The Perversity of Measuring Trust

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I once consulted to a convenience store chain with 150% store manager turnover. Turns out they gave lie detector tests to each manager every month to cut down on theft. The frequent measurement sent a message to managers— “someone must be getting away with this, maybe I’ll try it.” Click. Results perverted.

The Gallup Management Journal has a piece titled “Engaging Customers—All Day, Every Day.” Here’s how they tee up the issue:

It’s tough to exaggerate the importance of customer engagement. Fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth, according to Gallup research, while actively disengaged customers represent a 13% discount on the same measures…

So, considering the amount of money on the line, it pays to scrutinize every single customer-employee encounter. That’s exactly why so many call centers survey customers to determine their level of engagement.

But what happens between measurements? At best, customer service representatives (CSRs) see their customer scores once a month. Many CSRs only get their scores quarterly or annually. It’s difficult to sustain energy and focus on customer engagement when the feedback is infrequent. The challenge for team leaders and managers becomes finding ways to keep CSRs committed to engaging their customers, even when new data isn’t available. Specifically, how can team leaders keep customer engagement from feeling like an isolated event, rather than a way of doing business?

Note two assumptions the article makes:

1. The purpose of all this “customer engagement” stuff is to increase share of wallet, profitability, revenue, and relationship growth for the seller;

2. The ideal management tool for accomplishing the above would be massive feedback in the form of customer survey data—way more frequently than monthly.

This is perverse on so many levels I don’t know where to start. Let’s look at just three.

Perversity number one: the advice that Gallup then serves up is excellent—and has almost nothing to do with their premise. Their advice is to establish emotional connections with customers across four levels of customer engagement—Confidence, Integrity, Pride, and Passion—and they give excellent advice about how to do it. Well done.

Why oh why, then, do they position this advice as being the fallback alternative to multiple choice phone surveys? When was the last time you filled out a “how did we do” survey except when you were pissed off? The data are necessarily non-specific, post-hoc, and suspect. Why do we think it better than real-time good supervisory feedback?

Perversity number two: mistaking the end for the means. If integrity is in service to making a buck, why should anyone trust you? Faking sincerity is a con job.

No one knowingly trusts a con man—because he’s in it for himself. Companies who say the purpose of customer service is to make money are simply con men who are more up-front about their goal.

Make profit an outcome, not a goal. If you make it a goal, you sow distrust. If your goal in establishing trust is to make money, you will lose both.

Perversity number three: believing that extrinsic measures are better than intrinsic ones. If the system rewards and encourages me for going from a weekly score of 3.5 to one of 3.6, then I will obsess about tricks, tweaks and tunings. If you then peg my compensation to it, you can be sure the last thing I’ll think about is true customer connection. Click. Results perverted.

Read Alfie Kohn’s fine book Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise and Other Bribes. Someone who actually cares about me will beat the pants off someone who fakes caring to make money off me. And ironically, the first person is far more profitable anyway. As a byproduct.

Do what Gallup recommends as second best; it beats the hell out of massively focusing on extrinsic measures. And not just for convenience store managers.

Trust, Da Ali G Show, and Manipulation

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This blog writes about matters of trust: usually from the perspective of the one who would be trusted or trustworthy. What about the flipside; when we ourselves are the ones doing the trusting?

David Maister has a provocative post on that subject, called “Can we be manipulated?”

He cites a new book, a recent Wall Street Journal article, and his own honest assessment that some of the potentially manipulative techniques outlined in the book are indistinguishable from the techniques that might be used by someone acting as a true trusted advisor.

Comments on David’s excellent posting are also worth reading. I want to sharpen the issue and add my two cents here.

As David puts it: how susceptible are we to those with high skills and low motives? What can we do to make ourselves less susceptible—less likely to trust the untrustworthy?

There are basically two generic solutions—you can see them played out in the comments to his post. One lies in exploring the other person, and one in exploring ourselves.

The first examines the other’s motives. Put simply, what’s in it for the other guy? If the answer isn’t clear, ask questions; if they’re not forthcoming, ask why. If the answer is too good to be true, it probably is. And so forth.

