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To Live Outside the Law You Must be Honest

Bob Dylan long ago surpassed his namesake Dylan Thomas in fame. His lyrics grace the lists of most popular lyrics of all time; my favorite is “the ghost of electricity howls in the bones of her face…” from Visions of Johanna.

Some lines are more than just poetically evocative – they also hint at serious truths. One such line is this: “To live outside the law, you must be honest.” The lyric is from Absolutely Sweet Marie, from (IMHO) his greatest album, Blonde on Blonde, recorded in New York and Nashville in 1966. As with all Dylan songs, who knows what the artist meant – he’s not talking – but here’s my take.

It’s easy to color within the lines. It’s easy to paint by numbers, fill in the check boxes, meet the specs and follow the regulations. In short, to follow the law. But when it comes to issues like trust and ethics, balancing social responsibility and profits, navigating between government demands and consumer demands – it’s not enough.

It’s tempting, taunting, tantalizing, to look to the law (or corporate guidelines, or regulations) for guidance when faced with a difficult issue in client relationships, customer satisfaction, taking responsibility, or ethical issues. It’s also a copout.

Such issues demand a higher order of resolution. When faced with a client demanding to know the truth about some matter, how much truth do you share? The ‘law’ will clearly tell you what truths not to tell; and if you want to argue from omission, what truths are therefore not restrained. But your client – or your constituencies, or your legacy – isn’t going to be satisfied, in part because all you’re doing is citing ‘the law;’ you’re not taking any responsibility.

Being Honest, Being Principled

In this situation, I’m equating “be honest” with “be principled.” Principles apply to more than just honesty, but honesty will do fine as a stand-in for other principles. The point is – you’d better have something more than chapter and verse at hand to satisfy a demand for trust or fairness, whether from clients, employees or society at large. The statement “but it was legal” doesn’t cut any mustard in the higher courts of human interaction.

If you’re looking to be trusted, compliance is de minimis; by itself,  even inflammatory. “Sorry, that’s the law” is only slightly more satisfying than “Sorry, that’s our policy,” or, “Sorry, that’s not how we do things around here.”

Instead, you need principles – rooted in human nature and human relationships. Principles like service to others, or collaboration, or transparency, or don’t treat others as means to your ends. It’s principles like these that provide better guidance to tough decisions. (It’s also principles, that in the long run, must undergird the law itself for the law to be seen as legitimate.)

Living Outside the Law

To “live outside the law” doesn’t mean you’re a criminal – but in Dylan’s meaning, it does mean you’re an outlaw. You operate in part outside the narrow proscriptions of the law; you find affirmation by others of your actions by grounding them in broader principles.

That’s ultimately what makes others trust you. We live our daily lives by universal principles that others recognize as legitimate as well. We don’t trust people whose ‘ethics’ amount to rote checkbox compliance. We trust those who come from someplace deep, a place where connection to others and relationships with them are bedrock. People who feel their principles and are confident enough in them to re-compute them in every situation, as if for the first time.

If you’re going to live outside the law – and you should – you’d best be honest.

Can You Ethically Sell to a Friend?

Maybe you have a college classmate in a company your firm would like to sell to.   Maybe a neighbor down the street works for an organization you wish you could sell to. Maybe you’ve become friendly with someone in a client company for which you’d like to do further work elsewhere in the organization.

Can you sell to a friend?  Should you? And even if the answers are ‘yes’ – how do you go about doing it?

The Ethical Quandary

Let me make a guess: the reason you’re reading this article in the first place is that you feel somehow squeamish about these situations. Part of you feels it’s unfair to take advantage of a friendship for the sake of sales, that it cheapens your friendship. More importantly, you’re concerned you might put your friendship at risk by appearing to use it for your own commercial gain.

Worst of all – you’re worried what your friend might think of you.

Well, rest assured: there are some times when it’s wrong to sell to a friend – and there are some times when it’s right. There are ways to tell the difference. And there is a way to do it that minimizes any risk. And when you follow these rules, any ethical quandary disappears.

Let’s be clear. If you’re coldly using a personal connection solely to get business, but you pretend otherwise, and you don’t truthfully much care about the consequences to your friendship, then you are indeed behaving unethically. And we struggle not only to be clear about our own motives, but with how it will appear to our friend. So, how can it be done ethically?

The Brother-in-Law Test

Imagine you’re watching football (your version of ‘football,’ of course) on the couch with your brother-in-law who is over to visit for the holiday weekend. At a break in the action, he asks you, “Listen, your company works in the widget services business. We’re thinking about buying some widget services; who do you think we should be talking to, and what should we be careful about in talking to them? And should we be talking to you guys?”

Most likely, your first response is not “Boy, have I got a deal for you!” You’d probably say something like, “Well, there are several things to think about. We do widget services of course, but there are others as well in that business. The first thing you need to think about is the scale of involvement you want; and next is probably the complexity of your customer base. Depending on those answers, you might want to talk to us, or to someone else.”

