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Think for a minute about the relationship between words and reality. In theory, we use words to describe reality. In practice, it goes the other way too. The words we use first affect our perceptions of reality, and then – through acting on our perceptions – reality itself.
Propaganda is the obvious example. But there’s a creeping, more insidious form of reality-distortion that has been playing out in the field of marketing in recent years.
Let me hone in on just three words: Content, customer, and relationship.
Ripped from the Headlines
Before and after AT&T’s recent US District Court victory in its pursuit of acquiring Time Warner, CEO Randall Stephenson stated on several occasions (e.g. here and here) the strategic rationale for the deal, basically:
We have direct relationships with over 120 million customers; data analytics allow us to match them to their preferred content, allowing maximum monetization.
I picked this example precisely for its banality. There is nothing incomprehensible about this statement; nothing logically or strategically wrong with it in business terms. We all understand what Stephenson means.
And yet – this statement, had it been made just 10 years ago, would have meant something entirely different. In fact, I’m not sure it would have been even comprehensible. That’s how far we have moved in terms of the meaning of words.
Content. Thanks to the cool Google Trends tool, I can tell you that interest in the phrase “content marketing” as a search term grew by 1,400% in the 8 years from July 2000 to now. With that growth came a change in meaning.
Way back then – ten years ago or so – the dictionary definition of ‘content’ was: “the substance or material dealt with in a speech, literary work, etc., as distinct from its form or style.” Synonyms included “subject matter, subject, theme, argument, thesis, message, thrust, substance, matter, material, text, ideas.”
That definition is now woefully out of date. Here’s how Wikipedia talks about content marketing:
“Digital content marketing, which is a management process, uses digital products through different electronic channels to identify, forecast and satisfy the necessity of the customers. It must be consistently maintained to preserve or change the behavior of customers.”
Today’s “content” (new meaning) is literally “content-free” (old meaning). (See how hard it is to talk about this stuff?). The relevance – and even the substance – of today’s “content” lies solely in its ability to generate changes in behavior.
“Content” no longer means “the substance or material dealt with…as distinct from its form or style.” Instead, it is precisely the ‘form or style’ that has become the arbiter of quality. If they click on it, it’s good quality; if not, it’s bad content.
Anecdote. I get about two inquiries per week from “marketers” offering to write “content” for this blog, including clickable links, for which they offer to pay me. About two thirds of them literally have spelling or grammatical errors in their (vastly impersonal) emails. Such a low bar, and yet the majority fail.
I invite the minority who can hurdle that low bar to feel free to take a shot, but that they actually have to demonstrate some knowledge of the subject of trust.
Most of them take me up on the offer to send a sample – and every single time, the drivel they send is massively content-free (old definition). It is banal, un-insightful, trivial, showing no interest in the subject matter – little more than clickbait, cadged from other people’s “content.”
The word “content” has been stripped and flipped. Not only does it no longer mean what it meant – in the case of “content,” it has arguably come to mean the opposite – what we might have called “content-free” in another era.
Customer. This word grew only 300% in relevant Google search interest in the last decade. In the same time period, the word “consumer” actually declined by 50%. I’d like to suggest that today’s “customer” is what we used to mean by “consumer.”
Merriam Webster defines the difference thusly:
Customer: An individual usually having some specified distinctive trait: “a real tough customer”
Consumer: One that utilizes economic goods: “Many consumers make purchases on the internet”
In other words, one is an individual, a person, a human. The other is an abstraction, a datapoint, a statistically refined category.
Back in the 1990s, Martha Rogers and Don Peppers foresaw a brave new world of “One to One Marketing,” in which an organization fine-tuned its responses to address the unique needs of customers, ultimately at the individual level. They talked about “Interacting with customers” individually through “mail, phone, or online communication.”
Let me ask you: If you’re one of Randall Stephenson’s 120 million “customers,” have you recently tried “interacting” with AT&T through “mail, phone, or online communication?” Do you feel like an “individual?” Or like one of many ‘consumers?’
The word “customer” – just like “content” – has been stripped of its common meaning of only a decade ago. It has become bloodless and transactional. [Note: there’s a lot to like about this: I assure you I love buying online and having interconnected CRMs that learn my desires. But I don’t confuse it with having a ‘relationship.’]
Relationship. Google Trends tells us that the popularity of “relationship” as a search term has roughly doubled in the last decade. The Cambridge dictionary suggests “a relationship is the way two or more people are connected, or the way they behavior toward each other….A relationship is also a close romantic relationship between two people.”
That is so last decade.
For Randall Stephenson (and I’m not picking on him alone, it’s true for any BigCo these days), a “relationship” means a billing relationship, i.e. we send them invoices and they interact with our billing system, in accordance with complex fine-print clauses contained in contracts.
Or it can mean “Amazon may want to construct a more seamless relationship with its millions of customers.” Hmmm…ever tried to talk to an Amazonian?
