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Books We Trust: The Collaborative Organization by Jacob Morgan

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This is number 11 in a series called Books We Trust.

I first met Jacob Morgan a little over a year ago in New York. Appropriately, we had first met on Twitter, then agreed to a coffee on an East Coast trip of his that coincided with a free midday on my end. Lucky for me!

What’s unique about Jacob is the extent to which he intuitively grasps how new digital tools and strategies can be used to create Collaborative Organizations where employees share, connect and engage with each other and with information.  This in turn helps build trust, fosters collaboration and positively impact the lives of employees both at and outside of work.

Most of us “get” that collaboration – whatever that means – is a powerful force in today’s networked business world. Unlike most of us, Jacob “gets” just what that does mean. That’s what his book is about.

Charlie Green: Jacob, you’re so modest. I honestly did not know, until I saw the draft the number of interesting people you connected with in writing this book: Don Tapscott, Gil Yehuda, Craig Newmark, Darren Entwistle – and I’m just scratching the surface. How did you gain entrée to all these interesting folks?

Jacob Morgan: I’ve been very fortunate to get such amazing people involved. The former CIO of the USA (Vivek Kundra) was the closest I could get to the President himself endorsing the book!  As soon as I had something I could share with people I immediately began reaching out to leaders who I thought would make great supporters of the book.

These leaders themselves believe in the concept of a Collaborative Organization so the book really resonated with them.  I had relationships at many of the companies who were able to help make this happen; without them, none of this would have been possible.

Charlie: You spent a month traveling throughout China, including rural areas, and were amazed at how easy it was to stay digitally connected. Easier, in fact, than inside some major US corporations. The corporate use of technologies lags the social uses that are developing outside the walls. What’s up with that?

Jacob: The barrier for individual use of social media is non-existent. All you need is an internet connection.  For corporate-led collaboration initiatives to take place, all sorts of things need to be considered: cost, security, risks, employee adoption issues, vendor selection, integrations and customizations and more. Realistically many companies are still trying to figure out what it all means and how it can be applied to their business. There is also a high degree of fear.

Charlie: We often hear people – let’s say mainly from my generation – who bemoan the lack of depth in relationships that comes about from the “shallowness” of social media connections. In contrast, you point out that in 1977, an MIT researcher found that people working 30 yards apart from each other interacted as well as people half a world away.

The problem this raises is not what came to be called strong ties, but rather one of weak ties.  The power of weak ties to extend functional work relationships, you point out, is revolutionary and massive.  Say a bit more about that please?

Jacob: The study showed that if you’re more than 30 meters away from someone, you might as well be in another city.  Beyond 30 meters, collaboration and communication drop off significantly.

Weak ties act like bridges between groups or areas. Think of Oakland and San Francisco.  Each can be considered a strong community with a lot of strong ties. But the Bay Bridge, which connects the two, allows people from San Francisco to go to a new area, Oakland, and vice versa.

The same is true within companies. People with strong ties typically know the same group of people; it’s an overlap, it can lead to staleness, which is why we need to extend beyond our networks. This we do through weak ties.

How often were you able to get a job interview, access to a party, a discount on something, or an introduction to someone based on a weak tie?  LinkedIn is a great example of a platform that allows you to build weak ties in the business world that you can potentially call on later.

Charlie: It’s my sense that many people in business think of collaborative tools with the paradigm of sharing databases, as a problem of knowledge management, powerful queries and the like. But you caught my attention with three items right out of my own books: thinking out loud, listening and remote team trust-building.

These are core skills for human-to-human trust creation; how in the world can bloodless abstract digital tools help us to connect in these powerfully human ways?

Jacob: Keep in mind that technologies are simply the enablers; it’s still people that are using these tools and engaging with each other. These tools allow us to share information in new ways; the same is true for listening. 

We can have a pulse on the company by checking out a corporate activity feed, or sharing an idea or a challenge that we’re trying to figure out.  This happens often in the consumer space with Facebook and Twitter – again, it’s the corporate world that lags.

As far as trust goes, we tend to trust people with whom we have something in common.  These new collaborative tools allow us to form communities of interest, passion and expertise that help employees build relationships, and hence trust with one another.

Charlie: One of the several rich case studies you describe was for a 1500-employee group at Penn State that created an intranet. What struck me was that the plan for implementation and adoption was to take 3-5 years. In fact, it was done in 1.5 to 2 years. And – wait for it – you say there was never an in-depth strategy for doing this.

What was the secret sauce that pulled that one off?

Jacob: No two companies go down the same path. Penn State planned quite conservatively for their initiative but even they were surprised by the faster adoption.

I can’t say there was a secret sauce per se, but I do know that they really cared about this initiative and they made it front and center. Though they didn’t have an in-depth strategy, they did have some foundation laid out for what they wanted to do.

It’s a bit like trying to become a great swimmer by studying YouTube videos, reading books, and interviewing the greatest swimmers.  Sure, it’ll you give you some tips and ideas, but at the end of the day you need to jump in the water to learn and adapt.

Is this the best approach for every company out there?  Probably not, but it can certainly work for some, as Penn State has shown.

Charlie: You talk about the risks of implementing new collaborative technologies, but also about the risks of not implementing them.  What are the biggest of those latter risks, the risks of not taking a risk?

Jacob: I’d say some of the top risks are:

  • Having a disengaged workforce that doesn’t care much about the work they do or the company they work for
  • Inability of the company to stay competitive
  • Having an inefficient workforce

Charlie: Jacob, I’m totally sold that an organization using these technologies fluently could become enormously successful. If you had to narrow down the top two or three barriers to acceptance of them, what would you say they are?

