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Collaboration is the New Competition: Isn’t It?

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On the one hand:

  • This year a main theme of the Davos conference, where the worlds elites meet, was collaboration;
  • The buzz du jour—actually, for quite a few jours now—has been networking;

And yet—the lesson doesn’t seem learned just yet. In fact, business is positively schizophrenic these days. Three examples:

1. In Fortune’s March 17 issue, A.G. Lafley, CEO of P&G, talks about the major change he implemented. At one point he says, “I encouraged [managers] to compete like hell externally but to collaborate like family internally.”

A few paragraphs later, he says “we began to seek out innovation. Innovation is all about connections, so we get everyone we can involved: P&Gers past and present, customers, suppliers, even competitors.”

So, which is it? Do you compete with your competitors, or collaborate with them? Yes.

2. I wanted to hire my good friend John, a lawyer, to do some legal work for me. I told him I wanted him to be practical, not theoretical—and I needed good value for money. He replied, “I will focus on practical, and will be careful with funds, while also balancing the need to protect myself.”

Protect yourself? From whom, John? I’m the only threat he can possibly be talking about. So, what am I? A client, or a competitor?

3. The Wise Marketer , a group that focuses on loyalty programs, says in its newsletter of March 6:

“…by retaining 5% more of its customers, a company can almost double its profits… In other words, it pays to engender loyalty. So that’s WHY we need loyalty programmes – or more specifically, the data that we can gather from them."

Their words, not mine: the reason we have loyalty programs is for us to make more money. Loyalty—as in semper fi, or ’til death do us part—is engendered by business in order to make money—not for its own sake. Means, not ends.

Like Hugh Lofting’s Pushmi-pullyu, business has become of two minds.

On the one hand, the reigning strategist of our time, Michael Porter, teaches that business is about competition, that there are Five Forces of Competiton, and that two of them are about a company’s rivalry with customers and with suppliers.

By this view, the natural state of business affairs is a Hobbesian state of nature, where we fight with others in our supply chain. Made a lot of sense 20-30 years ago. So Detroit competed with its union, its dealers, and its suppliers.

Meanwhile, Toyota collaborated with its suppliers, and today enjoys a huge cost advantage because of it.

On the other hand, in a world where increasingly you have to get world class at one thing and outsource the rest, you had better get really good at collaborating with your supply chain—not suing them and having them sign NDAs. Collaboration is the new competition.

What is happening here, Mr. Jones, is that a Brave New World is colliding with a rapidly obsolescing business ideology. As always happens, the New World will eventually win. The only question is, how much damage will be sustained along the way. Because old ideologies die slowly, like old ideologues.

Business will have to re-learn the lesson of the human race. Survival does not depend on Darwinian strength—it depends on co-existence, co-location, collaboration. Darwin himself stated, if I’m not wrong, that survival depended more on adaptation than on overcoming.

We’re going to have to root out an awful lot of knee-jerk beliefs and behaviors based on the old-think of competition, in order to get to a more universally efficient and value-producing world of collaboration. It’s not so much an issue of moral illness, as it is of mental illness. We need to think anew, and aright.

Oh, and I’m still hiring John. It was his training, not his heart, doing that bad talking. It’s his heart I trust.

Carnival of Trust for March is Up

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The Carnival of Trust for March is up. This month it’s hosted by Duncan Bucknell at his IP ThinkTank blog.

What is a Carnival, you might ask? It’s a blogosphere equivalent of an anthology, in which a host collects of blog postings on a particular subject. The Carnival of Trust, unsurprisingly, collects what we hope are some of the best writings every month on trust.

Duncan has come up with some tasty choices this time. For example, read musings on topics like:

What if the post office ate your Intellectual Property application?

Why is a virtual community like a Koi Fish Pond—particularly with respect to recycling waste?

How can you build trust while facilitating meetings?

Can Finns trust the Finnish government to censor websites? (hint: probably not)

Enough with trusting your lawyer—can your lawyer trust you?

The cool thing about the Carnival of Trust (I think) is that each guest host (the host rotates each month) must limit him- or herself to only 10 choices; the Top Ten of the month. Secondly, each host must succinctly add value in their commentary—think of those great one-paragraph movie reviews in the New Yorker.

Do yourself a favor: click through to this month’s Carnival and enjoy some incisive, interesting writing, courtesy of Duncan Bucknell.

And if that whets your appetite, by all means have a look at past Carnivals.

Like to see your own blog posting in a future Carnival? Submit your blog entry here. Trust me, you can’t win if you don’t post an entry!

Next month’s host will be Mark Slatin, whose musings on trust and business are worth reading any day.