In other words, you’d probably approach your brother-in-law in the manner of a trusted advisor – someone who applies his expertise with the best interests of the client in mind. You place the long-term interests of a close relationship (family in this case) over the short-term interests of your business.

And, if you knew your firm wasn’t the best choice for your brother-in-law, you’d probably tell him as much. The point is, you’re more attached to your long-term relationship with family than you are to a sales transaction at work.

So – what’s the difference with a friend?

Selling to a Friend

The correct answer is – there shouldn’t be any difference. If your services aren’t the best fit for your friend’s company, then you shouldn’t be pitching her. And if you really do have the best solution for your friend’s company – then you should be selling it, if only because you’d like to see your friend and her company do well.

The real question isn’t whether you should treat a friend like a brother-in-law – it’s why you would treat any customer any differently?

How to Do It

Notwithstanding all the above, it can be socially awkward to sell to friends – as much for the friend as for you. Relax, you don’t have to jointly take an ethics course. All you have to do is Name It and Claim It.

Acknowledge the issue out loud, and the elephant in the room disappears. You might say something like, “Look, I realize it could be awkward for us as friends to do business; I have no intention of jeopardizing our friendship, so I’m making this suggestion very mindfully.” Or, “I initially hesitated to raise this given our friendship, but realized I’d be cutting you off from something valuable if I didn’t speak up.”

To sum it up: if you wouldn’t sell it to your brother-in-law, don’t sell it to your friend. And if you would sell it to either one, say so, and say clearly why you’re doing it. If it’s the right thing for your friend to buy, then it’s the right thing for you to sell – to your friend as much as to anyone else.

How the Best Leaders Build Trust

The following is a guest blogpost by Rick Lepsinger of OnPoint Consulting. You can connect with Rick directly at rlepsinger@onpointconsultingllc.com.  

Several years ago, tech giant Google set out on an ambitious research quest to build the perfect team. The project examined a host of factors, including team composition, management style, and task management, poring through a mountain of quantitative and qualitative data over the course of several years to identify what factors made teams successful. When the study concluded, the final results were actually quite simple.

What mattered most to a team’s success wasn’t how it was put together, how it carried out its tasks, or how quickly it worked. Instead, it came down to a single word:

Trust.

Teams in which members trusted one another were far more likely to take risks, ask questions, admit mistakes, and offer new ideas than teams with low levels of trust. Intuitively, this should not have come as a surprise. People feel more secure when they trust those around them, which allows them to focus their energy on the tasks at hand rather than constantly assessing where they stand with others.

In today’s team-driven business world, building a culture based on trust is one of the most important responsibilities facing leaders in all types of organizations. While companies may go to great lengths to establish a culture that encourages trust, it falls upon individual leaders to follow through with those intentions and bring that level of trust to their teams.

In order to build trust strong enough to endure, leaders must first understand the essential elements of trust and recognize how they relate to one another. One way to think about the essential elements is to use the Trust Equation, as put forth in the book The Trusted Advisor.

Credibility

It’s difficult for a leader to build trust if they don’t have a proven track record of achieving results and demonstrating their expertise. Team members need to see their leader as a credible source of authority and information. If they don’t, they may second-guess decisions or become disengaged from the rest of the team.

Establishing credibility takes time and effort. Team members often need to see that someone knows what they’re talking about before they can place their trust in them. Leaders can, however, take a number of actions in their day-to-day dealings to improve their credibility. Avoiding exaggerations, answering direct questions with direct answers, and offering viable solutions to problems will help demonstrate to team members that they’re committed to being truthful and focusing on measurable results.

The best path to earning credibility is through building relationships with team members over time. Establishing a reputation for honesty by encouraging transparency and admitting when they don’t know something allows leaders to show they’re committed to the team’s success and not out to bolster their own reputations.

Team members need to trust that leaders stand behind what they say and do. They should not selectively disclose information or only emphasize positives while downplaying negatives. Should leaders lose that reputation for truthfulness, they run the risk of being seen as self-serving, manipulative, or unconcerned for their team’s success.

Reliability

If leaders need credibility coming into a team environment, they must show that people can count on them to follow through on their word if they want to succeed in the long term. Unreliable leaders who make big promises but seldom act on them will quickly lose whatever trust they’ve built. Team members need to know that their leader will be there for them and will keep whatever promises they’ve made.

While it’s easy to think of reliability only in terms of tasks and official responsibilities, it can extend to interpersonal dealings as well. A leader who always does their job can still lose the team’s trust if they make a habit of brushing off commitments and not following through on smaller issues on a regular basis.

Reliability needs to be established over time, but it can often go unnoticed if leaders don’t make the work they’re doing visible to others. Regular communication and transparency are extremely valuable in building a reputation for reliability. Clarifying roles within the team also helps to establish accountability by making it clear who is responsible for which tasks.