Jacob: There are three types of resistance: they come from employees, managers, and IT. Respectively:

The top employee barriers are not wanting to learn a new technology, and saying they don’t have enough time.

The leading managerial barriers are not seeing it as a priority (which I believe is a fear and a lack of understanding problem), and uncertainty about the overall business value and ROI.

For IT, the top barriers are low prioritization (again, often due to fear and understanding), security issues, and lack of budget.

Charlie: The full title of the book is The Collaborative Organization: A Strategic Guide to Using Emerging Social and Collaborative Tools, and it just formally came out on July 9th. I hope you sell a boatload of books. Thank you for sharing your thoughts with us here.

Jacob: My pleasure, thanks Charlie!

 

 

Books We Trust: The Decision to Trust by Bob Hurley

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This is the eighth in a series called Books We Trust.

The Decision to Trust is one of the best books written in recent years on trust; it is a major contribution to the subject.

Author Bob Hurley teaches at Fordham and Columbia, so it’s no surprise that the book is solidly rooted in the extensive academic work on trust. Perhaps more surprising is that the book is also intensely practical, based on his years of consulting and research work with significant companies.

I sat down recently with Bob at his decidedly un-Lincoln Center-ish Fordham offices near Lincoln Center.

Capitalism: Back to the Future

Charlie Green: Let’s get one thing clear: you’re not doing double-duty as Basketball Hall of Fame high school coach Bob Hurley over in Jersey City – are you?

Bob Hurley: No, but I’m a fan, so I’m flattered by the confusion.

Charlie: OK, that’s out of the way. This is a wonderful book, Bob, clearly the result of years of research.

Bob: Decades, actually. I started as an accountant, then got an MBA and did consumer marketing. Eventually I realized I really wanted to be a teacher. I ended up at Columbia, where I studied under Morton Deutsch, the founder of the field of conflict resolution and a brilliant psychologist.

Today, I teach various courses in leadership and management at Fordham, and I teach executive education at Columbia

Charlie: Let’s jump right to the book. The heart of it, and I think the genius of it, is your idea of approaching trust from the point of view of a decision. A decision to trust is a largely psychological decision by the trustor, which is affected by the trustor’s own propensity to trust, and by the trustor’s view of the trustworthiness of the trustee in the particular situation.

Tell us the power of approaching things that way?

Bob: Well most people especially business people understand decision-making. When we frame the issue of trust as a decision we can help people not only understand about trust but also understand how to help others make a choice to trust vs. be suspicious. We do this by helping trustees understand how to be trustworthy in the eyes of others. This not only makes the model grounded in research in psychology, but also very practical.

It turns out that this approach also it allows you to make sense of trust from an interpersonal, group and organizational perspective. It may have a psychological locus at the heart of it, but it also allows for intelligent discussion about social environments and institutional behaviors.

Charlie: Would you list the ten factors please, as a teaser to get readers to click through and buy your book?

Bob: Sure. The first three factors are trustor-related: the level of risk tolerance, the trustor’s level of psychological adjustment, and the power position of the trustor all affect their likelihood to put themselves at knowing risk of another, which is how I think of the decision to trust.

The other seven factors are situational: They are security, similarity, alignment of interests, the level of perceived benevolent concern, capability, predictability and integrity, and communication. Some of those are about the trustee’s character as perceived by the trustor – some are about the trustor’s perception of the situation.

Charlie: You can then use this model to test, rate, rank, diagnose, consult and so forth, right? It’s a powerful tool for consultation and management.

Bob: Exactly, and it’s been widely tested over the years in thousands of situations. I started out testing it in exec ed programs; I wrote up a version of it in an HBR article, which led to more consulting and more testing.  It’s extremely workable, in addition to being well-grounded in the trust research literature.

Charlie: What are some of the problems to which you’ve applied the model?

Bob: There’s quite a range, from making better individual decisions, to leadership, to more effective team organization, even to culture change and trust repair. The model describes the failures of organizations like the Catholic Church’s problems with priestly sexual abuse, and the DaimlerChrysler debacle.

Charlie: You’re quite clear about the need to address trust issues systemically, aren’t you?

Bob: I think so. Personal trust is critical, but culture trumps personality. If we don’t get leaders to start to high trust create cultures and systems, we won’t get there. You can’t just change individuals and stop there.

For trust to get better in the trust-challenged world we live in, we have to get better at all three dimensions; trustors have to get better at making better trust decisions, trustees have to become more trustworthy, and we have to make our organizational cultures, systems and processes more trustworthy .

Charlie: David Gebler, in the field of ethics, makes much the same point: most ethical lapses are not due to moral failure on the part of individuals, but to an environment that is insufficiently supportive of ethical behavior.

Bob: Makes sense to me, and I would add that we need to go well beyond ethics to understand what makes people and companies trustworthy. Just because a person is ethical does not mean people will or should trust them!

Charlie: Let’s talk about one particular application of the Decision to Trust Model (DTM), that of leadership and management. First of all, what’s your take on how our ideas of “leadership” have evolved over the years?

Bob: I would say that the science behind leadership has evolved from trait theory to focus more on relationship, the need for flexibility and agility, EQ and the importance of self awareness and authenticity. When I teach leadership I tell people that the generic version of leadership is not terribly helpful to you.