A “relationship” is at the heart of CRM software, the “single largest area of spending in enterprise software” by 2021. Yet said “relationship” is conspicuously devoid of much in the way of interpersonal connection, the essence of the old definition of relationship.
Adding It All Up.
I didn’t call out Stephenson’s last word: monetization. But it speaks volumes for itself.
For all too many companies, monetization has become the goal, the objective, the point. And if your goal is simply and solely to monetize the customer-content relationship, you will end up cheapening the relationship – precisely the opposite result of what (supposedly) was intended. This is no different from shareholder-wealth-maximizing companies of the ’80s. Treating profits as goals rather than outcomes not only ruins relationships, but ultimately ruins profits as well.
Listen, I’m not trying to make a Luddite case. I am all in favor of most things tech and business. I’m trying to point out, however, that when we subconsciously appropriate old words for new realities – and fail to notice the shift – we end up adrift.
Is it any wonder we hear so much about declining customer loyalty? Unfulfilled young people’s real-world relationships? Angst, anomie and anger in social interactions? Reversion to tribal political connections? Lowered institutional trust ratings?
Part of the answer, I believe, is that in our haste for the brave new world, we neglected to provide names for some of the old virtues and values. Yet without names, we can’t talk about them. And if we can’t talk about them, we forget them, and create a reality devoid of those same virtues and values.
Words – or their absence – really do affect the world we live in.
I spoke with BigCo, Inc. They wanted their B2B salespeople to become trusted advisors.
They felt (correctly) that greater trust levels with their customers would result in greater intra-customer market share and greater profitability. And they were right – as far as that goes.
But they then described to me their implementation plan. It consisted of breaking down the objectives into finer and finer components and matching them up with accountable business units – pretty standard practice.
As we dug deeper, a pattern emerged. The higher penetration levels, for example, were broken into more sales calls, more proactive ideas, and greater time spent up front. On the face of it, that sounds perfectly reasonable: if penetration were to increase, you’d probably see these changes in activities.
But there’s a causation/correlation problem here. Simply increasing the number of sales calls won’t do a thing; they have to be good calls. Simply offering more ideas won’t do a thing; they have to be decent ideas. Simply spending more time up front won’t do a thing; the time has to be well-spent. And simply assuming good calls, decent ideas, and well-spent time does not make it so.
This sounds perfectly obvious in the telling, but I have found that BigCo’s story (which is a composite of several clients) is common. It may even be the norm.
BigCo confused key performance indicators (KPIs) with critical success factors (CSFs). They confused correlation with causation. They confused measurements with the things being measured. And since we live in a management world that uncritically worships metrics (“if you can’t measure it, you can’t manage it”), this confusion has critical and strategic implications.
That’s especially true when you’re trying to implement a values-driven strategy – such as becoming trusted advisors.
Measurement and Management
Just because something sounds obvious in the retelling, it doesn’t mean it’s obvious when you’re in the middle of it. Case in point: BigCo’s flawed logic in their approach to trust-based selling.
Increasing penetration requires more sales calls, they thought, and they’re probably right. Their mistake lay in thinking that “more sales calls” was a cause. It’s not – it’s an effect.
“More sales calls” may be a KPI, but it’s not a CSF. It may be an outcome, but it’s not a driver. “More sales calls” is a metric. It is not the thing that “more sales calls” is intended to measure. That “thing” is something like “more high-quality interactions driven by mutual curiosity.”
This confusion between actions and measurements, causes and effects, and KPIs and CSFs is not just common – it’s becoming rampant. It’s a real issue for digital age businesses in some ways even more than old-line businesses. Let’s look at some examples.
Gaming the Numbers
We’re all familiar with the salesperson who knows how to tweak an imperfect system to maximize his commissions at the expense of, say, the company’s gross margins. “Hey, I’m just following the incentives you built in,” he might say. That salesperson seized on a metric that imperfectly measured the company’s intended sales behaviors. (The proper management response would be not to change the metric, but to insist on a higher set of principles that overrule one misguided number.)
The next time you get a customer service operator on the line, check to see whether they conclude by saying something like, “May we say that I gave you excellent customer service today?” You are experiencing a system that is driven by metrics to the point where operators shamelessly beg for ratings. The metrics have been pimped out to serve a goal other than the customer service they were meant to measure.
See for yourself. Go to Amazon, and search for books under any significant topic you like (e.g., sales). Make sure you sort on relevance. It’s amazing how many books are rated over four stars (out of five). The reason is simple: we have been taught to look for ratings. Of course, the emphasis on ratings suborns all kind of perjury, misleading comments, and even outright falsehoods.
It’s not just books. Look at the flood of “recommendations” on LinkedIn. Look at the massive follow-me-I-follow-you dynamic on Twitter and other media. Or just look at your own behavior. What do you do when a friend asks you to rate a book, promote a blog post, or recommend them? There is monstrous grade inflation in most customer-rated aspects of business today.
Much of this comes down to our obsession in business with metrics. It goes back to the invention of the spreadsheet and the success of books such as Reengineering the Corporation. Numbers-all-the-time is today’s secular business religion.