Intimacy

By this point, it should be clear that building trust is about establishing relationships. Intimacy, or the act of communicating and empathizing with others on a personal level, is a crucial part of this process. Regardless of their position within an organization, people want to know that they (and their work) are valued. Leaders must find ways to create connections with their team members that allow them to provide the professional and emotional support they need.

Team members also need to trust leaders to be discreet with the information and issues they share with them. This is particularly important for conflict resolution and internal feedback. If employees don’t trust leaders to show consideration in handling that information, they’ll be less likely to share it in the first place, which can only make existing problems worse over time.

Building healthy intimacy in a team environment requires a great deal of effort. Team-building activities that allow people to get to know one another outside the context of work are an effective method for deepening interpersonal relationships. Leaders can also set aside time to talk to team members regularly, allowing them to voice concerns or share their thoughts. This accessibility gives leaders an opportunity to demonstrate empathy and address issues before they become problematic.

Setting up internal community pages, social media groups, or message boards can help employees connect with one another in ways that go beyond their work responsibilities. Building these connections makes it easier for them to trust one another in difficult times because they can see what they have in common.

Self-Orientation

Good leadership often requires an individual to put the interests of others first. Leaders therefore need to be aware of whose interests are motivating their decisions and actions. A leader who constantly does things to make themselves look good, such as taking credit for the team’s work or asserting themselves purely to show off their expertise, will very quickly erode whatever trust they’ve built with their team.

Self-orientation can also impact the perception of credibility and reliability.  A manager with extensive knowledge and a proven track record for success might normally be seen as credible, but if their actions suggest that they care more about furthering themselves at the expense of others, they will find it difficult to leverage that experience with their teams. This kind of self-serving behavior also makes it harder for people to see them as reliable. It’s difficult to count on someone who has a reputation for only being out for themselves.

Anyone in a leadership position is going to have their actions closely scrutinized. Leaders must be sure to take their team members into consideration whenever they make decisions. Here again, communication is vital. People are better able to accept decisions when they know their opinions or concerns were genuinely heard and considered.

Identifying Trust Issues

As Tolstoy famously observed, “Happy families are all alike; every unhappy family is unhappy in its own way.” The same can be applied to successful teams and failing teams, especially when it comes to trust. Effective teams may be structured differently, but they all exhibit the same fundamental elements of trust. Ineffective or dysfunctional teams, however, can take a number of forms, depending upon the root causes of distrust.

Many factors can make it difficult to establish trust or undermine it over time. One of the biggest warning signs of trust issues is deflection of responsibility. When no one accepts accountability for their actions, they’re sending a message that they don’t care about anyone but themselves. While this is bad enough from team members, it is absolutely toxic when the leader refuses to take responsibility because it makes trust almost impossible to establish.

Dysfunctional teams might also be riven by harmful gossip and backstabbing. Without proper intimacy and self-orientation, team members assume the worst from one another and question the intentions behind every action and behavior. Even worse, they rarely direct their criticisms at the person they’re upset with, instead sharing their negative thoughts with coworkers and undermining whatever sense of camaraderie might have existed on the team. When leaders speak ill of someone, other team members begin to wonder what might be said about them when they’re not around.

Healthy, effective teams thrive on interpersonal interactions. When team members stop relating to one another on a personal level, keeping all conversations to “strictly business,” deeper trust issues might well be at work. Effective communication requires a level of comfort. If team members aren’t comfortable communicating with each other, then they’re also likely to find it difficult working together in general. When leaders become distant and aloof, employees may begin to question their intentions or true goals.

While healthy teams celebrate wins as a group, dysfunctional teams often break down into a collection of individuals bent on pursuing their own goals. Rather than focusing on how to make the team succeed, a team member might instead focus on how to make themselves look good regardless of the team’s outcome. Leaders who become caught up in pursuing their own goals will quickly lose their team’s trust. Even worse, this behavior could very well encourage people to “save themselves” by focusing on avoiding responsibility for the team’s failures.

Establishing trust is one of the most vital tasks facing any leader in a team environment. While the talent of individual team members is obviously important, much of that talent will go to waste if the team is rendered dysfunctional by a lack of trust. Leaders must find effective strategies that leverage their credibility and reliability to facilitate better, more authentic communication. By establishing closer connections based on intimacy and proper self-orientation, leaders can avoid the damaging effects of losing trust within their teams.  

Why You Should Refer Your Competitors to Your Clients

(I dug this out of the old chest; it still holds up).

Refer your competitors to your clients in the sales process.

Yes, I do mean it. This is not a sarcastic title, or a clever trick. But I’ll warn you: your motives will affect your outcome.

Step One—check your objective. Is it:

a. To get the sale, or
b. To do the right thing by the customer.

Now multiply by 10 times – the next ten similar sales opportunities.

