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Responding to RFPs – Joint Blogpost with Babette Ten Haken

[This jointly-written blogpost appears also on Babette Ten Haken’s blog, Sales Aerobics for Engineers]

Many Requests for Proposal (RFPs) are well written, and play an important role in the intelligent procurement processes of well-run companies. We both know that to be true, yet sometimes we have to wonder: Why is it that we see so many of the other kind? Is it lack of knowledge on the part of the RFP writer? An inability to alter processes that might have worked in the past?

You know the kind we’re talking about: RFP’s that are written to avoid talking to salespeople, that assume the only relevant variable is price, that are motivated by a fear that salespeople will gang up and collude against the buyer if it becomes known there’s a purchase afoot.  These types of RFPs are written from a defensive position, rather than as a confident and aggressive approach to creating mutually beneficial business relationships and outcomes.

We’ve both written about RFPs before (Charlie in Open Letter to Clients: Why You Should Drop RFPs; Babette in Do You Mean Business?  In this post we want to address how to respond to such RFPs.

Remember: There are good reasons for creating as well as responding to RFPs. Any hurt feelings you might have are irrelevant to your proper reaction. Strive for an objective, reasonable tone, devoid of blaming. That will help the central point you want to make.

A Sample Response

You might consider something like this as a starting draft:

Dear ___ :

I hope this finds you well, etc.

I wasn’t sure how to respond to your RFP regarding objectives, agenda and costs. Here’s why:

• In our initial call, I shared with you a list of objectives that past clients achieved through us.  I was trying to help you defineyour own objectives, rather than presume to tell you what your objective should be.

• We also discussed several alternative program designs, to help you craft your own agenda, rather than us simply proposing one for you.

Basically, I was trying to collaborate on a customized design rather than to sell a standardized product.

What I read into your RFP is that you’d prefer not to engage in a design discussion, but rather go straight to bid.  There is of course nothing wrong with that, and it’s completely your decision.  At the same time, I find that usually means one of two things:

1.     The customer really isn’t interested in customizing, preferring a standardized product; or

2.     The vendor decision has been pretty much made (and we’re not it).

Again, there’s nothing wrong with either one of those. But in either case, it’s hard on our end to justify investing the extra time. We have a mild preference for customized products; more importantly, we fear misunderstandings from purchases based on incomplete understandings.

Please don’t hear anything critical or complaining about this; nobody’s wrong, no feelings are hurt.  I just want to be clear and not leave conversations uncomfortable or unfinished.  I hope I’m not offending by being very candid and direct in this email; my intent is to make it OK for us to be truthful with each other.

Best wishes….

That was a real-life letter, by the way.

If you’re thinking, “that sounds way too direct,” ask yourself how many sales hours you spend requesting people to allow you to respond to one of these cattle-call documents, vs. the time you spend with prospective customers? Because that’s the price you’re paying for an inability to directly confront the issue.

Your goal is to reduce your responses to RFPs whose sole goal is price. That means you need to rethink your customer acquisition strategy too.

Understand whether your relationship with your customer merits strong consideration, or whether you feel you’ve already been placed in the “also-ran” category. If you believe your thought leadership and industry, product or platform expertise is genuinely of value to them, then this is why you give yourself permission to reply directly. Respond from a position of  confidence and knowledge.

What if It Doesn’t Work?

If you are right, they will see it your way and ask you to talk further. If they don’t ask you to talk further, it is because:

a.     It was price-driven anyway, in which case you just saved a lot of time, or

b.     You were wrong, and they actually don’t care about your expertise, in which case you saved a lot of time (and got something to think about), or

c.     You offended them.

If you’re concerned about the last possibility, then we urge you to write a better letter, because you’re still preparing to waste a lot of time.

Meantime, you might want to know the actual response to the real letter above:

LOL! The next steps are in our court.  We need to really look at the links you sent us and come up with a draft of what we would like to see and then get back to you.  I will certainly email/call you if we have any questions along the way. You are still very much in the running.

Was that a worthwhile letter? When was the last time you could have written such a letter? What will you do when the opportunity next presents itself?

 

Good Things Happen When you Swing the Bat

At a talk last week, new friend Petter Østberg told me an old story with a new twist. It takes a great sports metaphor for achievement – and steps it up a notch to leadership.

First, the metaphor at Level One.

If You Don’t Do A, You Can’t Get B

You’ve heard this one before as, “If you leave the putt short, you are 100% guaranteed to miss the putt; never leave it short of the hole.”

Or maybe you know The Great One, Wayne Gretzky: “You miss 100% of the shots you never take.”  It’s not just about scoring percentage, in other words, it’s also – very much – about shots on goal.

You also know, “No pain, no gain.” “You’ve got to pay to play.” One of my favorites is the thundering voice from heaven that comes down to the whining loser who is kvetching about never winning the lottery: “Do me a favor – first, buy a ticket.”

All these metaphors remind us of the need to take risks. In our misguided efforts to avoid the risk of doing the wrong thing (call that Type 1 error), we end up not doing the right thing (call that Type 2 error). And in life, as in nearly every sport, it is that Type 2 error that ends up being the Big Bomb.

