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March Carnival of Trust is Up!

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The March Carnival of Trust is up. 

Hosted this month by  Beth Robinson, at her blog Inventing Elephants, Beth brings above all an eclectic perspective to the subject of trust–and it shows in her wide-ranging choice of topics and insightful commentary.

The Carnival of Trust, hosted on a rotating basis, chooses the Top Ten trust-relevant posts of the preceding month–and provides trenchant, bite-sized commentaries on the posts themselves.  The result is a limited set of highest-quality content.  High content, pre-screened and with intelligent value-adding commentary.

Click through to the Carnival and see what Beth’s eclecticism brings to the subject of trust.  There are strong blog pieces here ranging from social media, to building business trust in China, to an advocate of predictability over trust, to ROI and accountability.  All of which wonderfully demonstrate the breadth of issues touched by trust. 

If you’ve got a blog post you’d like to see in that Top Ten list, feel free to nominate it.  The carnival comes out once a month, on the first Monday of each month. The deadline for submissions (see http://blogcarnival.com/bc/submit_1693.html) is always the prior Thursday.

Thanks again to Beth for hosting; drop on by for some tasty reading. 

Fixing Executive Compensation: Social Engineering, or Ethics?

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A little over two years ago I wrote a post called The Next Big Trust Scandal—suggesting it would be Executive Compensation.

I may have gotten that one right. Think of the fuss lately about corporate junkets (most recently, Northern Trust) , CEOs on private jets, etc. And of course, Obama’s proposal to cap executive compensation.

Which brings us to yesterday’s Wall Street Journal Op-Ed page, where two respected academics (Judith Samuelson, Lynn Stout) write “Are Executives Paid Too Much?”

They get a few things quite right—and one big thing quite wrong.

They suggest an epidemic of short-termism is responsible not only for compensation excesses, but for value destruction in the economy as a whole. In this they are surely right—or, to be accurate, I completely agree with them.

They also offer a simple, practical and powerful suggestion:

“Top executives who receive equity-based compensation should be prohibited from using derivatives and other hedging techniques to offload the risk that goes along with equity compensation, and instead be required to continue holding a significant portion of their equity for a period beyond their tenure.”

Well done.  But now for that Other Thing. The heart of their problem statement is:

“Our economy didn’t get into this mess because executives were paid too much. Rather, they were paid too much for doing the wrong things…. The system was perfectly designed to produce the results we have now. To get different results, we need a different system.”

No. The problem extends well beyond “the system,” and it won’t get fixed at the same level it was caused.

We cannot let business off the hook by claiming the rat maze was incorrectly designed, the cheese was of the wrong variety, or was hidden in the wrong corners. The solution does not lie (solely, or even mainly) in tweaking financial incentives, even in shifting timeframes.

The solution to egregious excesses—and to a lot more—simply must include a healthy dose of personal accountability for doing the right thing. A conscience. An inkling that society has expectations, and the power to demand that they be met. For lack of a better term, ethics.

Samuelson/Stout’s three solutions—metrics, communications and compensation structures—don’t include a simple social demand to behave decently.

What has to happen, I think, is not behavioral engineering, but shock therapy.

I am not being naïve here. In fact, I think they may be. The verbs in their recommendations are “we need new ways to measure,” “must change the ways they reward,” “need to ensure.”

The academics and the exec comp consultants are not going to force change. In fact, by treating the issue as a strictly technical one, solvable by just tweaking metrics and rules, they are actively complicit in the continued non-ethical framing of the problem.

Force is what’s needed. CEOs and Boards don’t do things because an academic says they should. Radical politicians have it right when they say, “power comes only to those who take it.”

My suggestion is for a lot of people to get really ticked off. The authors may deride Obama’s solution, but a president proposing policy exerts a lot of pressure. Columnists, bloggers, authors, short-sellers, reformers—get angry. Shareholder activists, get active. Demand accountability and decency.

As Alfie Kohn says, “monetary incentives work. They incent people to get more monetary incentives.” If we believe the only reason corporate people behave the way they do is to maximize their own personal bank accounts, then we will get nothing but more rats, moving in slightly different directions, more and more firmly grounded in nothing beyond their rat-ness.

Ironically, author Lynn Stout may understand this well, having recently written a paper called Taking Conscience Seriously. It looks good. One hopes she will allow her thoughts on conscience to more deeply infect her writings on altering corporate compensation.

 

 

Sucks To Be You

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Ever feel like being sincere–but want to hedge your bets?  To sincerely empathize with another–but not lose your hipness?

Then it’s hard to beat, “It sucks to be you.”

The phrase has been around at least a decade; it was the title of a 1999 hit record by Prozzak, and a song in the play Avenue Q.

Which is more popular: self-pity, or sarcasm?  Here are googling results for:

    “Sucks to be me”    111,000
    “Sucks to be you”    215,000

Sounds like sarcasm wins.

I was reminded of this phrase a few days by a scene in the TV show Scrubs, wherein a new intern used it in lieu of a more traditional bedside manner.  (Another Scrubs moment: Turk tries it on Carla, with not so funny results).

Here are some snarky definitions from the Urban Dictionary: 

When something bad happened to another person, it sucks to be that person.  “Your daddy is in jail for getting you pregnant. Sucks to be you.”

A phrase which expresses mild sympathy for the plight of another, while implying greater relief that those circumstances have befallen someone other than the speaker.

An expression of acknowledgement of hardship. Depending on context, can be sympathetic or taunting.

“You: My car broke down, and I have to get to the other side of the state tonight!
“Me: Damn, dude. Sucks to be you.

