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Employees Win a Big Round Against Non-Compete Agreements

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Occasionally, the law appears to coincide with commonsense. The longer the view one takes, the more likely this is.

Occasionally the long view seems captured in a single case; one which appears obvious in the rear-view mirror, but which was anything but at the time of the decision. In the US, Brown v. Board of Education comes to mind.

Last Thursday, as reported in law.com, “the California Supreme Court effectively invalidated the use of most non-compete agreements in the State.”

"In sum, following the Legislature, this court generally condemns noncompetition agreements," Justice Ming Chin wrote. "Under the statute’s plain meaning, therefore, an employer cannot by contract restrain a former employee from engaging in his or her profession, trade, or business unless the agreement falls within one of the exceptions to the rule."

As the Industry Standard put it more directly, “California Supreme Court says non-compete agreements are illegal.”

While this doesn’t reach Brown v. Board of Ed status, nor is national, nor is it conclusive—I think it may come to be viewed as “about damn time.”

Non-compete agreements, in my humble opinion, are of a class with indentured servitude and restraint of trade—both of which are (largely) illegal.

(Disclaimer: I am not a lawyer, and I welcome the opinions here of those who are: I’m just speaking as a businessperson and an observer of business—and, Iike to think, on behalf of commonsense).

Non-compete clauses are common in many industries. They typically are required as a condition of employment, and they restrict an employee’s ability to leave to go to work for a perceived competitor or related business for a period of time (often 1 to 2 years, sometimes more).

One reason many employers use non-competes because they feel the company “owns” its customers or clients, and the employee shouldn’t “be allowed” to “steal” the customer. This reason is the parallel to restraint of trade.

But I have yet to meet a client or customer who enjoys being thought of as “owned” by a provider. Most of them resent that framing of the relationship. Most customers feel, as I do, that the choice should be theirs—that neither employer nor employee “owns” them, and that if they want to follow an employee to a new employer, their right to do so shouldn’t be infringed.

From a commonsense capitalism point of view, I’d simply add that if a company hasn’t been able to transfer the personal relationship to a corporate one, then the resort to heavy-handed legalisms only spotlights their management failure.

The second reason some employers like non-competes is they feel they have some “right” of control that exists after the employment contract is up. This reason is the parallel to indentured servitude, where an employee is required to “work off” an obligation over time.

Smart, successful companies—McKinsey, Goldman, PwC—have long known the value of alumni. The value of post-W2 form relationships is enormous. But not if it’s coerced.

This is simple human dignity; employers do and should have many rights, including various forms of intellectual property protection (trademarks, patents, copyrights)—but those rights have their own distinct protections and can stand on their own. Using employees as chattel to further a former employer’s competitive adventures is unnecessary—and thoroughly out of sync with a modern global business world.

That’s how I see it. What do you think?

Great Moments in Marketing Fear

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I may not be a marketer by profession, but I doubt I’d get much argument from the pros about what sells best—reliably, dependably, year in and year out.

Sex. And fear.

Maybe sex is number one. But if so, it’s not by much.  Fear of fill-in-the-blank. Being left behind. Being left out. Not getting the joke. Looking dumb. Dressing wrong. Knowing the wrong people. Doing the wrong thing. Not doing the right thing. Being stuck with something that smells. Having a house that smells. Being the smell.

Identifying the right “pitch” or “hook” is, I suspect, even more important for fear-based products. Case in point: a particularly clever new product.

Introducing Slydial—see the August 2 New York Times article, Don’t Want to Talk About It? Order a Missed Call, by Matt Richtel:

When Alexis Gorman, 26, wanted to tell a man she had been dating that the courtship was over, she felt sending a Dear John text message was too impersonal. But she worried that if she called the man, she would face an awkward conversation or a confrontation.

So she found a middle ground. She broke it off in a voice mail message, using new technology that allowed her to jump directly to the suitor’s voice mail, without ever having to talk to the man — or risk his actually answering the phone.

The technology, called Slydial, lets callers dial a mobile phone but avoid an unwanted conversation — or unwanted intimacy — on the other end. The incoming call goes undetected by the recipient, who simply receives the traditional blinking light or ping that indicates that a voice mail message has been received.

