David Maister on Trust and Professional Services (Trust Quotes #7)

David Maister  is well-known to readers of this blog. David was lead author on The Trusted Advisor along with myself and Rob Galford. A former Harvard Business School professor, he originally specialized in logistics and transportation (writing 8 books on those topics.) He became the guru of Professional Services with his 1993 book Managing the Professional Services Firm after which he wrote 6 additional books on professional service firm topics.

CHG: Welcome to the Trust Quotes series, David, I’m glad to get you on the record on the subject of trust some ten years after we co-authored The Trusted Advisor. How has your view of trust changed, if at all, since then?

DM: I’m probably a little more skeptical and less hopeful now than I was ten years ago as to the degree to which earning trust is learnable (or teachable.)

When you and I (and Rob) wrote about trust in 2000, we stressed that earning trust was not just about the knowledge of tactics or the possession of skills, but required some underlying attitudes or character attributes – for example, a real interest in those you were dealing with, and a sincere desire to help (what we called “low self-orientation.”)

As authors, consultants and teachers, we (and others) can help a lot with the knowledge and skill parts of understanding trust, and perhaps even (through role playing and practice) help people improve on the behavioral aspects – getting more skilled in conversations for example.

But what remains as a dilemma is what happens if people are actually not that interested (on a personal level) with those whose trust they are trying to earn, or are not really trying to “focus on helping first, and keep the faith that, by earning the relationship, you’ll get what you want down the road.” 

I am suspicious about whether the underlying attitudes or character traits necessary for trust are as common now as they have been in the past.

This is not a comment on the inherent flaws of individuals. Rather, I think we have seen a generational change (or two) in the institutional context within which people have been raised. Customers and clients, through their increased reliance on purchasing departments, are signaling a lesser interest in buying through relationships. At all levels (so-called “partner” or “non-partner”) professional firms are routinely achieving improved economic results by treating their people as “employees at will” rather than assets or members of an organization which gives and expects loyalty. The data is very clear – in the law for example, the single biggest means by which firms improved their profitability (across the profession) was de-equitizing existing partners and drastically reducing the numbers of people promoted to partner. That’s not just a response to the recession – it’s been going on for decades.

Accordingly, I think we are living in organizations which have low (and declining) trust and individuals are responding in kind. I think our economy and society has been training people to not trust.

CHG: For the record, what do you think is the role that trust plays in professional services–or for that matter in business as a whole?

DM: I remain as convinced as ever that a high-trust method of operation is the best high-profit, high growth strategy. In my 2001 book Practice What You Preach, I studied 139 professional operations and was able to show statistically that the key determinants of financial success were when the people throughout the organization (not just those at the top) agreed with the statements “we always put the interests of clients first,” “we have no room for individualists who put their own interests ahead of the clients or the firm,” and “Our managers are men and women of integrity who always act in accordance with what they preach.”

However, it is sad to report that while these attributes (where they existed) could be shown to produce high profits and high growth, they were not common. Alas, in most businesses, neither the employees nor the clients can trust that managers will act in accordance with the principles they advocate. So, cynicism and self-protection results.

CHG: In your career, David, you consulted to or worked with a panorama of industries—law firms, accounting firms, advertising, actuaries, public relations, architects, consulting firms. What did you find to be the most common trust issue across all of them?

DM: Over the past decade or two, there has been a collapse of the “professional service firm model” as a special form of organization. In the past, what made a professional service firm different from a general corporation was that it was built on some generally agreed (if sometimes implicit) assumptions. Assumptions that you could depend upon and trust that they would be observed.

Under the old model, professional firms offered careers, not just jobs. If you were hired at the entry level, it was “assumed” that, in exchange for your hard work, you would be given an apprenticeship, be well-trained and, if you didn’t make it to the higher levels of the firm, you would be helped to find an alternative career. If you did “make partner” there were assumptions that (even if there was no such thing as life tenure) you were treated (and expected to behave as) a long-term member of a cohesive team, and that the firm would be loyal to you if you were loyal to the firm.

None of these “rules’ or assumptions apply today. No-one today knows what it means to “be a partner.” It’s hard to be trusting or trustworthy (between and among partners) if no-one knows whether or not there are sustained “rules of engagement.” Accordingly, even in some incredibly admirable firms, I hear sentences like “I feel like I’m only one bad year away from being terminated.”