“Her: I totally blew my interview, and now you’re going to get the job for sure.
“Him: Ha ha! Sucks to be you!

I’m fascinated by this phrase, and I’m not entirely sure why. 

•    On the purely aesthetic side, it is an artfully efficient expression of ambivalence—in only four words, it confuses the listener as to the speaker’s intentions.

•    Like much slang, it can change meaning depending on intonation alone.

•    Like doublespeak, it can hide motives, while appearing clear.

In other words, it’s the ideal phrase for those seeking to remain ambiguous.

I have no idea whether the phrase has gotten more, or less, popular in recent years, but I suspect it’s a phrase for the times–when the times are slippery, hip, frivolous, and when sincerity is slightly out of vogue.  Like, a few years ago.

If that’s true, then I suspect the phrase is in for a decline.  The times right now are darker, less celebrating of witty repartee. In such times, snarky humor just isn’t as funny.  

We are inclined to be more frustrated, seeing that our fates more are tied to those of others. If it sucks to be you, it probably sucks to be me too. It behooves us all in such times to relearn trust in each other.

 

Regulatory Policy 2.0 – The Alternative

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[Second of a two-part Blog Post]

Yesterday I suggested that our existing 3-legged approach to regulation (separation, compliance, transparency) not only failed to prevent Madoff, but positively enabled him.

Today I’ll talk about an alternative.

Until last weekend, when the world discovered Madoff hadn’t bought stocks for 13 years (TrustMatters readers heard about it 5 weeks earlier here), the consensus was Madoff was so sophisticated no one could follow him.

Turns out sophistication itself was the ultimate scam. Madoff built a Potemkin village. He knew what a trading system and a hedge fund should look like, and gave us the appearance of one.

In fact, it was just another Nigerian Ministry scam.  Give me your bank account numbers. and I’ll make you rich. Trust me.

The SEC, like all regulators, relied largly on three mechanical approaches:

• structural separations
• compliance processes
• disclosure.

All were built around the modern sophisticated financial world. What they entirely missed was the human element of any great scam. Hide stuff in the most obvious of places. Utterly believe your own lies. Get the con to focus on your spiel while you swap the pea out of the walnut.

They missed the “man” in con man.

If past is prologue, as unfortunately it usually is, there will be a firestorm of protest and we will end up, through the best efforts of Congress, Fox News and the tabloids, with More of The Same. The same trio of regulations that Madoff manipulated. And it will cost billions and billions more in regulation and in stifled economic sub-optimization.

So what’s the answer?

Human-based regulation–beyond structure, processes, disclosure. Regulation 2.0.

Human-based regulation recognizes and embraces three human traits:

1. We live up (or down) to expectations
2. People are infinitely creative–regulators must be as well
3. Selective audits plus severe consequences both inform and deter people.

Set clear expectations. We cannot allow confusion between “ethics” and “compliance.” The phrase “but it was legal” cannot be permitted to be the end of conversation. Regulators have to continue dialogue with non-lawyer citizenry, stay in touch with norms and mores. Most important—they must have a visceral sense of the “rightness” that their agencies were built on in the first place, and unflinchingly convey that sense of mission and expectations to their industries.

Harness Creativity. Regulators can find role models in the audit profession, the IRS, and the GAO. They can look farther afield at successful police departments, e.g. New York City’s counter-terrorism operation. The ultimate objective can never be to just ensure compliance—it must be to fulfill mission.

Visiting RIA offices to review papers too easily becomes a bureaucrat’s exercise. We need regulators who think like cops, who are inherently suspicious, who demand proof, who creatively out-think the Madoff du jour. (Harry Markopolis’ testimony in Congress—the second part—gives excellent examples of this, epitomized by the simple, “is something funny going on around here? Here’s my card—call me if you see anything suspicious.”)

Selectively audit, severely penalize. Auditors and the IRS have excellent track records doing selective audits. You don’t need to examine every book—just let every bookkeeper know that their books might be the ones examined next.

Combined with the public announcement of severe consequences, this approach both tells the industry what behavior is expected, and says they are accountable to the public they serve. It’s like a police perp walk—it publicly shames and humiliates.

(From this point of view, the continued absence of a perp walk for Mr. Madoff, together with the absence of any consequences thus far, sends the wrong message. It says “old” regulation still holds sway: he can stay in his comfortable digs until the legal process grinds its way to some determination of whether or not he has committed a violation of a particular law).

Madoff’s scam was old-school, Nigerian-Ministry, thuggish. That doesn’t mean the SEC employs incompetent people. It does mean, however, that they are toiling under an inadequate philosophy of regulation.

We will not regain trust in our institutions until we remember that trust is, at its heart, a human thing—and begin to act that way.

Regulation 2.0 is a good start.

How Not to Sell a Window

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We need to replace our picture window, so I’m told.

My wife, Thelma, is an Architectural Designer. Whatever she says goes when it comes to house repairs and needs. My opinion, while sometimes solicited so I don’t feel left out, isn’t really relevant, and that’s fine with me. So, when my wife started getting quotes, I didn’t even answer the phone.

On one call, I couldn’t help overhearing one side of the conversation, and wish I’d heard what the window guy said exactly. It went something like this:

Window Guy: I understand you’re looking for new windows from the form you filled out at the Home Show last week.

Thelma: Actually only one, in our dining area.

Window Guy: Well we’d like to come out and quote it for you.

Thelma: Ok – when? We want to do it soon.

Window Guy: We’d need to find a time when your husband will be there too.