Genius. Elegant in its simplicity. The sweet relief of being able to plausibly lie and avoid conflict at the same time.  It’s calling when you know someone will be out—squared.

Where does this fit in the pantheon of problem-solving inventions? It’s gotta be up there with Get Out of Jail Free cards, the morning-after pill, the hangover pill (slot as yet unfilled), homework-eating dogs, and the deus ex machina plotline.

Because almost all our worst fears involve other humans. Fear of being eaten alive in the forest by bears? Chicken——, compared to the mortification of a teenager shunned by peers. Hearing Sister Mary say you’ll rot in hell for doing whatever it was you already did. Receiving a dear John call. Calling dear John.

Slydial is unique only in one tiny detail. You already have access to voicemail. You can already send digitized voice messages. Slydial’s tiny tweak is the shortcut straight to voicemail, unbeknownst to the receiver. It is the caller’s equivalent of caller ID or spam filters. One small step for technology—one giant leap for Freudkind.

Because this permits the caller to lie. Plausibly.

The caller’s lie is this: “Hey, I tried to call you, but you were out. So I guess I’ll just have to leave this message on voicemail—not that I want to, gosh I hate to do this kind of thing so impersonally. Sorry about that, but—well, it wasn’t my fault. So, anyway, hey—I’m breaking up with you. I couldn’t make it into work today. The dog ate my homework. About your party, you know, pre-existing commitment. We’ll do lunch another time. Sorry I missed your birthday.”

All without that distaste that accompanies having to talk to the Other.

Seinfeld’s George Costanza—the patron saint of avoidance—would have loved Slydial. His spiritual progenitor, Larry David, would know just how to market it. Perhaps Slydial’s owner, MobileSphere, should hire David to consult, based on this from the article:

MobileSphere’s co-founder, Gavin Macomber, said the tool was a time-saver in a world in which conversations could waste time, whereas voice mail can get directly to the point. Part of the reason people are so overwhelmed, Mr. Macomber said, is because they are connected to devices and streams of data around the clock.

Puh-leeze. Alexis Gorman knows better. She works in marketing, and says of her Dear John slydial, “I can do without the drama…I wanted to avoid an awkward conversation.”

So does Manny Mamakis, also quoted in the article as finding it a time-saver. But then Manny speaks the Truth:

“It does make you more cowardly,” he said.

Slydial’s effectiveness—like Borat or Punk’d—depends on being relatively unknown. It loses power once it goes mass-market. “You rat, don’t think you can Slydial me!”

I predict a meteoric—albeit short-lived—success for Slydial. Anything that feeds fear of other people will sell well. Sex it up and the sky’s the limit.

Sometimes fear sells you what you actually do need—say, the morning after pill.  But other times it sells you the illusion of what you need.  What you need is usually closure, not avoidance.  

 

Is Sales Efficiency Killing Your Sales?

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A search on Google for the following sales-related terms shows:

• Sales force management 315,000
• Sales force effectiveness 113,000
• Sales force productivity 44,500
• Sales force performance 37,200
• Sales force efficiency 28,100
• Sales force compensation 15,300
• Sales force motivation 6,150
• Sales force measurement 577
• Sales force relationships 244
• Sales force trust 33

The numbers alone suggest a certain sense of priorities in the world’s interest in sales. In the broadest sense, let’s just say the reigning focus seems highly seller-focused.

Here’s a quote from what I would suggest is a fairly typical piece on selling:

XYZ has developed proprietary approaches to measuring and maximizing salesforce efficiency. Sales managers can learn, quantitatively, how their best people invest available selling time, including a measurement of expected sales dollars per sales call. This knowledge is used to improve the efficiency of others in the salesforce. Simple tools can tell the sales manager what the expected outcome would be of adding one additional sales person, of getting each salesperson to make one more call per week, and so on.

[Our] model addresses several common sales planning flaws:
* Salespeople call on too many accounts, and therefore don’t have enough time to call on those accounts often enough to be successful.
* Salespeople don’t spend enough time with the accounts that provide the best opportunity for growth.
* Salespeople spend too much time calling on low potential accounts.
* Salespeople don’t realize how precious few sales calls they have to invest [sic] each year.