Few entry-level hires (according to the survey data I have seen) expect to be with their firms 5 years hence. They don’t believe that their firm has any form of commitment to them. The recent actions during the 2008-2010 recession, wherein junior and admin staff were the first to be tossed overboard in the (successful) attempt to preserve partner incomes proved to everyone where the true priorities of most organizations lie. Together with the fact that, in many professions, professional firms are increasingly publicly held, professional firms are (in my view) much more short-term focused than a decade or two ago. This breeds distrust inside the organization. No-one knows what rules or organizing principles (if any) can be depended upon.

I’m sorry to sound so cynical, but my experience is that juniors don’t trust partners, partners don’t trust each other (especially if the other partner is in a different office, practice specialty, or industry group), no-one trust that management will do what they say they will, and everyone views clients as people to be feared (or seduced) rather than people to trust. Shining counter-examples do exist (the usual names) but they are not the norm.

Yes, researchers, authors and consultants can prove that these are counterproductive and self-defeating attitudes, but that doesn’t make them any the less prevalent.

CHG: As long as we have that list in mind—is there one industry in particular that you found particularly better at—or more challenged, for that matter—at issues of trust?

DM: In general, I find excellence at trust to exist at an individual level (there are many incredibly admirable practitioners in every profession) a very few firms that have firm-wide reputations for it, and no one profession or industry that has a consistently high reputation for being more trusted than other industries. There’s a reason there are consultant jokes, doctor jokes, lawyer jokes, plumber jokes, dentist jokes, accountant jokes, etc. As generalizations across entire professions, we’re all bad at working well with clients.

One profession – the law – does have a particular challenge with trust inside their own organizations. As I pointed out in a recent article, lawyers are professional skeptics: They are selected, trained, and hired to be pessimistic and to spot flaws. To protect their clients, they place the worst possible construction on the outcome of any idea or proposal, and on the motives, intentions, and likely behaviors of those they are dealing with. As Tony Sacker, my kind and gentle brother-in-law and a solicitor in the United Kingdom, says: “I am paid to have a nasty, suspicious mind.”

Recently, I was advising a firm on its compensation system. They didn’t like my recommendations. Finally, one of the partners said, “David, all your recommendations are based on the assumption that we trust each other and trust our executive or compensation committees. We don’t. Give us a system that doesn’t require us to trust each other!”

Much current practice in firm governance, organization, and (not least) compensation comes from the fact that partners vigorously defend their rights to autonomy and individualism, well beyond what is common in other professions. There is nothing inherently wrong with that. However, as major corporations consolidate their work among a smaller number of firms, domestically and internationally, they expect that firms will serve them with effective cross-office and cross-disciplinary teams. Firms are vigorously responding to this with a stampede of lateral hires, mergers, and acquisitions. Their goal is to create big organizations offering many disciplines, locations, and cultures. The unanswered—actually, barely asked—question is whether these firms can shift from a managerial approach, based on partner autonomy, to new approaches that can create a well-coordinated set of team players.

It is hard to unbundle which is the cause and which is the effect, but the combination of a desire for autonomy and high levels of skepticism make most law firms low-trust environments.

CHG: What’s happening with trust in business these days? Your take on it?

DM: I’m not sure I have the “view from the mountaintop” perspective about business as a whole, so perhaps the best way for me to try and answer is as a consumer. Continuing my less-than-hopeful theme, I have to report that as a recipient I do not experience much change or improvement, at least systematically, from those who try to serve me. I’m not saying that I don’t like my doctor, lawyer, plumber, dentist, broker, (and so on.) It’s just that I do not perceive that they are doing anything new that they did not do ten years ago. (Do your readers?)

Nor do I see many game-changing approaches from new entrants in many professions that systematically increase trust between provider and client. Many professions are moving to fixed-fee pricing in part due to the historical lack of trust in the motives of providers who billed by the hour.

One approach that recently caught my attention was the offering of a premium-fee “concierge” primary care physician services where the doctor limits the number of patients to 400 instead of the normal primary care doctor who has a “list” of 2,500 patients or more. This COULD be a systematic way to increase intimacy and accessibility, but (at least in Massachusetts) it has not taken off in a big way.

CHG: Your old industry of professional services; what did you find to be the most common failing—and did it by any chance have any connection with trust?

DM: Most of the weaknesses or failings of professional firms, in my view, derive from the fact that professionals (and their institutions) are made up of highly intelligent people who value and celebrate that which is rational, logical, analytical and based on high intelligence. After all, it is superiority in those things that are screened for in doing well in college and, especially, in obtaining advanced degrees. However, few of us who went that route (unless we had it from childhood) were ever helped in developing our interactive, emotional people skills.