  • If your objective is always “get the sale,” then well before number ten, everyone will know you’re in it for yourself, short-term. You’ll have a reputation. You’ll win about the same percentage as your market share—say, 30% for sake of discussion.
  • If your objective is to do the right thing by the customer, then well before number ten, everyone will know you’re in it long-term, to help them. You’ll have a different reputation. And (can you say “paradox”?), your own success rate will get better—say, 40% or higher.

Option b doesn’t mean you’re not in it for yourself—just that it’s not your primary objective, and you’re willing to trust a longer-term process.

Step Two—admit you’re not always the perfect choice for every customer. (If this feels hard, and your market share is less than 100%, consider the implications of believing you’re always the best: either your customers are very stupid, or you can’t sell a perfect product.)

Let’s review. Your objective is to help your customer (which also gets you better sales numbers), and you admit that your product isn’t always the best.

Step 3: Therefore: shouldn’t you offer your customer informed advice about other alternatives? Shouldn’t you refer your competitors as a possible alternative?

The best reason to do this is—because it’s the right thing. But there are ancillary reasons:

  • Being willing to refer a competitor is the most direct indicator of your having the customer’s interests at heart. It makes it look like you care (note: don’t try faking this). 
  • In those rare cases where you convince someone against their better interests to use you instead of someone better suited for them, odds are that everything will unravel and you’ll regret it. Take one small loss and consider it an investment in good will.

Think this is suicidal? Try forwarding this blog to your existing clients, saying how crazy I am, and that you would never be so stupid as to point them to anyone but yourself, because…because…well, you try and explain it.

If you agree with me, and you are a buyer of goods or services, consider forwarding this blog to your suppliers, asking them to educate you regarding choices in their industry. And see how they respond.

  • The best ones have already done so. The next best will meet the test and give you some great info—be good to those suppliers, they just took a risk to help you.
  • And those who tell you there’s no need to review because they’re the best—well, you know what to do.

How do you say the words? Try this:

“We both win if you make the best decision. Given my understanding of your situation, if you haven’t already done so, you should also be talking to X and Y. If you do so, it’ll help our discussions.”

Is it a trust thing? You betcha.

Seduced by Tools and Processes

One of my favorite newsletters comes on Sunday mornings from Andy Paul. It’s called The Weekly Sales Fix. (He also does a great weekly podcast). While he focuses mostly on large B2B sellers, his thoughts this week mirror what I’ve also been seeing in smaller B2C marketers. 

The overall thought is an over-reliance on tools and processes.

First, Andy’s take on it:

I’ve been in sales for 4 decades….

We’ve all read about the various research findings that paint a dismal picture of the state of B2B sales. 

Low quota attainment rates. Falling close rates. Increased ‘No Decision’ rates. Buyers saying they find no value in their interactions with sales reps.

However, I believe that the fundamental reason these problems exist is that we have taken our eyes off the ball.

Too many in sales are trying to substitute process, methodology and technology for the fundamental and irreplaceable human connections that are at the heart of the B2B sales transaction.

The true science of selling is not about metrics. It’s about the science of mastering the human to human interaction.

Unfortunately, sales people today aren’t being sufficiently educated about the human element of sales.

The more time I spend in sales, and the more time I invest in working to help other sales people, the more clearly I’ve come to see that the keys to success at any level in our profession are directly tied to mastering a small handful of basic human behaviors.

Be human.

Ask great questions.

Listen slowly.

Deliver value.

You can make it more complicated than this. But, why would you?

Because, no matter what sales process, technology or methodology you utilize, your ability to win ultimately boils down to mastering those four behaviors to build functional and effective relationships with your buyers.

Simplicity.

Well said, Andy. Now let me apply those same thoughts to what I’ve been seeing on the smaller business side. 

I get (and I bet many of you do too) a lot of emails and LinkedIn requests that completely ignore Andy’s advice. 

  • Someone sends me a LinkedIn request; they look interesting, so I accept. Within hours, I get a message telling me about their services and suggesting a call or a meeting.
  • Someone sends me an email – it says a bit about their services, but absolutely nothing about me or my business, much less why I might be interested. Worse, they assert that they’re relevant and can help me. Worse still, they suggest a call or a meeting to explore how they can help me.

The Seductiveness of Tools and Processes

On the B2B side, the sheer power and connectedness of today’s CRM-and-related systems is impressive. As with all tech, things are getting digitized and interconnected. You can track and link to virtually unlimited amounts of things, including your own (automated) ‘content’ and customers’ responses.

The seduction is this: the belief that Because You Can, Therefore You Should. 

  • On the B2B side, because you can micro-identify potential buyers, their past behaviors, their likely interests, and monitor their reactions to anything you might put out, therefore you should do all the above. 

No, you shouldn’t. Because as Andy Paul points out, the approach touches precisely zero of the four factors Andy calls “keys to success.”