Thelma (not missing how that sounded): I actually make the decisions on this. I do architectural design, and do this a lot. We don’t need him there.

Window Guy: It’s our policy to have both homeowners present. We can’t do it without him too.

Thelma (with a raised brow and just a hint of sarcasm) : Ok – thank you. I guess we won’t use your windows then.

Who would have thought Window Guy or his script would provide a teaching moment? What Trust Principles were ignored, and what was the result?

From the book Trust-Based Selling, the four principles that drive Trust-based Selling are:

1. A focus on the customer for the customer’s sake, not just the
seller’s sake.

Let’s see. Window Guy has the person on the phone who requested the quote, who’s experienced in the field, and who has clearly identified herself as both the technical and the economic buyer. His script–if that’s what it was–focused on whose needs?

2. A style of selling that is consistently collaborative.

Thelma was pretty clear that she was ready to collaborate. So the customer collaborates, but Window Guy can’t get out of his own way and off his own agenda.

3. A perspective centered on the medium to long term.

She’s an Architectural Designer, and probably helps clients decide about windows. I bet if she were a happy customer if she’d be a great referral source–for Window Guy! But on the other hand, if she’s unhappy, would she ever refer Window Guy? Or would she perhaps even suggest others if the name came up?

4. A habit of being transparent in all your dealings with the customer.

Thelma was transparent. She said exactly why I didn’t need to be there. Window Guy? He never shared why it was relevant for me to be present. Maybe they have experience with customers that evidenced a need to answer both homeowners questions at the same time. But he didn’t share that, or any other reason, and even if there was a reason, it should have been one that complied with Trust Principle #1 above. But he never got there, because he wasn’t listening, or there was no place in his script to allow for a dialog.

The result? First, Window Guy didn’t get to bid because I won’t be there. Second, we don’t have to deal with that company.

Maybe in Window Guy’s world that’s a win-win. Not in mine.

To Hug or Not to Hug?

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I’ve had several awkward moments greeting several different clients in the past few months, where the unspoken question for both of us has been, “To hug or not to hug?” The question seems to arise with clients who fall in two categories:

1 – Business friends – these are clients with whom I don’t necessarily socialize outside of work, but with whom I have established a relationship that’s far more than strictly business — a relationship marked by candor, warmth, genuine caring, and the easy exchange of personal as well as business information.

2 – Personal friends who have become clients – these are clients with whom I had a personal relationship long before we did any work together.

The dilemma arises when a handshake seems completely inauthentic because it’s too formal and distant, and yet a hug seems out of place in a business setting. So what usually results is a really awkward, jerky-movement thing, like two chickens in a barnyard – one of us sticks out our hand while the other moves in for a light embrace, then we both pull back and switch, trying to match the others’ first move.

Trusted Advisor work teaches us to seek intimacy — not fear it – through emotional connectedness with clients; to dare to show clients that we care about them and that we see them more as human beings than walking, talking revenue streams. And yet the question, “To hug or not to hug?” raises all kinds of ancillary questions. Such as:

-What if my client doesn’t like to hug anyone, let alone his or her consultant?

-Should the rules be different depending on whether my client is a man or a woman? The same gender or the opposite gender?

-What if someone else who is “outside” the relationship is there to witness (or be left out of) the hug?

-What is the equivalent dilemma in a country with different cultural norms, where hugging might be completely off the table but kissing might not?

-How much is too much? Where do we draw the line?

Your thoughts?

A Tendency to Blame and an Inability to Confront

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I am on vacation this week, and will be going back to the vault for some ‘oldies but goodies’ posts.  I hope you enjoy them: I’ll be back in a week or so with new material.

Over a delightful lunch last week, a client said to me, “I don’t remember where I got this, but I have a saying I keep nearby in my office:

"All management problems boil down to two things: a tendency to blame, and an inability to confront."

“I know where you got it from,” I said; “you got it from me, and I got it from Phil McGee.” Credit where credit’s due, Phil.

And here’s why credit is due.

A tendency to blame. To “blame” someone means to falsely suggest that they are responsible for some negative thing. The problem starts with ‘falsely,’ and gets worse.

To lie about someone makes you a liar. It means we cannot believe what you say. It means your motives are suspect, and therefore all actions that follow from them.

And lying about someone’s responsibility isn’t just lying–it’s lying about someone. It is an indirect form of character assassination. “Blamethrowing” is an apt pun, for blaming is ferociously destructive.

Finally, it’s evasive. “It-was-him” means “it-was-not-me.” Blaming means manipulating the listener—for the blamer’s own hidden purposes.

Inability to confront. Blame goes hand in hand with an inability to confront others directly with the truth. “The truth” is very simple—it’s what happened, what someone felt, what is. It’s reality.

I mean “confront” here not in a negative sense, but in a sense of being able to speak, to another human being, that which is true. Inability to confront means inability to have an honest conversation with another about the truth.

Evasion. Insinuation. Insincerity. Implication. Avoidance. Dodging, fudging, skirting, deception, fabrication, distortion. These are accusations we level against those who cannot confront.

Yet the accused doesn’t hear them—because their inability to confront extends to themselves. “I didn’t mean to hurt,” they say—often sincerely. But partially "good" motives do not excuse wrongful actions—or inactions.

Is Phil overstating the case when he says “all management problems can be reduced” to these two? Let’s see. What about:

• Giving and receiving feedback
• Interviewing
• Delegation
• Teamwork
• Engagement
• Leadership
• Morale
• Collaboration
• Crisis management
• Persuasion
• Trustworthiness
• Problem definition
• Project management
• Relationship management

Blame and inability to confront affect each item on that list, and that list covers a multitude of management issues.

