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Oprah and Two Trust Tests

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Trust is bustin’ out all over. Or, to be more accurate, its perceived absence is creating a lot of press.

It’s one thing to become a focus for Steven H.R. Covey Jr.—but it’s yet another level of phenomenon when Oprah puts trust on the front page of O Magazine.

Of particular note is a self-scoring “trustometer” self-assessment trust test by Martha Beck.

It’s a good quiz; go take it, you’ll learn something.

There are three kinds of trust surveys: those that measure trusting, those that measure trustworthiness, and those that measure the combination, i.e. trust. Ms. Beck’s trust test measures the first—trusting.

The thrust is: how clearly can you see things for what they are, rather than as they appear through your own obscured ego-driven lenses? Your gut feelings are probably very good—unless you get in their way.

This is a good message—the ability to intelligently take risks, to trust, is a powerful thing. In the Age of Madoff, where trusting is an unpopular concept, this is a welcome reminder of the importance of trust.

So much for trusting: how about, can we measure how much people trust us?

Yes we can. If you’ll forgive the shameless self-promotion, that’s what the Trust Quotient™, or TQ™, measures—our level of trustworthiness. (To be precise, since it’s also a self-assessment, it’s our best guess about how much others trust us).

Unlike the Beck trust test, which gives you a one-paragraph “if your score was between __ and __, you are ….”, the Trust Quotient trust test gives you several pages of analysis and recommendations about the various components of trustworthiness.

Take them both: the Beck Trust test on your ability to trust: and the TQ Trust Quotient test to assess your trustworthiness.

 

 

Show Me the Elephant

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Why is that leaders and the teams they lead often ignore their issues until they have no choice but to take action? This despite the fact that, more often than not, waiting longer limits their universe of available responses.

I work with a practice group in a professional services firm. They have regular meetings of timekeepers and staff. Lately at those meetings there was an elephant in the room – anxiety about how the economy was going to affect them. Rather than talk about what was really on their minds, they discussed administrative matters and client issues.

In a recent discussion with the practice group leader, I asked – “so what are you and your group going to to do to address the downturn?” My client hadn’t really thought about it. Like many, the leader hoped the team could ride it out. I suggested “name it and claim it." It was simple – raise the issue for the group and talk about it. Some questions to ask:

· How busy are we?
· If we keep doing things the way we are now, what will happen?
· What do we need to do differently?

In such discussions, keep nothing off the table. On the cost side, address reductions – staffing, salary and other expenses. On the revenue side, consider new business activities, think about rates and fixed fee alternatives, figure out how to get paid sooner. Address the issues that have to be addressed. Get cveryone to take ownership of the problem. Put the elephant front and center, and deal with it as a group.

What happened? People got to share their anxieties in an appropriate way, own the problem and develop a solution together. They appreciated the opportunity to think out loud with each other.

Does it really matter why we procrastinate on such issues? Fear is probably at the heart of it. But the origin doesn’t necessarily alter the action. What needs to be done is to name it, so we can claim it.

Do you have an elephant in the room that needs to be called out?

Does Closing Kill Sales?

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Jill Konrath has a great little podcast titled Closing Can Kill Sales, at salesopedia.com.  

Right there, you may be tempted to say, ‘oh come on, that’s old hat.  Nobody does that anymore; it’s totally schlocky and manipulative and in (B2B, consulting, telecom—pick your choice) no one does that anymore.’

Well, just last week I came across a sophisticated B2B software/communications company, and guess what they wanted to know: how to close more sales.

They may not be thinking old-school “assumptive closes, constant closing,” or “you want more fries with that?”  But they are still focused, as a critical operational goal, on how to “close more sales.”  Plus ça change…

Jill is refreshingly direct.  Pure Midwest, corn-fed charm, you betcha; and she’s the real deal in person.  She came up the classic way, selling Xerox copiers.  She cut her teeth on the “ABC” rule—Always Be Closing.  But, like Huck Finn, she always felt badly about not being able to do it.

About closing, she is direct: “I hate it.  It always felt like a violation of the way people normally behave.  It’s about manipulative strategies to get people to say yes, and I just hated it.”

She sold a lot of copiers, though.  “One thing Xerox did teach us was to ask a lot of questions, and I was good at that.  I was really trying to find out the business case, and I didn’t know if it was there or not.  So I kept asking so I could find out, for myself.”