  • On the smaller business side, the seduction is that because you can easily invite me to join you on LinkedIn or ID me on a targeted mailing list and send me the equivalent of your brochure at zero cost, therefore you should do all the above. 

No, you shouldn’t. Because if your response to an invitation acceptance is to send me a pitch, you’re committing the business equivalent of asking for sex on the first date. It’s just not done. It’s rude. 

Worse, it pretty much doesn’t even work. The law of large numbers won’t help you.  If your strategy was to micro-target desirable buyers with all your great screening tools, then offensiveness actually backfires on you: not only is the potential market smaller, but your bad reputation spreads more thoroughly.      

Whether you’ve been seduced by processes or by tools, you are 

a. Not being human

b. Not asking great (any?) questions

c. Not listening slowly (if at all)

d. Not delivering value 

With great tech comes great temptation: Just because you can do something doesn’t mean you should. As Andy says, keep it simple, and keep it human.

Don’t Let It Ruin Your Day

Is your child driving you nuts with their self-destructive behavior and refusal to listen to your hard-earned wisdom? (Alternatively, are your parents driving you nuts with their constant attempts to control and guilt-trip you?)

Is your client behaving badly? Not returning calls, not making decisions, refusing to face up to tough decisions, constantly back-sliding on your (excellent) advice?

Did one of your (ostensible) good friends diss you recently? Have they refused to apologize, and continue to evade the issue? Have you heard by the grapevine they said something more that appears to confirm their betrayal of you?

Well, I have your answer. Here it is. Don’t Let It Ruin Your Day.

Of Course, You Already Know This.

But that’s just the problem, see. You already ‘know’ it, so you think that therefore you’ve already extracted full value from the proposition. You think, ‘Yeah, yeah, you can’t control other people, it’s not me it’s them, serenity now yada yada, live in the moment – I got it.’

But you don’t  ‘got it.’

If you did, you wouldn’t be living in a constant state of resentment, stress, and worry.

One of the dominant myths of our time is that if you cognitively understand something, you have mastered it. But the brain is a very weak weapon when up against the heart and the nervous system. Knowing something and a dollar may get you a cup of coffee.  Eons of wisdom literature suggests there’s something more to it.

A closely related myth is that the answer lies in doing something. At least that gets one step beyond “understanding” – or so we think.

But the belief in action suffers the same defect. It assumes that there exists An Answer. You’re smart enough to know that The Answer is probably not going to be found in better analytics, Big Data, convincing arguments or brilliant aphorisms. So you look to the softer side – you get better at empathy, listening, vulnerability, open-ended questions and the like. Maybe The Answer lies in better behavior.

Nope, sorry. As long as you’re attached to the outcome, you’re still bound to your attachment – and the attendant resentment, stress and worry. (Medication has its place, of course, but medical-grade marijuana is just the latest non-solution).

At wits’ end, it’s tempting to think, “ah, chuck it all. I’ll just withdraw from the game, there’s no point, I’ll make friends with hopelessness. Maybe happiness lies in just giving up.”

Don’t Let It Ruin Your Day

The answer, it seems to me, is to marry the instinct for thought and action with the detachment from outcome. You should still talk to your kids (and your parents); you should still stay engaged with your clients; you should still strive to make your friendships rich and mutual.

Just don’t let it ruin your day.

The problem is not striving, and the answer is not withdrawal.  The trick is to take the best of both: keep engaging – just detach from the outcome.

Sales

Note: this is not just happy talk for your spiritual side. It also has to do – profoundly – with sales. The answer to sales disappointment is not to “toughen up” and dial more sales calls; and obviously it’s not to stop selling.

The answer, in business development as in life, is to keep striving, for the betterment of your clients and customers. Just don’t let it ruin your day.

Take pride and pleasure in the process, keep putting out good effort for your clients. Just don’t be attached to the outcome. Don’t Always Be Closing: instead, Always Be Helping.

Keep on selling: and when it doesn’t work out, just don’t let it ruin your day.

The Degradation of Trust in Marketing

 

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.

 

Trusted Transactions, or Trusted Relationships?

Justice Potter Stewart once remarked, with respect to pornography, that it was virtually impossible to define it, but, “I know it when I see it.”

Ditto for trust. It’s both a verb and a noun. Its objects are implied and contextual, as in “I trust my dog with my life – but not with my ham sandwich.”

Increasingly, we need to make explicit another dual-meaning of trust. We trust relationships, and we trust transactions.  I trust John – to have my best interests at heart. I trust eBay – to create trustworthy transactions with strangers. It does not follow that I trust an eBay customer to go out on a date with my daughter.

Much of the public dialogue today confuses these two distinctions. Is it Congress that people don’t trust? Or is it members of Congress who themselves are considered untrustworthy? To the average voter, it’s a distinction without a difference. I suspect the inability to tease them apart is itself a source of anger. But if we fail to separate them, we doom ourselves not only to nasty public discourse, but to failed solutions.