Let’s refine our statement of focus in selling. The usual treatment of sales goes beyond just “self-focused.” It also defines sales heavily in terms of return on investment, and of processes. The solution to higher ROI is often found in changing processes.

For a more academic example, see a 2006 Harvard Business Review Article, The New Science of Sales Force Productivity, by Ledingham, Kovac and Simon:

Today’s most successful sales leaders are taking a more scientific approach. Savvy managers are reshaping their tactics in response to changing markets. They are reaching out to new customers in innovative ways. And they are increasing productivity by helping the reps they already have make the most of their skills and resources.
Leaders who take a scientific approach to sales force effectiveness have learned to use four levers to boost their reps’ productivity in a predictable and manageable way.
1. They systematically target their firms’ offerings, matching the right products with the right customers.
2. They optimize the automation, tools, and procedures at their disposal, providing reps with the support they need to boost sales.
3. They analyze and manage their reps’ performance, measuring both internal processes and results to determine their teams’ strengths and weaknesses.
4. They pay close attention to sales force deployment—how well sales, support, marketing, and delivery resources are matched to customers.

What is remarkable in all these lists is the virtual absence of the “R” word: relationships.

There is “scientific” (read “quantitative analysis”) study of products, automation, tools, procedures, internal processes, results, and deployment;

There is general agreement that the end result is to be judged in financial terms (ROI—effectiveness), which can be decomposed into various ratios (efficiency in general);

Mirroring this self-absorbed perspective of both design and outcome is the treatment of the customer. Almost all sales models are based on a single-transaction—with the usual “feedback” arrow saying “return to beginning and start over."

Try substituting “relationship” into this self-oriented, mechanistic and transactional mindset and there is only one kind of relationship it applies to: a one-night stand, repeated endlessly, with only the names changing.

There is no forward momentum in a series of one-night stands. No growth, no development, no connection—and no relationship. (I’m not knocking one-night stands, by the way, or saying they are "wrong;" I’m just saying call them what they are).

There is nothing wrong with counting sales dollars as a pretty good indicator of sales success. And it’s natural to want to dig deeper. But if all the digging is focused on ourselves, our processes, our metrics; and if all the relevant timeframes are shorter and shorter; and if we fall prey to the Skinnerian belief that you must shorten the time between action and monetary reward for the rats salespeople—then we conspire to reap what we sow—the one-night stand.

Great short-term performance doesn’t come from short-term selfish, transactional management. Great short-term performance is simply one part of a longer success story that comes from a long-term, relationship-driven concern for the customer.

Competing With Your Supplier is Not a Best Practice

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Fortune’s Geoff Colvin writes in the July 21 edition about Gary Reiner, GE’s CIO, in Information Worth Billions: General Electric’s CIO Tells How He Makes Infotech Pay In a Big Way.

Reiner reports directly to Jeff Immelt, GE’s CEO. Immelt wants three things from him—one of which is sourcing. Says Reiner:

"…we were one of the first to do e-auctioning. Our job would be to commoditize the item as much as possible and then leverage IT to have our suppliers bid for the business.

Of course, Reiner says that though GE loves to buy through reverse auctions, it hates to sell that way.

"…the more commodity-like the part or service is, the easier it is to auction; and the more differentiated, the less easy it is to auction…we try to make more of our business portfolio be products and services that are non-commodity—that are differentiated. So we are not as auctioned on the sell side as we are on the buy side.

All well and good. And of course (insert here your favorite paragraph on the fabulous track record of GE, Jack Welch, etc.).

And yet, and yet…

I’m left with the inescapable feeling that Reiner—and Immelt, and GE—view business as being exclusively and exhaustively about competition. Including competing with your suppliers. And competing with your customers.

With suppliers, it’s about extracting the best price from an auction. With customers, it’s about extracting the best price by avoiding an auction.

In both cases, it’s about extracting maximum price in a zero-sum transaction whose boundaries are limited to product features, product quality, and price. What’s good for me is not good for you, and vice versa. We are inextricably opposed.

If that sounds perfectly obvious and normal to you, then think about what’s missing.

