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Buying Insurance from the Trust Bank

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The payoffEver have something you said or did misunderstood? Maybe the level of misunderstanding is directly related to the amount of trust you have built up. Here’s what happened to one of my clients:

Cheryl wanted to congratulate her long-time client Tom on his recent promotion. So she bought him his favorite whiskey and a gift bag. She put the whiskey in the gift bag herself, and personally delivered it to Tom’s office. Several days later Cheryl received an envelope containing a $20 bill along with a note from Tom’s assistant attached to the cash saying, “We found this in the bag. It must have been a mistake. P.S. Tom says thanks.”

Cheryl was mortified. Being in the construction industry Tom was extremely sensitive to anything that might appear to be inappropriate. Cash in a bag with a bottle of whiskey could qualify. Cheryl had no idea how the $20 bill got into the gift bag, although she suspected that she may have been holding on to the $20 bill as she was packing the gift bag and it dropped in the bag along with the bottle. She called Tom immediately after receiving the note, but he was traveling. She knew she couldn’t address this issue in an email.

When Tom returned to the office the next week, Cheryl and Tom met on the project they were working on. Cheryl thought Tom might have forgotten about the $20, but at the meeting, she mentioned the bottle, the money, and her suspicion of how the $20 got in the bag. She expressed her fear of what it might have looked like. Tom had forgotten about it, but he appreciated her raising it.

Because of their relationship, Cheryl had accumulated a lot of trust in the Trust Bank. Tom did not even think anything was wrong or inappropriate, because he trusted Cheryl. If we looked at his reaction, we would say that he didn’t question her motives or veracity, because he trusted her – trust that was built up long before the incident occurred. In fact, when Tom mentioned the $20 to his wife, she said: “It’s Cheryl – it must have been a mistake.”

So we have a happy ending. This may seem like a dull story. No great conflicts. No cleaning up a horrible mess. Cheryl and Tom had a good laugh – and joked that even if Tom could be bought, a $20 payoff wouldn’t cut it. And with that discussion, both deposited more currency in the Trust Bank.

Fixing What Ails Wall Street: Ethics, or Incentives?

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ShrugThe financial and insurance sector of the US economy has more than doubled  since the 1960s. Compensation levels in that sector have way more than doubled, and in way less time. Finally, the finance sector is highly responsible for the recent massive losses in asset value, with the attendant down economy, unemployment, etc.

If you’re with me on those three statements, then you probably agree that something is wrong on Wall Street. But just what?

Are warped incentives to blame? A Gordon Gekko-ish culture of greed? A mugging of economic thinking by anti-Keynesian theorists? An over-emphasis on competition? A failure of regulation?

(And let’s not go to the ‘we need to be less trusting, because there are bad people out there.’  We do not need more suspicion in the world today; we need more trusting, and more trustworthiness of those who would be trusted.)

If we force it, most answers boil down to two: it’s either the greedy financiers’ fault, or the fault of the system to restrain natural greed. Let’s look at some recent examples of both views.

In This Corner: The System’s to Blame

Eric Dash, in the blog Economix,  does a fine job running down several reasons why pay packages got so out of whack with performance. He focuses particularly on moral hazard and timing issues. If you can gain big by risk, but can’t lose, then the game is rigged against the public. And if you take the money and run, then no one can hold you accountable.

But in the end, Dash suggests culture is key—the culture of correctly linking risk to pay–or not–encouraged by those at the top.

It seems curious to cap a structural critique of the industry with a conclusion that is based on a human-nature sort of thing like culture.

Curious, but rather right.

And in This Corner: It’s Ethics That Are At Fault

Over at Investment Business Daily, Gary Stern reports that companies are cutting back significantly on ethics training. “The decision by some firms to cut back on ethics training may haunt them,” reports Stern. “Analysts say creating an ethical culture can help sustain long-term growth, not hamper it.”

Interestingly, Stern also cites a strong culture as the ultimate source of ethical behavior.

But the quotes above illustrate a weakness at the heart of much of the arguments for ethical behavior. They often try very hard to prove that ethical behavior is profitable behavior, hence we can have our cake and eat it too.

Problem is: if the ultimate test of ethical behavior is profitability, then it makes a complete hash of ethics.

