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Attract! Attract! Why Attract is the New Retain

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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 @ [email protected].

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

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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

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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

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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

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“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

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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.

Trust based Leadership

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With all the trust surveys proliferating out there, I’m sure one of them includes questions that rhyme with “do you trust leadership of __?” And if so, I’m pretty sure the numbers have declined over recent years.

And I think most C-suites would agree that leadership—at corporate and institutional levels—would benefit greatly from being more trusted. In other words, the times scream out for a clear approach to trust-based leadership.

So—here are the headlines. 

Trust-based Leadership: the Top Ten List

1.    Don’t Fake It. The best way to be trusted—by far–is simply to be trustworthy. Reputation follows trustworthiness—not the reverse. The best PR comes from publicizing good things, not from spinning them. Don’t put your marketing, PR, or communications in charge of trust; you are in charge of trust, 24-7, by your own thoughts and actions. Don’t confuse the metrics with what they are supposed to measure.

2.    Your Ego is Not Your Amigo. Being driven can be OK. So too can being impatient, customer-obsessed, product-obsessed, design-obsessed, or people-obsessed. What cannot be OK is being obsessed with yourself. If you can’t check your ego at the door, seek professional help; stop taking it out on others. It is Not About You. If you think it is About You–you might be a bad leader.  

3.    Collaborate, Don’t Compete. No one is the enemy. Not your customer, not your supply chain, your employees, the union, not even your competitors. If you think you are competing with anyone, you are focused on gaining advantage over others; you are making yourself the center of things. (See Rule 2 above). Let others obsess with competing. You be the one to go think about what you can do for [customers, employees, your supply chain, even your competitor]. She who adds the most value lives best. And longest, at least in terms of client loyalty.

4.    Leading is Emotional. Choose your own leader; not one of the Usual Suspects. Now ask: were they passionate? My guess is they were, and their moments of passion were the source of much of their influence. Leaders lead, which means others follow them, and emotional passion is a big driver. Very few people follow the numbers-only guy or gal.

5.    Integrity Means Wholeness. You can’t be all things to all people. The more you try, the less integrity you appear to have. What you can do is to be the same person, at all times, to all people. That makes you whole, entire, integral—one who has integrity. A leader is unafraid to show his whole self.

6.    Be Transparent. A trust-based leader welcomes reality. The goal is to change reality, not to spin it. To see things as they are and to change them is noble. To see things as they aren’t and talk about them as you think you would wish others to see you as talking—well, that’s just BS. Don’t go there.   A leader knows that reality is her friend.

7.    Play Long Ball. You can’t be transactional and be trusted. Transactions can only be trusted in packages. Time is the key. Never cut a deal with someone—cut the 27th deal in a chain of 132 deals you intend to cut with them. That way you build a relationship—reliability, connection, mutual obligations, and the business vocabulary to express them. A leader is always thinking and acting in the long term.

8.    It’s Personal. The Godfather line, “It’s not personal; it’s business” was precisely wrong. It is both. Leadership can’t be trusted unless leaders are trustworthy. Companies aren’t trusted (except for the narrow case of reliability); people are. Trust can be engineered; but at the end of the day, all trust is experienced as personal.  A leader exemplifies it.

9.    Trust is Relationship. Robinson Crusoe didn’t need trust (before Friday, anyway). Trust is like ballroom dancing—you need two to tango. One trusts, the other is trusted. One by itself isn’t even the sound of one hand clapping. It’s non-trust. You can’t be trusted if you don’t trust back.  There is no trust without both parties in relationship. A leader knows how to play both roles; by trusting, he becomes trusted. By being trustworthy, he invites trust.

10.There is no Trust without Risk. Trust mitigates risk, but only by taking another risk. Ronald Reagan’s ‘trust but verify’ was good politics, but bad trust. Verification destroys trust. Trust is risk freely-taken, for the greater advantage of both. It is paradoxical, which is why risk-mitigation techniques end up destroying it. A leader knows that sometimes, she’s just gotta take a leap.

Invictus: Real Leadership, Real Management

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This week we’ll be exploring the theme that business is inherently personal, and that we’ve forgotten that fact to our detriment.

Last weekend I saw the movie Invictus, Clint Eastwood’s latest, about the early days of Nelson Mandela’s presidency in South Africa. It stars Morgan Freeman (of course) as Mandela, and Matt Damon, as captain of the hapless rugby Springboks, South Africa’s version of the Chicago Cubs.

Mandela knew that the Springboks were as hated by the black population as they were beloved by the Afrikaaner whites. His insight was to see the power of reconciliation that could be achieved if the team were to pull off the equivalent of the 1980 US Olympic hockey team’s victory.

The movie reviews are mostly positive; even the critical ones suggest that Eastwood got the critical story right. And the true story itself is so enormous that it needs no embellishment. For my part, Eastwood has rounded the sharp edges over the years, and increased the role of heart. For me, he has earned the right (since as far back as The Good, the Bad and the Ugly et al) to jerk my heart around pretty much as he wishes.