The Wages of Confusion
The “so what” is big indeed. Assume any metric, almost by definition, has to be a pale reflection of the “thing” that is to be measured. We accept anniversary gifts as tokens of our love, market share as an indicator of competitive success, and, in the case of BigCo, numbers of sales calls as indicators of trusted advisor relationships. But we all know an anniversary gift does not a marriage make.
The only way to become trusted advisors to your customers is to gain the trust of your customers. You do not cause trust by increasing the number of sales calls; rather, greater trust causes more invitations for you to call on prospects. Doing the dishes doesn’t cause a great marriage; instead, a great marriage results in your doing the dishes willingly.
Confusing KPIs with CSFs causes KPIs to be artificially inflated. We know this intuitively, and so we discount them – while still trying to get higher scores on more of those discounted-value KPI metrics. We all know the game is rigged, but we keep playing it faster and faster.
What’s at stake is nothing less than how we implement things like “better client relationships.” You don’t get there by measuring metrics and deluding yourself that you’re addressing root causes. You get there only by understanding what it takes to interact with your very human customers—and then doing it.
Do that, and the numbers will take care of themselves.
Why is it that, in today’s age of instant gratification, we feel like we never have enough time? Emails fly across our inboxes – we get instant responses. Someone reaches out via text, and we expect a reply so fast that we are caught watching the tiny ellipses flash about as we wait.
Life and technology go much faster now. Why is it then that we keep saying there’s not enough time? We connect faster; shouldnt there be more time to create trust?
The truth is – there’s still plenty of time. And it doesn’t take much.
I heard it again today. I hear it in almost every workshop I do, and in every – bar none – big company sales organization I work with. It sounds like this:
I believe in trust and relationships, but it’s a luxury problem. Here in the real world, the pressure’s on. I don’t have time to do all that nicey-nice stuff, I’ve got to hit my numbers. And even if I did have that kind of time, my clients don’t. The days of easy-going ‘what’s keeping you up at night’ conversations are over – they’ve got as much pressure as I do, and maybe more.
I just don’t have time to build trust-based relationships. Hopefully, someday I will.
But with that attitude, that day will never come. Because trust-based relationships don’t come when you’ve got plenty of time – they’re forged when you don’t have time, and have to trust someone. The whole relationships-vs.-metrics debate is based on four false beliefs. When will you get rid of them?
Myth Number One: You Don’t Have the Time
Maybe you’re old enough to remember an old ad for Fram Oil Filters: “You can pay me now – or you can pay me later.” It stuck because it rang very true – if you refused to pay for a cheap oil filter, you’d end up paying for much more expensive engine repairs later.
It’s the same here. Every phone call, conversation and meeting that you cut short to “save time” puts a label on your head. The label says, “I’m a transactional sales guy; I will never invest in my customer, and I’ll blame you for being the busy one.”
As Aristotle said, you become what you practice. If you never take time for relationships, if all you do is transact, then you become a transactor. And nobody suddenly decides one day out of the blue that they really want to have a trust-based relationship with someone who’s been transacting with them since forever.
The truth is, a little time taken now, up front, results in far more efficient use of time down the road – even just next month. Trust-based relationships aren’t just more effective, they’re more timely and less costly.
You do have the time; you’re just constantly refusing to invest it for returns in future time.
Myth Number Two: Your Client Doesn’t Have the Time
How do you know? Because they told you so? Get real. What client is about to tell you they’re not busy? They want to control their time with you, not give control over to you.
And the same logic applies: our customers are as short-sighted as we are, constantly failing to invest a bit of time up front for future gains of time. So they tell you they don’t have the time, and you believe it, and the two of you race off so as to cut the elapsed time of your transaction. And then do it all over again the next time you meet.
They have as much time or as little time as you do; and if neither of you breaks the vicious cycle, the cycle will stay unbroken.
Who should break it? That’s easy – you should.
Myth Number Three: Trusted Relationships Take Time to Create
The truth is, people form strong impressions of trust and relationship very, very quickly. Initial impressions get formed in much less than a second.
Think about someone you trust. If asked why, your first thought is not, “our trust has grown over the last 6 years.” It’s far more likely something like, “One day we were talking about XYZ and he said an amazing thing…ever since…”
Because trusted relationships are step functions, not continuous curves. They are based on events, moments, instances. Trust gets created in those moments. If you never let yourself be open to those moments, it will never happen.
Trust doesn’t take time. The only sense in which it does is the creation of a track record. All qualitative aspects of trust take virtually no time at all.
Myth Number Four: Relationships are Built on Quantity of Time
Wrong. Relationships are built on quality, not quantity. It’s true with your dog. It’s true with your five-year old child. And it’s equally true with your client.
The quality of your time matters far more than the quantity. An hour on the golf course or hoisting a beer doesn’t hold a candle to sincerely asking a difficult question, and conveying to your client that you care about the answer, and that you’re a safe haven in discussing it.