No one ever got their MBA because of superior empathetic skills. Few people, if any, had a successful law school career because of their predilection for being a team-player rather than focusing on their own accomplishments. No-one teaches you (formally) the abilities of being a good conversationalist – having a fresh point of view, but not trying to thrust it upon everyone else, speaking politely and respectfully; telling good stories to illustrate key points; being good at drawing other people’s views out and drawing them into the conversation; not being afraid to admit areas of ignorance; listening with genuine interest. In our educational system (and in our firms’ training and development approaches) these basic human skills are either absent, or treated as secondary.

It sounds trivial and trite to say “It’s all about learning to deal with people,” but what’s often overlooked is that it’s very HARD to develop such people skills if you don’t start until later in life. People and firms underestimate how much effort and time it takes to develop such skills.

CHG: Tactically speaking you’ve heard me talk about trustworthiness vs. trusting, with the combination adding up to trust. On which side do you think business needs more work?

DM: I think you have made an incredibly important distinction, Charlie, and it’s a major contribution to get people thinking about it. I think you and I have always believed that you can’t be seen as being trustworthy unless you are prepared to trust, and being prepared to trust is an incredible leap of faith for many people. So, that’s the hardest part for many people.

When people ask, “How can I be seen as more trustworthy?” there’s more than a little hint of “Let’s get to the stage where I begin to benefit as quickly as possible.” Asking “How can I learn to trust more those with whom I want to have a relationship?” demands that people really are taking a relationship (rather than transaction) approach. Unfortunately, there are people looking at “trust’ as an approach or tactic to “do the deal more quickly.’ They underestimate the mindset change that’s really required to make it work.

CHG: How do people come to learn about trust? How did you learn about it?

DM: Today, “trust” is a hot topic. As you have pointed out, Charlie, claims to being “your trusted advisor” are everywhere. Everyone wants to train their people to earn clients’ trust in order to lower selling costs and avoid fee pressure. What is often misunderstood is that enhanced trust CAN do these things, but it’s not a gradually rising response curve. A little more trust does not get you a little less fee sensitivity or a little more repeat business.

In my experience, it’s a big “step function” – only when you have clearly put a big difference in trustworthiness (and trusting behavior) between you and others in the market can you then reap the rewards of being truly different. I’m not saying it’s “all or nothing” but it’s close to that. “I trust them a little bit more than others” is not much of a commendation, and is not likely to lead to a big change in buying behavior.

My own introduction to trust was by experiencing it – examples that we included in The Trusted Advisor book, and some that have happened since. Every so often, you come across someone – a dentist, an interior decorator, a financial advisor – who earns all your business and long-term loyalty by putting your interests first. And when it happens, as it happened to me, you become an instant convert.

I truly believe there are no secrets here – it’s just the Golden Rule, “Deal with others as you would wish to be dealt with.” The trouble is, too many of us think that our business is different or that our clients are different. We don’t trust them to reciprocate if we do the right thing, so we drop the golden rule and relapse into transactional behavior.

CHG: You didn’t just write about trust only in The Trusted Advisor; in what ways did trust show up in your other books?

DM: All of the lessons of trust in dealing with clients also apply, virtually un-translated, into building trust inside the organization. I wish I had done what our co-author Rob Galford did and written The Trusted Leader, which was a logical follow-up.

Actually, I did try write about effective management and how trust applies. It’s a constant theme thorough all my books. However, it’s still hard to be completely convincing. It’s very sad, but there’s a school of though out there among many managers that accepts Machiavelli’s line about it being better to be feared than to be admired. In the balance between “pragmatists” and “ideologues/idealists”, I still find more people who are self-described pragmatists, rather than managing their businesses according to strictly-adhered to values, standards and principles.

CHG: Unlike Willie Mays, you retired while still on top. Do you miss it?

DM: So far, not at all. I’m not saying I won’t wake up one day with a passionate desire to write another book, it could happen.

But it feels really great not to get on airplanes, and my wife and I, after treating Boston (our home town) as the place where for 25 years we did our laundry, are finding that (surprise, surprise!) it has many wonderful things to offer that keep us busy and engaged.

CHG: David, it’s been a delight talking with you again, thanks so much for taking the time.

This is number 7 in the Trust Quotes series.

The entire series can be found at: http://trustedadvisor.com/trustmatters.trustQuotes

Recent posts in this series include:
Trust Quotes #6: Anna Bernasek
Trust Quotes #5: Neil Rackham
Trust Quotes #4: Peter Firestein on Trust, Character and Reputation