A relationship. An approach of collaboration. A view that this transaction isn’t a carefully negotiated one-night stand, but rather a joint journey. A view that gets beyond mere product characteristics and price. A sense of commitment to customers or suppliers. A feeling of responsibility for the health of both parties. A willingness to pool information, rather than use it as a wedge.

That’s some of what’s missing.

Let’s call GE’s view the “competition-centric” view. It was given intellectual expression and validity by Michael Porter in his 1978 classic Competitive Strategy. In that book, Porter laid out quite clearly the nature of business: it was to compete. And the nature of competition was equally clear. There were five competitive dynamics facing the firm: two of those five were the competitive struggle between the firm and its customers, and the firm and its suppliers.

In other words—business, by this view, is quite specifically about competing with your customers (and suppliers).

This view is not “wrong” per se. It helped a lot of companies—including GE—to survive and prosper.

But this is not your father’s business world. Nor Jack Welch’s. Not any longer.

Today’s "flat" business world—30 years after Porter—is about extended enterprises, not hard-walled corporations. It’s about supply chains, not about monolithic vertically integrated organizations. Best practices today are about collaboration, not competition; about influencing, not managing; about commercial relationships, not competitive ones. It’s about 1+1=3, not "do unto others before they do unto me."

Those who succeed today aren’t those who play “hardball,” but those who learned early on to play nicely in the sandbox with others. Because in today’s business world, there is no longer any separation worth the name; in a globally scaled world, everyone outsources pretty much everything. A competitor today is a collaborator tomorrow and a customer or supplier on alternate Tuesdays.

Exhibit 1: the auto industry. Toyota has a genuine cost advantage over Detroit because it has always treated its suppliers as an extended organization—not as enemies to be kept at bay and bled nearly dry. That collaborative advantage is the competitive truth—not the self-serving excuses (by Welch, among others) about health care and pension costs (which were after all freely signed into contracts by Detroit management without a gun to its head).

Yet the dominant business ideology in the West continues to be—competition. These antiquated belief systems are increasingly at direct odds with the horizontal, extended, diffuse, globally interdependent world we now live in.

And of course, that’s how it works. Beliefs die hard—well after the conditions that birthed them are long gone. Ideology is the last vestige of a changing world.

Competing with your customers? If that was ever a “best practice,” it should now be relegated to an increasingly bygone world. It’s not “bad” or “wrong”—it just doesn’t work as well anymore. And that trend is only increasing.

 

Self Help Con Jobs

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Would you like to be more trusting? Maybe you’d prefer to be more trusted?

Most of us would like to get better at both. But how does one get better—at anything?

Virginia Heffernan has done the heavy lifting for us in the NY Times Book Review section in Advice Squad, her just-slightly snarky look at the New York Times’s advice, how-to and miscellaneous best-seller list from March 9, 2008.

You’ll recognize every genre, if not every title.

For example, there’s the “buy up the Alabama rights for some 800-number fish lure that keeps showing up in obscure publication, then re-sell them via the internet to some other person looking to get rich quick” scheme.

There are the “serenity now” variations once satirized on Seinfeld.

There are variations on looking young, not looking old, great skin, less fat, you are what you eat, get skinny by cleaning your house.

I don’t know what you call Suze Ormon; like Dr. Ruth and Tony Robbins, she clearly knows her stuff, but it’s somehow more about the Suze show than the subject.

There’s a special circle of hell reserved for Deepak Chopra, who ages ago (another lifetime?) actually wrote intelligibly about things medical. Not any more.

But the quintessentially American number one best-selling self help book—for a long time running, I believe—is The Secret.

This book is the capsule story of all the other books—they all promise the One True Way, if you will just follow their advice.

It is also number one because it captures the true secret of a con job—bad logic applied to serious issues. Which results in some major tsouris.

What do I mean by bad logic? This.

Imagine all four variations of a syllogism:

  1. If you got B, you must have done A.
  2. If you do A, you’ll get B.
  3. If you don’t do A, you won’t get B.
  4. If you didn’t get B, it’s because you didn’t do A.