This isn’t about skepticism, but curiosity. If the issue is money (and it often is), it’s important to understand the other’s business model. “An investment that guarantees you a nine percent return? Hmmm—help me understand how you do that.”

The second solution lies in understanding ourselves—especially our weaknesses. What are we afraid of not getting, or of losing? What are we unconfident about, or threatened by?

Self-knowledge improves our gut instincts, but even more helps us listen to the gut instincts we already have.

Sacha Baron Cohen’s alter ego in Da Ali G Show (the rap version of Borat) had, to my recollection, only two encounters with people who refused to buy into the joke—Donald Trump and Newt Gingrich. Say what you like about those two, but their self-confidence is high enough to make them bullet-proof to the practical joker. Each in effect said, “if you’re real, you’re an idiot and I’m not buying in. If not, then your joke is boring and I’m busy, goodbye.”

Mark Twain wrote about The Man Who Corrupted Hadleyburg—a 19th century version of Borat, holding a mirror to a town that thought it was incorruptible. It became thoroughly corrupted not because it was corrupt to begin with, but because it thought it wasn’t.

Of course, when it comes to trust, there are no guarantees. Trust lies in that interesting territory between blind faith and calculated risk-taking.

Trust Tip 38: Don’t Exceed Expectations

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You hear it all the time: the imperative to “exceed expectations.” Sometimes the imperative gets compounded, as in “under-promise and over-deliver.” Sometimes it gets underlined, as in “always exceed expectations.”

Let’s be clear here. One who always exceeds expectations is a liar. He lies either in intentionally low-balling the expectations, or in exceeding his promise. Or both.

If you have another word for it, be my guest. But I think you can make a good case that “always exceeding expectations” is a form of lying.

To begin with, it requires stating something known to be not true. That means misleading with conscious intent. For another, the motives of the exceeder/liar are mixed at best. The main purpose of doing it seems to be to “get credit” for having done so; a self-centered motive, not a client-centric one.

But the real problem with exceeding expectations is that, like most lies, it erodes the trustworthiness of the one telling the lie; in particular, his credibility.

Tell enough lies, and they’ll call you a liar. Exceed enough expectations, and they’ll begin to consciously pad your projections and promises.

Do it on Wall Street with earnings projections, and eventually you’ll get caught in an unsustainable updraft of earnings projections factoring in greater and greater expectations. It’s the Christmas Turkey syndrome on steroids.

It’s a fool’s game. Your long-term trustworthiness is worth more than a flash of delight in a client’s eyes. Like any addiction, the surprise declines with regularity; we begin to expect the rabbit out of the hat, then demand it. Trustworthiness, by contrast, ages like fine wine.

There’s nothing wrong with an occasional surprise to the upside. But engineered surprises, delivered regularly, degrade trust. You can’t afford them.

Don’t exceed expectations: set them cleanly, and then meet them. Your customers will thank you.

A Better New Year’s Resolution

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My unscientific sampling says many people make New Year’s resolutions, but few follow through. Net result—unhappiness.

It doesn’t have to be that way.

You could, of course, just try harder, stiffen your resolve, etc. But you’ve been there, tried that.

You could also ditch the whole idea and just stop making resolutions. Avoid goal-failure by eliminating goal-setting. Effective, but at the cost of giving up on aspirations.

I heard another idea: replace the New Year’s Resolution List with a New Year’s Gratitude List. Here’s why it makes sense.

First, most resolutions are about self-improvement—this year I resolve to: quit smoking, lose weight, cut the gossip, drink less, exercise more, and so on. All those resolutions are rooted in a dissatisfaction with the current state of affairs—or with oneself.

In other words: resolutions often have a component of dissatisfaction with self. For many, it isn’t just dissatisfaction—it’s self-hatred. And the stronger the loathing of self, the stronger the resolutions—and the more they hurt when they go unfulfilled. It can be a very vicious circle.

Second, happy people do better. This has some verification in science, and it’s a common point of view in religion and psychology—and in common sense. People who are slightly optimistic do better in life. People who are happy are more attractive to other people. In a very real sense, you empower what you fear—and attract what you put out.

Ergo, replace resolutions with gratitude. The best way to improve oneself is paradoxical—start by being grateful for what you already have. That turns your aspirations from negative (fixing a bad situation) to positive (making a fine situation even better).

