people.

I once discussed a point with an Arican American woman co-worker. “You know,” I said, “it’s like that Rolling Stones song.”

“I don’t think I know it,” she replied.

“Sure you do,” I said, “it was a Top-40 song.”

She looked at me askance; “and just whose Top-40 would that happen to be?” she asked me.

It had never dawned on me that my pop-music experience wasn’t universal.

We praise a lot of traits in people: loyalty, fearlessness, conviction, compassion, integrity. In business, we praise intellectual rigor (though ironically our generally accepted business model for human motivation often resembles Skinner’s for rats). We value courage and entrepreneurial instincts, as well as leadership ability (whatever that means).

I’d like to give some props to humility. Let’s bow down to the fact that basically we don’t know diddly—particularly when we think we do. Let’s celebrate humility, which leads to honesty, and then perhaps to curiosity. Humility is the starting point that makes all things possible. Certainly that’s true for trust.

When you meet a man with the courage of his convictions, watch out.

Or, as Peter Jennings would have more generously put it, turn the coin over to look at the other side.

I had dinner tonight with Phil. Phil is CEO of a specialty printing company; he learned the business through Xerox, the class act of sales back in the day. Way back.

His company had to buy several pieces of moderately expensive printing equipment. They got pitches from three organizations. The salesmen from Brands A and B, the well-known brands, had known Phil and his company for some time. Brand C, a lesser-known quantity, was represented by a young woman.

Brands A and B offered prices around $140,000. The young lady at Brand C offered Phil re-manufactured equipment at a price of about $80,000.

“How do we know this is going to work and stay working?” asked one of Phil’s manufacturing people.

“Well,” she replied, some of the biggest players in your game are using it and will be happy to tell you how much they like it. Let me give you their phone numbers.”

“We’re going to want this in soon, and have it hit the ground running with no problems,” said Phil.

Replied the saleslady, “Phil, the sooner it’s in and working, the sooner my commission stream starts paying. You and I are on the same side of the table. The sooner you get happy, the better for both of us.”

Phil told me, “I’d pretty much resolved to go with Ms. C, but I wanted to give the other guys a chance to respond gracefully. I called each of them up.”

Brand A, when I told him we were going with Brand C’s remanufactured product line, said, in a huff, “Well—if I’d known we were going to be dealing in used stuff—”

“He didn’t need to say another word,” said Phil. “Not only did he lose this deal, he probably lost the next five I’ll have. I can’t count all the things he did wrong, starting with pissing me off. Let’s see: bad-mouthing the competition, not focusing on me, giving me attitude, implying I’d misled him—any one of those was enough to lose my business.”

Then Phil called salesman B, with the same news. “Aw, gee, Phil, you and I go way back, I thought we had a good relationship, shouldn’t that count for something…our people have spent an inordinate amount of time on this…”

“And by then,” said Phil, “I had blocked him out too. How many penalty flags on that play? Let’s see, we saw the ever popular ‘it’s about the salesman not the customer’ routine; he was telling me the relationship never meant anything but money anyway; he was begging worse than a dog at a picnic with his eyes on a sirloin; and he’s trying to guilt trip me. ‘Inordinate,’ indeed. Nope, he’s outta here.”

Phil explains it this way:”I’ll supply my own guilt, thank you very much. The guy I feel obligated to is the guy who answers all my questions, smiles and asks if I have any more. The minute someone says I owe them, I no longer do.”

That’s the paradox. If you want to sell, stop selling. That’s my little way of saying it.

What are your words for what Phil’s talking about?