What is the opposite of a tendency to blame and an inability to confront?

Someone who speaks the truth. Who speaks it in a way that can be heard by all. Someone who accepts his own responsibility—no more, no less. Someone who simply sees things as they are. And who is willing to assign responsibility exactly where it belongs, equally whether it’s his or someone else’s.

When we can see things as they are, and confront them as such, “blame” disappears. There is simply truth, and our various roles in dealing with it. Once seen, it is easily spoken.

The trick is to see things as they are.

 

 

 

62 Sales Tips for a Recession – Based on Trust

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 We’ve been exploring a 5-part series on How Trust Principles Can Recession-Proof your Business Development:

  1. The Trust Perspective
  2. The First Trust Principle: Client Focus
  3. The Second Trust Principle: Collaboration
  4. The Third Trust Principle: The Long Term View
  5. The Fourth Trust Principle: Transparency

Today we have have aggregated all 62 Specific Sales Tips in one post for your convenience. You can also download 62 Specific Sales Tips as a pdf for easy reading and forwarding to friend.

Organized by the Four Trust Principles (Client focus, Collaboration, Long Term, and Transparency), here we go—from 1 to 62.

 

How to Succeed in a Recession with Client Focus

 

1. You’re a staff strategist or a line marketer. You have one mandate: Focus. Downplay new lead generation—recessions are time to dance with the one who brung you. Good strategists know saying yes to one means saying "no" to others. Resist the temptation to go RFP-hunting. Let your #1 customers know who loves them, and show it.

2. You’re a financial planner. You fear client phone calls in a recession—they mean withdrawals. Do the opposite—call your clients. Give them life advice, like "next year is not the time to retire after all." In times of fear, those who reach out to hear the pain are those who gain later.

3. You’re an accounting firm. It’s tax season. Everyone thinks you’re busy. Surprise them with something free:  a 2-3 hour clinic for your clients’ kids who are now college graduates on how to do their own taxes.

4. You’re a CPA firm. Offer to "spotlight" your client’s human interest / charity / goodwill story on your firm’s blog or newsletter.

5. You’re a restaurant owner. You know who your good customers are. Surprise them next visit and pick up the tab. Quietly. After the meal.

6. You sell insurance but don’t track your clients’ payment status because you already got the commission. Start tracking them now. In a recession no one wants unintentionally lapsed LTD or long term care policies.

7. You’re majority owner of a private company. Take off your shareholder hat and put on your investment hat. This is when you grow share by growing trust. Draw down on the shareholder account to invest in the employee, customer and supplier relationship accounts.

8. You provide tech support to home businesses. That green stuff about lowering electrical costs is a lot more interesting to customers than it was 6 months ago: bone up on it.

9. You’re a doctor, and recessions mean more scrambling for less insurance money. When you have good test results for a nervous patient, don’t wait for the next visit. Call and celebrate with the patient for a few minutes.

10. You’re a one-person consulting shop. Recessions drive changes in customer needs. Can your firm change on a dime to meet new client needs? Of course you can, you’re a one-person firm. Figure out what those new needs are, then go talk to the client.

11. You’re in corporate sales and your funnel has slowed to a crawl. Do your research, then offer your prospect three ideas that can reduce costs in the next quarter without any extra work.

12. You’re anyone. In a recession, customers are more worried and self-focused than usual. Go take that course on listening and empathy you’ve been putting off.  It’s twice as important now, and you’ve no longer got the excuse of being too busy.

13. You’re a practice area head in a professional services firm; project or client relationship managers report to you. When was the last time you visited the top 3-4 clients? Go visit, with your client manager. Your agenda? "Just wanted to hear what’s new with you. Besides our own services, what can we do for you?" And don’t even think about charging the time.

14. Your customers are in retail (or chemicals, or telecom—whatever). Ask yourself what’s changed, new, and critical to them because of the recession. Now ask what you can do to help. ("Increase sales" and "cut price" don’t count). Then redesign your offerings.

(Example: For us, professional services firms are big clients. They are cutting back discretionary travel and training. The "obvious" answer is webinars. But as one client says, "There’s only so much webinar you can take stuck in your cubicle from 9 to 5. We’re being webinar-ed to death." Our solution? The Onsite Offsite(TM). The best of offsites, minus the costs, but without the compromises of conventional one-way datapipe solutions).

15. You’re a consulting firm. Don’t succumb to the "hey, we’ve all got to pitch in here, can’t you lower your rate for us" argument. Pitch in, yes. Make strategic investments, yes. Re-tool your offerings, yes. But don’t lower your rates. It just says you had "padding" before. And an insolvent consultant is no help to clients.

16. You’re a law firm.  Offer a series of brown-bag talks given by partners on recession-relevant topics. Invite your existing clients.

17. You’re a development director for a charitable organization. Your donors are your customers. Instead of asking them for money, turn the tables: ask how a particular donor is affected by the recession. How can you add value to his or her life? With whom can you put them in touch?

18. You’re a systems firm. Your tech leaders need speaking training. Invite three clients to join so they can learn too.

19. After a long day at the office a longtime client contact calls to tell you he’s been laid off. You have to leave, but offer to speak later that night, to help out in any way you can.

20. Some of your customers sell to other customers of yours. Make introductions, then make more.

21. You’re an accounting firm. Hold topical lunchtime 60-minute phone calls for five of your medium-sized clients’ treasurers on recession-relevant topics. You run the logistics and line up the topics. And don’t wait until after tax season, they’re hurting now.