Lessons from the 2007 Financial Crisis

Back in 1970, the US mortgage industry was still adequately described by the perennial Frank Capra Christmas movie “It’s a Wonderful Life,” with Jimmy Stewart as George Bailey, president of the Bedford Falls Savings & Loan. Bailey (for he and the company were inseparable) made loans to people he knew personally.

The bank’s depositors were Bailey’s friends and neighbors. The depositors were also the borrowers; likewise, the employees. The loans stayed on the S&L’s books, presumably to term. Those who took out mortgages had no intention of doing anything other than paying them off, with burn-the-mortgage parties at the end.  No moral hazard here.

This was relationship trust. The strength lay in personal ties, cemented over time. A man’s word was his bond, and anyway you knew where he lived. His reputation was everything, at least until it wasn’t. Relationship trust served business and society well.

But relationship trust was about the only kind we had, and it had its limits.

Transactional trust in George Bailey’s world was shallow and fragile indeed. The S&L was at risk of being forced out of business by a single competitor, the evil Mr. Potter. It was at risk of the low-tech deposit processes of Uncle Billy. Most importantly, it was at risk of a bank run. It was a good thing George Bailey worked the relationship trust game well, for he had precious little else to depend on.

Trusted Transactions in the Mortgage Business 

Fast forward to 1995, Dwight Crane, Robert C. Merton and others published The Global Financial System: a Functional Perspective. A masterpiece of what sociologists knew as “functionalism,” this book laid out the case for transactional trust, viewing the mortgage business as one part of a complex and, ideally, integrated financial system.

In the chapter on mortgages, they ran down the characteristics of a system you could trust. It would have markets – markets for deposits, markets for mortgages, markets for loan originations. The book listed the costs of not having a systemically integrated system: risk of meltdowns, differential pricing within very narrow geographic regions, low liquidity, gross inefficiencies.

In short, George Bailey’s relationship-driven-trust was considered too risky, too costly, too uncreative and too unresponsive. Above all, it was too expensive. Consumers – the would-be purchasers of mortgages – were subjected to higher prices than necessary, driving up the cost of home ownership, and therefore driving down the economic livelihood of those seeking the American dream.

You simply could not trust such a system, the good professors opined.  “It’s a Wonderful Life” was now half a century old. George Bailey was quaint. (No one noticed that only one year before the 1995 book, contributor Robert C. Merton had become a Board Member of the soon-to-be-notorious little hedge fund called Long-Term Capital Management L.P.)

In business, Progress was synonymous with all these terms: systemic, low-cost, efficient, market-based, liquidity. No one was about to cast doubt on the important and positive nature of all these terms.  The academics and wunderkind of Wall Street were creating institutions you could trust.

The new trust was almost entirely cast in terms of systems and transactions. Transactions replaced relationships. Where markets couldn’t handle the job, models could. Of course, from today’s vantage point, this looks as naïve as the academics’ view of George Bailey a few decades ago.

In a few short decades, the “trust” pendulum swung from a man’s word to the solidity of a system. We went from high personal trust to high systemic trust – each extreme without the moderating influence of the other.

We Need Rich Trust

The transactional revolution in mortgage banking indeed delivered on most of its systemic promises. Markets were established, costs were lowered, liquidity was raised. But it all, as we know, ended very badly.

The confusion over trust went way beyond semantic. Alan Greenspan himself in 2008 famously said:

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.”

In other words, Greenspan thought that transactional trust would have the same sort of reputational bias that relationship trust had. He was, sadly for all of us, mistaken.

Transactional trust absent relationship trust had its own internal seeds of destruction. The absence of long-term relationships was crystallized in the Wall Street acronym IBGYBG – I’ll be gone, you’ll be gone, let’s do the deal. Just as personal trust doesn’t scale easily, so transactional trust doesn’t easily foster ethical behavior.

George Bailey wasn’t wrong, he just had no system. The professors weren’t wrong, they just assumed relationships. The truth is: we can’t afford just one form of trust or another, we need a rich mixture of both.

Well Beyond Mortgages

The mortgage industry is but one example. The electorate, reflecting it all, ends up exerting single-issue us-vs-them pressure on its own.

The polls are basically right: we do have a crisis of trust. But what crisis? It is not just a failure of morality. We cannot fix it solely by getting back to ‘family values,’ or seeking out leaders of impeccable morality. Those are, in fact, necessary conditions, but they’re not sufficient.

On the other hand, those who insist that the system is sound, it just needs tweaking, are dead wrong as well. This is not a matter of incentives needing adjustment. This is not a matter solely of transparency in markets. Those too are necessary conditions – but not sufficient.

We live in an interconnected world: transactional trust is critical for us to do live a life built on global commerce without it.

At the same time, there is no social structure or business process that can work without humans. There is no lock that can’t be picked, no code that can’t be broken. There is no inhuman system that can’t be perverted by humans.