A lot of the “I don’t have time for relationships” line is frankly a cover-up for fear of customer intimacy. Invariably, the workshop participants who tell me they haven’t got time are the same workshop participants who tell me that customer intimacy is too risky, and potentially unprofessional. Meanwhile, their compatriots who understand the qualitative basis for relationships are selling circles around them.
Haven’t got time to form relationships and still meet your metrics? If that’s what you’re saying, you don’t understand how to meet your metrics. In any medium timeframe, the person with the relationships will outperform on all business metrics the person without the relationships.
And being busy’s got little to do with it.
It’s an article of faith in business that “if you can’t measure it, you can’t manage it.” The alternative phrasing is, “What gets measured gets managed.”
Nowhere are those mantras more repeated than in the fields of corporate sales and training. And at the intersection—the field of sales training—it’s beyond an article of faith; it’s more like The Book.
And yet, in my admittedly limited experience (serving mainly high-end, intangible, B2B businesses), I’ve noticed very curious things:
- Learning and development organizations want to see precise, detailed performance metrics in their sales training programs, and they request evidence of such metrics from vendors’ past client engagements.
- Those same companies do not themselves have such metrics for past training programs – and they balk at the opportunity to create them when offered.
- Those companies feel guilty about this disparity.
They shouldn’t feel guilty. There’s a reason none of them actually produces the metrics they claim to want—because the metrics they want are the wrong metrics. Furthermore, the act of measuring them is harmful.
Companies for the most part end up doing the right thing despite their “best thinking.” Like Huckleberry Finn, who felt himself a sinner for having helped the slave Jim escape to freedom, learning and development departments are not sinners at all—they’re actually doing the right thing.
In this article, I’d like to congratulate them for their “failure” and point out an alternative to the wrong thinking they’ve been holding themselves accountable to.
The Heisenberg Principle of Training
In physics, the Heisenberg Principle says that at the sub-atomic level, the act of measuring either mass or velocity actually changes either the velocity or the mass. In other words, measuring affects measurement.
What’s true at the micro-level in physics is true at the higher-order level in business training—the training of skills in areas such as engagement, vulnerability, listening, trust, empathy, or constructive confrontation. In those areas, the act of measurement affects the thing being measured. That effect can be positive or negative.
It does matter that you measure. What also matters, however, is what you measure and how you measure it – and we think wrongly about each.
It goes wrong when we approach these higher-level human functions as if they were lower-level behavioral skills. We apply the same mindset to them that we successfully apply to learning a golf swing, developing a spreadsheet, or creating a daily exercise habit.
These higher-level arenas evaporate when we subject them to the relentless behavioral decomposition appropriate for lower-level skills. Consider an example:
You declare to your spouse your commitment to improving your marriage. Your spouse is happy to hear of this decision until, that is, you declare that “obviously” you need a baseline and a set of metrics to regularly track your improvement. Still, your spouse is a team player and grudgingly agrees to go along. You jointly assign a 79.0 basis (on a 100 scale) for your baseline quality of marriage.
All goes well the first week: you are mindful of taking out the garbage, looking away from your email when your spouse speaks to you, and asking “how are you?” at least once a day—until measurement time. You then ask your spouse to rate your progress at the end of week 1: “Do you think I’ve moved the needle from 79.0? Maybe up into the 80s, huh?”
At this point, your spouse declares the experiment over, suggesting that you don’t “get” the whole concept. Oops. And by the way, you just slipped below 79.
What went wrong? On one level, it trivializes marriage to describe it solely in terms of behavioral tics like taking the garbage out, even though in the long run there is clearly a correlation. Further, focusing on taking the garbage out suggests it’s a cause rather than an effect. Finally, the frequency of focus on such things forces attention away from the true causes and drivers—a mindful attitude.
And on a deeper level, treating measurement this way confuses ends and means. A good marriage should be rewarding on its own terms. The overlay of a report card raises ugly questions: From whom are you seeking approval? And approval of what? Why, after all, are you doing this in the first place? What does “success” at the scorecard add to success in the marriage?
Gamification, so useful in more plebeian aspects of life, is trivializing, even insulting, when applied to the game of life.
Want proof? Ask your spouse.
Errors in Training Measurement
Such measurement is also trivial when applied to higher-level sales training. It’s true that to be successfully trusted as a salesperson, you need to do a great job of listening, empathizing, telling the truth, collaborating, and focusing on client needs. And if you do all of those things, you will sell more.
But the higher sales come about because you focus on the relationship. The sale should be a byproduct of a relationship – not the purpose or goal in itself, with the relationship solely a means to the sale. Focusing solely on the byproducts sends exactly the wrong message.
There are two errors you can make:
- Measuring those improved sales every week (or very frequently). Doing so proves to everyone that you really don’t care about all of that empathy and trust stuff except insofar as it improves sales. Which means you’re a hypocrite. Which means they won’t trust you and won’t buy from you. Hello Heisenberg.