22. Just to practice Principle 1 Client Focus, go drop dimes in someone’s parking meter, or pay the toll for the guy behind you. It’s cheap behavioral training for client focus. And it makes two people feel good.

How to Succeed in a Recession with Collaboration

23. If you’re a consultant of any type, write your next proposal seated next to your client. Bring all your backup records, rent a conference room, and collaboratively proceed to write a joint proposal. Rather than deal with issues after the proposal has been written and sent and it shows up as a disagreement in the final sales meeting—raise it in joint meeting.

24. If you’re a speaker or trainer, put together a speaking tour, or a combined webinar, of like-minded people—including those you used to think of as competitors.

25. Does your company outsource key processes? Is the recession causing strains in the relationship? Have an offsite meeting with key leaders of each firm, with the agenda of "where can we collaborate more, and argue with each other less?"

26. Answer the question the customer asked you, not the one you wanted to answer. The customer is not your competitor—collaborate with the customer by talking straight.

27. If you’re a B2B manufacturing salesperson, call a key customer. Suggest the two firms sit down together offsite for a day and discuss "what could we do better together to make things cheaper, faster, or more profitable for both of us?" Be prepared to share your manufacturing process, costs, and profit margins, so you can figure it out together.

28. If you’re a professional services provider, sit down with your client and see which portion of your services could be performed more cost effectively by the client, or how your costs could be reduced. For example, if preliminary research needs to be done, ask if the client has someone who could do it, and get approval to rely on it, or use it as a base. If you charge for materials, let the client make the copies and produce the the books. When you travel for the client offer to use the client’s travel service if the client can get a better price on travel.

29. If you’re professional services firm with underemployed staff, offer to swap similarly underemployed staff with a client. Both will gain valuable perspective and experience without being taken off critical work. The employees involved will feel grateful and challenged. And the linkages between the firms will be strengthened. None of which would easily happen in good economic times.

30. If you’re in a business where sales are large and take time, then at the next sales presentation meeting, have a client individual co-present with you. And make a point of it, saying "working collaboratively with you is what we believe in, and it’s even more important in tough times like these." Actions speak louder than words.

31. If you’re in a functional department of a large company (HR, Legal, IT), identify 3-4 of the same departments in other large companies in your geographic area. Create a collaborative work group across the companies that meets (within bounds of legal agendas) to share best practices and work opportunities.

32. Give your receivables clerk a budget to buy flowers or chocolates for the payables clerk at your most important customers for Valentine’s day (you’ve still got a few days).

33. If you’re in sales or customer relationship management, go find who, if anyone, is handling innovation for your firm. Ask them if they would like to collaborate on that innovation work with Customer A, Customer B and Customer C?

34. Ditto in reverse. Ask your key customer whether anyone is handling innovation in their firm—and if they would appreciate the chance to work with your innovation people.

35. Look over your professional services providers. Is there anyone with whom you can work a barter arrangement? (Remember to check with your accountant on the tax issues, even if you don’t want to be appointed by the President).

36. If you’re in sales, go talk to your customers’ salespeople. Share best practices and success stories; also share horror stories about how each organization treats salespeople from other companies (including how theirs treat you). You will gain perspective and insight about your customer’s company, and they may even put in a good word for you with their company’s buyers.

How to Succeed in a Recession with a Long Term View

37. Buy two tickets now for a major cultural or athletic event scheduled for mid to late 2010. Send one to a highly favored customer or client, with a note saying "We will get through all this, together, and I look forward to celebrating with you once we do. Keep this ticket in a safe place, because mine is the seat next to yours."

38. Pick your top 3 clients, and strategize internally on how you can strengthen your relationships for the long run. Then go discuss those plans with those three clients, telling them exactly what you’ve done, and why.

39. Help everyone you know who has been laid off–provide advice, contacts, and/or just listen. These are people who are potentially great customers down the road, but don’t do it for that reason, do it because you care.

40. If you’re a consulting organization, now is a great time to establish your alumni network. And if you already have one, kick up the level of involvement. Host cocktail parties in various locations. Establish or update the directory. Get your alumni an intranet page, or a devoted Facebook group or other aggregation. Facilitate their networking.

41. If you’re a lawyer or consultant and not using social media to connect with your clients, now is the time for this type of investment–build your network and help your clients build theirs.

42. If you are one of the many unfortunate individuals who has lost a job, don’t burn bridges in anger, hurt or frustration. You’re now selling you. Keep the long term in mind. Join the alumni network—or offer to help create one. Use social media. Begin networking ASAP. Leaders don’t like causing hardship—they prefer to help. How you act in the days after a layoff advertises your trustworthiness.

43. If a key customer is in the middle of an important job with you and they can’t afford for you to finish it, talk it over with them and offer to defer payment until such time as the customer can pay. That could be a long time. But if the relationship is good, this generous offer creates trust and greatly reduces the risk of nonpayment. And the cost of financing these days is very low. It doesn’t cost much to be generous, it lowers credit risk by creating trust and reciprocity, and showing a little faith and courage does wonders for the relationship.

44. Consider what you can offer your clients’ children. Seriously. A financial planner in Canada offered free investment planning education to a client’s 12 and 14 year old children. His co-workers chided him because there were no fees associated with it. His response was, "Are you kidding? Their father loves me for it; that’s good for referrals. And someday his kids will inherit a lot of his wealth. I’m in this business for the long haul—my lifetime and the lifetimes of my clients."