Gratitude forces our attention outwards, to others—a common recommendation of almost all spiritual programs.

Finally, gratitude calms us. We worry less. We don’t obsess. We attract others by our calm, which makes our lives connected and meaningful. And before long, we tend to smoke less, drink less, exercise more, gossip less, and so on. Which of course is what we thought we wanted in the first place.

But the real truth is—it wasn’t the resolutions we wanted. It was the peace that comes with gratitude. We had mistaken cause for effect.

Go for an attitude of gratitude. The rest is a positive side-effect.

 

 

Postscript: the article in the NYTimes on 7 January titled Happiness 101 suggests that gratitude is the most effective "strategy" of many studied in engendering happiness.

Bad Marketing 101: Trust Me!

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Trust me!

Those are perhaps the two most trust-destroying words you can say. But look how often they get said.

Try googling the phrase “to be your trusted advisor.” I got 31,300 results when I checked just now.

Here are a few:

Our commitment to you is to be your trusted advisor and mortgage partner for life. Click here to access our Finance Tools. Click here to get Pre-Approved…

Our experience and depth of knowledge qualifies Telcordia to be your "Trusted Advisor" when you need an expert’s assistance

These florists blend their knowledge of flowers with an understanding of style to be your trusted advisor

And my personal favorite,

We have a unique understanding of your career needs and are uniquely positioned to be your trusted advisor.

Why does saying “trust me” accomplish the opposite? Because it violates social norms, and because it is self-contradictory.

Trust is personal—an outcome, not a come-on. On a first date, asking for either sex or for a very long-term relationship is likely to get you neither. “Trust me” is the business version—socially inappropriate, especially on the “first date” equivalent of the internet.

More importantly, “trusted advisor” is something you want others to say about you, not say it yourself. You can talk about it amongst yourselves, hope for it—but not proclaim it.

Saying you are, or want to be, someone’s trusted advisor, is like saying you are, or want to be, really humble.

But don’t trust me on it…

Trust Tip 3: The ABC 20 Question Rule

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This comes in two parts: generic and specific. ABC and 20 Questions.

The generic tip is “always be curious”—ABC.  If you’re always curious, you’ll ask good questions. You’ll have to develop some hypotheses in order to come up with questions. You’ll develop insights. You’ll be market-focused, rather than inward focused—always a good place to focus first.

But most importantly, your self-orientation will drop.  Self-orientation is the biggest factor affecting personal trust—if your objectives, goals and focus is on yourself, then to that extent, customers and clients won’t trust you.  As well they shouldn’t.  Being constantly curious transforms self-orientation into customer focus.

The tactical part is the list of 20 questions.  Always have a rolling 20 question list about your client and your customer on hand.  Keep them in a notebook, in your to-do list, in a separate client info/data file.

Keep the questions genuine—questions that you honestly don’t know the answers to, and the knowing of which would add to your knowledge of the company and its issues.  Don’t use gimme questions that you could have looked up; make them richer questions, ones requiring insight or perception.

Now put the two parts together.  At every client interaction, be curious by asking one or two of your questions.  There’s no need to be coy about it—you can tell your client exactly what you’re doing and why. Top up your questions list a day or two later, so it’s always a rich one.

The trick, I think, is discipline in doing it.  This is not a tip that delivers results by thinking about it; you actually have to do it.

And so now I must confess: I’ve been suggesting to people for some time that they do this, and I haven’t been doing it myself.  I don’t like making New Year’s resolutions, but I think I’ll make a December 28 resolution.

I’ll report back to you in a few months on my results.  I’d love to hear yours.

Seasonal Sarcasm and Santa: Who Can You Trust?

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If you seek another heart-felt paean to the true meaning of the holiday season—then move along, nothing to look at here folks…

This post is the counterpoint.

First, we need a great bah-humbug blog post. This year’s winner is Private Equity:

As a culture we are horribly conflicted. We denominate value in cash, but consider it dirty and evil. Cash is a universal storage mechanism for value, except when it comes to gift giving, where somehow, magically, the value is diminished because it is the "thought that counts." That, by the way, is complete and utter bullshit. Please, those relatives who are reading this but don’t know it is me, I ask you this one thing: don’t try to think.