To not take a risk is the biggest risk of all.

Petter’s story started out this way. A deceased dear friend of his helped run the Little League programs in their town. One of the lessons he taught kids was, “Good things happen when you swing the bat.” If all you do is “take” the pitch, you’re likely to end up striking out.

(Apologies to the non-baseball countries out there, but you get the idea).

Good, good. The youngsters are being taught this Big Truth as well, all’s joy in Mudville.

Getting People to Take Risks

But as David Maister points out powerfully in Strategy and the Fat Smoker, the trick is not cognitive. Just realizing you’re fat and shouldn’t smoke doesn’t mean you’re going to stop gorging and emulating a chimney. Would that it were that simple.

The failure of most corporate training programs (not to mention the people who take them) is to believe that cognition implies action. Entire classes of professions (lawyers come to mind) believe that if they can simply understand something, they have acquired the only thing they need to act upon it.

When it comes to algebra, fair enough.  Maybe even learning a foreign language.

But when it comes to altering substantive human behavior, that belief is So – Not – True.

So it is with golf, hockey, baseball, and I’m sure with cricket and futbol. Armchair athletes from the business world nod sagely as they receive this wisdom from Tiger, the Great One, His Airness, you name it.

“Yup,” they say, “that’s just how it is in my world; you gotta take that risk.”

But they don’t. They really, really don’t.

So: how do you get people to take risks?

Leadership and Role Modeling are Key to Change

Answer: you do it through role-modeling, and you do it young.

Back to Petter’s story.

The Little League coach didn’t just encourage his team to swing the bat. He told the kids’ coaches and the kids’ parents to tell their kids to swing the bat, and with the passing of this dedicated coach just before this year’s baseball season, you now hear his mantra – “Good things happen when you swing the bat” – echoed on every playing field in his town.

The kids got the message, but here’s what he told the coaches:

Look, guys. I know you all mean well. But when a kid swings at a pitch a foot over his head, what do I hear you tell him?  “Lay off the high cheese,” you yell, gesturing with your hand high above your head, “wait for a good one – wait for your pitch. ”

And that is just wrong. These kids look up to you. You’re their leader. This is one of the few remaining times in their lives they’re going to listen to someone, and it’s you they’re listening to now.

These players are very young, and they’ll get more coordinated, that’s nature, but they won’t become better batters unless they swing the bat. There are plenty of other people who will teach them over and over the dangers of taking a swing; don’t you add to that.

Because if they wait for life to serve them up “their” pitch, they’ll lead wasted lives, waiting for that pitch. In life, that pitch rarely comes.

Don’t do that to them. Instead, teach them that if you swing, all things are possible. If you don’t, nothing is. Don’t you wish someone had taught you that?

I know I do. Thanks Petter for that story, and lesson.

Blow Up Your Budgeting Process

If you work in a large organization – This Blog’s for You.

You know what season is coming soon – you dread it. ‘Tis the season of Planning & Budgeting; the annual ritual of much time, many iterations, and little meaning – full of sound and fury, signifying not much.

What if you could radically revolutionize that process? Almost blow it up? All in a socially and politically acceptable manner, of course.

Resource Allocation is So Last Millennium

Planning and budgeting processes are about resource allocation. Partly that’s to coordinate plans. But partly it’s about predicting the future – of markets, the economy, technology – so we can intelligently place resource bets. So that we can plan on having umbrellas in case it rains.

We have built processes to worry about the future so that we can place resource bets in advance. But what if we didn’t have to place those bets in advance? Who cares about predicting rain for tomorrow if I know there will be an umbrella within arm’s reach when I need it?

What if you always had access to an umbrella? What if you did not have to make capital investments, hire and train people, develop new products – until the day before you needed to? And you were then able to do so with the snap of a finger?

You wouldn’t waste time predicting the future – you’d just deal with it on arrival. And increasingly, that’s what the world looks like.

The umbrellas, it turns out, are right within our grasp, right when we need them – if we just know to look for them. And there are three places to look.

The Three Sources of Umbrellas When You Want Them

Old style planning and budgeting assumes scarcity of resources – few umbrellas. We need to re-think; to recognize the umbrellas are already there, and we’re just facing a sourcing or distribution problem.

The three keys to changing that problem definition are speed, collaboration, and transparency.

Speed. You probably budget for headcount. If so, you assume a certain elapsed time for a category of employee – let’s say, a three-month cycle.

What if you could cut that to three weeks? To three days?  Think contracting, outsourcing, working virtually, across time zones, modularizing work. It’s the way software and movies and consulting and projects get done now, why not extend it to “core” hiring?

Speed attacks the need to plan for umbrellas, because it reduces your exposure to time-spent-without-umbrella.

Collaboration. You probably budget for facilities and equipment – because you assume you must own or have first call on assets. But what if you could get all the access you need just by sharing with others? And save tons of money at the same time?

After all, you rent a room at the Marriott in Chicago instead of owning a condo there. Push that thinking further; it’s like doubling your proven resource reserves without spending a penny on exploration.

