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Trust in a Coffee Cup – The Intimate Actuary

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I’ve often wondered: is our real workplace office the coffee shop?

Many years ago, when I started work as a management consultant, the smoking area was the place where information was exchanged, relationships forged, and informal deals brokered. There’s an informality when people congregate without agendas; barriers are dropped, titles mean less, and deeper social connections get forged.

Is this ‘informality’ the key to the Trust Equation’s key component of Intimacy?

Coffee Shop Intimacy

Being a Brit, we often think they’re the same thing. The beers after work and the ‘Cheeky Nandos’ (see here for our befuddled American friends) is our default to creating intimacy; but perhaps we should think a bit more deeply.

Intimacy as a component of trustworthiness is actually more about security and a sense of empathy, a less boisterous and socially connected emotion. It’s individual and personal, and is expressed differently from person to person. One size definitely doesn’t fit all.

I learnt this the hard way over a series of weeks working in a large financial services client. My personal default style is always openness and candid sharing of the personal (full disclosure: I’m Irish). I’m always looking for that connection. So – what happens when that openness meets The Actuary?

Actuarial Intimacy

I’m not suggesting by any means that actuaries are not able to display intimacy, but by the very nature of their work they are not emotional risk takers. Instead, they must be able to be analytical and reflective. The profession tends to attract those who feel simpatico with those requirements.  Social settings are rarely the default home of The Actuary. And yet – for them, as for all of us, Intimacy is still key to trust.

Throughout the weeks we worked together my daily routine began with a visit to the inhouse Starbucks; and every day (maybe 2-3 times a day) I’d offer to buy a coffee for my actuarial friend and client. And (of course) every day he would decline, much to my frustration. I wanted nothing more than to sit down with him and understand what his passions were, his family situation – who he was as a person.

We worked together closely, and made great progress, but for me it was like wading through cement – no conversation, no social interaction. It was killing me. Worse still, I had no idea if I was even making an impact with the work. His only foray into ‘real’ communication was to starkly tell me one afternoon, after my third coffee of the day, “You spend on average £7 a day on coffee; that’s close to £2,000 a year.” (I suspect he even worked out my life expectancy on the back of that).

Yet I couldn’t have been more wrong. In hindsight, this was his conversation starter, though it took me until the project was finished to recognize it as such. We delivered on time and with (to my mind) a great result. His expressed view was that we had delivered what was expected.

On our final day working together, before I left for a new client, I was sitting with colleagues both client and peers. We were engaging in what we knew best, that snappy ‘cheeky Nandos’ social interaction, and of course I was comfortable again – back to normal.

Just before lunch my actuarial friend paid me a visit. And, he came with a gift – a very risky gift for him, a branded insulated coffee-mug. Initially I thought, “Yes! I’ve converted him, he’s a social coffee drinker now.” But again, I had misread him.

He looked me in the eye and said to me, “Johnny, I’ve really enjoyed working with you. I’ve brought you something to say thank-you for making this a success for me, and for my team.”

Suddenly I was the one without words. I defaulted to my informal social style, we exchanged some trivial social niceties, and we said our farewells.

You Can’t Buy Intimacy

It took me months to realize that for him intimacy wasn’t about being social. It wasn’t bonhomie or office banter. In fact, it was much deeper than that. For him it was about me understanding him, including what was important to him and how he felt about it. That then translated to what needed to be done, by when and with what outcome.

Success wasn’t beers and back slaps: it was me realizing how important it was to him that the job be done well, and him being comfortable that I had understood that about him.

We had created intimacy and we had built trust – slowly and painfully for me, measured and appropriately for him. Ultimately, he felt safe knowing that we would get where we were headed, together, and that he could trust me to share that commitment.

I still see him in the airport lounge on my regular commutes between Edinburgh and London, and every six months or so he’ll introduce me to a colleague. He’s always polite, measured and professional. As for me, well, I always have a coffee in my hand.

But we both know.

Trust Matters, The Podcast: Kick-Starting a Relationship with a New Boss (Episode 20)

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Trust Matters, The Podcast: Trusting a Team Member on a High-Profile Project (Episode 19)

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Trust Matters, The Podcast: How to Establish Trust When Managing a New Team (Episode 8)

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How Smart People Get Stupid

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Exhibit A. Google conducted a multi-year, multi-million dollar study called Project Aristotle to determine just what distinguishes successful teams from unsuccessful ones. Tons of data were examined, decades of research studied, multiple hypotheses explored.

The answer? Drum roll: successful team members display more sensitivity toward their colleagues, e.g. granting them equal talk time.

THAT’S IT!

If you find that a stunningly unsurprising flash of the obvious, you don’t understand how things work in business these days. Here’s the reaction of one Googler to that study:

“‘Just having data that proves to people that these things are worth paying attention to sometimes is the most important step in getting them to actually pay attention…I had research telling me that it was O.K. to follow my gut,’’ she said. ‘‘So that’s what I did. The data helped me feel safe enough to do what I thought was right.’’