The trouble all begins with number 1:

“I never gave up the dream that I’d [make it in Hollywood, win American Idol, own the big house, win the SuperBowl, hit the lottery]. I never stopped believing I could do it. And today, here I stand—I did it!”

This is what logicians call a “necessary condition.” If you’re going to win the lottery, you have to buy a ticket. To win American Idol, you’re going to have to stay positive. To play in the NBA, you gotta have some big ambition.

The biggest problem comes with shifting to number 2—believing that a necessary condition implies a sufficient condition.

A necessary condition means that if B is going to happen, you will have to do A. A sufficient condition means that if you do A, then B will happen. The shift from a necessary to a sufficient condition is the central con job of The Secret—and of most cults. From “all winners believe” to “all believers win.”

Such a small shift. Such a Big Lie.

In the particular case of the The Secret, the Big Lie is compounded, because it’s not about believing in a diet or a magic pill; it’s about believing in belief itself. You gotta believe! Anything is possible if you only believe! This is the stuff of Oprah’s evil twin; of snake oil salesmen.

If dreaming big were a sufficient condition, every dreamer would win the lottery. If mere willpower were enough to win American Idol, the parade of early season misfits would be in the finals. Simon Cowell’s role is to remind us all that talent and hard work matter too. We love to hate him because we want to believe those self help books are enough—if you just dream hard enough!

But no—just because the winner dreamed, doesn’t mean dreaming makes you a winner. Hope is not a strategy. Strategies require more than dreaming. The inner city is full of kids whose life’s hope is to play in the NBA—far too many for the NBA to accommodate. And they have no strategy to back up the hope.

That’s the con job. But the evil of The Secret lies in versions 3 and 4—especially 4.

Version 3 says, all those poor fools out there who aren’t winning; it’s because they don’t believe. I, of course, know better. I know the power of belief.

Then the clincher, version 4. If you didn’t get wealth fame and happiness, it’s not because The Secret is a lie—it’s because you didn’t believe strongly enough in The Secret; in belief itself.

When Dorothy and Toto say “you have to believe,” we call it entertainment. But Madison Avenue sells the same Secret, as George Carlin pointed out so brilliantly: If you don’t buy our product, you will emit sinister genital odors and everyone will know it’s you and shun you and it all will be your fault, because you were warned. So Buy Now.

The Secret is a closed system. You cannot argue with someone who believes both that A is necessary and sufficient for B, and that the absence of B is necessary and sufficient to infer the absence of A. Work that one out. Like any closed system, every attack on it is rejected as illogical. That’s why they call it a closed system; an objection is defined as wrong.

For True Believers, it doesn’t matter what A is—it’s the experience of having an Answer for Everything that seems so seductive.

Some of us suffer more than others from an inability to believe, particularly in ourselves. A shot of energy, a bit of belief itself, can be a bracing and positive thing; when coupled with a strategy, even life-transforming.

But an entire industry selling people the belief they can influence lotteries and believe BMWs into the front driveway—no. Some of those end up as the ones we laugh and cringe at in early American Idol episodes. Others just slink off in shame when they come to. But most just buy another self-help book, desperately secure in the belief that belief will be enough—this time.

How do you get better at trusting and being trusted? Don’t peddle snake-oil. And don’t buy it either. Belief is necessary; it is not sufficient.

 

From Financial Relationships to Financial Transactions, Losing Trust on the Way

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The New York Times this Sunday has initiated an ambitious and comprehensive look at the financial crisis facing us. Gretchen Morgenson, a crack business writer, has not only her normal Sunday business page lead, but also the entire issue’s Main Section Front Page lead.

And rightly so. Count me among those who believe this is no ordinary recession; we’ll live to live again, but there has been huge financial misbehavior by all of us for a very long time; we’re going to have to pay the piper for some time to come.

Morgenson points out we doubled our mortgage debt in 7 years as a country; our savings rate—at 8% in 1968—is now 0.4%. And the biggest scorecard of all is the fall of the dollar, already precipitous, and likely to get worse.

One of the patterns that emerges is the conflict we have created in the world economy in the last two decades between efficiency and trust. It’s a major trust issue—one of social and political structure.

Here’s the idea.