Why own a car when you can use Zipcar? Why are you paying Microsoft for software to sit on your PC getting old when you can access cloud software, always updated, for less? Why are you buying books instead of renting them? Why are you spending money on dedicated office space when you could share it out with other tenants? Why are you driving alone?

Collaboration attacks the need to plan for umbrellas, because it changes a resource scarcity problem to a capacity utilization problem, while expanding perceived capacity.

Transparency. You probably budget for knowledge management and IP development – because you think your organization must carefully nurture its precious wisdom. But what if you could generate more knowledge, and more know-how, by openly sharing what you have with everyone else?

This is the logic behind meet-ups, networks, communities of interest, affiliate marketing, tribes, wikis, webinars, curating, mash-ups, and Spindows.

Transparency attacks the need to plan for umbrellas, because it sensitizes everyone to the presence of more umbrellas, to the availability of umbrella substitutes, and to rain-control initiatives.  

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Help free your organization from the tyranny of old-think resource-constrained planning and budgeting processes. Ask yourself how to get your group’s work done faster, more collaboratively, and more transparently.

This is how to be a socially and politically acceptable business revolutionary.

(Props to my mastermind group of @StewartMHirsch, Scott Parker and John Malitoris for this post) 

Real People Real Trust: Transforming a Business from the Inside Out

Ron Prater has worked in government consulting firms for almost 20 years, including three years with Arthur Andersen LLP. In 2007, he set out with partner Alan Pentz to create a company that would apply real entrepreneurial curiosity to find new ways to solve the U.S. government’s biggest problems. The result is Corner Alliance. Find out how this organization, triggered by a crisis in its formative years, applied the principle of collaboration to devise a new and different kind of corporate culture.

Leadership Lessons

Ron and I have known each other through other people for years. A few months ago I was talking with Corner Alliance Director Sarah Agan, a mutual colleague and veteran consultant. I was intrigued by the unusual ways she described a recent all-hands meeting. “We practice ‘inner voice’ all the time,” she said. “And we have an explicit value to eat our own dog food.” Needless to say, I was intrigued by Sarah’s word choice and even more so by her animation. I wanted to find out more. So I set up some time to talk with Ron and Sarah together.

Ron explained it to me, “‘Eating our own dog food’ means we operate the way we advise our clients to—we follow the same processes and approaches we recommend to them.” “Essentially, we practice what we preach. It can be harder than it sounds when you’re trying to balance helping clients succeed while also trying to grow a sustainable business. And it hasn’t always been that way, even in our company’s short life.”

Learning the Hard Way

Corner Alliance had some growing pains in its early years. “We had a really tough time a few years ago when we lost a project that led to a serious financial struggle,” Ron confided. “I, along with my partner, Alan, and our Director of Operations, Brandi Greygor, responded in typical ways. Privately, we talked daily about how much money we had left in the company’s line of credit and what to do if we maxed out what the bank would loan us. Publicly, we sent a general message to staff that we all needed to ‘increase billability’ but we were afraid to state the full reason.

“We thought we were doing the right thing by keeping the true stress from our staff. The MBA books say it’s important to protect the people from the stress of running the business. And the HR consultants told us we had to follow proper procedures to avoid lawsuits if we did have to lay people off. So we kept things hidden.”

Going contrary to conventional business wisdom, Ron and the other principals listened to their own inner wisdom. “It’s not how our guts said to handle it. We faced a real inner conflict every day for months. How do you form a company of trust and transparency when it seems like all the advice you get—from grad school, friends, lawyers, and more—says to withhold information?

“Looking back,” Ron said, “I grew more personally from that very tough time than from every great year I had. While it was hard, the learning from those six months led to one of the most positive and significant turning points for Corner Alliance.”

Eat Your Own Dog Food

Out of the crisis came a big transformation for the company. “With cost-cutting, along with full transparency with our staff, we managed to stabilize our operations,” Ron said, “And we realized that, on the heels of such a hard and painful time, we had a real opportunity to fundamentally re-think and re-vision.

“So Alan and I announced to our staff that he and I would map out a new company strategy,” Ron elaborated, “including our top three strategic priorities. We told people at an all-hands meeting that we’d start by focusing on which clients to talk to and what to offer them. That message landed with a thud. Within the first few minutes of the meeting it was clear we had made a huge mistake and needed to rethink the approach.

“Our people said, ‘That’s not how we advise our clients to develop strategy. So why are we doing it that way?’”

That uh-oh moment led to a dramatically different plan to create the company’s strategy. “We realized we’d be stronger if we engaged the whole company in the company,” Ron continued. “And instead of starting with what we do and where we want to go, we started with who we are and what we wanted to stand for as a company,” Ron explained.


Put Values First

The group put first things first. “We focused first on our values, and to do that we created a conversation rather than creating a task,” Ron said. “We also found a way to make it a truly collaborative process, not just a collaborative process led by one person. We’ve never been about one-person trust—not at our core—so we found a way to define our values that would reflect that we all have to trust everyone else in the company.