I happen to believe that for the most part, behaving ethically is indeed profitable; the longer the timeframe and scope, the easier it is to prove this (sustainability initiatives are a good case in point). But to use bottom-lines to justify ethical behavior is hugely back-asswards.

The Worst of Both Worlds.

What happens when we combine a reliance on structural issues with a casual view of ethics that defines moral behavior in terms of profitability?

A striking example, it seems to me, occurred this summer in healthcare legislation hearings. Representative Stupak of Michigan asked  three health insurance industry leaders whether they would commit to ending the practice of rescission unless there were fraud or misrepresentation.

They fact that the companies refused to so commit is not surprising, or even troubling, to me. There could have been valid business reasons not to knuckle under to such a public hijacking.

But then the leaders opened their mouths to explain why they would not so commit.

“No sir we follow the state laws and regulations,” said one leader.

“No, I would not commit. The intentional standard is not the law of the land,” said another.

Allow me to translate. ‘The reason we won’t stop nailing innocent people to the wall and rescinding life-saving policies for trivial reasons is—because it’s not illegal for us to keep doing it.  And we’ll keep doing it until you stop us by making it illegal.’

What?

I suggest that’s the result of decades of decay in ethics. We have come not only to over-rely on structural solutions, but have produced business ‘leaders’ who blithely abdicate any ethical responsibility in favor of laws passed by state legislatures.

How can business be trusted if it has no ethics beyond a lawyer’s opinion?  What kind of ethics is that?

The law should be based on ethics, more than ethics should be based on the law. Law schools, business schools, corporate boards, industry and professional associations should all be ashamed that they have lost track of the difference, and have got it thoroughly backwards.  They need to be held accountable for encouraging this kind of bland monstrosity.

What’s really wrong with Wall Street? Not misaligned incentives, but misaligned views about who owes whom: it’s business that has an obligation to society, not the reverse.  Apparently not everyone got the memo.

 

 

Is Trust the Answer to Your Short-Term Memory Loss

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concentration and focusI think I’m more forgetful these days. Names, next steps, appointments; calls to return, to-do’s.

Is it due to age? Perhaps; every year I seem to get 365 days older.

Is it due to the complexity of the world? These days, 6 degrees of separation is so five minutes ago. It’s at least down to 4 degrees, closing in on 3.

Is it the ubiquity of mechanized devices to substitute for memory? Could be: kids who learn math on calculators forget how to do addition, and with wireless to-do lists integrating with everything, we have no good reason to exercise our memory muscles—maybe they atrophy?

Maybe. But there’s another explanation.

My doctor put it this way:

The brain circuitry for cognition is fairly complex. Before you can talk about memory, you have to talk about the whole process that precedes it.

If memory is flawed, sure, your memory recall capability can be to blame. But so can your memory storage capability—perhaps it slowly degrades.

Further back in the chain, maybe the storage placement function is to blame—memories are getting stored in the wrong places.

But most likely [says my doctor] it’s that the event was only weakly impressed on us in the first place. The photo was under-exposed. The signal to noise ratio was too low.

In other words, if you’re not paying full attention in the first place, your memory recall is doomed from the outset.

Multi-Tasking is Mugging My Memory

I think he may be right. Multi-tasking may be mugging my memory. I certainly see that happening in others—sitting in classes with blackberries and open laptops. Texting and phoning; reading and watching TV and texting.

A close friend made the same suggestion to me just a few days ago. Since then I’ve been making half-hearted efforts at stopping my multi-tasking addiction, and what I’ve discovered is–I’m pretty hooked.

Interestingly, paying attention is also at the heart of trust. Trust is inherently a relationship: a relationship between one who trusts, and one who is trusted.

At the heart of any relationship is the attention that must be paid, one to another. If attention is high, the relationship is strong. If it’s weak, then so is the relationship.

Why Focus is Central to Trust and to Memory

What is it about paying attention that makes it critical to both memory and to trust? I think it is the same phenomenon. Relationships, like events, only make impressions on us if we are open to them.

If I’m not paying attention to you, you can’t make an impression on me. And of course I won’t trust you. Which means you will not be trusted, and I will miss out on the experience of trusting. Bad stuff all around.