Did anyone say Facebook? Uber? Airbnb? Zuckerberg and Sandberg today are as enamored of the potential for better algorithms to solve trust problems as Crane and Merton were about the potential of markets to unilaterally fix trust back in their day.

Trusted transactions? Or trusted relationships? Yes. We need ‘em both. Always have, always will.

The Reverse Elevator Speech: Disaster and Recovery

Trust requires that someone take a risk. Perversely, that means the avoidance of risk is tantamount to preventing trust.

One of the hardest things to do is to recognize this need in the face of mundane, everyday interactions, where it always seems that taking a risk is inappropriate.

So rather than give a mundane business example, let me do this one by metaphor.

A British account executive years ago told me the following story:

“I was going to see a potential client for what could have been an important piece of business for us. Unfortunately for me, I missed the scheduled plane by minutes, and thus was delayed by an hour. I called, and they agreed to reschedule the meeting to accommodate me.

“When I arrived, a bit flustered, the team of a half-dozen clients execs had gathered downstairs, and we all then went to the lift to go upstairs to the designated conference room.

“Unfortunately the lift was made for about four people. We all crammed into the lift, and it slowly began to climb. At that point someone – how shall I put this – well, as we English say – passed gas. The lift continued its crawling pace upward. No one, of course, said a word, nor even altered their expression. There was dead silence.

“As the doors finally opened, we all rushed to get out – all at once. And all 7 of us thereby tumbled onto each other on the floor. We all picked ourselves up, even more embarrassed, and again without saying a word to each other, made our way into the conference room.

“As I set up at the head of the room, I could feel the weight of this triple discomfort: I was late, the tumbling all over each other – and of course the ‘gas’ incident in the middle. It was all contrived to create a mutual sense of misery.

“What to do? I stood in the front of the room and said, ‘Gentlemen, little did I know this morning what a fine level of intimate relationship we should all achieve in so little time here this afternoon. I am honored indeed.”

“Well, everyone fell all over each other laughing; I had somehow managed to prick the balloon of the unspoken that hung over us like a cloud, and the rest of the day went marvelously. And oh yes, we got the sale.”

What this gentleman had done, in our nomenclature, was to Name It and Claim It; that is, to speak aloud the one thing that no one could figure out how to talk about. He did it with humor – an excellent tool – and was rewarded for the relief he caused by an appreciative relationship, and even a sale.

So What?

Charming, you think, but quite beside the point. What’s it got to do with me?

Well, as it happens, I had another conversation just last week (with, as it happens, another Englishman). He was a business development manager, tasked with what felt like an impossible burden.

“The senior partner insists on bidding a job in a sector in which we frankly have no experience. Certainly far less than anyone else. And he wants me to pretend it just doesn’t matter, or to dazzle them with bluster, or in some way to just blow through it. It’s simply not going to work, and we’ll look the fool.”

Well, yes they’ll look foolish if that’s how they go about it. They don’t recognize the relevance of the reverse elevator speech.

The solution is for the senior partner to say something like this:

“You may be wondering why a firm with so little experience in this sector is even here pitching you at all today. Certainly I wondered it! But I assure you we don’t make a habit of tilting at windmills.

“There is an angle here that I fear conventional wisdom might not point out. We’ve seen it a few times before, and it can make the difference between a run-of-the-mill project and a truly game-changing solution.

“I simply could not let the situation rest un-addressed. And that is why I am here in front of you today. Now, what we see going on here is…”

You may have picked up that there’s a ‘catch’ here.  The catch is that you actually have to have something consequential to say. If you have nothing consequential to say, then you shouldn’t be there in the first place, and you deserve what’s about to happen to you.

But if you do have something to say, the surest way to strangle it before it sees the light of day is to deny the elephant in the elevator – the lack of relevant sector experience, in this case.

Hope, they say, is not a strategy. Hoping somebody won’t notice the obvious is a strategy-killer. In such cases, not to take a risk is the biggest risk of all.

Get credit for stating the obvious, for telling the truth, and for relieving the tension that everyone feels. Put it out there. That way everyone is leaning forward on their seats, waiting to hear the idea that just might be so good as to overcome the banality of traditionalism.

Take the risk. Call out the wind in the elevator. Like a vaccination, it amounts to taking a little risk to mitigate the much larger risk staring you in the face. And you’d be surprised at how often it works.

Tackling Trust in the Tech Sector

(I’m attending #CODECON this week). Trust in digital technology is a nascent hot issue. The headlines are a target-rich environment for emerging trust issues: from GDPR to autonomous vehicles to fake news to ad tech to AI to cyber-hacking. Tech leadership is scrambling to stay out in front of the EEC, the Justice Department, and – most of all – public opinion.