“Since we’re a virtual company with staff in five different states, we selected an on-line tool to help us create the conversation. Everyone could contribute real-time, see each other’s inputs, make comments, and vote.”

Take Your Time

The process of defining yourself takes time Ron learned. “We allowed three weeks to generate ideas, and it took us about four months to solidify our values. If we had tried to get results in a one-day strategy session, our output would have been more generic—even with everyone participating,” Ron added. “People needed time to digest and think through what they stood for and then internalize that in relation to the company. The elapsed time allowed people to contribute at their best, and allowed the most important things to materialize organically.”

They ended up with 10 explicitly stated corporate values that are the foundation on which Corner Alliance continues to be built. Not surprisingly, “Eat our own dog food” was on the short list.

It’s a value that Sarah especially endorses. “We live that value even beyond our approach to strategy development,” she added. “Everyone takes turns running our internal meetings—everyone. We share leadership that way, and expand our capacity as leaders and facilitators at the same time. People get to experiment, practice, and learn in a safe environment, and they get real-time feedback. Just like the leaders we serve, we have to be willing to take risks and make mistakes to learn.”

Sarah continued, “It’s okay for things not to go well. What’s not okay is not learning from it. One of the greatest gifts we give each other is feedback. We are deliberate about creating a culture where we all recognize we’re both perfect and imperfect, where we can bring our whole selves—who we are and who we aren’t.”

Tell It Like It Is

Financial transparency is another key value that emerged from Corner Alliance’s collaborative strategy process. “Alan was instrumental in moving us to open-books management,” Ron said. “We now share just about everything with all employees every quarter, the exception being salary information. We have bi-weekly company-wide calls where everyone sees each other’s billability, our revenue, where we are exceeding or falling short of revenue projections.  We don’t hide anything bad or anything good.”

Ron is clear that the effect is palpable. “It has made a massive difference in everyone understanding the business impact of their decisions,” he stated. “It also supports one of our other corporate values, which is sustainability. I believe the whole firm really understands the state of Corner Alliance and can see that we have a really strong foundation for growth right now.”

Be Bold with Clients

That kind of transparency also now extends to Corner Alliance clients—in a bold and differentiated way. The stated value “inner voice” is about people sharing their internal dialog as much as possible, recognizing that’s often where the truth lies. Corner Alliance staff is encouraged to not leave important things unsaid.

“This is definitely not easy,” Ron emphasized. “It takes a commitment to practice over time with our clients and with each other. We actually label it, as in, ‘Using my inner voice, I’d like to say I think there are serious organizational risks associated with what you are considering.’ This makes it easier to do and hear as the person listening now knows that the person speaking is taking a risk.

“Our people know they’ve got the organization behind them every time they venture into inner voice territory,” Ron affirmed. “As Alan points out about using inner voice, ‘It’s a personal risk to reveal what you’re thinking but not saying. It’s a risk to the organization if you don’t.’ But we all also recognize it’s important to apply this value wisely, appropriately, and thoughtfully.”

Perhaps the most unexpected result from this dedication to speaking the truth is that clients have begun to pick up both the practice and the lingo. Ron explained, “When our clients started saying to us, ‘My inner voice is saying xyz,’ we knew we were onto something bigger.”

Reap the Rewards

The list of indicators that Corner Alliance is onto something is long, and now includes growing staff, secure multi-year prime contracts in place, and work with key government executives who have budgets in the billions. “Corner Alliance is poised for an incredible year in 2012,” Ron said with pride. “Not only are we making a difference in the business of government, but we get emails from clients saying, ‘You’ve changed my life.’”

The focus for 2012? “Helping people thrive by doing creative, meaningful work, and living the life they want—not just the work life they want,” said Ron.

The Bottom Line

Ron feels very strongly that what Corner Alliance has created was not led by or done by one person. “Featuring me for this article is actually counter to our culture,” Ron stressed. “Corner Alliance has been led by a collaborative approach using values as our core, and that’s precisely what will lead us into the future.”

And a promising future it is.

Connect with Ron on LinkedIn.

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The Real People, Real Trust series offers an insider view into the challenges, successes, and make-it-or-break-it moments of people from all corners of the world who are leading with trust. Check out our prior posts: read about Chip Grizzard: A CEO You Should Know; Ralph Catillo: How One Account Executive Stands Apart; Anna Dutton: A Fresh Perspective on Sales Operations; Heber Sambucetti: A Learning Consultant’s Approach to Leadership; Janet Andrews: What Trust-based Strategy Consulting Looks, Feels, and Sounds Like, and John Dunn: An Entrepreneur Wins with Partnership.

 

Attract! Attract! Why Attract is the New Retain

The mantra of “attract and retain” has been around the HR community – and its general management constituency – even longer than the unfortunate rush to refer to people as “talent.”

It used to make sense. But it doesn’t anymore and the implications are significant.

Why Retention?