The global financial system has gotten far more efficient by applying business process thinking “best practices.” Define processes so they can be outsourced to others, the thinking goes, who can then do those processes at a global level of scale, more cheaply.

That logic is what drives the outsourcing of payroll and benefits processing. It’s the same logic that drives mortgage lenders to sell loans to banks, and banks to package them to asset packagers.

It has in many ways worked: more capital became more available in more places to more people more quickly and at lower costs than had been the case 20 years ago.

Unfortunately, there was a side effectT—the substitution of short-term transactional fee income for longer term relational income sources (like interest).  And fee income has turned out to be the crack cocaine of the financial industry.

It isn’t just mortgages. It shows up in banks every time you get hit for $2 to withdraw $100 from an ATM not your own. It shows up in credit cards—in late fees and over-limit penalties, in huge rates for cash withdrawals. And of course if you refinance a mortgage, fees abound—enough to become the primary source of profitability for the refinancing institution.

Who cares about your damn loan when they can make money off of the act of taking out the loan, and more money out of selling it to someone else. Give ‘em a ten-year balloon loan at teaser rates. On Wall Street, the moral decline was captured with the phrase, “I’ll be gone, you’ll be gone—just do the deal.”  Gimme more crack—gimme the fee income, you can have the relationship and the loan.

So here’s the social trust issue.

One of the four Trust Principles (see my article “Trust: the Core Concepts” or my book Trust-based Selling) is the focus on relationships, not transactions; on the medium-to-long term, not just the short-term.

That idea is pretty simple and clear. Trust thrives in relationships, not in random encounters between strangers. Economic models that link entities—and people—allow trust to grow.

Economic models that structurally dissociate people—blind online bidding systems are an extreme case—are at best trust-neutral, and in many ways trust-destroying (in the case of blind online bidding, that is in fact the intent).

So we have a dilemma. The economics of outsourcing processes has indeed resulted in lower costs. It has also resulted in lower trust.

Can we have both? And if so, how?

I don’t have the full answer, of course. But I believe the answer is going to rely on two things:

  • The political will—in government and in business—to recognize that, in the long run and in the big picture, we are all inextricably linked, and we’d better behave as such. In other words, an ethos or common belief-set based not on competition, but on collaboration.
  • The insight that low cost alone does not drive value; that relationships, in fact, are the source of far greater value than the micro-process-here-now-self-aggrandizing instincts we have been propagating as “best practices.”

It ain’t going to be easy, though.

Top Ten Reasons Organizations Don’t Teach Trust

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This recently from Tom Hines of the Monitor Group.

"My question to you, Charlie, is simple, but something that I’ve been struggling with for some time now. If every CEO or other senior leader (or at least the great majority) seems to agree that success in selling is in some part attributable to trust based selling concepts, then why do they spend virtually all of their training $$ on sales process, closing techniques, etc. It seems like a dirty little secret that this is nothing but a waste of money."

"I have worked with literally hundreds of sales people over my career and no process, qualification questions or closing technique ever works without establishing trust as the foundation of any client relationship. So the question then is why don’t organizations prioritize and invest in helping their organization understand the dynamics of trust and use that as the foundation of any other program they try to implement? It seems to me that they spend a great deal of money on "quick fix" programs that do nothing to change behaviors and belief systems about the importance of trust and how it is the only way to improve performance."

Well, Tom, no surprise, you’re preaching to the choir. But I know you mean the question seriously too, and I too take it as a serious question.

Why is it that things are that way?

Here’s my Top Ten list for why organizations, especially sales organizations, don’t invest more in trust. 

10. Fear–of looking wussy, as in Real Men Don’t Play Trust Games.

9. Thinking that business is about competition. It’s not. It’s about commerce.

8. Fear—of someone taking advantage of us; hence do unto others before they do unto you.

7. Bad long-term logic. We are dominated by financial logic, internal rates of return and present-value discount rates. That belief outlaws any investment beyond about 25 years. The parent of a child operates on a longer timeframe, not to mention entire nations in Asia.

6. Inability to defer gratification.

5. A Hobbesian hangover. The continued belief, fostered by ideologue economists and politicians, that the world is an evil place—life is nasty, brutish and short–and therefore the best defense is a good offense. Even if the premise were true (I have no position on it), the conclusion certainly is not.