The real challenge is finding out given who you are, what form of leadership can you manifest. We do not need to all become Winston Churchill! Trust fits into this notion of leader-follower relationship and authenticity. Bill George at Harvard has done a great job adding to this notion.

Charlie: Interesting.  And how does the DTM play out here? How can a leader use it practically?

Bob: Given that we know what makes people decide to trust, we can start by manifesting these “signals” of trustworthiness. Behaviors like aligning stakeholders interests, demonstrating benevolence and not opportunism, articulating values and ensuring value congruence and perhaps most importantly communicating with openness, transparency; and don’t forget listening with empathy and being approachable. These things can be taught but we have not focused on them enough!

Charlie: What’s your take on how our capitalist system has turned into such a low-trust system. It clearly wasn’t always this way; what has happened?

Bob: We need to re-define capitalism. It has been a great creator of wealth but it needs to evolve. As the global financial crisis showed us in spades, many business leaders have become opportunists focused on short-term greed. We need to grow a generation of integrative stewards who bring stakeholders together in moving the enterprise forward and focus on the long term. We need more incentive for capital to take a long-term view. Managing our businesses for the next quarter and our country for the next election is a prescription for disaster when we are competing with companies and nations that have 10, 20 and100 year plans!

Charlie: I think your model has another virtue, which is it’s useful even in application to our political system – no small feat in a polarized world. Is that right?

Bob: Political marketing is essential about getting people to doubt your opponent and trust you. Since Bush Senior’s win against Dukakis, this has been done using the same tricks used in marketing soda or soap. There is an emphasis on appearing trustworthy, while not actually being trustworthy.

We are mostly to blame because we take short cuts in assessing trustworthiness and at some level we do not want to hear the truth. We need systemic reform in politics; we need to “get the money out” as a first step (create alignment of interests). After that, term limits, and strict rules limiting lobbying.

We need to stop talking about big or small government, and starting talking about effective or ineffective government. I talk about this in the book. The major reason people do not trust government in the US is that they see the system as incompetent and wasteful. 

Charlie: Bob, thanks so much for spending time with me, and congratulations again on the book. It truly is a milestone in the literature on trust, in my humble opinion, and I hope it gets all the attention it deserves, which is a ton.

Bob: You’re welcome, it’s been a pleasure.

 

 

Books We Trust: The Speed of Trust

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This is a special edition of Books We Trust. Stephen M. R. Covey, Jr. wrote the hugely successful The Speed of Trust: The One Thing that Changes Everything, and I am delighted to interview him in the same week as our own Trusted Advisor Fieldbook hits the street.

Some of you may still confuse Stephen M. R. Covey with his famous father, Stephen R. “Seven Habits” Covey. You will no longer confuse them after this interview.

I first reviewed The Speed of Trust nearly four years ago, and the success of the book has since only accelerated. Stephen’s message has been heard globally in all walks of business and society. It is a compelling formulation that has stood the test of time.

Stephen also has a new book coming out in January; we got him to talk about that as well.

Why Trust

Trusted Advisor Associates: Stephen, first of all, thank you for joining us. It’s a privilege to have your voice in this series.

I’m guessing this book did not come to you in a flash of overnight insight. It has all the earmarks of thoughtful development. At the risk of oversimplifying—how did you get interested in trust in the first place?

Stephen Covey: Great to be with you, Charlie. My excitement for trust grew out of a number of simple, yet profound, experiences I had as a practitioner. For example, I’ll never forget an experience several years ago when a company I was in charge of worked with two different suppliers to provide the same product for our business. Both had good people and good reputations.

We started off trusting them both. But while one supplier consistently performed, the other was sporadic. We had to put in place redundant inspection processes for the inconsistent supplier which took extra time and cost more money, causing our product costs to rise. We ultimately decided to drop that supplier and do all our business with the one we trusted.

Soon after, I found myself noticing this same phenomenon everywhere: that the economic implications of trust were as great as, if not greater than, the social implications. I began to see the impact of trust—or the lack thereof—in every area of business and of life. I eventually concluded that trust is the one thing that changes everything, and today I am only more convinced that is true.

TAA: The “speed of trust” is a brilliantly concise statement of an essential aspect of trust. I find that when I quote you, “As trust goes up, speed goes up and cost goes down; as trust goes down, speed goes down and cost goes up,” people’s heads nod vigorously. That is distilled, refined essence of insight—how did you come to that simple, precise formulation?

Stephen: I could see it everywhere I turned. I could see these dividends of trust—speed and cost—everywhere in my business and in client organizations we were working with. And it worked in either direction whether the trust was low or high. Because trust impacts so many things—again I call it “the one thing that changes everything.” The biggest challenge was to keep this insight simple and focused, instead of trying to cover the waterfront.

It seemed to me that in the discussion of trust, what had too often been neglected or at least was unpersuasive, was what I call the “economics of trust”—showing the hard-edged, quantitative, tangible dimensions of trust. I felt that speed and cost was the best way to capture that. Speed was the biggest insight since it is something people immediately resonate with, but cost was equally important since it was the most quantifiable of all the measures.

Rich Details

TAA: The story of Warren Buffett doing a mega-deal with Wal-Mart in a half-day meeting and a handshake was brilliant. How did you come to hear of that?

Stephen: I always study Warren Buffett’s management letters in his annual reports and I know how he operates with enormous trust in his leaders. He shared this experience of his remarkable story of the Wal-Mart/McLane deal in one of his letters [the 2004 Berkshire-Hathaway Annual Report] and I immediately could see that it was a superb illustration of the speed of trust, specifically demonstrating how, as I often say, “nothing is as fast as the speed of trust.”