It’s been awhile since anyone dusted off the basic retention rationale, so let’s review the bidding. Here are some commonly stated reasons why companies should pursue employee retention:

  1. It costs more to hire than to retain people
  2. The more experienced the hire, the more it costs to retrain replacements
  3. Experienced employees know the ropes, the lingo, how things are done
  4. Experienced employees form deeper relationships with customers
  5. Retained employees are motivated, which helps customer relationships.

Of course, a few of these tenets were always subject to qualification – number 5, for example. Longevity can just as easily drive complacency and myopia as well as it can drive motivation.

But that’s not the Big Story. The Big Story lies in the assumptions underlying all five of those beliefs. Those assumptions are:

  1. the benefits of retention increase in direct proportion to longevity, and
  2. the pace at which new employees become productive is relatively fixed.

Both beliefs are looking a lot less true these days.

What’s Changed?

Two things have changed: work and people.

Work. Work has become outsourced, modular, plug-compatible, horizontal, contracted, bite-sized, for-hire, project-based. Employers shun fixed costs and value flexibility.

This is partly because they can: technology has made work-sourcing a global phenomenon, freed from space and time. It’s also partly because they have to: global sourcing means competitiveness is also global. The global economy has undergone a massive make/buy analysis and has come down heavily on the “buy” choice. If you’re not working with the world’s best/lowest cost doer of some key task, then you’re at a disadvantage.

The nature of work has shifted from a “job” focus to a “project” or “task” focus. Employers no longer need “someone who can do…” but rather “someone who has done, and will do…”  The new work model is not semi-permanent vertical employer silos of people; it is the model used by the film industry and by consultants, a constantly shifting nexus of tasks and resources.

Recruitment comes to resemble an ongoing speed-dating event.

People. I think we’re finally past decrying the lack of employee “loyalty;” it’s so last millennium.  People are “loyal” to their professions, their technologies, maybe their customers – but not to the constantly morphing corporate entities that sign their paychecks.

The skills of the new generation have evolved to fit the new workplace. The Facebook generation, adept at mass-scale peer relationships, doesn’t relate well to authority, no matter which side of the relationship they’re on. Geography? Twitter is everywhere and while not every 20-something can afford time in Europe, they all know someone who can and does, and can all Skype it and tweet it 24-7 in the meantime.

The oldsters may not like the verbal promiscuity of “friending,” but it fits perfectly with the new workplace. While society may pay a price in the dearth of deep, vertical relationships, the market place is demanding breadth.

Attraction and Retention Redux

Let’s put these trends together. What the economy needs, and what people are organizing to offer, is the ability to form relationships at the speed of transactions.

To companies, the attractive employees are not those with deep potential; they are those who can hit the ground running in a plug-compatible world, instantly connecting with thousands of like-minded peers within the company and without.

To people, the attractive employers are not those who offer long-term “commitments” (usually just relationship-disguised transactional offers anyway) but those who offer the ability to be instantly productive, while offering personal growth opportunities in the form of autonomy and new activities.

There is an obvious match here. What is no longer obvious is the relevance of “retention.”

Why would an employer want to retain people when the changing market requires ever-changing skills that can be bought quickly with precision rather than trained over time with generality?

Why would an employee want to be retained, when (s)he can find ever-changing opportunities to gain experience in a world thousands of times bigger than one employer alone could ever hope to offer?

Attract! Attract! Three New Strategies for Companies

The above are massive trends. The trend is your friend. The challenge is to ride the trend, not fight it. Here are three strategies for doing so:

1. Aim for zero cost onboarding and training. Zero works well as a stretch goal, but it’s not enough. How can you get people to pay you to join your company? (This is not as crazy as it sounds: how much do people pay to go to Harvard? So, become the “Harvard of YourNiche.”)

2. Reverse-hire search firms. Tell Russell Reynolds you want every employee to get one bonafide offer from an outside firm every year to keep them motivated. If they stay with you, they have re-upped, and become re-attracted. If they leave, you can choose either to recalibrate your attractions program, or wish the employee well and let them tell the market how employee-dedicated you are. (This is not as crazy as it sounds; Tony Hsieh already does a version of this at Zappos, paying people not to take a job offer).

3. Up your knowledge management game. Tenure is such an expensive way to gain company knowledge. Figure out how to make it available to every employee, from day one.

And don’t assume that means AI and databases. Try the same thing that works in the outside world: massive horizontal networking. Invent intra-LinkedIn and Intra-Tweet. (This is not as crazy as it sounds; Clay Hebert is working on SpinDows)

Attract and retain? That sounds like a motto for a roach motel. The new mantra is Attract! Attract!

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Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ info@trustedadvisor.com.

25 Warning Signs You Have a Low-Trust Organization: Part 3 of 5

Low-trust organizations can be spotted in many ways.  This is third in a series of five. In this one, we explore warning signs from leadership. Previous and future posts address warning signs from:

  • Employees
  • Teams
  • Leadership (today’s post)
  • Products and Services
  • Clients and Customers

Leadership Warning Signs of a Low-Trust Organization

Look at the leadership in your organization. Does it have some of the following characteristics? If you’re a leader yourself, think hard, you might be contributing to a low-trust organization. These issues all arise from leadership choices, after all.