I’m not picking on Google; they are not unique. (And they are, indeed, really smart). But let me restate what Exhibit A is really telling us:

Millions of years of evolution have brought humans incredibly complex and exquisitely tuned neurological systems, capable of instantly intuiting not just friend vs. foe, but parsing a spectacularly wide array of emotional messages being sent out by our fellow humans.

Yet the smartest of the smart among us have determined that you can’t trust that system – unless it’s backed up by years of technological research that couldn’t have been done even just ten years ago.  Fortunately, we have now been given permission by that research to ‘trust your gut.’

It’s a wonder the human race stumbled along without that study for so many years.

 

Exhibit B. We recently got a plaintive email from a genuinely perplexed  client.

He said:

I hear constantly that being authentic is crucial. But it’s hard to get a clear grasp on the idea. It’s especially hard to figure out how I can know (instead of just feeling or believing) that I am authentic – much less know that someone else is.

Absent knowing we’re authentic, can’t anyone believing they’re authentic just claim to be so? How could anyone prove otherwise?  And since we can’t really know authenticity, doesn’t that also mean we can’t measure it, so we can’t compare it across people or time or situations?

Hasn’t someone come up with a way of getting at authenticity by way of knowing, rather than feeling or believing? I’m struggling to know how I can know I’m authentic. I hope this makes some sense.

This person’s pain is real, and deep; I don’t want to appear insensitive by citing it as a cautionary example, we can all relate to the sentiment. Yet, contrary to their hope, the query makes no good sense at all. Instead, it represents the abandonment of commonsense.

Authenticity – to pick that particular example – speaks to an alignment of beliefs and feelings with the cognitive functions that our writer called “knowing.”  When we run across someone who accesses solely their cognitive talents, we don’t think of them as authentic – we think of them as Sheldon Cooper. They are inauthentic because they are presenting not their full selves, but only their frontal cortexes to others.

“Authentic” is what we feel instantly in our pre- and sub-conscious instinctive feelings about other people. It is the same kind of feeling we get when we jump away from the speeding car, recoil at the sight of a snake, or feel our hearts tug when a puppy wags its tail at us.

An Outbreak of Reductionism

This is hardly the first outbreak of hyper-rationalization. In the social sciences it has a name – physics envy. It is particularly virulent today in neuroscience, where some, having locating certain emotions in particular areas of the brain, claim to have “explained” those emotions. Description is by far the narrowest form of explanation – it’s more akin to translation.

But the disease affects business as well. We have no trouble smiling at the naiveté of Frederick Taylor and his stopwatch, measuring people like machines. Yet we are every bit as mechanical and naive today.

Today, it is an article of faith in many of our most successful companies that “management” is a matter of decomposing goals into a series of cascading behaviors which, properly measured and carefully matched to incentives, produce an internally consistent, humming machine. All you need is a dashboard, which is easily available in the form of widgets.

The manifestation of this belief system (codified in “if you can’t measure it you can’t manage it”) is the enormous investment in training, goal-setting, reporting, progress discussion, and performance reviews – all of them non-direct value-adding processes.  All of them are built around a behavioral view of meaningfulness, a pyramid view of behaviors, and a system for metrics and incentives.

Every training department knows to use the Skinnerian language (“attendees will learn the behaviors associated with mastering the skills of XYZ…and will be rated regularly thereafter on a four-point scale of Early, Maturing, Mature, and Master.”)

Petrification by Metrification

This is precisely the technique used decades ago by Harold Geneen, who believed in rolling up data from all his subsidiaries and managing by the numbers. Except Geneen was measuring profit margins, inventory turns and capital costs. (And it turned out it was Geneen’s outsized personality, not his system, that made it work).

Today’s managers are applying the Geneen model to manage things like trust, authenticity, ethics and vulnerability – with the same tools they apply to measuring click-through rates. There is a huge mismatch. Entire organizations – and not just Left-coast tech companies – are being managed by cascading goals and KPIs, each firm with its own acronym for the process.

This continued reduction of higher order human functions to behavioral minutiae, coupled with the rats-and-cheese-in-the-maze approach to incentives, succeeds only in hollowing out those functions. Try this thought experiment: How do you incent unselfishness?

In the words of ex-consultant and CEO Jim McCurry, all this leads to “petrification by metrification.”  You don’t get the genuine article, but a fossilized replica. It may look real, but it’s checkbox stuff.

Scaling the Soft Skills

George Burns once said, “The most important thing in life is sincerity; if you can fake that, you’ve got it made.”