For her ingenious  (and delightfully self-serving) solution,  click here.

But maybe the season is seriously busted, and “bah humbug” is just a tactical solution.  No, what we need is strategic change. Maybe Xmas is in sore need of re-branding.  NYTimes to the rescue.

 

…starting just after Thanksgiving, the designers did their best, first identifying the three chief problems with the brand: it’s divisive, ugly and, of course, over-commercialized. Next they came up with a big idea to try to fix these problems. It was not to rename Christmas, exactly, but to streamline it by creating what might be thought of as an “overall umbrella brand,” Mr. Bierut said, one that sounded contemporary, hip and, most important, Internet-ready: x.mas. Corporations willing to pony up big money to be the official sponsors of x.mas could also participate, making for shiny new Web sites like Apple.mas, Target.mas, Nike.mas.

Click here for more on this exciting new reform.

I refuse to check the TV listings to see how many times It’s a Wonderful Life is playing this season. The more interesting film by far is Miracle on 34th Street.  For one thing, in MO34, we are left intriguingly in doubt as to the sanity of Mr. Kringle even at movie’s end—unlike the one-dimensionally clueless angel Clarence in Capra’s accidental never-intended memorial.

Moreover, Miracle has a modernist edge to it.  Santa is nearly fired by a numbers-driven Type-A middle manager for suggesting to a shopper that she buy the toy from Gimbel’s across the street.  (The cynical shopper confounds the manager by congratulating him on "this wonderful new stunt you’re pullin’.”)

Macy’s President happens along and instantly realizes that Santa’s customer focus is far more effective for Macy’s than the conventional features and benefits approach.  He announces:

…not only will our Santa Claus continue in this manner…but I want every salesperson in this store to do precisely the same thing. If we haven’t got exactly what the customer wants, we’ll send him where he can get it.

No high pressuring and forcing a customer to take something he doesn’t really want. We’ll be known as the helpful store, the friendly store, the store with a heart, the store that places public service ahead of profits.

And, consequently, we’ll make more profits than ever before.

Ah but of course that’s only a movie.  True customer focus like that would be suicidal in the real dog eat dog world.

Right? 

Coke, Green Tea and Trust

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The Coca Cola company, with Nestle, is test-marketing a new product called Enviga. It’s being marketed as “the drink proven to burn calories.” It also raises some high-stakes trust issues for Coke, the food business, and business in general.

"Enviga is a great tasting beverage that invigorates your metabolism to gently burn calories, and it’s a positive step people can take as part of a balanced lifestyle – like taking the stairs."

—John Hackett, senior vice president, Coca-Cola North America Marketing

“In no way, shape or form are we suggesting that Enviga is a weight loss beverage.”

—Dr. Rhoda Applebaum, Coke’s chief scientist

Hmmm…

"Many consumers are going to see the term ‘calorie burner’ and think it means weight loss."

—Parke Wilde, director, food policy and applied nutrition, Tufts’ nutrition school

“It’s ironic that Coke, a company that has been a major promoter of weight gain, is now pretending that it is coming to the rescue of overweight people,” said CSPI executive director Michael F. Jacobson. “Plain old tap water has zero calories, five calories fewer than Enviga, but unlike Enviga, tap water doesn’t cost 15 bucks a gallon.”

2003, Coke’s then-CEO:

"The Coca-Cola Company has always been fundamentally in the relationship business, and trust is at the heart of every relationship our Company has ever developed. Consumers trust that they’ll be refreshed by the highest-quality beverage. Customers trust that we’ll provide the highest level of service and attention to their needs. Our bottling partners trust that we’re operating in the best interests of the Coca-Cola system. In short, when you’re fundamentally in the relationship business, trust is the essential first condition. But you can’t demand trust—you have to earn it."

—Conversation with CEO Doug Daft, 2003

Here’s an example of what’s at stake:

Coca-Cola has been voted as one of the most Trusted Brands by Reader’s Digest -celebrating its 52nd year in India in the Reader’s Digest Asia’s Trusted Brands Survey 2006. Coca-Cola in Asia has been voted as a ’Platinum Winner’ and Coca-Cola in India has been voted as a ’Gold Winner’.