4. The cult of rationality. Belief that only “scientific” management works; forget passion, belief, relationships—and trust.

3. Over-emphasis on measurement. The belief that “if you can’t measure it, you can’t manage it.” Just think about that. False on the face of it.

2. The cult of short-termism. Here-now, bird-in-hand, payback time, fees-not-interest, outsource, monetize—it all adds up to transactions, not relationships. Not good for trust.

1. Fear—that someone will find out who you really are if you don’t manage your image. So tighten up, spin everything, and get out of Dodge before they can spot you for who you really are.

What’s your answer to Tom’s question?

Can You Tell the Truth About Being Self Interested?

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The other day I was teaching a seminar, and someone phrased the following question:

I understand your point that, in sales, we should pay attention to the other person, focus on their needs, subordinate our own ego, and so on. But I have a hard time squaring that with honesty. After all, I’m in business to make money. They know that as well as I do. Isn’t it disingenuous—even dishonest—for me to pretend I’m totally focused on them, and not on myself?

That’s a very relevant issue to lots of people, and very well stated.

The answer in many ways boils down to one word—timeframe.

If I’m in a romantic relationship for sex, I’d better plan on some dinners, flowers, conversations and companionship on the way there. (And vice versa, by the way).

If I’m going to rely on friendships, then I’d better be prepared to invest in them over time.

If I want to have high energy and good health, then I’d better be prepared to forego the chocolate cake cravings from time to time, and to exercise sometimes when I don’t feel like it.

In other words, the desire for immediate gratification is often the enemy of longer-term happiness. Sad but true. In one study (maybe a reader can help me remember where/when), five year-olds were analyzed according to their ability to defer gratification (“one cookie now, or two in an hour”). Their subsequent lives were then traced over decades. Those kids who chose more later were notably happier, more successful, more stable later in life.

So it is in sales.

If I insist on closing every deal; if I insist on metricizing every little aspect of my sales process and tying rewards to each part; if I am constantly evaluating the discounted present value of the next ten minutes of conversation so as to decide whether to qualify or flush the prospect—then I am not a deferred-gratification salesperson, I am that greedy kid saying “me want cookie now!”

And people react to us accordingly. People who expect sex too early in relationships tend not to get it. People who never invest in their friends lose them. People who can’t resist the extra piece of cake get fat.

Back to my student.

The apparent conflict between self-interest and customer orientation evaporates if we look at the right timeframe. If all I can see at any point in a sales conversation is the likelihood of closing, then I am a “me want cookie now” kind of salesperson.

But if I’m willing to invest in the relationship—to let go the incessant attachment to outcome, to enjoy the ride as well as the destination, to qualify leads occasionally as opposed to constantly, to drive my reward from the total package rather than the quarterly pieces, to live in the relationship not the transaction—then things get better.  In fact, all things get a lot better.

It’s a bit of a paradox: the best short-term results do NOT come from trying to manage the short-term, but from managing in the long term. Your own best sales results come not from trying to sell the other guy, but from helping him get what he wants.

Your own self-interest is truly served by serving the other. And that’s the honest truth–about which you can be honest.

The contradiction is only in how you phrase the problem. Phrase it in the longer term.

 

Why People Don’t Trust Trust

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In broad terms, what I do for a living is teach (mainly corporate) people to be trustworthy with their business partners, customers and clients.

One of the most frequent objections I get is, “But what you’re suggesting is naïve; it’s too risky, and people will take advantage of you.”
Let me explain why this is a non-sequitur at best, and flat wrong at worst. There are three mistaken assumptions in this claim:

1. Believing that trusting and being trusted are the same
2. Believing you can earn trust without risk
3. Believing that people’s primary instinct is selfishness.

Trust is not symmetrical. To be trusted by someone is not the same thing as trusting someone. When I recommend being trustworthy to my clients, I mean things like admitting when you’re wrong, not fudging your credentials, recommending competitors if they are better for the job, and generally speaking the truth about whatever is going on with you and the other person and the situation at hand.