Ironically, the management teams who try to apply Big Data techniques to rich, basic human interactions are swimming upstream. The right way to scale soft skills and sensitivity not only looks different than the way you incent car  salespeople, but it’s a lot cheaper and faster. It has to do with leading with values, engineering conversations, and role-modeling.

But that’s fodder for another blogpost.

 

 

 

Is Measurement the Enemy of Management?

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Growing up as a cub consultant, billable hours were without question the defining metric in the consulting industry. It seemed obvious therefore, that achieving success would be dependent on increasing my billable hours. I was hardly the only young consultant to come to this obvious conclusion.

Fortunately for me, I found a mentor who took me aside one day and explained that billable hours shouldn’t be seen as a goal; instead, I should see them as the outcome of the quality of my work. In other words, if my work was good, there would be no shortage of hours. From that perspective, billable hours were an indirect and lagging indicator of quality.

His message was loud and clear: I should worry less about my direct output metric, and focus more on the principles, behaviors, and attitudes with which I approached my work. It was, in retrospect, the most important lesson of my consulting career and one too few others are taught.

In that light, two recent blog posts caught my attention. One was by Charlie Green, in which he recounted a fable with a choice between trust and measurement.   Another was by Chris Brogan, extolling the virtues of a trust agent at LinkedIn. The coincident timing of these two posts, with my own experience, drove the title of this post.

Is it possible that, as my mentor warned, we have systemically driven a wedge between the practice of good management and the tools of measurement? Has the relationship between driver and driven been reversed? Has the metric become the goal in itself rather than the outcome it sought to measure? Has measurement become the enemy of management?

 Management and Measurement

Of course, good measurement should serve management. It has always been an important element of managing, it tells the good manager where to look although not what to do. There is nothing intrinsically that sets management at odds with measurement until the manager uses the metric as a substitute for judgment. How many companies established arbitrary targets for reductions in force in the recent recession rather than gaining a broad and deep understanding of where capacity could be reduced without damaging long-term capability?

 I’m beginning to fear however, that measurement is replacing management. Several pervasive and tectonic factors have driven the two apart. One is simply, for lack of a better term, the modularization of business. Business process reengineering, supposedly invented 25 years ago, has taught us to break businesses into many pieces, and to achieve full scale economies (hopefully at a global level) in each of them.

That kind of approach demands that each module fit neatly with the next, the same way that couplers enable railcars to effectively and efficiently hook up and create a train. The “couplers” of choice have almost always been metrics. If we can specify measurements that our suppliers must meet, then we can have the best of both worlds – customization and scale. The more modularized our businesses, the more we manage by measurement.

Question: Did the folks managing the Deepwater Horizon rig think about the revenues and profit BP would gain from a safe and successful well in the Gulf and conversely the risk of a disaster? Or did they think about the bonuses that would go along with meeting budget and timing expectations for getting the drilling done and the rig moved?

Of perhaps more direct importance is that we have simply become more short-term and reward driven in business then we were 100,000 years ago when I was a pup. My fellow consultants who obsessed about their billable hours may not have had as much long term success in their individual careers as those who paid attention to quality and long-term relationships, but it seems that they have won the measurement war. The true tragedy is that the measures that may have merit when looking at a large scale organization, may destroy trust and relationships at the individual level. Charlie wrote about the dangers of measurement focus as it relates to sales and client relationships in his February 2, Business Week article, Metrics: Overmeasuring Our Way to Management.

The dominant belief systems today in business include “maximize shareholder value,” “if you can’t measure it you can’t manage it,” and “what’s the net present monetized value of that.”  Finance is the driving function of today’s business world; in my day, that claim was held by the value producers. Too often we drive for the metric itself, forgetting that the metric is supposed to measure something bigger, deeper, more important and fundamental. To use the consulting analogy, we are all focused on monthly billable hours instead of value for the client. “Pay-for-performance” has become shorthand for lazy management. If you assume that the numbers are everything, then you don’t need to dig beneath the numbers to find out their drivers.

Actually, I suspect it goes deeper. “Pay-for-performance” is also an expression of lack of trust. It comes from an unwillingness to trust others to do the right thing in a business context; what we view as risk mitigation is in fact a form of management by asphyxiation. Managers throughout organizations know that it is the metrics that matter…the overall outcome is incidental. We have replaced “no pain, no gain” with “no risk, no loss” when it comes to developing managers and finding creative ways to add new value.

To go back to Chris Brogan’s trust agents, does your company know who its trust agents are? Does your organization support, value and reward its trust agents? These are the people who chose door number one in Charlie’s fable….choosing to have the highest level of trust while giving up the ability to have it measured. 

So a question for the readers: Has measurement become the enemy of management? Or can we have it both ways?

The Trust Reader Volume 4

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Greetings, and welcome to this month’s ebook, Volume 4 of the TrustReader. The TrustReader series announces the publication of new articles on the Trusted Advisor website.