45. If you offer a client a special "one off" deal, be clear about why you’re doing it. For any deal you craft now, imagine doing the same deal 100 times under similar circumstances. Would you? Would your client? If you didn’t answer "yes" to both, go back to the drawing board. Don’t worry about what you’re going to "get" in the near-term, or even from whom. It all works out in the end when we’re willing to do what’s right. And the end is what matters when we’re living this principle.

46. If you’re a leader, be prepared to lead in a most personal way. The month after 9/11, Koh Boon Hwee, then-chairman of Singapore Air, described the US airline industry’s reaction to the drop in travel: "They laid off huge numbers of employees." By contrast, at Singapore Air, Koh took a massive pay cut, his direct reports took sizable hits, and everyone took a significant but smaller pay cut. He laid off no one. It’s no wonder that travelers, employees and shareholders alike are loyal to such companies. They live the trust principle of long-term focus, and are richly rewarded for it.

How to Succeed in a Recession with Transparency

47. Once you develop your plans for addressing the recession, share your information and concerns with key customers, including how your plans could affect the relationship. This can create an intense, positive discussion.

48. If you have layoffs that affect customers, let them know immediately, together with succession plans for customer contacts. And don’t try to shut off customers from dialogue with their former contacts in your firm; give closure room to work. If you’re afraid of what the employee will say, then you have bigger problems to work on—trying to hide it will only make it worse.

49. If you come up with an approach to the economy that could help other companies—yes, even competitors—share it publicly. Be the company that cares enough about people to share the innovative ideas that could help pull us all out, or reduce the pain that individuals will bear.

50. Share your cost structure with your customers. This will eliminate any suspicions they have about your pricing. They will also appreciate your candor and come to trust you more.

51. Don’t BS your customers about where your own company stands—financially and otherwise—because you’re afraid of looking bad or making your clients/partners worry. Tell it like it is. They can handle the truth. Leave spin control to the ordinary companies out there. When fear rules the land, truth-telling serves as an anchor to those who don’t know what to think.

52. Share personal information about your staff with potential clients. Pictures and bios make it far easier for customers to know who they’ll be working with, or who they’ll be speaking with on the phone. Human to human. It makes it all personal. If you’re holding back because search firms might poach good people, remember—in a recession there’s not a lot of hiring going on. Right now, making customers feel safer is more important than holding rare hiring raids at bay.

53. In sales conversations, compare your product or service to others. Include all relevant information—the good, the bad, and the ugly—to help your customers make informed choices. Do not even think of spinning it—you cannot spin and be transparent at the same time. Realize that some buyers will go with your competitors as a result of what you’ve shared. Deal with it. You’ll end up with more and better in the end.

54. During your next client visit, ask yourself:  is there an elephant in the room? A hidden objection, a pricing concern, a weakness, a broken promise? Take the risk, do the counter-intuitive thing and say something like, "Hey, I might be way off-base about this, but if I were in your shoes, I might be wondering … Is that an issue/concern for you?" You have to unlearn some old bad habits to be transparent. But there are few faster ways to build trust.

55. Now is the time to ask for feedback from your clients. Honest feedback. Really honest feedback. Now is also the time to offer feedback for your clients. Honest feedback. Really honest feedback.

56. Tell the truth about your own emotional reality. If you’re stressed/worried/anxious … saying so will build intimacy. We’re not advocating a public panic attack; we all have to manage our emotions well during tough times. But to an extent we’re all in a similar boat right now and being real about it has its own rewards. Not the least of which is you are far more likely to get the straight scoop from your client about his/her reality, which puts you in a much better position to be of service.

57. Consider sharing information about your backlog, prospective orders, or plans as they affect vendors and suppliers. In a recession, having advance, non-binding discussions about the future is invaluable to those who sell to you. Help them and they will help you. Clam up and refuse to discuss, and you just frustrate them. We normally avoid this kind of disclosure out of fear for losing some competitive edge. That fear is vastly over-stated, and more than compensated for by the supplier loyalty you engender by being willing to open with those who serve you.

58. Your company wants to purchase a complex piece of equipment, but it’s too expensive. Your vendor wants to sell it to you, but doesn’t know how to make it less costly based on your specs. If you are both transparent—why you need it, what it’s worth to you, what it costs them, and how they make it—then together you can find a way to make it cheaper. That’s collaboration—but what enables collaboration is transparency.

59. Share information about your product development plans. Amazon just got slammed on their own blogs for giving their customers no advance warning and no price break for the new Kindle. Amazon will do just fine, thank you, but who needs the bad publicity? Yes, that’s the industry norm in electronics—but that hardly makes it right to tick off your existing customers in a recessionary time.

60. When your client asks you a question such as, "Do you have experience in…?"—answer honestly and completely. If you aren’t right for a project, it’s ok. Put your scarcity mentality, which drives your fear of losing the sale, on the back burner. It’s better to address that up front, then for your client to find out later. You should always do this, but in recession-based times of fear and suspicion, the power of transparency in service to the customer is magnified.

61. It’s a naked world—you really can’t hide anything anymore thanks to emails, meetings at Starbucks, cell phone records. You may be practicing transparency unintentionally. But "oops" moments make you look deceitful, especially in sales. So, don’t do that. Don’t say or write anything you wouldn’t mind everyone reading in the newspaper. Honesty and lack of spin in sales in suspicious downtimes is so refreshingly counter-intuitive that your sales will increase.