More recently, I met with Grady Rosier, the CEO of McLane today and also at the time of the deal, and he described to me how this deal could be done so fast, saying, “You also have to understand, it is a core business philosophy at Berkshire-Hathaway, the trust. Warren’s ability to acquire quality companies is built around the trust.”

TAA: In the course of writing the book, was there anything that surprised you, that you wouldn’t have guessed going into the project?

Stephen:  I found the deeper and deeper I got into the writing, the more and more persuaded I became that one of the main reasons trust had been so grossly underestimated and neglected was because it is so obvious, so fundamental, so simple that we tend to look right past it. It’s common sense—but unfortunately it’s not common practice.

Trust Movement

TAA: How would you characterize the market’s response to your message of trust? What do you find people most commonly say about it?

Stephen: There’s been an overwhelming response, especially today, because we’re increasingly operating in a low-trust world. And as Buffett says, “Trust is like the air we breathe. When it’s present, nobody notices. When it’s absent, everybody notices.” Today, almost everybody is beginning to notice the loss of trust. So the most common response I get from people is how relevant trust is to what’s going on with them in their world today—with all stakeholders.

TAA: What would you say are the biggest barriers and obstacles to trust in business these days?

Stephen: I think the biggest barrier is what I call counterfeit behavior. Counterfeit behavior is like counterfeit money—it looks like the real thing, but upon closer inspection, you realize it’s not. Examples of counterfeit behavior include “spinning” instead of talking straight; hidden agendas instead of transparency; overpromising and under-delivering instead of keeping commitments; blaming others instead of practicing personal accountability; “covering up” instead of righting wrongs; and so forth.

The 13 behaviors of high-trust leaders I identify in The Speed of Trust all have opposites and counterfeits. The biggest problem is less about trust’s opposite—it’s obvious to people that won’t work—and more about its counterfeit. The counterfeit appears that it might work and often is culturally acceptable. There are many industries, companies and cultures in which counterfeit behavior is the prevailing norm and practice.

An example of counterfeit behavior being the prevailing norm can be seen in politics today. But as a result of this type of behavior, we don’t trust politicians. A 2011 GfK study of the most trusted professions in 19 countries showed politicians dead last—by a wide margin. Part of it is the nature of the challenges politicians are facing today, but part of it is how counterfeit behavior has too often become the accepted norm.

Global Trust

TAA: I’ve found that trust dynamics are global—but the cultural expressions of those dynamics vary a lot. Do you have any specific observations about similarities or differences across cultures?

Stephen: I agree with your assessment, Charlie. I put it this way: the principles behind trust are universal and timeless but the specific practices can be very cultural. The key is to separate the principle from the practice. Too many confuse the practice with the principle. So, for me, the two key behaviors that help us cross cultures are to listen first and then to demonstrate respect for what we hear. If we do that well, we’ll be in a position to understand how trust plays out in a given culture.

Take the behavior I call “Talk Straight.” The principle behind the behavior is truthfulness—telling the truth. But the particular practices behind the behavior will vary within different cultures. For example, talk straight might be manifested differently in The Netherlands who are renowned straight talkers (the common expression is that “you can’t offend the Dutch!”) than perhaps in many Asian countries where it is typically more subtle, nuanced and balanced (and sometimes achieved through intermediaries).

If we listen first and demonstrate respect for what we see, we usually can come to a better understanding of what trust means in different cultures and situations.

TAA: You’ve contributed, even driven, a global awareness of the role of trust. Do you think it’s a movement that will stick? Are you worried that it may come to be seen as a fad?

Stephen: I’m biased, of course, but I predict it will be a movement that will endure and ultimately transform society. Here’s the paradox: at the same time that we’re seeing a crisis of trust almost everywhere we turn, we’re simultaneously beginning to see a “renaissance of trust” as well—with people, leaders, organizations, and causes that are emerging and rising up to support a better way of leading and living.

For example, consider companies such as SAS Institute, Zappos.com, and Wegmans Food Markets—all of which lead out with trust. And consider leaders such as Indra Nooyi of PepsiCo, with her deliberate focus on “Performance with Purpose.” And consider the best of Sustainability and Corporate Social Responsibility initiatives. Plus, consider causes like Conscious Capitalism and the emergence of Social Businesses.

I don’t think trust will fade away; rather, I believe it will increasingly become part of the fabric of how we lead. In fact, if we’re not creating trust, we’re not leading—we might be managing, we might be administering, but we’re not leading. And leadership is not going away anytime soon.

TAA: What do you say to skeptics who suggest an individual can’t make a difference regarding trust in the business world? Any advice?

Stephen:  If you think the problem is “out there,” that very thinking is the problem. We’ve got to take ownership for this. The ripple effect metaphor is very real as it relates to trust. Trust is an inside-out process. That doesn’t mean we don’t need leaders at the top starting with trust, because we do. It simply means that we don’t need to wait for the leaders at the top to lead out with trust because each of us can take the first steps—wherever we are.

And if we get results in a way that inspires trust, our influence will expand dramatically and we’ll become the ripple effect ourselves for our team. Or our team will for the organization. Or our business will for the industry. Or our industry will for society. And so forth.

Looking Forward

TAA: You have a new book coming out in January. What can you tell us about it―we’re eager to know!

Stephen: The book is called Smart Trust. In a nutshell, it’s about how to trust in a low-trust world. It takes the two extremes—blind trust based on gullibility where people end up getting burned at one extreme, versus distrust based on suspicion where people don’t even see the possibilities at the other extreme. It presents Smart Trust as a  third alternative, a practical way of operating with high trust in a low-trust world, of navigating risk while maximizing possibilities.