Trust is indeed important for a company like Coca Cola—moreso than perhaps they realize. Parse Daft’s statement on trust and you’ll find it wanting—except for the line about bottling partners, it’s indistinguishable from a generic "we provide best quality products and services" statement. Daft uses "trust" as a synonym for expectations—a pretty narrow definition.

For a global company like Coca Cola, the more relevant synonyms for trust would be credibility and self-orientation. That is, are they seen to be believable, and in whose interests are they seen to be acting?

(The right answers would be ‘yes’, and ‘those of several stakeholders’.) What’s your sense of Coke’s answer?

Trust Tip 72: Write Your Next Proposal with the Client

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Our normal modus operandi, of course, is to leave the meeting and say,
 

“Thanks, that was a really helpful meeting. I’ll get you a written proposal via .pdf and FedEx next Thursday, and we look forward to hearing back from you a week later.”

What if, instead, you were to say,
 

“Thanks, that was a really helpful meeting. Why don’t you book the same conference room again next Thursday morning, and let’s write this proposal together.

“I’ll bring all our cost charts and resource pricing tables, as well as various background and qualifications materials. You bring the requirements materials you need.

“We’ll work together to jointly define problem statements, approaches, timing, pricing, outcomes and outcome measurements.

“It will still only be a proposal —I realize there’s no guarantee. But it will be the best darn proposal we ever wrote and you ever got, because we’d agree—to the best of our ability—how we would work together in advance to address all your issues and build those approaches into the proposal itself.

What do you say? ”

We normally think of the sales process as something that precedes having a good customer or client relationship. First we get the sale, then we can be all trusting and collaborative.

Writing the proposal together, with the client, changes that. It creates trust and collaboration before the sale. It models those attributes in the proposal process itself.

Doesn’t your client deserve the best proposal possible? Don’t you? Why not work together—on the same side of the table—to make sure you both get what you deserve?

 

Stock Options Abuse: Jail or Restraining Orders?

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Which is a better deterrent to crime: jail sentences, or restraining orders?

We normally apply these sanctions against perpetrators of domestic violence, or robbery. But what about the scandal du jour—endemic stock option abuse?

Which is a better deterrent to stock options abusers: prison sentences, or structural reform around corporate governance?

The latest twist in options backdating? The practice has now been found among directors, not just executives. This is the lesson from a Harvard / Cornell / INSEAD report.

"In the data, we found that directors’ grants are equally susceptible to manipulation," Bebchuk said.

A “lucky” director grant was more likely at companies where executives received lucky grants, the study found. And firms with a higher incidence of lucky option grants were more likely to have governance practices considered unfriendly to shareholders, such as a minority of independent directors on the board.

The firms were also more likely to have "entrenching" bylaws, which make it difficult for shareholders to remove directors.
The study is not the first to raise questions about a possible link between options backdating practices and board governance practices. A study by the Corporate Library of 120 companies implicated in backdating found a high incidence of interlocking directors, or directors who served on more than one company that backdated.

The study suggested that backdating practices may have spread from company to company through these interlocking director relationships.

The disease metaphor is very tempting—practices that may have “spread from company to company through interlocking director relationships.” That sounds like the right answer is quarantine—Chinese walls—house arrest—restraining orders. In other words, reform.

Tempting, but extremely expensive. The US is already an overly litigious society and businesses are creaking under regulatory weight.

Using reform to solve trust issues is like using contraceptives to control the deer population—humane, but very costly, and hard to administer.

Punishment is not the preferred vehicle of reformers. But it may be just the right medicine for trust violations. Selective, highly visible, publicized, strong sanctions, particularly prison.

Many argue that prison is not a deterrent against crimes of passion, and only fosters recidivism. Precisely the opposite can be said about corporate executives and directors. Their crimes are coldly conceived, and prison to them is likely a huge dose of ice water. Jeff Skilling’s conviction and sentencing has already prevented more Jeff Skillings, I suspect.

Trust violations at the board level don’t require Chinese walls, but Chinese prisons. Sanctions are far more efficient, and probably much more effective.