62. Share your product development plans with your customers before the products are ready for prime time. The software industry long ago figured out that the benefits of letting customers develop their beta releases vastly outweighed the competitive advantage accruing to a customer. People are more likely to buy what they’ve had a hand in developing—if you give them the chance. If you’re in professional services, sharing the early version of a new service offering with potential clients will give you invaluable insight, help educate your buyers, and increases trust. More importantly, your willingness to share your imperfections "early and ugly" says a lot about who you are.

Don’t forget, you can also download 62 Specific Sales Tips as a pdf for easy reading and forwarding to friend.  And, in a spirit of collaboration, we sincerely hope you will feel moved to jump in and share your own comments and ideas.

Day 5 of 5: Trust-based Business Development in a Recession: Principle 4, Transparency

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This is Day 5 of 5 in our week-long series of selling in a recession using the Four Trust Principles. Today’s principle is Principle 4—make transparency your first instinct, except when being transparent is illegal or hurtful to others.

Transparency helps business development in a recession in three ways.

First, it gives information to your customers, suppliers and partners so they can generate new ideas about how to work with you—to cut costs, create new service offerings, or alter their own practices to align with your products or services.

Second, emotional transparency enables empathy—always important to selling, but especially now. Empathy deepens personal relationships, which build better business relationships. And relationships formed under times of stress are the strongest.

Finally, transparency is the antidote to suspicion. In a recession, bad behavior goes up. Buyers are more suspicious of sellers’ motives. Transparency eases their mind about the motives behind your actions, your words, and your intentions. Transparency helps your sales.

As you read through today’s suggestions list, you’ll probably notice that the main reason we don’t practice transparency is fear—fear of being taken advantage of by competitors, by employees, and by customers. Now is the time to remember the adage “the best way to make a man trustworthy is to trust him.” You receive the behavior you expect.

Try trusting your customers by being transparent.

Here are 16 ideas for improving sales in a recession by being transparent. Please add your own—on this post, and on all five of the days’ posts.

1. Once you develop your plans for addressing the recession, share your information and concerns with key customers, including how your plans could affect the relationship. This can create an intense, positive discussion.

2. If you have layoffs that affect customers, let them know immediately, together with succession plans for customer contacts. And don’t try to shut off customers from dialogue with their former contacts in your firm; give closure room to work. If you’re afraid of what the employee will say, then you have bigger problems to work on—trying to hide it will only make it worse.

3. If you come up with an approach to the economy that could help other companies—yes, even competitors—share it publicly. Be the company that cares enough about people to share the innovative ideas that could help pull us all out, or reduce the pain that individuals will bear.

4. Share your cost structure with your customers. This will eliminate any suspicions they have about your pricing. They will also appreciate your candor, and come to trust you more.

5. Don’t BS your customers about where your own company stands—financially and otherwise—because you’re afraid of looking bad or making your clients/partners worry. Tell it like it is. They can handle the truth. Leave spin control to the ordinary companies out there. When fear rules the land, truth-telling serves as an anchor to those who don’t know what to think.

6. Share personal information about your staff with potential clients. Pictures and bios make it far easier for customers to know who they’ll be working with, or who they’ll be speaking with on the phone. Human to human. It makes it all personal. If you’re holding back because search firms might poach good people, remember—in a recession there’s not a lot of hiring going on. Right now, making customers feel safer is more important than holding rare hiring raids at bay.

7. In sales conversations, compare your product or service to others. Include all relevant information—the good, the bad, and the ugly—to help your customers make informed choices. Do not even think of spinning it—you cannot spin and be transparent at the same time. Realize that some buyers will go with your competitors as a result of what you’ve shared. Deal with it. You’ll end up with more and better in the end.

8. During your next client visit, ask yourself, is there an elephant in the room? A hidden objection, a pricing concern, a weakness, a broken promise? Take the risk; do the counter-intuitive thing and say something like, “Hey, I might be way off-base about this, but if I were in your shoes, I might be wondering … Is that an issue/concern for you?” You have to unlearn some old bad habits to be transparent. But there are few faster ways to build trust.

9. Now is the time to ask for feedback from your clients. Honest feedback. Really honest feedback. Now is also the time to offer feedback for your clients. Honest feedback. Really honest feedback.

10. Tell the truth about your own emotional reality. If you’re stressed/worried/anxious … saying so will build intimacy. We’re not advocating a public panic attack; we all have to manage our emotions well during tough times. But to an extent we’re all in a similar boat right now and being real about it has its own rewards. Not the least of which is you are far more likely to get the straight scoop from your client about his/her reality, which puts you in a much better position to be of service.

11. Consider sharing information about your backlog, prospective orders, or plans as they affect vendors and suppliers. In a recession, having advance, non-binding discussions about the future is invaluable to those who sell to you. Help them, and they will help you. Clam up and refuse to discuss, and you just frustrate them. We normally avoid this kind of disclosure out of fear for losing some competitive edge. That fear is vastly over-stated, and more than compensated for by the supplier loyalty you engender by being willing to open with those who serve you.

12. Your company wants to purchase a complex piece of equipment, but it’s too expensive. Your vendor wants to sell it to you, but doesn’t know how to make it less costly based on your specs. If you are both transparent—why you need it, what it’s worth to you, what it costs them, and how they make it—then together you can find a way to make it cheaper. That’s collaboration—but what enables collaboration is transparency.

13. Share information about your product development plans. Amazon just got slammed on their own blogs for giving their customers no advance warning and no price break for the new Kindle. Amazon will do just fine, thank you, but who needs the bad publicity? Yes, that’s the industry norm in electronics—but that hardly makes it right to tick off your existing customers in a recessionary time.