The book also focuses on how trust not only impacts prosperity but also how it changes energy and joy—hence the subtitle of the book, Creating Prosperity, Energy, and Joy in a Low-Trust World.

TAA: Stephen, thank you so much for taking this time with us. You have done a great service to the cause of trust in business, and it’s a pleasure to be able to help give it the recognition it deserves.

Stephen: Thank you, Charlie. I reciprocate your kind words because I think so highly of you and your tremendous contributions to this field. It’s great to be co-catalysts together in helping to bring about a renaissance of trust!

 

Books We Trust: True North Groups, By Bill George

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This is the seventh in a series called Books We Trust.

Bill George is author (with Peter Sims) of True North: Discover Your Authentic Leadership. Part of the J-B Warren Bennis series, it has been widely read and praised. In his new book, True North Groups, he (with co-author Doug Baker) focuses on how True North precepts can get established for people and organizations.

Bill George is another small-town Midwesterner who made it (very) big. After punching his ticket in the McNamara Defense Department days, he eventually spent a decade each with Litton Industries, Honeywell, and Medtronic (where he was CEO).

These days he teaches leadership at Harvard Business School and serves on the Board of several Very Big companies. Click to his bio; you’ll be impressed.

Bill does not waste time; we got right into it.

Capitalism: Back to the Future

Trusted Advisor Associates: Bill, after your MBA, you spent decades in big-business companies that worked closely with government. How did you feel watching the progression of Milton Friedman, Michael Jensen, Ayn Rand, Alan Greenspan, and the doctrine of shareholder value—an ideology that pitted business against government?

Bill George: Michael Jensen has recanted; he’s writing about ontological leadership with Werner Erhard. Greenspan admitted the flaw in that ideology.

There’s been a total transformation. We have collectively realized the flaws in those old simplistic economic theories; this notion that people are motivated only by self-interest, this is simply not true. Mike Porter is another one, a brilliant guy who is now writing about shared value, not shareholder value.

There is a transformation in business right now of major companies moving away from that old paradigm.

Take Alan Mullally at Ford; he’s changing things there right down to the individual employee level. He is focusing on the long term, on sustainability.

Corporate CEOs today are the best I’ve seen, the best in my lifetime. Besides Mullally at Ford, there’s Palmisano at IBM. Steve Jobs rightly got a lot of credit. All the CEOs I know are moving away from shareholder value to values and vision. Paul Polman at Unilever says, ‟My job is not to serve the shareholder, but to serve the customer.”

TAA: That’s pretty optimistic. What do you think happened?

Bill: It’s just what’s happening, that’s all. These things only happen when you come to realize we were going the wrong way. Think Enron; that was a hugely emblematic event…there were 100 large companies with very large “accounting” problems.

You get a raft of major companies like BMS with a $1.5B accounting adjustment, and that’s not an accounting problem—that’s a failure of leadership. This went way beyond a few crooks; this was a business disaster.

But we’ve seen that. Outside Wall Street, there are a lot of really big companies that are just done thinking that way. Not going back.

Wall Street and Washington

TAA: What about Wall Street?

Bill: Wall Street never ceased. The problem is maximizing short term shareholder value―that’s the best way to go out of business. So it’s really not surprising Wall Street melted down.

Regarding Wall Street, I’m a wait and see guy. There are all new CEOs on Wall Street now―Jamie Dimon and Lloyd Blankfein are the old guys. The new folks are the ones who’ll have to make the call. A guy like Paulson can make $4B selling things short; that’s legal, he does it fair and square, but let’s not kid ourselves that’s value creation—it’s not.

TAA: What about Washington?

Bill: I’d like to see them lead, but we’ve got to take it out of the political arena: we’re just not going to get there via the politicians. They’re more interested in the parochial, ideological interests.

And that’s the greatest sin. We in business lost sight of why we were in business, lost track of the role of leadership in the first place.

Toyota and J&J took their eyes off the ball. Ford’s now beating Toyota, because Toyota took its eye off the long-term, culture/quality ball. And Ford rediscovered it.

I was on the board of Novartis. They always focused on a breakthrough drug to solve unmet patient needs―a drug that is going to advance medicine. Look at Ken Frazier at Merck, Pfizer vs. Merck, he’s pushed to keep up the level of R&D spending. Pfizer’s done the exact opposite. The short-termers keep citing Net Present Value as the driver of short-term focus, but the truth is they don’t know how to do the math right.

[CHG: An aside—read this WSJ article from February 4 of this year detailing Bill’s point: when the two companies announced their opposite strategies, the market drove Merck stock down 2.7%, while Pfizer saw its stock rise by 5.2%. That’s an 8% spread because of announced strategies.

Today, 8 months later, try comparing the two companies’ stock prices; they are back to dead even; the gap is gone. But Merck has the advantage of a tailwind in its R&D momentum; Pfizer gave it up.]

Leadership and True North

TAA: Let’s talk about leadership and bring it back to True North Groups. What should leadership be about?

Bill: Back in the day, HP was just a great company. Dave Packard totally practiced MBWA, management by walking around, a truly humble guy. Four successive CEOs now have gone the wrong way. Leadership matters greatly.

The key issue now is that the leaders’ job is not to exert power, but to empower people, including those who have no direct reports. You have to have an empowered group of employees that are excited about mission and values. If you only bring your head to work, you cut yourself off at the neck; if that’s all you can bring to the game, I’d love to compete with you.