1. The Cult of the Corner Office thrives.

  • Do you have corner offices that are not conference rooms? Do they come with extra appointments, more square footage, better desks? Are there criteria for who gets them? You may have an issue.
  • If you have sanctified real estate, the odds are you have other visible symbols of class status and rank. With one exception, class systems detract from trusted relationships in an organization.
  • The exception: you’re intentionally running a business that connects meritocracy and materialism. Some trading operations fit that description. But you’re not likely to confuse them with high trust environments anyway.

2. The highest performer is a values-offender.

  • Name the 2-3 smartest, highest-bonus, most successful persons in your organization.  Does at least one of them get there by thumbing his or her nose at your avowed corporate values? Then you have a problem.
  • Values mean nothing if they are not enforced. Very few values statements have exceptions clauses (“…unless you can make a really profitable sale..”). What part of “team player,” “integrity,” or “client-focused” do you think rhymes with not showing up at team events, obfuscation, or self-aggrandizing?
  • Nothing shoots holes in values statements like blatant hypocrisy.

3. Blame is an art form.

  • Blame is the opposite of responsibility. If leadership means anything, it means taking responsibility. If the first words out of leaders’ mouths in the face of difficulty are to blame the situation or another person, what you have is the absence of leadership.
  • Don’t confuse an explanation with an excuse. Explanations are important; they help us know what to do differently next time. They do not, however, let anyone off the hook. Leaders can’t be let off the hook; that’s part of the definition of leadership.
  • Blame and its twin “inability to confront” corrode trust. They both try to disconnect responsibility from the truth. Leaders don’t do that.

4. “Need to know” is your catchphrase – and you’re not in the military.

  • The military, and military contractors, legitimately operate on a “need to know” basis. Not too many others do. It’s an easy rationalization that leads to low trust.
  • If I say you don’t need to know something (outside the military), it means you can’t be trusted with the information. Maybe you’re incompetent, maybe you’re a blabbermouth, maybe you’ll misinterpret it; there can be many reasons for low trust. But they’re all low trust.
  • If I don’t understand or accept why I have no need to know, then I will resent you telling me. Resentment leads to all kinds of avenues, none of them good, and all of them low-trust at heart. Need-to-know erodes trust.
  • None of them above is any different because it’s a policy: a policy to withhold the truth systemically just means you have a systemic approach to withholding the truth. Now you have a whole organization that is untrusting.

5. The need to “have a positive outlook” trumps the need to tell the truth.

  • Many a leader has said, “We need to keep people’s morale up, make sure they hear this the right way, don’t let them get depressed.” That way lies trouble. Because the truth has a way of getting out.
    • Most people in most situations would prefer to hear the truth, to make up their own minds. They don’t trust people who assume they know better.  Remember Colonel Jessup in A Few Good Men, yelling, “The truth! You can’t handle the truth!” Don’t be that guy.

In the next post, we’ll explore 5 ways in which products and services can indicate a low-trust organization.

Why We Don’t Trust Politicians: the Case of Healthcare

Stephen M.R. Covey, in his recent Trust Matters interview, notes that politicians rank lowest in trust among all professions. He identifies counterfeit behavior as the underlying cause.

He’s right; and of all the high-visibility disagreements today – wars, abortion, debt – none has inspired more flagrant counterfeit behavior than health care. It’s a polarizing issue in itself – and its abuse by politicians puts added stress on the social compact.

A Massive Inconvenient Truth

Never mind climate change. Here are a few far greater inconvenient truths that everyone knows, but no one will admit:

  • Only a very small portion of the US population could afford to pay for the health care they have come to expect
  • The health care system as it exists could not survive without massive government subsidies
  • Health care is an economic good – as with housing, food and consumer goods, what you get is what you can afford.

Our collective inability to admit these truths in a socially useful manner means that the cost of health care is killing jobs and crippling American competitiveness.  Like parasites choking their host, the politicians are too tied up with reality-as-we-like-to-pretend to speak the truth – even though we all know it.

Result: bad health care, bad economics – and bad social trust.

How We Got Here

Albeit with the best of motives, Medicare, ERISA, and subsequent regulations greatly expanded the proportion of the population who could seek health care. Health care usage exploded as people took advantage of a service seen as low cost and already paid-for. With that expansion, hospitals, insurance carriers, drug companies, device makers and health care providers were able to train doctors, fund research and invest in marketing programs; all paid for with government and employer dollars.

Laudable though the goals were, the legislation also forced mid-sized and large employers to devote an ever-increasing proportion of their compensation expense to employee benefits – with a resultant decline in real wages. Until the Affordable Care Act, small employers could avoid the non-discrimination rules through the purchase of insured health plans.

The inconvenient (again) truth is: this tangled web of intertwined interests has become so pervasive that the “private” health care industry would implode without the government.  Health care in the US has become an entitlement program for both individuals and for industry – and no longer perceived by most Americans as an economic good paid for with wages or profits.