14. When your client asks you a question such as, “Do you have experience in…?”, answer honestly and completely. If you aren’t right for a project, it’s ok. Put your scarcity mentality—which drives your fear of losing the sale—on the back burner. It’s better to address that up front, then for your client to find out later. You should always do this; but in recession-based times of fear and suspicion, the power of transparency in service to the customer is magnified.

15. It’s a naked world— can’t really hide anything anymore thanks to emails, meetings at Starbucks, cell phone records. You may be practicing transparency unintentionally. But “oops” moments make you look deceitful, especially in sales. So, don’t do that. Don’t say or write anything you wouldn’t mind everyone reading in the newspaper. Honesty and lack of spin in sales in suspicious downtimes is so refreshingly counter-intuitive that your sales will increase.

16. Shareyour product development plans with your customers before the products are ready for prime time. The software industry long ago figured out that the benefits of letting customers develop their beta releases vastly outweighed the competitive advantage accruing to a customer. People are more likely to buy what they’ve had a hand in developing—if you give them the chance. If you’re in professional services, sharing the early version of a new service offering with potential clients will give you invaluable insight, help educate your buyers, and increases trust. More importantly, your willingness to share your imperfections "early and ugly" says a lot about who you are.

 

That’s the end of this weeklong series of using trust to improve selling in a recession. Link back to the beginning of the series here. And feel free to add your own ideas throughout.

 

 

Day 4 of 5: Trust-based Business Development in a Recession: Principle 3, Long-Term and Relationship Focus

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This is day 4 of 5 in our week-long series about selling in a Recession using the Four Trust Principles. Today’s principle is Principle 3—Focus on the medium-to-long term, not the short term. This implies a focus on relationships, not transactions.

Even more than the other Trust Principles, this one is relevant to selling in recessions.

On Day 1 we suggested that the right trust-based attitude in a recession is to remember that down cycles are only half the story—and the half in which trust is most indelibly created. All strong relationships live by the motto ”for richer and poorer, for better and worse…”—and the test of the relationship is rocky times. The time to harvest trust is in good times; the time to build it is now.

You find out who your friends are when times are tough. You find out who really cares about you when they have to choose between self-serving and other-serving opportunities. And others find out how you make those choices. By choosing to defer self-aggrandizing activities in support of your customers—precisely when it’s hardest to do and takes the most courage—you increase your service to your customers the most, and earn their trust.

The suggestions that follow are built from that perspective. Please–add your own ideas to the list so that everyone can benefit. Here are 10 ideas to prime the pump:

1. Buy two tickets now for a major cultural or athletic event scheduled for mid to late 2010. Send one to a highly favored customer or client, with a note saying “We will get through all this, together, and I look forward to celebrating with you once we do. Keep this ticket in a safe place, because mine is the seat next to yours.”

2. Pick your top 3 clients, and strategize internally on how you can strengthen your relationship for the long run. Then go discuss those plans with those three clients, telling them exactly what you’ve done, and why.

3. Help everyone you know who has been laid off – provide advice, contacts, and/or just listen. These are people who are potentially great customers down the road; but don’t do it for that reason, do it because you care.

4. If you’re a consulting organization, now is a great time to establish your alumni network. And if you already have one, kick up the level of involvement. Host cocktail parties in various locations. Establish or update the directory. Get your alumni an intranet page, or a devoted Facebook group or other aggregation. Facilitate their networking.

5. If you’re a lawyer or consultant and not using social media to connect with your clients, now is the time for this type of investment– build your network and help your clients build theirs.

6. If you are one of the many unfortunate individuals who has lost a job, don’t burn bridges in anger, hurt or frustration. You’re now selling you. Keep the long term in mind. Join the alumni network—or offer to help create one. Use social media. Begin networking ASAP. Leaders don’t like causing hardship—they prefer to help. How you act in the days after a layoff advertises your trustworthiness.

7. If a key customer is in the middle of an important job with you and they can’t afford for you to finish it, talk it over with them and offer to defer payment until such time as the customer can pay. That could be a long time. But if the relationship is good, this generous offer creates trust and greatly reduces the risk of nonpayment. And the cost of financing these days is very low. It doesn’t cost much to be generous; it lowers credit risk by creating trust and reciprocity; and showing a little faith and courage does wonders for the relationship.

8. Consider what you can offer your clients’ children. Seriously. A financial planner in Canada offered free investment planning education to a client’s 12 and 14 year old children. His co-workers chided him because there were no fees associated with it. His response was, “are you kidding? Their father loves me for it; that’s good for referrals. And someday his kids will inherit a lot of his wealth. I’m in this business for the long haul—my lifetime and the lifetimes of my clients.”

9. If you offer a client a special "one off" deal, be clear about why you’re doing it. For any deal you craft now, imagine doing the same deal 100 times under similar circumstances. Would you? Would your client? If you didn’t answer “yes” to both, go back to the drawing board. Don’t worry about what you’re going to “get” in the near-term, or even from whom. It all works out in the end when we’re willing to do what’s right. And the end is what matters when we’re living this principle.

10. If you’re a leader, be prepared to lead in a most personal way. The month after 9/11, Koh Boon Hwee, then-chairman of Singapore Air, described the US airline industry’s reaction to the drop in travel: “they laid off huge numbers of employees.” By contrast, at Singapore Air, Koh took a massive pay cut; his direct reports took sizable hits; and everyone took a significant but smaller pay cut. He laid off no one. It’s no wonder that travelers, employees and shareholders alike are loyal to such companies. They live the trust principle of long-term focus, and are richly rewarded for it.