The key issue in leadership is not to develop the next CEO, it’s to develop leaders all over the place. It’s not about developing a few good people at the top, but working on 10,000 or more.

The question is how to develop those leaders: you can’t do it through the old Darwinian GE model. Not everyone should be focused on getting Jeff Immelt’s job. That is just not where the traction is.

That’s where True North groups come in. Turns out that the best way to truly develop individual leadership capabilities is in small groups, made up of peers, of people who tell life stories, where people can find out who they really are. Because if they lead life as a fraud, thinking they’re impressing the world, it won’t work.

Steve Jobs’ most powerful message was to be who you are. Don’t let others’ opinions—Wall Street, recruiters—rob you of the courage to follow your heart. They used to snicker at me at Harvard Business School when I talked like that, but they don’t today.

TAA: How do you find a True North Group, and how do they get it right?

Bill: We found it happens in small groups. You see the success of this small-group phenomenon in affinity groups—AA, the YPO, breast cancer survivor groups, Rick Warren’s Saddleback Church—read Malcolm Gladwell’s explanation of it.

We tried to take this to people who don’t have an affinity group like that; people in business—what are they supposed to do? A great way to define a True North group is to ask yourself, “If I found out I was going to die, who would I talk to?” That’s your group.

TAA: What is it that True North Groups do?

Bill: If you buy the premise that we have to help develop people, this is the way to do it. You don’t go to Wimbledon to play tennis—you start years before. You don’t learn leadership by reading, you learn it by doing it—by living it, and talking about it. And then you need a way to process that.

There are several things we write about in the book that are critical to True North Groups’ success; I’ll highlight a few. One is non-judgmental feedback.The courage to tell it like it is—not ‘brutally,’ because that would come with judgment. Just speaking the truth, straight-up.

TAA: This is not leadership development ala Jack Welch’s GE.

Bill: A lot of people still want to use leadership development as a selection process; the big boss comes in and watches a while and says this guy’s good, that guy’s not.

Instead, you’ve got to have confidentiality and peers. This is a little hard for the leadership development people; a lot of them still like bringing people to Crotonville, but that’s too expensive.

You know the one thing we heard from leaders we interviewed? Loneliness. They’re alone. That’s true for middle managers too—the sandwich phenomenon, pushed from both ends. What’s the treatment for loneliness? A group.

People want to know, can I be real in the workplace? Is it OK? A group deals with that.

Making It Happen

TAA: You’ve actually influenced the Harvard Business School to do this, right?

Bill: My course on leadership uses small groups of 6 people. Half your time in this course is spent in authentic leadership development this way. 1,500 HBS students have gone through it—1,100 or so MBAs, and another several hundred from exec ed programs. About half your credit is for hanging out in that small group.

TAA: How well does it go over?

Bill: Neo-classical economists don’t get it, and neither do Wall Streeters—for the most part. Yet. But the rest do. It is quite significant that the Harvard Business School appointed Nitin Nohria as Dean. [Readers might also enjoy an early TrustMatters blogpost on the MBA Oath].

TAA: How does this play out for you?

Bill: Here’s the irony: all my life I’ve seen myself as a leader—because people followed me. Now I realize, that’s not what it’s about at all. It’s about empowering others.

I get to talk to all these great leaders—Mullally, and so on. I tell them all, ‘Just call me, let’s talk.’ Because we all need that. No charge, of course; we just talk.

TAA: This has been great. I will try and organize these notes into a coherent whole, and run them by you so you get the final word.

Bill: Nah, don’t worry about that. Just print it up.

 [CHG: And so that’s what I did.  If there were any mistakes made in summarizing our talk, I guarantee you they’re mine].

Books We Trust: Selling to Big Companies

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The first thing that struck me about Jill Konrath’s best-selling book Selling to Big Companies was the voice.  It is plain-spoken, direct, commonsensical, no-BS.  And it is completely guileless.

When I first met Jill, it was immediately apparent that these are personal traits.  She is a Minnesotan—a Midwesterner of the old school. My grandparents and parents were from Nebraska; I knew exactly who Jill the person was, and why the book was an extension of her.

But Jill knew something I didn’t know. I came to selling from consulting. Jill came to selling from selling.  For me it was an extrapolation from a related field; for her it was a version update, a call to the profession.  To my surprise and delight, we ended up in the same place.

Her book is not just about moving from small-time selling to Big Company selling.  It is also about moving from the “that was then” to the “this is now” world of the corporate buyer. She is an astute psychological observer, along with Scott Adams of Dilbert fame.  She knows what it means to work in a downsized world with out-of-date corporate-purchased Blackberries, defined contribution plans, and 10PM phone calls with other time zones–and what that all does to the buyer.

Jill Konrath Interview

Charles H. Green: Jill, thanks so much for doing this.  I wanted to honor your work, starting with Selling to Big Companies, and moving on to your more recent book, SNAP Selling.  But let’s start back in time.  When and how did you first get into selling?

Jill Konrath: Let me start out by saying that I never, ever wanted to be a salesperson. I viewed it as a despicable profession filled with slimy, schmoozing, manipulative hucksters.

But some friends and I had come up with a business concept that we thought was pretty good. SCORE (Service Corp of Retired Execs) liked it too. At the end of our meeting, our advisor said, “Now which one of you is going to be in sales?”

I answered, “If it’s such a good idea, shouldn’t it sell itself?” He laughed at me and told us someone had to learn to sell.