But if I pay attention to you, I will notice things about you, as well as being open to you. I may come to trust you; and you, being noticed by me, may behave in a more trustworthy manner. We allow ourselves to be paid attention to. Good stuff all around.

I think I’ll start small; batch processing email rather than staying constantly on the grid. Cold turkey is kind of frightening.

Who knew that fixing my multi-tasking might help my memory as well as my relationships?

I’ll keep you posted. If I remember.
 

How to Be a Self-Deprecating Horn-Tooter

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shucks meowcheese.comI recently ran for a seat on the condo board of the brand new community I live in. I lost. In front of about 60 people.

My reaction was a mixture of gratitude (“I think I just got spared a LOT of work”), huffiness (“How could they pass ME over?”), and a dash of embarrassment (“Oh no, I think I just looked like an IDIOT in front of a large group of people”).

In reflecting on what worked and didn’t about my little platform speech (I had three minutes to pitch myself to the group), I realized there are some important lessons about trust-based selling to tease out of my defeat.

What Worked

My dominant strategy was to lead with high Intimacy and low Self-Orientation, and to differentiate myself a bit. How? By telling them first why they might NOT want to elect me. I shared openly that I’m a first-time home buyer and had never before been on a condo board – in fact, I had just made my first condo payment ever. My self-deprecation was effective, I think, in that it got a good laugh and set their expectations about what they could and couldn’t count on me for (couldn’t: Board/home ownership expertise; could: honesty and lightheartedness).

What Didn’t Work

There was one thing I didn’t do that left my constituents understandably less than confident in my abilities. I was too humble. I fell into the trap that (sweeping generalization coming) many women do of being tentative about tooting my own horn.

Sure, I told them a little bit about my professional background (close to 20 years in consulting, the latter half with an emphasis on teaming and relationship skills, which lends itself well to community-building endeavors). But I didn’t let them know that when it comes to starting something up (new community, new board), I’m your woman.

I didn’t tell them that eight years ago I launched a business that now boasts a client roster of global companies that generate millions and billions in revenue each year. I didn’t tell them about the community service program I created that, within six months of its inception, was given a prominent mention in SELF magazine and then acquired by a national non-profit.

(Even as I write this, my brain is screaming: Enough with the tooting horns already!)

Bottom line: I didn’t think about what would be of value to them, link that to what I brought to the table, and say it out loud.

What I’d Do Next Time

Of course, this is all speculation; I might have lost because they didn’t like what I was wearing – who knows. I think it’s safe to say, though, that next time I’d be more effective (and certainly less huffy and embarrassed) by doing the following:

– Take five minutes to prepare. Think about what my fellow condo association members might really want in their first set of officers, and know what the link is to my experience and skills.

– Lead with the same opening – why you don’t want to elect me. It’s honest. Plus it’s a little contrarian, and I like that.

– Toot toot toot away. Confidently, succinctly, matter-of-factly, with an emphasis on the aspects of me that directly address their interests and concerns.

I’d leave them with a more complete picture of me–not one that’s either over- or underexposed.

Seems to me these guidelines apply no matter who we are, what we’re selling, and to whom we’re pitching the sale: prepare and be honest about both your strengths and your weaknesses.

That and choose your clothes carefully.
 

Hard Solutions to Soft Trust Problems

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I write a lot about how trust is a soft solution to hard problems—like profits, revenue, loyalty, and retention.

Trust itself has some ‘soft’ and some ‘hard’ components. In the Trust Equation,  we usually think of Credibility and Reliability as the “hard” aspects of trustworthiness. And we think of Intimacy and Self-Orientation as being the “soft” aspects.

But it’s messier than that. For example, a firm handshake and look in the eye go to enhanced credibility, yet they have nothing to do with credentials or expertise.

And then there’s a really big one.   Sometimes, very ‘hard’ actions can dramatically affect the ‘soft’ emotions of our clients, customers, employees.

Take my friend R.

How Weak Business Processes Hurt Trust

He shared with me an email exchange with the customer service folks at American Express. He has an Amex-CostCo card that offers rebates for various categories of expenses.
As he puts it, “I trust Amex to get the rebate classifications right.”