This month, we lead with the effects over-measurement and value can have on a business. From the most recent Olympics, contest shows, and more we seem to be knee-deep in rating systems. But is it possible that the ever-growing need to rank our business practices and relationships can in fact be a deterrent?

The lead article explores this theme by looking directly at measurement itself. The other two articles reflect a similar theme; what we lose when we rely too much on abstract, quantified approaches to business.

In this edition of the Trust Reader Volume 4 we feature:

  • Metrics: Over-measuring Our Way to Management
  • Why Value Propositions are Overrated
  • The Point of Listening is Not What You Hear, But the Listening Itself

GET THE TRUST READER VOLUME 4 HERE

I welcome your comments, and hope your entry into Spring is as welcome as the warmer weather.

Metrics: Overmeasuring Our Way to Management

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Contrary to the popular saying (“if you can’t measure it, you can’t manage it”), the ability to manage is not dependent on the ability to measure. 

In fact, overmeasurement has some serious downsides.

TrustMatters readers have heard this theme before, but I’m happy to say this time it’s being published in the Management Channel at Businessweek.com. 

Read the full article at: Metrics: Overmeasuring Our Way to Management

And have a great Wednesday.
 

Employment Law: When Solutions Make Problems Worse

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Continuing this week’s theme of highlighting the role of the personal in business.

I was at a reception the other day, and ended up at a table with doctors and an employment lawyer. The lawyer specialized in advising corporate clients about equal opportunity employment law.

This partly means advising clients who have been sued. I asked him whether clients also invited him to make themselves lawsuit-proof, or whether the bulk of his practice was after-the-lawsuit defense. "Once they’ve been sued, they get religion and invite me in to design policies," he said.

"And it’s a helluva business. I worried at first that it would die out, but it turns out it’s the law practice that keeps on giving."

Maybe I was being a little feisty, I don’t know. But that’s where the fun started.

Managing People, or Managing Process

"It would seem to me," I ventured, "that the best way to prevent EEOC lawsuits is to be really good at basic people management: telling people the truth, face to face, about the role they are expected to play, getting great at giving and receiving feedback about how well they are or are not doing it."

"Oh, no no NO NO NO!" the lawyer responded. "That’ll get you killed in court. You have to have processes, document those processes, train on them, document that you’re training on them, and do everything short of tape-recording every conversation with every employee you have to make sure that no one’s saying something that could be interpreted wrongly.

"I tell all my clients a simple story–a small off-color joke. They laugh at it and it helps them bond with me in my presentation. Then I tell them how that joke could cost them a million bucks. It puts the fear of God in them. Employment law is the gift that keeps on giving."

When to Talk, and When to Blog

I am gradually, over my many years of experience, learning when to pick fights, and when to walk away from them. There was no point in arguing with someone I’ll never meet again over an issue I’ll never convince them about. (I was reminded of this wisdom by Judy kicking me under the table). 

On the other hand, it’s a great topic to blog about, and I hope it’ll stimulate some conversation. So let me be very blunt about my point of view.

That lawyer is the kind of pompous bureaucrat who gives bureaucracy a bad name. His intentions are not bad; not at all.  But he is a highly paid content-expert who is sowing discontent, alienating people, and creating inefficiency, all the while believing he’s contributing to our great system of private enterprise.

Harsh?  Well, here’s a few caveats.  First, not all lawyers agree with him. Second, this is an issue hardly unique to employment law. Third, there’s nothing wrong with processes per se.

But still: what I said.

Why Good Management Mitigates the Need for Process Management

I worked for two consulting firms. One had detailed employee contracts outlining things like intellectual property and non-competes; it got sued a couple times per year. The other had no such clauses and its employment contracts were 20% the length of those of the first firm. It had no employee lawsuits in 20 years.

The reason is simple: one managed by process and contract, the other by people. The latter obviates much of the need for the former.

If you treat people as objects to be controlled, they will oblige by meeting your (low) expectations. If you tell entire industries that they’ll be managed by regulation and laws, they will stop behaving ethically and do what they please until you make it illegal.

If you start making process compliance the guts of employment law, you lose the very human relationship that makes employment work. The problem lies not so much in the law as in ignorance of how human relations work.

Lawyers have no training in management. No fault there, neither do doctors or rabbis or engineers. But managers do. They are supposed to manage. When they default their management tasks to lawyers, they get what they deserve–employees who are suspicious of the motives behind their communications. And the employees are not wrong to feel that way.

Managers abdicate personal management at their own risk. The cost of running bureaucratic compliance operations to compensate for a failure in basic supervision is massive.

The answer is not more bureaucracy–it’s more truth and honesty, transparency, and responsibility-taking.  Don’t treat people like caustic assets who might sue you unless you insulate yourself with processes.  Instead, treat them like human beings who can be developed through good management, and who will serve you well in return.

 

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.