What does Jill say to people about closing?  “I say to them, never close; never be closing.  But always advance the sales process.  They need to know the next step, whatever it is, that’s true.  And eventually, you’ll hear a magic word—they start to say ‘we.’ Then, after a while, it’s ‘how do we buy this?”

There are others—Phil McGee is one, I hope we hear from him—who I think might say that’s exactly what ‘closing’ is supposed to mean—not manipulation, just relentlessly exploring questions. 

But Jill is no dummy either, and she’s quite insistent about ‘never close.’  Why the passion?

I think it’s because the word ‘closing’ is encrusted with nearly a century of subtext of control and manipulation.  It is too baked in for the niceties of alternate definitions to have an effect.

Take my B2B software example.  They don’t want old-school scripted trick lines; they think they’re too sophisticated for that.  But they’re kidding themselves.  Just as much as an old door-to-door vacuum cleaner salesman, they’re looking for a way to get a customer to do what they want them to do—namely buy their product.  They just want it done in a hip, 2009, Sales 2.0, CRM, modern kind of way.

Control and manipulation by any other name is still the same.

The real meaning of Jill’s dictum is deeper, I think.  It means, stop, stop stop trying to force your will on others.  Allow yourself to believe that if you really treat customers well and help them to make the best decision, you’ll get your fair share of that opportunity—and way, way more than that in the opportunities that follow.

For most of us, closing does kill sales.  Paradoxically the best way to sell is to Stop Trying to Sell, and Stop Trying to Close.  Just help your customer.     

Sacred Cows, or Goals Gone Wild

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Personally, I love seeing sacred cows sacrificed. Maybe it’s that contrarian thinking helps learning. Maybe skepticism came with studying philosophy and doing strategy consulting.

Maybe I’m just a little bent. Whatever.

Let’s take goal-setting. That’s about as big a sacred cow as you get in business. Googling “goal setting” gets you 5.6 million hits.

Jack Welch praises it. Scottie Hamilton and Michael Phelps get cited as examples of it. Martial artists swear by it. Management by objectives is built around it.

I’m not sure there’s any more common theme in self-help and business success books. It’s just so, like, obvious. Goal-setting may be the secret behind the success of Motherhood and Apple Pie. I’m pretty sure it explains the Boy Scouts.

So–what an unexpected delight to find a balloon-pricking, mellow-harshing, skeptical piece of inquiry in, of all places, Harvard Business School.  (Actually, it’s in the HBS Working Knowledge series, which does a fine job of exploring quirky ideas. They’re just not usually so big as this one).  A little bonus: the smirky title, "Goals Gone Wild: the Systematic Side Effects of Over-prescribing Goals Setting."

The paper is summarized here and co-author Max Bazerman is interviewed here:

From the executive summary:

• The harmful side effects of goal setting are far more serious and systematic than prior work has acknowledged.

• Goal setting harms organizations in systematic and predictable ways.

• The use of goal setting can degrade employee performance, shift focus away from important but non-specified goals, harm interpersonal relationships, corrode organizational culture, and motivate risky and unethical behaviors.

• In many situations, the damaging effects of goal setting outweigh its benefits.

But surely, you say, this is a case of excess, of bad apples. Goals are not the problem, people who use goals badly are the problem. (You remember–guns don’t kill people, people kill people).

No, says Bazerman. When the adoption of goals so predictably and systematically produces negative results, it is fair to say it is goals themselves that are the problem. (Are you listening, NRA?)

Well, you might say, if goal-setting is so dangerous, how’d we get to use it so much and so deeply?

Says Bazerman:

It is easy to implement. It is easy to measure. It is easy to document successes. And in laboratory experiments, it has been shown to be extremely successful at improving the measured behavior. [we] simply argue that goals have gone wild in terms of their impact on other unmeasured outcomes. When we factor in the consistent findings that stretch and specific goals both narrow focus on a limited set of behaviors while increasing risk-taking and unethical behavior, their simple implementation can become a vice.

Bazerman and his co-authors are not saying goal-setting is bad per se; they’re not raving nut-jobs. They’re just asking a question that doesn’t get asked nearly often enough.

They have taken a sober, holistic look at one of the most pervasive, unchallenged, unexamined mantras of business—and brought some welcome fresh air to the issue.

Bravo.

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?