Until, that is, he checked and noted a number of vendors who had not been picked up in the rebate program.  They included such obscure names as Southwest Air, Exxon, Red Lobster, and Marriott.

R. wrote Amex a nasty-gram, and heard back (quickly) with a number of reclassifications. However, Amex also said they didn’t know of Red Lobster or Java City, and would R. please give them more information.

This had the unfortunate effect of upsetting R. more, not just because they didn’t know Red Lobster, but because they didn’t try to look it up. As R. put it, “this made me doubt your past statements.”

Sure enough, he went back and found numerous previous missed classifications. He asked Amex to make these changes and further investigate prior months and years on their own. 

In response to this email, he received an apology and a $50 rebate.

Which, again, didn’t mollify him, but had the effect of getting him even more upset.

And it’s not hard to see why. When you’re talking about money, and when you have as good a reputation for customer service as Amex does, customers come to expect, if not perfection, then something not far off. A series of ‘close enough’ efforts, capped by a weak attempt to buy peace, is ineffective—even brand destroying.

The customer just wants things to work the way they should. You buy a BMW, you expect it to work—and well. You go into McDonald’s, you expect the experience to be predictable, on-time and flawless. You enter into a program with Amex, you expect them to get it right. Not close; right.

The effort to get things right is not rocket science. It is just very solid blocking and tackling; making sure your systems and procedures and processes are as airtight and foolproof as you can get them. It’s the “hard” stuff—there is nothing squishy about nailing down business processes.

But look at the result. R. may or may not have been as ticked off as you would be. But your response, like his, would surely be an emotional one.

What Starts as Bad Execution Gets Interpreted as Bad Intentions

The truth is, we impute emotional intentions to hard actions. We see ‘hard’ behaviors, and we impute ‘soft’ motives—resulting in very intense ‘soft’ feelings.  You don’t just engender ‘hard’ trust by doing ‘hard’ things. You can create ‘soft’ feelings by ‘hard’ actions, just as you can create ‘hard’ results through ‘soft’ actions.

Perhaps ‘hard’ and ‘soft’ aren’t really all that useful. It’s all part of a package. If we are trusted, and if we trust—legitimately—everything gets a lot better. It’s all part of a package.
 

I Should Have Said…

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ContemplationEver leave a conversation and think: “I should have said…”?

A coaching client of mine who is a lawyer related to me how he realized that he had missed an opportunity for new business during a meeting with his client. Here is how the conversation went:

Lawyer: My client and I talked about the business and his family.
Me: What were you thinking about when he mentioned the opportunity you think you missed?
Lawyer: Actually, I was thinking about a deposition I had to take later that day.

Charlie Green’s recent blog “Does Multitasking Ruin Your Ability to Multitask?” addresses how multitasking – while on the phone, watching TV, taking in scenery – affects our ability to get things done effectively. Isn’t it also multitasking when one is ‘just’ thinking about something else?

And wouldn’t it be interesting if our minds and our bodies were in the same place at the same time? Perhaps we would process and act on information in real time, and not have to say "I should have said…" Then again, that’s where we sometimes find ourselves.  Then what?

I suggested a simple fix for the lawyer’s lack of mindfulness. He could address the issue head-on by applying the skill of Name it and Claim It.  Say to the client: “When I left your office, I realized that you had a concern you might have wanted to discuss, and I missed it at the time.   Is that something you’d still like to talk about?”

What about you?  Do you have something you’d like to talk about – an "I should have said" story, and how you fixed it?

They’re Just Not That Into You

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I remember an old, old Peanuts cartoon. Charlie Brown is watching Lucy and another girl from afar. He approaches them: “You girls were talking about me, weren’t you!” he says accusingly.

“No we weren’t,” the girls say with a smug expression. Charlie Brown reverts to his earlier distant position, and waits a bit. Only to return once again, and ask: “How come you girls never talk about me?

We All Act Like We’re the Center of the Universe

A basic human presumption seems to be that we are, each of us, the Center of the Universe (COTU).

I recall reading about a Brazilian native tribe largely insulated from the rest of the world. Some westerners took two tribesmen on a trip to Sao Paulo, and then New York.