But this is a business blog, not a movie blog.

The Best Way to Lead, and the Best Way to Manage

We meet Mandela just after he has been elected president, after nearly 30 years in prison. His power lies in the overwhelming respect he merits by forgiving all those who imprisoned him.

In his first meeting with the Matt Damon character, Pinnear, Mandela asks him a question: How do you lead? Pinnear’s answer is clear, and Mandela delightedly agrees with him.

The best way to lead is to lead by example.

Mandela leads by refusing to fire the white former security officers, thus personally demonstrating reconciliation of the highest order on Day One of his administration.

The second question Mandela poses is, what is the best way to manage? And his answer is equally clear.

The best way to manage is through inspiration. And the best way to inspire is to demand of others things they cannot themselves conceive of accomplishing.

As Pinnear’s wife asks him how the meeting went, it dawns on Pinnear that Mandela has just acted on those two questions–by asking him to lead the hapless Springboks to (gasp) the World Cup championship, a goal he himself could hardly conceive of.

Leadership and Management: Whatever Happened to Role-modeling and Inspiration?

It was only 15 years ago that Collins and Poras conceived of BHAGs–Big, Hairy, Audacious Goals.

It was 21 years ago that C.K. Prahalad suggested that Strategic Intent–basically a "stretch" view based on direction, discovery and destiny–should inform strategy.

Warren Bennis has been preaching for many decades now the importance of role-modeling.

Yet what do we have these days?

  • Chuck Prince, former CEO of Citibank, says "As long as the music’s playing, you’ve got to get up and dance." Role-modeling? I don’t think so.
  • The image that remains today from "Shoeless" Joe Jackson’s 1919 conspiracy to fix the World Series is that of a kid saying, "Say it ain’t so, Joe!" In other words, dismay at the betrayal of a role-model. The fallout from today’s flame-out by Tiger Woods is discussed more in terms of brand image than of leadership.
  • The dialogue these days about the financial meltdown is centering on compensation incentives and structural reform. Management by inspiration? Not in evidence lately.

 

The point is not whether scientific management doesn’t have its place; surely it does. But that place has been overdone to the detriment of both leadership and management.

This is not some untested thesis. Mandela accomplished some remarkable things by applying these human principles to an "organization" of some 50 million people, and to problems as intractable as racism. Makes Citibank look like a walk in the park.

Whether you liked the movie or not, Clint Eastwood is channeling a message for our times.

Trust is the New Black: Insights from Craig Newmark of Craigslist

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Craig NewmarkCraig Newmark, founder and Chief Customer Service officer of Craigslist, spoke last week at the Harvard Business School Club of New York, a talk he titled “Trust is the New Black.” Can I borrow that phrase, Craig? With attribution, of course.

I had not heard Craig speak before. Readers of this blog will find themselves nodding at many of his comments, and I for one found his thinking on several issues to be insightful and provocative.

Since I am not a professional reporter and did not record his talk nor take detailed notes, let me state that these are my impressions: while I’m trying to make my comments correspond to the reality of what he said, any disconnects are entirely my fault.

Unlike many speakers in the HBSCNY series, Craig allowed his comments to be on the record; he also gave out his email, Facebook and Twitter addresses freely. Not really surprising for someone who describes his primary job as being customer service. As he put it, “I haven’t done customer service for—oh, about an hour now.”

In the same vein, he suggests, “customer service, if done in good faith, is a form of public service.” That takes “doing well by doing good” to a whole ‘nother level. (I see some parallels with Buddhist Capitalism).

Craig Newmark on Leading and Managing: Competition, Metrics, Timeframe

Craig stated in definitive terms a couple of themes that readers of this blog will resonate with—the need for long-term thinking, and the focus more on commerce, and less on competition.

Someone asked about what he focused on: “I’m focused on the next 20 years, with an eye to the next 200. And I’m not kidding.” He isn’t, either. He’s very conscious of changing society, e.g. his recent involvement in veterans’ affairs.

In response to the question, “Who among your competitors most causes you to lose sleep?” Craig answered, “I don’t really lose sleep over competition at all. My focus is much more on customer-related issues—spam and scam, service.” My translation: Take care of your customers, and your competition issues will take care of themselves. (It also brings to mind an old Jerry Garcia quote: “The Grateful Dead don’t strive to be the best at what we do, but the only ones who do what we do.”)

On analytics: “We get lots of anecdotal feedback, and rely on intuitive skills. Whenever I’m in New York, I love popping in on realtors. We’re not so big on formal analytics.” I can’t read Craig’s mind, but I suspect he’s also got a healthy suspicion about the dangers of OD’ing on analytics.

Craig Newmark on Trust

Craig uses the designation “curators” to describe the job of editors; that was new to me, and I like it. “The news curators have a particularly big role to play in restoring trust in the media.”