- Measuring the constituent behaviors. If you break down “empathy” into various behaviors (looks deeply into client’s eyes, pauses 0.4 seconds before answering questions, uses phrases like ‘that’s got to be difficult’ at least once per paragraph, etc.), it proves to everyone that you don’t “get” empathy. You are just a mimic, and not a terribly good one at that. Which means they won’t trust you, and won’t buy from you. Hello Heisenberg, again.
Using Measurement Positively
Up until now I’ve been negative about the ways measurement is used—actually, the way we talk about it being used—because in fact, our better instincts take over and we don’t actually do these things often. But there are positive ways to measure. There are three principles:
- Pick long-term, big picture metrics. The best one for sales training is, of course, revenue—but measured over time. The right timeframe varies with the business, but less than quarterly is too much.
Other things you could measure—and there shouldn’t be too many—include account penetration, share of wallet, or cost of sales. Again, these should be looked at as trailing indicators of performance, avoiding any suggestion that they are short-term causal drivers to be tweaked. You don’t cause mindsets like trust by practicing tiny behaviors; you cause tiny behaviors by focusing on mindsets like trust.
- Substitute discussion for reports. If your only reason for metrics is to “manage” them, then everyone will intuit your bad faith—that you don’t really care about empathy, you care about winning the battle for being empathetic as soon and as profitably as possible, and you will ding anyone for not being empathetic.
Instead, have irregular but frequent open-ended discussions about the numbers. There’s nothing wrong with discussing listening techniques or examining pipeline status. Doing so is how we get better and should be the purpose of sales coaching. But by discussing rather than “reporting” and “evaluating,” you show that your purpose is indeed on the end game (engagement, trust, etc.) and not on scorecards.
- Publicize discussions as motivation, not metrics. If someone has a breakthrough in listening, use the process to celebrate and educate the organization. (Look at what Joe did, and how he did it!) This is using Heisenberg in a positive way—to publicize insights and to encourage.
The alternative—defining smaller and smaller behavioral details—whether you publicize it or not, sends the message that salespeople are being evaluated, not coached. It also says that the metrics matter, not the end purpose they’re intended to serve.
Learning and development people: stop thinking you need detailed behavioral metrics. Give yourself a break, give your vendors a break, and give your salespeople a break. Coach your staff, demand principled behavior from them, and hold them accountable. Don’t track them minutely and with an hourglass. Coach on details to get better, measure end results to show it’s all working, and communicate what’s important.
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.
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.
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.
I had a conversation with BigCo., Inc. They want their B2B salespeople to become trusted advisors.
They felt (correctly) that greater trust levels with their customers would result in greater intra-customer market share, and greater profitability. And they’re right.
But then they described their implementation plan. It consisted of breaking down the objectives into finer and finer components, matching them up with accountable org units. Pretty standard practice.
As we dug deeper, a pattern emerged. The higher penetration levels, for example, were broken into more sales calls, more proactive ideas, and greater time spent up front. On the face of it, that sounds perfectly reasonable: if penetration were to increase, you’d probably see these changes in activities.
Confusing Cause and Effect
The problem is – simply increasing the number of sales calls won’t do a thing; they have to be good calls. Simply offering more ideas won’t do a thing; they have to be decent ideas. Simply spending more time up front won’t do a thing; the time has to be well-spent. And simply assuming good calls, decent ideas, and well-spent time does not make it so.
I know, it sounds perfectly obvious in the telling. But I’ve found that BigCo’s story (actually a composite of several clients) is very common. It may even be the norm.
BigCo has managed to confus KPIs (key performance indicators) with CSFs (critical success factors). They have confused correlation with causation. They have confused measurements with the things being measured. And since we live in a management world that uncritically worships metrics (“if you can’t measure it you can’t manage it”), this confusion has critical and strategic implications.
Especially when you’re trying to implement a values-driven strategy – like becoming trusted advisors.
Measurement and Management
Just because something looks obvious in the rear view mirror doesn’t mean it was obvious when you first came up on it. Case in point: BigCo’s flawed logic in their approach to trust-based selling.
Increasing penetration requires more sales calls, they thought; and they’re probably right. Their mistake lay in thinking that “more sales calls” was a cause. It’s not – it’s an effect.
“More sales calls” may be a KPI, but it’s not a CSF. It may be an outcome, but it’s not a driver. “More sales calls” is a metric – it is not the thing that “more sales calls” is intended to measure. That “thing” is something like “more high quality interactions driven by mutual curiosity.”
This confusion between actions and measurements, causes and effects, KPIs and CSFs, is not only common, it’s becoming rampant. It’s a real issue not only for old-line businesses, but for new era businesses as well. Let’s look at some examples.
Gaming the Numbers
We’re all familiar with the salesperson who knows how to tweak an imperfect system to maximize his commissions at the expense of, say, the company’s gross margins. “Hey, I’m just following the incentives you built in.” That salesperson seized on a metric that imperfectly measured the company’s intended sales behaviors. (The proper management response would be not to change the metric, but to insist on a higher set of principles that overrule one misguided number).