Where We Stand Now

Health care contributes to both our slow job growth and our growing income inequality. When health care costs grow as a proportion of compensation, rising lower-wage employee costs begin to overwhelm the value they can add. Naturally, employers then shift to exempt part-timers and contractors. Small employers, once exempt from the rules, now simply avoid adding workers.

The experience of every other nation is that health care rationing is an essential element of any solution; we can’t outrun it. We have not faced up to that inconvenient (yet again) truth in the US.

Enter: the Politicians

Health care is a fault line around which our two primary political parties have entrenched themselves. The GOP has the problem in its sights – but can’t stomach the solution. Democrats misstate the problem – and thus propose ever more expensive solutions. Both are hostage to ideologies.

Republicans look knee-jerk to the private sector, touting doctor choice and the doctor/patient relationship as a panacea. Their inconvenient truth is that the system will fail without the government – and that most of their voters will be unable to afford coverage.

Democrats insist on universal coverage with equal benefits for all, and the right to sue if things don’t go well.  Their inconvenient truth is that the system is unsustainable – and that their children will have to disavow it.

Neither solution is viable.  We all know it, but bury our head in ideological sands.  And yet the same time – because we really do know the truth – we don’t trust our leaders because we know they are lying to us. They refuse to speak the truth.

Getting to the Solution

Our politicians give only the answers we want to hear.  We know they aren’t true, but we fear the other side’s answers more, so we cheer for the answers we fear less.  We don’t want to “lose.”  Which means we all don’t trust anyone – and we all lose.

The strongest force against trust is the willingness to leave the truth unspoken.

Is there any candidate, anywhere, willing to say simply that not everyone can have the same health care? Can any candidate achieve escape velocity from our debilitating ideological prison? And would the rest of us be willing to acknowledge the truth if someone had the courage to speak it?

In a following post, we’ll discuss one potential solution and why our politicians will give up our trust in order to avoid it.

The Evolution of Trust-based Leadership

In 2000, I co-wrote The Trusted Advisor, with David Maister and Rob Galford. At the time, it was aimed largely at external professional services advisors. The word “leadership” appeared exactly once in the book (I checked).

This month, Andrea Howe and I published The Trusted Advisor Fieldbook. The subtitle is, “A Comprehensive Toolkit for Leading with Trust.” “Leadership” occurs 19 times, and the l-word itself appears many more times in its various forms.

What changed?

Trust Didn’t Change

The dynamics of trust are the same. I’ve developed the Trust Quotient and the Trust Principles since 2000, but the fundamentals are the same. The Trust Equation, the ELFEC process for creating trust, the dynamics between trustor and trustee are unchanged.

That’s hardly surprising. Trust is a fundamental human relationship that’s been around since well before the written word.

The World Changed

My Trusted Advisor co-author Rob Galford was more prescient than I; he wrote The Trusted Leader way back in 2003. Or, maybe he was ahead of his time. In any case, by 2011, the world looked radically different than it did in 2000.

In particular, the business world is:

  • Flatter – more horizontally linked, less vertically integrated
  • More inter-connected: think Linked-In, outsourcing, offshoring
  • More wired – Windows XP was then; the cloud and iPad are now
  • More independent – Boomers ruled then; millennials rule now
  • More collaborative ­– YourCo against the world is DeadCo
  • More transparent – Facebook, data scraping, digitized everything
  • More networked – a competitor in one line is a partner in another.

Leadership Changed

In 2000, “leadership” conjured up images of #1 leader Jack Welch pacing the floor in front of high-potential candidates at Crotonville, violating the chain of command with exhortations for “boundarylessness” – as long as it stayed within the boundaries of the corporation known as GE, that is.

Today, “high-potential” sounds not just elitist but out of whack with reality. Just as everyone today is a salesperson, everyone is in customer service – so too everyone is a leader.

That’s not corporate double-speak; it has meaning. The leadership skills of today are persuasion, influence, collaboration, the ability to create alliances, to join forces, to create environments that encourage collaboration, the ability to play nicely together in the sandbox, to forge agreements, and to play long-term win-win rather than screw-your-customer to jack up the quarterly numbers.

Leadership Skills are Trust Skills

Those skills are trust skills. We don’t need fierce competitors, we need fierce collaborators. We don’t need to ‘win one for the gipper,’ we need to win one for all of us. We don’t need vertical skills, we need horizontal skills.

Certain leadership skills are constant: the ability to inspire, to create and articulate visions and stories, for example. But others have been replaced. Being good at vicious infighting to gain the top job is – on balance, in most companies – a lot more dysfunctional these days than valuable. Making “tough decisions” isn’t the virtue it used to be; sometimes it just reflects a failure of imagination.

Today organizations are less about being led and more about cultures that foster leadership throughout.  Such cultures are driven by what we call Virtues and Values.

But that’s another story for another blogpost.

Help, Leadership and Teamwork

“I helped Maia and Maia helped me”… was the breathless comment of a three year old at the end of a very successful Easter egg hunt recently; she had formed a partnership with an equally ambitious four year old egg-hunter to be clear winners in the task of finding (and consuming!) as many Easter eggs as possible.