Craigslist puts a lot of effort into combating fraud. One person asked whether it was a losing battle, with fraud increasing. Here’s what Craig said: “You can’t make the world 100% safe, trust doesn’t come without risk. But in my experience [and he has a lot, I might add–CHG] the vast majority of people are trustworthy; maybe 1% of people have bad intentions. Just use commonsense.”

Asked about ways to improve trust going forward, Craig talked about establishing different levels on the scale between anonymity and certifiable identity. For a small transaction, maybe we don’t need to know much. For larger transactions, we need to have higher levels of verified identity.

Fair enough, but I actually found his answer to an earlier question to be even more relevant. “I’m not interested in politics, my focus is governance,” he said. “And we’ve got some great examples of governance right here in the US; they’re called the Constitution and the Bill of Rights. If you focus on asking how to work with those forms of governance, you can frame political issues in a far more productive way.” I’m guessing that Craig sees that focusing on issues of governance at the corporate level is similarly a way to resolve issues of competition, politics and social relevance, not to mention customer service.

My words now, not his: I think what he’s doing is running an organization which is at once purely capitalist and at the same time, always striving for integration into a broader context of social responsibility. Remember: “the dedication to true customer service through a for-profit enterprise is a form of public service.”

Capitalism and social responsibility are not incompatible: Craig Newmark is one of those rare leaders who sees that, done right, they are in fact inextricably linked, and for the benefit of both.

Four Principles of Organizational Trust: How to Make Your Company Trustworthy

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I am on vacation this week, and will be going back to the vault for some ‘oldies but goodies’ posts. I hope you enjoy them: I’ll be back in a week or so with new material.

Trust, in case you hadn’t noticed, has gotten “hot” lately. But much of it sounds very vague—soft, fluffy, nice-to-have, the buzzword du jour.

I’d like to do my part to make it real.

To me, that means breaking it down and making it sound; tapping into the strategy and mysticism, but also staying grounded in the tactical and the practical.

So let’s review some context; then talk about four specific operating principles a business can hone in on to improve its trustworthiness.

Putting Trust into a Workable Context

I’ve suggested elsewhere that “trust” is too vague a term to work with. To do something practical, we need first to identify the trust realm: are we talking about personal trust, or business/organizational trust, or social/institutional trust?

The next question is about the trust role: are we working on being more trusting? Or more trustworthy? They are not the same thing. And “trust” is the result of them both interacting.

Building a Trustworthy Business

In the realm “personal” and the role “trustworthy,” we can point to personal beliefs and behaviors as indicated in the Trust Quotient. But in business, trustworthiness is built through a set of daily operating principles. Trustworthiness is built from habitually behaving in accordance with a set of commonly shared beliefs about how to do business.

I suggest they can be boiled down to four.

The Four Trust Principles

1. A focus on the Other (client, customer, internal co-worker, boss, partner, subordinate) for the Other’s sake, not just as a means to one’s own ends. We often hear “client-focus,” or “customer-centric.” But these are terms all-too-often framed in terms of economic benefit to the person trying to be trusted.

2. A collaborative approach to relationships. Collaboration here means a willingness to work together, creating both joint goals and joint approaches to getting there.

3. A medium to long term relationship perspective, not a short-term transactional focus. Focus on relationships nurtures transactions; but focus on transactions chokes off relationships. The most profitable relationships for both parties are those where multiple transactions over time are assumed in the approach to each transaction.

4. A habit of being transparent in all one’s dealings. Transparency has the great virtue of helping recall who said what to whom. It also increases credibility, and lowers self-orientation, by its willingness to keep no secrets.

Executing on the Trust Principles

What are the tools an organization has at its disposal to make itself more trustworthy? Any good change management consultant can rattle off the usual suspects, but for trustworthiness, the emphasis has to shift somewhat.

The usual change mantra includes a heavy dose of behaviors, metrics and incentives. Some of that works here, but only to a point.

For example, Principle 1, focus on the Other, is contradicted by too much extrinsic incentive aimed at leveraging self-interest–it undercuts focus on the Other. And Principle 3, relationship over transaction, forces metrics and rewards to a far longer timeframe than most change efforts employ.

Another great shibboleth of change is that it must be led from the CEO’s office. But with trust, it ain’t necessarily so. Trustworthiness is a great candidate for infectious disease change strategies; guerrilla trust strategies can work at the individual level, and individual players can lead. Behavior in accord with these principles cannot be coerced; the flipside is, it can be unilaterally engaged in.

The most powerful tools to create a trustworthy organization are things like language, recognition, story-telling, simply paying attention to the arenas where the principles apply—and the will to apply them. Role-modeling helps; some skill-building helps. But most of all, it is the willingness to notice the pervasive opportunities to work in accordance with this simple set of four principles.

Trustworthiness breeds trusting (the reverse is true too); the combination is what leads to trust. Which, by the way, is quite measurable in its impact on the bottom line.