I have never heard anyone justify lying. But I hear lots of people say they’d never recommend a competitor, or that they’d shade the truth to win a job, or that they’d never acknowledge a situation of discomfort, or call out a dysfunctional client situation. Which as far as I’m concerned means you’re not willing to tell the truth. Which is often only marginally distinct from telling a lie.
But that’s how people talk themselves into not being trusted—that is, by coming up with excuses for not telling very much truth. Which comes across to clients and partners as hiding something. Which makes them distrust you.

Most service providers over-rate credentials and a track record, and underrate the power of telling the truth—all of it. Honesty, transparency, truth-telling, full disclosure—these are the things that lay bare motives, and convince others that nothing is being hidden.

But to the one who would be trusted, these can seem risky steps to take. Admit we made a mistake? Heavens no! They might think we are incompetent; they might be upset; they might fire us; they might not pay the bill. Better to say nothing of it, try to fix things up behind the scenes, and hope they don’t notice it.  But they always notice it. And the coverup is always worse than the crime.

There is no trust without risk. Ronald Reagan’s line “trust but verify” is a rhetorical trick. Trust with verification isn’t trust–it’s more like random drug-testing, which is what happens absent trust.

The one who would be trusted is the one who takes small, initial up front risks—risks of embarrassment, rejection, inadequacy. The one who trusts is the one who generally takes the far bigger, longer-term risk—buying the product, signing the contract.

How silly, then, to risk ruining a large, long-term deal by avoiding a small, short-term deal—out of fear. Yet it happens all the time. We can’t tell them they have a problem in purchasing management—they might be offended. So we’ll just do nothing.

It’s ironic that the largest cause of unwillingness to be trustworthy via truth-telling is the belief that the other party—the one we’d like to trust us—will screw us given the chance.
It has nothing to do with whether people are “good” or “bad,” whether they are or are not out to get you. Those odds vary by industry, geography, and other conditions.

But in almost any population (all right, so maybe Wall Street might be an exception), the willingness to behave at a level of trustworthiness beyond the norm for that population will itself tend to raise the level of trusting as a response. Simply put, people respond to trustworthiness in a reciprocal manner.

If someone behaves in a more trustworthy manner than I am accustomed to—then I am more likely to trust them than I would someone else on average.

What’s so dumb about being trustworthy?

 

The Mathematics of Age and Wisdom

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Time goes faster as we get older.

This makes intuitive sense if you assume time has a subjective flavor, in addition to an objective meaning. A year at age 10 is a tenth of one’s live; at age 50, it’s only 2% of one’s life. The rate of passage of time, measured by our perception of change, indeed increases.

Now apply that concept to age and wisdom. How much wiser is a 60-year old person than a 20-year old person? Three times wiser?
I would argue at least a multiple of six. If not more. Here’s how.

Let’s define wisdom in a narrow, simple way: the ability to perceive patterns from the data of life. And I don’t mean book-data. Any young trader on Wall Street can cite statistics about past bear markets. But the old traders will tell you, until you’ve been through one, you’ll behave stupidly when presented with it the first time.

A 20-year old person has seen 20 years of life. A 60-year old person has seen 3 times that much. Without complicating the math, the oldster has got 3 times more direct experience—more data from which to mine patterns.

But add subjectivity. A 60-year old has not only his or her own life at close hand, but the prior 60 or so years take on a new light. They become more accessible.

Born in 1950, World War II seemed impossibly distant for me at age 10. After all, it had started more than a lifetime ago—for me. At age 40, I was shocked that college freshmen viewed the Vietnam War as similarly distant. Like all boomers—veterans especially—the passage of time has brought those two wars much closer together.

My son, who is now 19, met my grandmother, who lived to 100. She listened to Civil War stories, first-hand, at the feet of soldiers who fought it. That’s one degree of separation from the Civil War to a PS3 gamer.

Yet that feels less remarkable to me now than it used to. I can now envision the 1920s far more easily than previously; but the 1890s still feel quite beyond my grasp.

So here’s my mathematical rule of wisdom: you can mine the history of 2x your age for wisdom.

Thank god wisdom doesn’t depend much on memory. That seems to work in the other direction.