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This week, as we get ready to say goodbye to 2012, we’re going to be posting some of what we call “Golden Oldies,” great posts from our Trust Matters vault. We hope everyone has a safe and happy holiday and wonderful New Year.
In trust-based selling, the default mode of presentation is transparency.
In trust-based selling, the time-frame is lifetime. Assume that you will meet this customer again, along with his or her customers, cousins, bosses and Facebook friends, and that every interaction is evident to all of them instantly. That’s your reputation.
Trust-based selling relies on the proposition that people return good for good, and bad for bad. If you treat a customer respectfully and with trust, and they happen to need what you are selling, the natural response is to buy it from you.
That proposition is not only an ethical template – it is a business model.
Trust-based Selling: McGraw-Hill, also available in Kindle and CD-ROM format. It’s a good book.
The term “trusted advisor” has undergone some changes since I first co-wrote the book by that title 11 years ago. Three changes, to be precise:
- It’s amazing how many more people claim to be one;
- It’s becoming clear that not every industry needs one;
- In the industries and functions that matter, the concept is gaining headway.
It’s the third point that’s most important, and most promising.
1. Grade Inflation, Title Inflation, Trusted Advisor Inflation
The United States has taken to heart Garrison Keillor’s fictional Lake Wobegon, where “all the children are above average.” That’s got to be the only sensible conclusion from the data, which show in-your-face grade inflation at the college and university level.
So I guess it’s no wonder that we have “Trusted Advisor inflation.” I’ve sat in on several corporate training programs lately where generally mid-level attendees were asked to indicate whether they were operating at the “trusted advisor” level with their clients.
About 70% said they were. That may not be Weimar territory, but it’s Lake Wobegon for sure. I will tell you from experience: that was not the case 12 years ago, even in the same industries.
My conclusion? Not much, actually. We live in a post-Warholian age of hyperbole. “Friend” doesn’t mean what it used to, nor do “authenticity,” “talent,” or “good audio,” for that matter. But it’s OK: it means what it means, namely how people actually use the term. Definitions are living things, captured only momentarily in dictionaries.
2. Not Every Industry Needs a Trusted Advisor
I had dinner the other day with an old classmate, a very senior advisor to a Very Big private equity fund, who keeps tabs on a dozen global retail clients. “So Charlie, tell me what’s up with Trusted Advisor Associates these days,” he said.
It was clear from his tone that he was skeptical about the relevance of the concept to his businesses – mainly B2C consumer-level chains in things like pet foods, electronics and sundries.
I could tell that because he visibly relaxed when I said, “Gary, I don’t need a trusted advisor relationship with the counter-guy at Dunkin’ Donuts. I love that he knows my order when he sees me come in – but that’s quite enough. It would ruin everything if we ever got past, ‘hi guy, the usual?’ And ditto for Starbucks.”
It’s true. There are whole bunches of roles and industries that don’t need to have trusted advisor relationships. Most B2C retail doesn’t need it. Traders don’t need it. Marketers don’t generally need it. Most non-client-facing roles don’t need it. Manufacturing roles don’t generally need it.
That’s not to say all those roles can’t benefit from the basics of curiosity, good values and manners. But, as per point 1 – let’s not inflate that into Trusted Advisor Status.
3. Those That Do Need It – Are Starting To See It
The term “trusted advisor” originated in high-end professional services and wealth management relationships and it’s still valid and well-understood there.
The biggest shifts I’ve seen since the original The Trusted Advisor in 2001 have come in four areas: sales, internal staff functions, leadership and the financial industry. (One industry that’s still a work-in-progress – pharma).
Sales. In the last decade or so, the field of sales has undergone a number of changes. Some – like Salesforce.com, Sales 2.0, Google clicks – have often made the function less personal, and arguably less trustworthy.
I like to think my own book, Trust-based Selling, published by McGraw-Hill in 2005, played a little role in that too.