Next time you get a customer service operator on the line, check to see whether they conclude by saying something like, “May we say that I gave you excellent customer service today?” You are experiencing a system that is driven by metrics to the point where operators shamelessly beg for ratings. The metrics have been pimped out to serve a goal other than the customer service they were meant to measure.
See for yourself. Go to Amazon, and search for books under any significant topic you like (e.g. sales). Make sure you’re sorting on relevance. It’s amazing how many books are rated over four stars (out of five). The reason is simple: we have been taught to look for ratings. Of course, the emphasis on ratings suborns all kind of perjury, misleading, and even outright falsehoods.
It’s not just books. Look at the flood of ‘recommendations’ on LinkedIn. Look at the massive follow-me-I-follow-you dynamic on Twitter and other media. Or just look at your own behavior; what do you do when a friend asks you to rate a book, to promote a blogpost, or to recommend them. In Dave Eggers’ 2013 best-seller The Circle (still #2992 on Amazon as I write this – another metric), there is monstrous grade inflation on all metrics in his Facebook-Google fictional internet firm of the future.
Much of this comes down to our obsession in business with metrics. It goes back to the invention of the spreadsheet and the success of books like Reengineering the Corporation. All numbers all the time are our secular business religion.
The Wages of Confusion
The “so what” is big indeed. Assume that any metric, almost by definition, has to be a pale reflection of the “thing” that is to be measured. We accept anniversary gifts as tokens of our love; market share as an indicator of competitive success; and, in the case of BigCo, numbers of sales calls as indicators of trusted advisor relationships. But we all know an anniversary gift does not a marriage make.
The only way to become trusted advisors to your customers is to gain the trust of your customers. You do not cause trust by increasing the number of sales calls; rather, greater trust causes more invitations for you to call on prospects. Doing the dishes doesn’t cause a great marriage; instead, a great marriage results in you doing the dishes willingly.
Confusing KPIs with CSFs causes KPIs to be artificially inflated. We know this intuitively, and so we discount them – while still trying to get higher scores on more of those discounted-value KPI metrics. We all know the game is rigged – but we keep playing it faster and faster.
What’s at stake is nothing less than how we implement things like “better client relationships.” You don’t get there by measuring metrics and deluding yourself that you’re addressing root causes. You get there only by understanding what it takes to interact with your very human customers – and then doing it.
Do that, and the numbers will take care of themselves.
This article first appeared in RainToday.
Trust in business has declined in recent years. One reason why can be demonstrated with a bit of math.
Assume two streams of income, with a net present value calculation for each. (I’ll use a 10% discount rate to simplify). Income stream A has a big payment in year 2 and then pays slightly more per year – but only for 5 years, after which it all ends.
Income stream B is steady and solid, giving less income per year – but lasting 8 years.
Which income stream do you choose? If you’re a dutiful MBA or financial manager, then in theory you choose B, the one with the higher NPV. In fact, in the real world, stream A is chosen far more often – for two reasons.
Reason 1. What if the example were ended after 7 years, instead of 8 years? In that case, the NPV of Income Stream B would drop to $44.72 – so presumably you’d choose Stream A, which is unchanged at $46.17.
Timeframe makes a difference. If the average time you spend in a job is less than 8 years, and you are a rational self-maximizing business person, you’ll choose a far shorter timeframe in which to maximize your performance, because that’s what you can control. And these days, it’s more like 2 years than 8.
Reason 2. In the above example, the unspoken assumption is that it is, in fact, a solitary single example. But assume there are thousands of investment opportunities out there, with very similar payoff characteristics. In which case the smart thing would be to take Income Stream A – and then sell it after two years. Then go find a new Income Stream A in which to invest your profits, and do it all over again. That way you’ll vastly out-perform either strategy, in virtually any time frame.
Or – would you?
Trust and Net Present Value
What’s this got to do with trust? Think back to Walter Mischel’s famed marshmallow study on deferred gratification. We do not trust people who have no self-will, who cannot defer their desire for instant gratification, because they are not in charge of their own desires. But that’s just one marshmallow incident; the rationale doesn’t go beyond Reason 1 above. What happens when one’s choices can be made over and over again?
That pattern – endlessly taking short-term gratification and jumping off onto a new high-then-low curve – is a very familiar one. It is what characterizes alcoholism, addiction, and it explains why junk food sells. “Just one more drink; one more cigarette; one more Frito. I’ll quit tomorrow, honest.” But there’s always another drink at hand, and cigarettes and Fritos are ubiquitous.
The connection to business? Easy. Think about the obsession with quarterly earnings. Think about Wall Street’s “IBGYBG” mantra (I’ll be gone, you’ll be gone – do the deal). Think sales quotas, weekly P&Ls, constantly refreshing online metrics for performance. A myriad of new front-end loaded opportunities for instant gratification. Running a business this way perverts strategy in favor of a series of opportunistic NPV calculations.
