Tag Archive for: Sidebar: Charles H. Green

Ronald Reagan, speaking of diplomacy and the Soviet Union, famously said, "trust—but verify."

The statement never made sense to me (except as politics). If you’re going to resort to verification, you’re not dealing with trust, but with risk management. Trust without risk ain’t trust.

Something related comes to us from a fascinating interview with Stanford’s James G. March in the October Harvard Business Review. (Thanks to the 1-800-CEO-READ blog for the link).

HBR: In your film on Don Quixote and leadership, you say that if we trust only when trust is warranted, love only when love is returned, and learn only when learning is valuable, then we abandon an essential feature of our humanity. How do we lose part of our humanity?*

March: We justify actions by their consequences. But providing consequential justification is only a part of being human. It is an old issue, one with which Kant and Kierkegaard, among many others, struggled. I once taught a course on friendship that reinforced this idea for me. By the end of the course, a conspicuous difference had emerged between some of the students and me. They saw friendship as an exchange relationship: My friend is my friend because he or she is useful to me in one way or another. By contrast, I saw friendship as an arbitrary relationship: If you’re my friend, then there are various obligations that I have toward you, which have nothing to do with your behavior. We also talked about trust in that class. The students would say, “Well, how can you trust people unless they are trustworthy?” So I asked them why they called that trust. It sounded to me like a calculated exchange. For trust to be anything truly meaningful, you have to trust somebody who isn’t trustworthy. Otherwise, it’s just a standard rational transaction. The relationships among leaders and those between leaders and their followers certainly involve elements of simple exchange and reciprocity, but humans are capable of, and often exhibit, more arbitrary sentiments of commitment to one another.

March doesn’t use the word "trustworthy" the same way I do; for him, it smacks of the "verification" part of Ronald Reagan’s formula. No matter: the core of his message is that reliance solely on "consequential justification" (I love that line) strips trust of its essence.

Makes sense to me!

Today’s issue of The Wise Marketer suggests that corporate honesty will be the number one key alternative marketing trend for 2007. Here’s how they put it:

"While marketers are constantly watching for alternative methods that can give them a competitive edge in over-crowded markets, Drew Neisser, CEO for Renegade Marketing explained to us the ones that will rise fastest in 2007. First among Neisser’s observations in looking for the key trends for 2007 is the idea that corporate honesty will take centre-stage, helping brands and products recover from potential disasters…"

On the one hand, a plus for increased trust in the business world. Transparency, openness, honesty, etc.—can’t complain about that.

On the other hand—check the motives implicit in the way it is positioned. When honesty is portrayed as the best policy in order to achieve self-oriented goals, we have to wonder about the depth of trust implicit in the honesty we’re offered.

The Value of Honesty and Trust

Honesty—or trust, even moreso—built on nothing but contingent results doesn’t resonate with us much. If the only reason someone isn’t lying to me is that they might get caught otherwise, then I "trust" that person only insofar as the enforcement mechanisms are in place. I’ll make sure to stay out of dark alleys and private conversations with such a person, because—you never know.

Good motives have a lot to do with trust. Which is why the preferred mode of motivation these days—behavioral short term results linked to incentive compensation—rings so hollow when it comes to issues of trust. If you behave the way you do because you get more money for doing it, then I’ll only trust you so far.

Motives matter—fake it and you won’t make it.

I attended my 30th reunion at Harvard Business School 2 weeks ago.

I learned some trivia; e.g. the only student from the prior year (class of 1975) who took his graduation picture without wearing a tie was one George W. Bush.

More importantly—the changes in HBS are a reflection of the changes business in general took in the last 3 decades. They don’t bode well for trust, at the individual, corporate or socio-economic level.

30 years ago, HBS viewed itself and was viewed as graduating leaders of industry. Management consulting and investment banking together were the “hot” new segments in which graduates took jobs, rather than traditional industry.

30 years ago, there were a limited number of courses, with emphasis put on cross-referencing concepts among the courses. Many of the faculty had significant business experience.

And 30 years ago, most cases (remember, HBS uses the case method) personalized the manager’s role. They’d begin with something like, “As Joe gulped down his first coffee, he pondered the situation of…” and ended with, “What should Joe do? What would you do?”
3 cases a day, 5 days a week, for two years, this was the intensely pragmatic lesson HBS taught: what’s the problem, and what should you do about it?

30 years later, the percentage of graduates going to consulting, investment banking and private equity is up quite a bit—a third or more. More interestingly, the sources of incoming students are parallel—about a third now come from those same investment banks and consulting firms.

Today, HBS offers many more courses, but they are more stand-alone, with less cross-referencing—the experience is less integrated. Faculty are more likely to be professional academics—and not with degrees in business, but in other disciplines. They are less likely to have business experience.

But most interesting, Joe is reportedly gone from the cases. In his place? Structural analyses—of competitive power, economics, strategies.

HBS is a microcosm. Its view of business is less about commerce, more about competition. Less about managers, more about management. Less about relationships, more about systems and processes.

Business itself remains much the same—except for the MBAs and exec ed graduates who are being trained to believe it can be conducted through mental constructs, rather than through human interactions.

The academicization of business has been critiqued before by Warren Bennis and James O’Toole in Harvard Business Review (How Business Schools Lost Their Way, May 2005). What has gone unnoticed is that the world is starting to go in precisely the opposite way.

The biggest single characteristic of business in future is that everything is getting connected. In a connected world, a focus on competitive relationships isn’t useful. What we need is an emphasis on connectivity, trust and collaboration.

HBS needs to teach less competitive differentiation and more collaborative value-adding; less how to win supply chain negotiations and more how everyone gains by operating them as a system; less about transactions, more about relationships.
Trust is the new glue; and HBS has lost some ground in the last 30 years in teaching it.

Where’s a good place to start? You could do worse than to bring back Joe.

Update: Thanks to Martin Calle at Advertising Age  for choosing this article for the Carnival of Consumer Marketing.