So, I got into sales by default. My friends refused, so if I wanted to start the company I had to learn how to do it myself.

CHG: So where did you get your start? And, was it what you thought it was?

JK: I was fortunate to get hired by Xerox, a company that literally had the best training program in the country. And, I discovered it was entirely different from what I thought. My image of a salesperson was based on the worst of the profession. At Xerox, I learned how to be customer focused in everything I did. I found out that I could be successful only if my customers were able to achieve their goals. From there, I sold technology systems for three years before starting my own company.

CHG: So, you didn’t go back to SCORE?

JK: Funny thing, but after working at Xerox, I totally abandoned my initial entrepreneurial dreams. Being in sales was just too interesting and challenging.

CHG: So, then you progressed through your sales career, you came to have a different view of sales; you realized that Big Company people were no different, really, than any others. What was the core realization you came to as you came to write SBC?

JK: Charlie, I actually wrote Selling to Big Companies for my friends and colleagues who worked for small businesses or owned their own firms. They were such talented people, but were really struggling financially. Many of them felt they had to prove their worth by working with small companies before they tackled larger firms.

So I wrote my book to show them how to get corporate clients who had budget allotted for their services and who appreciated their value. And yes, I knew that corporate decision makers were normal human beings because I worked for a big company and I sold to them as well.

CHG: What’s wrong with sales today? Is there a “single biggest problem” that you can point to? One “biggest opportunity” that salespeople can work on?

JK: Good question. I think there are a couple things wrong. First, people are still operating under the old sales paradigm that says make lots of calls and have a good pitch. Personally, I don’t think that’s ever effective in the corporate market, but it’s what most people consider “selling.”

Second, and very related to #1, is that our prospects/clients don’t care about the product/service. Nada. Not even one little bit. All they care about is their ability to achieve their objectives. I am continually appalled at the sheer lack of knowledge most sellers have about their customer’s business, market trends, key issues, strategic initiatives, and key success factors.

Without this business acumen and customer insight, sellers are functionally unable to plan an effective account entry campaign, help a company change from the status quo or win business from competitors.

CHG: Let’s not forget to talk about your latest book, SNAP Selling; how do you see it in the sequence of your evolving thinking? What’s that book about in the big context?

JK: SNAP Selling is all about selling to crazy-busy people – which I happen to think is most everyone today. They’re overwhelmed with work, have fewer resources at their disposal and impossible deadlines. Plus, they find it much easier to go online to research their issues, challenges and possible solutions. In short, they have no time for salespeople who waste their valuable time.

It’s having a huge impact on sellers. It’s nearly impossible to set up meetings. Getting companies to move off the status quo can take forever. And, differentiating is sometimes impossible.

In short, we’ve entered a whole new world of selling which requires us to use fresh strategies – or risk irrelevance. In SNAP Selling, I cover the new rules of selling and share multiple examples of how to implement these strategies for dealing with frazzled decision makers.

CHG: I should also mention to readers about your most excellent blog, also called Selling to Big Companies.  I’m a frequent, almost-daily, reader.

JK: Thanks for the plug!

CHG: What’s your advice to someone going into sales these days?  What should they focus on?

JK: Understanding their customer first and foremost – and then aligning everything they do with their customer’s business objectives and priorities.

CHG: How about someone who’s further along in their career; what’s the One Big Thing they can learn to do better?

JK: Becoming an invaluable resource. They should develop deep expertise in their niche, market segment, process – or some arena that is of high value to their target market. Also, they should continually be sharing ideas and insights to help their clients be more successful, as well as connecting them to other valuable resources.

Our crazy-busy prospects are desperately looking for people they can count on – and when they find them, they are extremely loyal.

CHG: I don’t know about you, but I always get people asking me for “tips and tricks.” I don’t know what they think they’re going to get; there are a few, but “tips and tricks” are not where it’s at, I don’t think—it’s mindsets.  But what about you?  How do you answer those people?  Have you got some?

JK: I have this special fairy dust that I sell to all my clients. It magically transforms them from self-serving salespeople into invaluable resources. Just kidding. Honestly, I tell people to do a “mind meld.” It’s imperative for them to look at their own behaviors from their client’s perspective.

For example, if they’re going to leave a voicemail message, they should call themselves first and see out it sounds. Most people are appalled at how bad they are and would delete their own messages.

This same practice can be applied to presentations (boring!), proposals (unending!), meeting plans (one-sided). It’s amazing what they can learn when the see their own behavior from another perspective.

After you learn to do this, it totally changes all your client interactions.

CHG: Can you step back and envision sales 15 years from now?  That would be, umm, the year 2026.  Whew.  What will be the state of Sales in the future?

JK: Yikes.  Well, first I see a major reduction in the number of salespeople. The ones who are eliminated will be the old style sellers who think it’s all about schmoozing and pitching. Since they personally add no value to the sales process, their prospects would prefer to buy online.

For those who remain in sales? I think the future is brighter than bright! In fact, these smart, business-savvy individuals will be well respected and in great demand. Plus, they’ll be highly paid because of the tremendous value they bring their organization and their clients.

CHG: Jill Konrath, thank you so very much for taking the time to talk with us, this has been a delight.

JK: My pleasure. It’s been fun talking with you.

Books We Trust: Selling to Big Companies is the second installment in our Books We Trust series.  The first was You’re Working Too Hard to Make the Sale, by Bill Brooks and Tom Travisano.