Business Since 1970 – One Major Trend
Biggest trend of the last 40 years? An obsession with markets. We have pursued, especially in finance, the grail of frictionless markets, believing that the Invisible Hand will save us by converting our individual selfishness into collective good.
It’s a crock. What markets have also done is encourage NPV calculations everywhere, all the time, and everything is monetized so we can compare them. There’s always another front-end loaded curve to buy into. Buy it and flip it. Invent a new business and IPO it before it goes profitable. IBGYBG. Markets – abetted by modularization and outsourcing and communications – have enabled massive short-termism in business.
The game works until the game doesn’t work. It works if you assume your grandchildren’s world will not suffer by your focus on short-term NPV enhancement. It works if you assume that a culture of instant monetization will beat Chinese strategies from a civilization accustomed to thinking in centuries. It works if you assume that long-term good is achieved by means of constant short-term optimization. But it isn’t.
Trust and Short-Termism
There’s a reason that one the Four Trust Principles is “Focus on the medium-to-long term, not the short term; develop relationships, not transactions.” It’s because trust is born from long-term commitments; the confidence that the other party is after something besides their own instant gratification. Short-termism is perhaps the most perniciously anti-trust business phenomenon of our times. We have been poisoning our corporate cultures through a relentless focus on markets, monetization, analytics and processes.
Those are not the basis of trust. A commitment to long-term principles and relationships is the basis of trust.
I trust my dog with my life – but not with my ham sandwich.
That is but one of dozens of humorous ways to indicate the multiple meanings we attach to the word “trust.” It’s remarkable how good we are at understanding the word in context, given its definitional complexity.
Who can you trust on the Internet to deliver the goods they said they would deliver (think eBay), to leave your apartment in good shape if you lease it on Airbnb, to not be a creep if you offer someone ride-sharing?
It’s tempting to look at the concept of reputation as the scalable, digital badge of trust that we might append to all kinds of transactions between strangers, rendering them all as trustworthy as your cousin. (Well, most cousins.)
Tempting, but not exactly right. Because trust, it turns out, is not reputation.
Alan Greenspan touted ‘reputation’ as the characteristic that made possible trust and free markets. He was dead wrong.
Greenspan believed that Wall Streeters’ regard for their own reputation meant that markets were the best guarantor of trust – because they would perceive their own self-interest as aligned with being perceived as trustworthy.
Unfortunately, Greenspan’s belief was probably based more in ideology than in history or psychology, as the passion for reputation was overwhelmed by the passion for filthy lucre, immortalized in the acronym IBGYBG (“I’ll be gone, you’ll be gone – let’s do the deal”).
Early Social Reputation Metrics
Think back, way back, to November, 2006. A company called RapLeaf was on to something. Here’s how they described their goal:
Rapleaf is a portable ratings system for commerce. Buyers, sellers and swappers can rate one another—thereby encouraging more trust and honesty. We hope Rapleaf can make it more profitable to be ethical.
You can immediately see the appeal of a reputation-based trust rating system. And with a nano-second more of thought, you can see how such a system could be easily abused. (“Hey, Joey – let’s get on this thing, you stuff the ballot box for me, I stuff it for you, bada-boom.”)
Then there’s Edelman PR’s pioneering product, TweetLevel. It does one smart thing, which is to avoid a single definition of whatever-you-wanna-call it. Instead, it breaks your single TweetLevel score into four components: influence, popularity, engagement, and trust.
having a high trust score is considered by many to be more important than any other category. Trust can be measured by the number of times someone is happy to associate what you have said through them – in other words how often you are re-tweeted.
According to TweetLevel, here are my scores:
- Influence 73.4
- Popularity 70.1
- Engagement 56.4
- Trust 46.9
So much for my trustworthiness.
Guess who owns the number one trust score on TweetLevel: it’s Justin Bieber. Now you know who to call for – well, for something.
The KLOUT Effect
It’s easy to poke fun at metrics like TweetLevel that purport to measure trust; but in fairness, because trust is such a complex phenomenon, there really can be no one definition. What TweetLevel measures is indeed something – it’s not a random collection of data – and they have as much right to call it ‘trust’ as anyone else does. Indeed, I respect their decision to stay vague about what to call the composite metric.
KLOUT raises a more specific question: it directly claims to measure Influence, and is clear about its definition, at least at a high level:
The Klout Score measures influence [on a scale of 1 to 100] based on your ability to drive action. Every time you create content or engage you influence others. The Klout Score uses data from social networks in order to measure:
- True Reach: How many people you influence
- Amplification: How much you influence them
- Network Impact: The influence of your network
I find that to be a coherent definition. If I’m a consumer marketer, I want to know who has high KLOUT scores in certain areas, because if they drive action, I want them driving my action.
Note that Klout doesn’t mention reputation at all – just influence. Where does trust come in? Klout says, “Your customers don’t trust advertising, they trust their peers and influencers.”
Well, I wouldn’t go there. On TweetLevel, the top three influencers are Justin Bieber, Wyclef Jean, and Bella Thorne. Influencers – definitely. People to be trusted? What does that even mean?