At their first stop, a large village of several hundred, they were a little nervous, but not intimidated. Then they made it to Manaus, Sao Paulo, and so on. At each stop, they became more shut down. When they finally returned to their part of the Amazon, they were permanently shocked out of their beliefs, and were not much the better for their education.

The Chinese call their land The Middle Kingdom. World maps in the US have, guess which country at the center? Not the same country as with maps sold in, say, France.

Years ago I read a study of students and professors. The study asked students how much time they spent thinking about the professors (not much), and how much time they thought the professors spent thinking about them (a lot,the students figured).

The professors, asked the same questions, said they didn’t in fact spend much time thinking about the students, but they were sure that the students, of course, spent lots of time thinking about them. Wrong again. Center of the Universe.  COTU all over the place.

On a more cosmic scale, it was only recently in history that we could as a species countenance the idea that the universe might not revolve around planet earth. And as ontogeny recapitulates phylogeny, each child grows up thinking his family, her bedroom, is probably the center of the universe.

Some of us—some a bit more than others—escape from the tyranny of self, but only just a little bit. We get angry, resentful and afraid—basically because people don’t behave the way we would like them to. After all, aren’t we the center of the universe?

We’re Not the Center of the Universe–Fortunately

Of course, we are most assuredly not. All those would-be subjects of ours aren’t paying us homage—basically they’re just not that into us.  They pay us about as much attention as we pay them (embarrassingly little, and please don’t tell anyone).

But there are two great causes for optimism in this observation. First, since most of humanity doesn’t really concern itself with us (or give a damn?), we are quite free of the bondage of others’ opinions. Our slavery is of our own creation.  We hold our own keys to freedom.

Second, once we see that others have the same uni-centric disease that we do, we can lighten up a bit and reach out over the 50-50 line for a touch of human contact.

Yul Bryner once said, “We come into this world alone, and we leave it alone; and if someone offers you kindness along the way, you don’t spit on it.” And, by and large, we don’t.

Bryner’s is the minimalist version. The maximalist version is that if you touch someone, you help to free them from their own self-obsessed bondage. By reaching outside yourself, you initially delight them; but quickly that turns to teaching by example. You show that it can be done, and you role-model the benefits of doing so.

If you live in the space that says you’re the center of the universe, people’s orbits tend to fly away from you. But if you reject that belief, then people become attracted to you; oddly, you become (directionally) the center of much more.  They trust you.

If  you think this blogpost isn’t about business, please think again. Think of what it means for sales, customer service, negotiation, contracts writing, supply chain management, marketing, advising, accounting, and customer engineering.

You are not the center of the universe. What a blessing.  Go pay attention to someone else.

Hire for Trustingness, Train for Trustworthiness

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You may know the HR saying, ‘Hire for attitude, train for skills.’ Our own Sandy Styer reminded me of that the other day.

The reminder came at an opportune time, as I was reading Eric Uslaner’s  excellent 2002 book The Moral Foundations of Trust, a book I’m embarrassed to say I haven’t read until now.

I’ve written before that trust is an asymmetrical relationship between one who trusts, and one who is trusted. (Most recently, in Why Trust is Assymmetrical, and What that Means for Trust Strategies).

Since 2000, when The Trusted Advisor came out, I have autographed my books with the simple phrase, “May you trust—and be trusted.” They are not the same thing.

Trust, Trustworthiness, and Trusting

Uslaner writes mainly about trust. Steven Covey Jr writes mainly about trusting. I have tended to write mainly about trustworthiness, and something about the interplay between the two (see The Dance of Trust.)

But I have to confess, the insight expressed in the title of this blog didn’t really come to me until I connected the HR insight and Uslaner’s work.

Uslaner eloquently makes the point that there are two kinds of trust. There is the kind you read about every day in surveys and headlines about ‘trust in Wall Street down last month,’ or ‘most trusted brands decline compared to internet,’ or ‘Obama’s trust rating down 10 points in 3 weeks.’   That kind of trust is pretty short-term, situational, and closely resembles things like reputation, brand image and customer loyalty.

There is another kind of trust: what the academics call social trust. That kind of trust is literally learned at home in our childhood. It doesn’t change rapidly or easily, is maintained in the face of specific events; it is, as Uslaner so correctly claims, in my humble opinion, a moral value. And it is that kind of trust–or its absence–that undergirds civil society. 