At the other end of the age spectrum, a Chief Operating Officer said to me last week that senior leadership relationships in his organization were improving through an increased readiness to approach colleagues with the simple request, ‘I need some help. Please do me a favour.’ It had not been easy to start to do this, he pointed out, because it had implied a declaration of vulnerability but the results were making it most worthwhile.

As leaders strive to build the agile, trust-based cultures that fuel the quality conversations – strategic, creative, curious, experimental – needed to generate breakthrough ideas and breakthrough execution, I notice them using more and more the language and approaches of ‘help.’ Are you noticing this too?

Thinking About Helping

If so, we might turn to Ed Schein’s 2009 book Helping: How to Offer, Give, and Receive Help. Schein suggests ‘what we think of as effective teamwork, collaboration and co-operation can all be understood best as consistent effective mutual helping.’ He defines teamwork as ‘a state of multiple reciprocal helping relationships including all members of the group that have to work together. Building a team therefore is not just creating one client/helper relationship but simultaneously building one among all the members.’

Schein points out the many challenges involved in giving and receiving help. As receivers of help, we can often feel diminished or ‘one down’ when offered help. As givers of help, we must consciously pause and turn away from what seems to be most pressing at the time in what are often very busy, hectic lives.

Principles of Helping

Three principles and tips stand out from Schein’s advice to leaders:

  1. Task interdependence is the foundation of strong mutual helping relationships. Maia of the Easter egg hunt understood perfectly that she and her little friend had better chances working together than did others searching on their own. Similarly, a VP of Sales and a VP of Operations in an IT Services company have formed a very strong ‘helping’ relationship around the challenging task of entering a new market. Schein argues that, without these mutually important tasks, it is very difficult to form strong ‘helping’ relationships. He zeroes in on the importance of solicited, specific, descriptive and goal-related feedback–enabling colleagues to become more helpful.
  2. The strongest helping relationships occur when both giver and receiver are ready, and the relationship is equitable. He urges the giver of help to check whether the person she wants to help is ready and able to receive it; and the receiver to give regular feedback on what is and is not helpful—in particular, being clear when help is no longer required.
  3. Effective helping starts with pure inquiry, a strong effort to understand and empathise with the needs of the person requiring help. No matter how clear the request for help, he urges us to pause and reflect, truly to listen, and to challenge our own assumptions. This is particularly important at the beginning of a helping relationship because it enhances the status of the one being helped, and maximises the information available to the helper.

The Trust Equation and Helping

The Trust Equation supplements Schein’s notions as a strong frame for effective helping relationships. To be truly helpful to you, I focus on your needs, not mine (low Self-orientation); you are safe raising any issue you wish with me, and I will engage with you at both emotional and rational levels (high Intimacy); when you ask for advice, I will be clear and truthful (high Credibility); and you can rely on me to be available to you when needed (high Reliability).

I recently saw one CEO commit to his organization to:

  1. Encourage open feedback across my leadership team about the pursuit of the team’s collective and individual goals. Above all, cultivate a readiness in the team to say ‘I am not sure’, ‘I need some thoughts on this one’, ‘This is not quite going as we would wish it to.’
  2. Adopt an even more inquiring approach with my colleagues, really listening in order to understand their needs for help, and challenging my own assumptions about what I think they need.
  3. Check in regularly on what help is needed and how this is changing.
  4. Invite help myself, showing my own vulnerability as a result. Acknowledge my own deficit of understanding and knowledge in numerous matters.

He will help his organization and his organization will help him. Just like the Maia egg-hunting partnership.

Lessons in Leadership and the Three Umpires

This is one of my all-time favorite stories. Three umpires (baseball, for our international readers) were talking about how they make calls on each pitch.

The first umpire said: “There’s balls and there’s strikes, and I call them like they is.”

Umpire number two said: “No, there’s balls and there’s strikes, and I call ’em like I see ’em.”

But it’s umpire number three that I like. He said: “There’s balls and there’s strikes, but they ain’t nothin’ until I call them.”

The Third Ump

What sets umpire number three apart? First, he understands that distinguishing a strike from a ball is fundamentally a judgment call. Television’s K-zone aside, it’s his job as the umpire to set a strike zone, to watch the pitches and declare where each pitch sails: inside, outside, high, low, or right down Broadway.

Second, he knows the integrity of the game depends on his certainty in his calls. The pitches really aren’t anything until he makes his pronouncement, and he has the courage of his convictions.

Lessons in Leadership

And how does the third umpire tie into leadership? A good leader does the following:

  1. Knows that a lot of decisions are in fact judgment calls, and is willing and able to make them – command presence.
  2. Provides clear and concise direction.
  3. Demonstrates passion and yes, courage of her or his convictions.
  4. Sets a fair and consistent “strike zone” and applies that to everyone.

The third ump, or the good leader, isn’t arrogant, non-collaborative or deaf to others. The good leader is willing to take on the tough responsibility of setting priorities, being clear in direction and demonstrating the passion to get others believing in the vision.

PS: For a great real-life story of courage and leadership, read Mike Myatt’s great piece.