Internal Staff Functions. The Big 5 staff functions – HR, IT, Legal, Marketing, and Finance – have made large jumps in many companies to realizing that their internal client relationships have exactly the same needs. How to get invited in before problems arise; how to get your advice taken; how to add value – these are all critical functions for an internal staff function. More about those functions here.
Leadership. Tons of things have changed with leadership. Let’s sum it up by saying leadership has become more horizontal, less vertical. That moves influence, persuasion and trust way up the required skills list for leaders. Rob Galford wrote about that in 2003 in The Trusted Leader; Andrea Howe and I wrote about it in last year’s The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading with Trust.
Financial Industry. Something is happening in the financial planning and wealth management industries. The line between brokers and fiduciaries is finally getting defined, and the balance of power seems to be shifting toward trusted advisor, client-focused relationships. (Some of you know this issue as fiduciary vs. suitability).
The issue is delightfully defined in a YouTube video about the difference between your butcher and your dietitian. For more on this issue, read Michael Kitces, who writes well and often about it.
Just around the industry corner is Wall Street, investment banking, and the flap about Michael Smith’s Goldman resignation. Investment banking used to be a pure trusted advisor kind of business. People like Epicurean Dealmaker still speak eloquently about that part of the business.
But investment banks have more complex business models these days, and it’s far from clear (to me anyway) that all of those businesses should be built on the long-term, client-centric models required by true trusted advisors.
1. Just because you think you’re a trusted advisor doesn’t mean you are one – Lake Wobegon is mythical, after all.
2. But neither does it necessarily mean you should be one. We don’t need trusted advisors on every street corner.
Sometimes a cigar is just a cigar, and we should leave it at that.
More about that in a moment, but first: congratulations to the 69 medalists in all 21 categories. Check them out: it’s a powerful reading list. And thanks to the Jenkins Group for putting together the competition.
Trusted Advisor Ethics?
You may be wondering, why the Ethics category?
We didn’t set out to write an ethics book, nor will you find that word in more than a few places in the book. And yet we find the honor of that category to be deeply satisfying, and very appropriate.
To understand why, read this commentary on Aristotle’s Ethics:
[Aristotle says that] what we need, in order to live well, is a proper appreciation of the way in which such goods as friendship, pleasure, virtue, honor and wealth fit together as a whole. In order to apply that general understanding to particular cases, we must acquire, through proper upbringing and habits, the ability to see, on each occasion, which course of action is best supported by reasons.
Therefore practical wisdom, as Aristotle conceives it, cannot be acquired solely by learning general rules. We must also acquire, through practice, those deliberative, emotional, and social skills that enable us to put our general understanding of well-being into practice in ways that are suitable to each occasion.
Stanford Encyclopedia of Philosophy, introduction to Aristotle’s Ethics
We hoped to write a practical book, grounded in fundamental principles, that would integrate client and provider, profit and professionalism, seller and buyer, leader and team player. Trust, we have found, is an excellent proving ground for such an endeavor.
We are grateful to the Axiom Book Awards for apparently seeing things in a similar way.
Many Trusted Advisor programs now offer CPE credits. Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ email@example.com.
In Part I, we said health care is a major cause of our declining trust in politicians. Our political inability to find a solution has led to massive economic costs, a subsidy-driven public sense of entitlement, and high-profit segments of industry hooked on maintaining the status quo. The situation is truly a mess.
We also promised a solution that might work – but with a challenge to politicians.
America was built on free enterprise and an emphasis on individual achievement. We also have a long history of compassion for the least fortunate (based more on private charity than in some other countries). Both of those laudable goals have been elevated to near-constitutional status: the pursuit of liberty and the pursuit of life, if not of happiness.
The problem comes when the two collide: when some individuals can afford massively expensive healthcare but the collective society cannot.
If we focused solely on the ‘life’ side, we’d get a national health system that would limit choice and proscribe options for all. That is anathema to the ‘give me liberty’ ethos.
But focusing on ‘liberty’ alone would create discrepancies in health care (imagine ambulances carting one victim of a car crash to hospital while leaving another on the pavement) widely perceived as unjust.