Books We Trust: You’re Working Too Hard to Make the Sale

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This is the first in a new series called Books We Trust. We expect to publish it irregularly, but about monthly.

The first book was a no-brainer for me. You’ve probably never heard of it; it was not a best-seller; it ranks about 900,000 on Amazon (not high). But I’m telling you; it is a wonderful book. It’s called You’re Working Too Hard to Make the Sale, by Bill Brooks and Tom Travisano.

—–

I came late to the study of sales (though early, and miserably, to selling itself). None of it made much sense to me—it all seemed either excessively hormonal, abstract, or manipulative. It all felt vague—a feast of gratuitous adjectives and amateur psychology.

I persisted, reading books I won’t mention, which only made it worse. Then one day, I ran across You’re Working Too Hard , by two folks I’d never heard of.

It made everything click for me. Suddenly I could make sense of trust, influence, psychology, money, fear, and closing.

One of the points that book made was that the concept of “needs” had gotten over-used. Everyone, they said, was focused on identifying needs and generating a complete picture of what the clients needed so that they could consultatively package and sell a solution that fit the specs of what the client really needed.

I had always felt something was lacking in that formulation (years later, John Caddell wrote, “No one ever bought a value proposition”), putting more words to my feeling—but that was later). Brooks nailed it down, with page after page making fun of the penchant for identifying needs.

It was “wants,” he insisted, that motivated buying behavior, not needs. Needs included toothpaste, bicycles, audits and CRM systems. But wants—that was different: wants included a myriad of hopes, wishes, fears, desires and aspirations. If a seller could connect on that level, the story went, buyers would transfer the purchase of their “needs” to those who had made the wants connection.

The data were astonishing. Travisano in particular—a former political consultant and pollster, I believe—had crafted the research to explore exactly that thesis. And, they’d done it across several relevant business sectors, including CEOs of small entrepreneurial companies and CIOs.

I knew how serious, educated people made big dollar decisions for serious investments in major services, and the rational, deductive model of decision-making that I had been taught simply did not bear resemblance to the undeniable parade of actual decisions I had seen. This book explained it.

And the punch line was marvelous: you didn’t have to satisfy people’s wants to get the sale—who would believe a salesperson could deliver on a buyer’s wishes, needs, hopes fears and aspirations? It was enough that you connected; that they felt understood, that someone “got” who they were. That, the research said, powerfully drove sales.

It was a eureka book for me. It meant you could be a real, genuine, flawed, warts-and-all human being—and still sell. As long as you could connect to the real person on the other side of the table. Faking it did not work; self-obsession did not work; the answer didn’t lie in process, or in mastery of closing lines, or even of the collection of questions and needs. It lay in understanding the human being in front of you. Suddenly I liked selling.

Co-author and researcher Tom Travisano died a few weeks after the first edition; lead author and more famous sales consultant Bill Brooks carried on with The Brooks Group in North Carolina. Brooks himself passed on in 2007, but his company is aggressively continuing, even prospering, through the efforts of his sons Jeb and Will.

I spoke with Jeb recently.

——–

CHG: This book was one of the top three sales books I ever read, and the one that had the most impact on me. How did your dad come to write it?

JB: First, we’re touched; thank you. Dad wrote over 20 books, but we always thought this one was the sleeper. He wrote them all longhand, on yellow pads, by the way. This was maybe the 6th or 7th book for him. It was released twice, first in 1995, then 2005.

I was young when I first read it. I thought, “What’s the big deal?” It seemed so commonsense, so obvious.

CHG: I had that feeling too just recently, re-reading it. But at the time, for me, I had to work at it to get it. It sounded simple—maybe I just couldn’t accept that it really was that simple.

JB: Dad said that back then, everyone was focused on needs, needs, needs. He made a lot of fun of “needs-based selling” in that book. He felt that Frank Bettger had it right years before—the idea that if you could show people what they really wanted, they’d move heaven and earth to get it. When dad got together with Tom Travisano, a skilled political researcher, they set out to prove it, and to prove that the dominant needs-based sales mantra missed the boat.

CHG: I still hear a lot of focus on needs; this book needs a rebirth. I always remember how they collapsed the key insight into one critical sentence: “Buyers are eager to buy what they need from salespeople who understand what they want.” Almost every word in that sentence is significant.

JB: Other insights included “People buy the salesperson, not the product,” and “the opening is where the sale is made, not the closing.”

CHG: And the research is solid; thousands of buying situations, blinded studies, both complex and simple B2B products and services. But let me ask you; in today’s sales 2.0 world, do you think his findings about buyer motivation are less relevant, or perhaps more?

JB: Without a doubt—even more relevant. In Sales 2.0, the buyer is supposed to be in control, and that’s true—but the buyer still doesn’t know what they want. If anything, they’re more confused by all the data, because they think they should know. So because it’s easier nowadays to find all your needs, that means it’s even more important to find someone you trust, who understands your wants.

I recently had to buy a health care plan for our business, and it was tough. I didn’t know much, and I didn’t want to do the wrong thing, I didn’t want to upset people, and so on. In fact, I had a lot of wants. And guess who I went with? The person who worked hard to find out what I wanted, without making me feel stupid. And you know what? That is just, plain, simple how it works. That’s what dad and Tom said so clearly. It sounded so obvious not because it was obvious—they had to uncover the truth to say it so plainly.

CHG: How do you and your brother think about that book these days, besides being proud of it?

JB: We live the values he talked about: Integrity and Intense Customer Focus. We’re a sales-driven company, meaning we deliver on buyer wants. And that’s what he talked about.