One problem with linking trust to reputation is that it can be gamed. One problem with linking trust to influence is that notoriety and fame are cross-implicated. Bonny and Clyde were notorious, so was Bernie Madoff and the Notorious B.I.G. – that doesn’t make them trusted.
Take Kim Kardashian. Is she influential? You betcha: her Klout score is a whopping 92. Does she have a reputation? I bet her name recognition is higher than the President’s.
But – do you trust Kim Kardashian? Well, to do what? (By the way, TweetLevel gives her a 70.1 trust score – way higher than mine. Now you know who to ask when you need a trustworthy answer; I’m referring all queries to her).
So here are a few headlines on trust metrics.
- They’re contextual. You can’t say you trust someone without saying what you trust them for. I trust an eBay seller to sell me books, but I’m not going to trust him with my daughter’s phone number.
- They’re multi-layered. Both Klout and TweetLevel correctly recognize that social metrics can’t be monotonic – a single headline number is useful, but it had better have nuances and deconstructive capability.
- Behavior trumps reputation. You can get lots of people to stuff the ballot boxes for you; it’s a lot harder to fake your own behavioral history. Trust metrics based more on what you did, rather than just on what people say about you, are more solid.
- Good definitions are key. When people say ‘trust’ and don’t distinguish between trusting and being trusted, they’re not being clear. There’s social trust, transactional trust – it goes on and on. Good metrics start by being very clear.
So what’s the link between reputation, influence, and trust? There is no final arbiter of that question. Language is an evolving anthropological thing, and as Humpty Dumpty said, words mean what we choose to say they mean. So job one is to be clear about our intended meanings.
Full disclosure: I have a small interest in a sharing economy company, TrustCloud. I have written more about the sharing economy and collaborative consumption in a White Paper: Trust and the Sharing Economy, a New Business Model.
Wouldn’t you know it – someone disagreed with me! I know, hard to believe…
But in this case, the someone was pretty interesting and had some good points to make. So please meet Erich Dietz, of Mindshare Technologies.
Charlie: Erich, welcome. Let’s jump right in. Consumers are getting surveyed to death… but how can one argue that the solution is as simple as changing the survey script?
Erich: You’re 100% right that every time a consumer turns around they are getting hit with surveys – surveys from every business they have ever interacted with. It’s a painful exercise that feeds a market research propeller head in an ivory tower somewhere who never shares what he/she knows; that’s what the problem is.
Which means I also agree with you that the solution is not as simple as changing a survey script.
Charlie: Well, now we’re getting somewhere!
Erich: This is one of those cases where dirt-simple solutions just aren’t realistic. Businesses must change their mindset – from surveying customers to engaging them.
Engagement derives from demonstrating respect for the customer’s time, showing that feedback is actually being used, and using surveys as part of a meaningful, recurring dialogue.
Charlie: So, it’s one of those mindset things: back to ground zero.
Erich: Did you really think otherwise? Me neither.
Unfortunately there will always be businesses that survey in a customer-unfriendly way. But I don’t think anyone is seriously proposing legislation to regulate or ban bad surveying.
What’s important is not how bad most surveying is – what’s important is how a smart company can take advantage of that. Let me suggest that if your business surveys the right way, then out of the 1,000 survey-invites the customer gets in a day, yours will be the one they elect to take. And that’s huge.
Charlie: That is pretty big, actually, and what you’re saying is the bad surveys actually make it easier for the really good ones to stand out.
So let’s jump to the question that begs: how does a business go about surveying the “right” way?
Erich: They increase their focus and commitment to structure, communication, and engagement. Let me start with structure.
Too many surveys are written for the surveyor; they end up long and rigid. Reduce the length of the surveys, focus more heavily on allowing customers to share their experiences, wants, interests, etc. in their own words. This is a radical change from asking the customer to conform to their rating scales or menu choices on every data point.
Transactional surveys should be no more than 2 minutes, and should set accurate expectations with the invite (e.g. “please answer 4 brief questions”).
I strongly recommend that, wherever possible, businesses compensate customers for their time. Think about ways to compensate the survey customer that can actually drive incremental revenue back into the business.
Charlie: Cool! What about communication?
Erich: When did you last feel that your feedback went anywhere meaningful? Most businesses miss the simple layup – tell the customer when they make a change based on customer feedback! You have to show customers you’re listening to – and acting on – the feedback they’ve spent their valuable time providing. Show them their time was not spent in vain.
Charlie: Common sense, even though it’s not common. Engagement?
Erich: Use surveys to enhance and deepen customer conversations. When a surveyed customer indicates service lapse, make sure the front line is empowered to follow up – personally.
Conversely, for those customers who indicated positive experiences – reach out, frequently, just to say thank you.
Charlie: Erich, those are eminently sound recommendations. If all survey designers took your advice – well, that’s an interesting thought-experiment. It occurs to me the effect would be massive. Thanks so much for taking time with us.
Erich: A pleasure, Charlie.