Most other countries have faced this problem.
The most obvious solution is a two-tier system: a public system providing basic and preventive care for all, and a private system paid for with after-tax dollars for those who can afford more. Similar systems exist in Canada and the UK, for example.
While most other countries accept this basic design – which treats healthcare as a universal right – in the gridlocked state of affairs in the present-day US, that solution feels like offending every special interest group in the country.
And so we watch, collectively, as our inability to act slowly freezes our remaining degrees of freedom. And still we don’t act.
Any solution must face one certain fact: we cannot afford to give the best possible care to everyone at all times. Canada and Britain have found their version of addressing this simple fact. We need to find an American twist to gain acceptance from our peculiarly American sensibilities.
Let’s be clear: this means, of necessity, a means-tested public system that won’t buy you knee replacements to improve your tennis game, acne treatments to fix your complexion or motorized wheel chairs to get you around your home. It won’t allow doctor choice or the right to sue.
Instead, it would be take a number and take your seat to see the doctor who, by the way, wants to work an eight-hour day for a modest salary and a regular schedule. It would be a system in which people of means could get more and better care – because they can afford it – and it would require a public ethos that accepts this disparity the same way it accepts Mercedes on public highways.
The private system could be employer-provided (taxable to the employee as compensation), or paid for personally with after-tax dollars. Those who choose not to insure and who don’t meet means-test requirements would be cared for by the public system but billed for services at full retail rates.
Care in the private system would be better in some ways (more time with patients), but worse in others (MRI machines and drugs would lack the cost-reducing scale they enjoy today).
Because people in the private system would pay for their healthcare and people in the public system will face waits and limited services, both will choose to use less of it – and devote more of their income to other goods. Lower utilization will drive down costs. Those in the private system will be more aware of costs. Those in the public system will get necessary care, but not everything they might want. There will be fewer hospitals with sophisticated equipment; fewer stand-alone surgery centers owned by doctors; less research to improve care and treatment; and less profit for the health care industry.
Getting to the Solution
Just as not everyone can be a millionaire, not everyone can have the very best healthcare. Just as some of us have better housing and more discretionary income – so some of us will have better health care.
What is ironic about this approach is that it ought to be easy for Americans. Given the twin ideological goals of equality and liberty, the US has always put more emphasis on liberty, compared to Europe and much of the world. The American answer to disparity has always been the ability to say, “That is today – but I can change this world for the better, for myself and my children.”
Where our politicians have truly let us down, and earned our distrust, is by betraying this American sense of the future. They have been peddling short-term solutions, promising everyone everything, here, now, today.
They are not alone in spreading this bad thinking – just look at banking and housing. But we’re talking about health-care here, and it’s politicians who must let go of promising the greatest possible healthcare to everyone all the time.
Americans know well how to offset inequality with hope. Maybe the ultimate reason we don’t trust our politicians is that they are being un-American, promising us the moon when we know all too well which planet we really live on.
The road to trust, for politicians, has got to go through Truth.
Andrea Howe and I, as you know, are celebrating this month’s publication of The Trusted Advisor Fieldbook. As it happens, friend-in-trust, Chris Brogan has a book coming out very soon as well–Google+ for Business: How Google’s Social Network Changes Everything.
Like peanut butter goes with jelly, it was obvious we had to interview each other. I do the honors here with Chris, and we obviously have far too much fun. Not to mention subtitles and StarTac phones.
Enjoy the video.
Last week I had the pleasure of speaking in Minneapolis at the annual meeting of the Twin Cities Compensation Network about trust-based relationships from an HR perspective. They were also kind enough to buy a few copies of The Trusted Advisor Fieldbook.
Ann is a true professional in the field. In addition to years of work contributing to the TCCN, she is also founder and editor of The Compensation Café, a collaborative blog in the compensation field.
Pop on over to Compensation Force to read Ann’s review and commentary, I think you’ll enjoy it. And thanks, Ann, for the kind writeup.