Trust is not yet the crippling threat that we see in financials or pharmaceuticals; brands are still strong, the sector is relatively regulation-free, and money is being minted. But the clouds are on the horizon.  According to Edelman PR, “Trust in technology is showing precipitous decline.”  Smart leaders know not to ignore the canaries in the mine.

The usual solutions are – to be kind – all over the map. They include governance, “best practices,” re-skilling, communications efforts, transparency initiatives, compliance programs, and mission statements.

If you feel these “solutions” are all vaguely unsatisfying – you’re right. What they all lack is a fundamental understanding of the basics of corporate trust, as applied to tech.

At the root of it all: people trust people more than organizations.

Trust – the Basics

Consider three basic, commonsensical tenets of trust:

  • Trust is a dynamic relationship between trustor and trustee;
  • Trust is created when a trustor takes a risk, to which the trustee responds (or doesn’t), creating higher levels of trust (or not);
  • The strongest trust is between persons; trust in organizations by contrast is pale, or ‘thin.’

Here are a few counter-intuitive corollaries of those basic principles:

  1. Working directly on the perception of corporate trust – through PR, advertising, reputation management – is pushing on a string. Corporate messaging urging you to trust the corporation is impersonal, viewed skeptically, and weak by nature;
  2. Risk mitigation doesn’t help trust, it destroys it. All trust begins by a trustor taking a risk; no risk, no trust.
  3. The best way to create a trusted organization is to create a Trust-based Organization: one in which all persons are trusting and trusted by all those they encounter, in all their interactions.

The failure of corporations to articulate coherent approaches to trust can be traced to their failure to fully appreciate that trust is primarily personal, that it requires risk, and that it is driven by employees interacting with others based on core trust values.

A positive (or negative) personal interaction with a Lyft driver does more to create (or destroy) trust than a revised TOS agreement, ad, or app feature. Ditto for an Airbnb host, a Google technical service rep, or a Salesforce account exec.  Corporate trust is created by the aggregation of personal interactions at the platform/customer interface.

Trust Basics Applied to Tech

The tech industry, like most, has a few peculiar wrinkles. For one, tech inherently deals with inanimate, impersonal ‘things,” whether that be iPhones or algorithms. It’s an uphill battle to personalize trust.

Another signature trust challenge for tech is scaling. This typically means data capture, digitization, and algorithms-cum-procedures. Trust can also scale – but through values, not algorithms. Corporate trust ultimately rests on personal trust, which rests on personally-demonstrated values:

  • Southwest Airlines’ reputation emerged unscathed from recent disasters that would have sunk United, because its demonstrated emphasis on deeply personal interactions inoculated it against the impersonal “big company” image;
  • Facebook has a great trust advantage in that its core subject is personal relationships. But it gained a reputation as being “creepier” than Google because, once hacked by fake ‘friends’, our sense of personal betrayal is far greater than for a flawed algorithm about buying preferences.

Transparency in tech is big – but often misunderstood. Transparency per se is not key – it’s how open you are about what you’re being transparent about. Ten pages of “disclosed” Terms of Service is like the small print at the end of your bank statement – more a cause for suspicion than a gesture of openness. Tech customers – like all people – will accept a wide range of behaviors as long as they feel you’re being intentionally open about them.

What is To Be Done?

The answer is simple, albeit not easy. Create a Trust-based Organization.

As noted above, that means an organization in which the cultural DNA is rooted in individual relationships, in which people know how to be trusting and trustworthy in all their personal interactions, and in which the organization supports such traits through some specific shared values.

  • Trusting. The key skill of trusting is intelligent risk-taking. This is less about risk-aversion, and more about knowing how to be personally vulnerable and emotionally connected. The skills of empathy, listening and transparency are, to paint with a broad brush, not widely practiced in tech – but they are as key to trust as anywhere else.
  • Trustworthiness. The Trust Equation lists the four factors of personal trustworthiness: (Credibility + Reliability + Intimacy) / Self-orientation. Tech people love the equation-based formulation, but tend to focus overwhelmingly on the two ‘rational’ components of Credibility and Reliability. Yet our research shows that, in fact, the single most powerful factor driving personal trustworthiness is Intimacy. Again, not a core strength in most of tech.
  • Values. The Four Trust Principles – Collaboration, Relationships over transactions, Transparency, and Other-focus – offer a values-based beginning point for cultural transformation. There are many things an organization can do to become trust-based, but chief among them are conscious role-modeling on the part of leadership: in particular, role-modeling of the virtues of trusting and being trustworthy.

(It’s worth noting that the traditional tools of change management – metrics, KSFs, incentives – are not only not very helpful in trust, but can even be counter-productive: we don’t trust others if we think they’re incentivized to appear trustworthy just to gain personal advancement).

In sum, people don’t trust YourCo. They trust the people in YourCo, and they do so based on how those people interact with them and with all others.

If you’re serious about improving trust in your company, don’t lead with your communications department – lead with your leaders. Personally.