Hire for Trustingness, and Train for Trustworthiness

How does one become trusted as an advisor, a salesperson, and internal advisor, a consultant? The short answer is: be trustworthy. How do you do that? Read my blogs and articles for the last 2-3 years, or buy my books.

But how do you create an organization that lives on trust? How do you create a trustworthy people-creating organization? How do you lead and manage a business that runs itself on trust principles? 

There are a number of answers, but it may be that number one in that list is: hire people who learned that deeper attitudinal moral value of trust at the age of 3 or 4. Hire trusting people. Hire people who know how to trust, and are not afraid to do so.

Hire people who treat trustingness as a moral value. Because that is hard to teach.

Get an organization full of high-trusting people, and you have amazing potential. Such people can quickly ‘get’ the skills of trustworthiness. By being surrounded by others they trust and who trust them, they get a lot done.

By contrast, high-trusting people may not be changed by low-trust organizations—but they’ll leave.  And low-trust people likewise may not be changed by high-trust organizations; but they’ll be a drag on things.

I’ll be writing much more on this. For now, the catch-phrase is:

Hire for trustingness, train for trustworthiness.
 

What Clients Really Want

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In a sales workshop for lawyers that I recently facilitated, a participant “role-played” a potential client. Together, we developed a scenario based on a business owner he knew well.

During this role-play, his fellow workshop participants sat one by one with the potential client to have a business conversation. Their goal was to be retained as his lawyer.

His goal as the client…well, he didn’t really know what his goal was. In character, he had a lot of potential legal issues that he saw as business concerns, without recognizing the legal implications.

After the role plays were over, I asked him what it felt like being in the client’s chair.  His response – “I wanted to feel like they cared about ME.”   Turns out, while he did care about his own clients, he did not fully recognize the importance to the client of feeling cared about until he sat in the client’s chair, himself.

That discussion reminded me of a program I co-led at a law school with the former General Counsel of a major US company. What did this executive want from his outside counsel?  To “feel the love."  His words.  And NO – there’s no oxymoron here.  Lawyers have feelings too!   He meant – show me that you value the relationship in addition to providing superior service.

Competence and creativity and even superior service are just the ticket in the door. Without that, the professional likely wouldn’t be or stay at the table. But caring can be the great differentiator, and a key to being a trusted advisor.

Changing chairs, even just to practice or see what it feels like, makes empathy come alive and shows what clients really want. 

Deposits and Withdrawals at the Trust Bank

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I’m going back and re-reading Chris Brogan and Julien Smith’s excellent new book Trust Agents.  At #25 on Amazon’s sales ranking, it’s “only” at 425 tonight. Look for a review upcoming on the book from this blog.

One of (many) points it re-emphasized for me was the nature of trust value creation.

How often have you said something like, “I can’t ask that question, or discuss that topic, or have that conversation—we haven’t established enough of a trust relationship yet.”

Maybe you think of trust in the way you think of deposits at the bank: you need to make enough deposits before you can make withdrawals.

But trust relationships only follow that metaphor up to a point. Trust is, after all, a relationship; it takes two to tango. One-sided “deposits” don’t build a relationship–they make a relationship uncomfortable.

If all you do is do favors for someone, you don’t create trust—you create guilt. In order for trusted relationships to work, you need to allow the other party to discharge some of the accumulated obligations that you create by being trustworthy and trusted.

If you allow the other party to do you favors—to trust you in turn—you actually deepen the relationship. Asking someone a favor—far from drawing down on deposits at the trust bank—actually builds the net trust between you.

It’s an issue of balance between deposits and withdrawals, and of activity in the account. If the balance between deposits and withdrawals is roughly equal, that’s good; gross imbalance is not good. And the level of activity has to be maintained; a stagnant account negates all the deposits.

Yes, it’s good to make “deposits” in the “trust bank.” But withdrawals are equally important. All trust “accounts” are truly joint accounts. Both parties have access to it, and both parties must play their roles.

If they do, then double-entry bookkeeping does not apply to trust accounts. Some other law of multiplicative value applies.

The trust bank operates by those multiplicative laws.