And if you’d like be a future host of the Carnival of Trust, write us at carnivaloftrust-at-trustedadvisor-dot-com

Hip to Be Square at Roundball

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Last post I talked about a possible trend against cynicism. Well, when it rains, it pours.

Mark Slatin tells us what happened at halftime at a recent Maryland Terrapins vs. Wake Forest basketball game.

I’ll just let Mark tell this story in his words:

The PA announcer introduced student contestants for the Pep Boys Fan Challenge. These two young men were competing for a year of free windshield washer fluid. I couldn’t make this stuff up! Regardless of where you sat that night, any fan could tell that both competitors had enjoyed their share of super sized Pepsi’s and grande nacho cheese tortillas.

The winning contestant would need to complete a “speed drill”. The goal? Dribble the ball from under one basket to the foul-line and back, then to the half-court line and back, then to the other foul-line and back, and finally to the far base-line before finishing with a successful basket.

The labored breathing started for both men as soon as they hit the first foul-line. As they reached the half-court line, one appeared to glance upward to see if an oxygen mask would mercifully drop from the Jumbotron. As they headed for the final turn, one warrior had gained, what they call in football, separation, from the other – nearly the full length of the court.

At this point, fans started to cheer. Not for the apparent victor, but to support the guy who was grasping onto hope…just to finish.

Then it happened.

The contestant who was gliding to an easy victory slowed down about eight feet in front of the basket, got down on all fours, and waited for his competitor, a complete stranger, to approach. As the athletically-challenged straggler huffed and puffed his way toward his competitor, he saw the offering of a human trampoline in front of the basket. Hands and knees now firmly planted on the hardwood floor, the first contestant pointed up to his own back.

The anticipation and noise level escalated as he neared with slow motion speed. Without breaking stride, the newly anointed crowd-darling picked up steam, took a final dribble, jumped on the back of the first contestant and slam dunked the ball to an erupting Comcast Center crowd.

Unexpected.
Unnecessary.
Unselfish.

Both men hugged and held each other’s hand in the air in victory as the video camera sent their image to the arena mega-screens. The Terps went on to win the basketball game; but, these men were the real victors that night.

By humbling ourselves and not seeking the spotlight, we build trust.

By giving credit instead of taking it ourselves (especially when we can), we build trust.

By doing what is unexpected, unnecessary and unselfish, we build trust; capturing the hearts of everyone in our arena. The one-year supply of windshield washer fluid is just a bonus.

What Mark said.

Fighting Cynicism

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I often want to be hip and in the know.  I don’t think I’m the only one.  And frequently this urge manifests itself in sarcasm, cynicism or being snide.

Are we living in a time where this urge is perhaps more prevalent than others? So much so that we’re beginning to see a backlash?

Some see the Obama phenoma as evidence of such a backlash.  I’ll abstain from that debate.  Besides, I’ve got a better piece of evidence.

In Advertising Age —‘of all places,’ I’m tempted to say—we find Snide Advertising is Bad for Business and Society,  by Richard Rapaport. He dissects some of the snarkier, hipper ads on TV today—ads by FedEx, Budweiser, Priceline.com.

I don’t think of advertising as a bastion of expansive social thinking; much less of a philosophy linking social well-being and business profits. I think of it as a center of cynicism, actually. And yet, read these few snippets (and remember, this writing appears in Advertising Age):
 

There are few barometers so reflective of modern life as TV advertising. It makes sense. Take the culture’s most facile minds, challenge them to pry cash from an increasingly tapped-out audience, and what do you get? Commercials built on sadism, on derision, on one-upsmanship — in a word, "snide."

If you look up "snide," you find synonyms such as "sarcastic" and "malicious." Snide advertising possesses a governing syntax that demands, to begin with, sacrificial victims…

Another building block of snide advertising is physical aggression…

Snideness is the leitmotif of sexy slapstick that predominates in ads for domestic beer bottlers, the bottom feeders of American advertising…

The bottom line of snide advertising is a kind of Darwinian "survival of the snappiest," requiring that you get the last word in any exchange and that it be a "gotcha."

… the crux of snide advertising [is] the ability to communicate that you and your product are too hip to so much as work up a spit to actually sell the merch; that the very process of making the ad, like most other human endeavors these days, is barely worth the effort.

…It behooves marketing professionals to understand the difference between subtle irony and idiot snideness and aim for an advertising denominator cognizant of the maxim that expansive, confident consumers part with their cash far more readily than do angry, fearful ones.

When the purveyors of pitch are telling us not to foul the nest—maybe there’s something going on?

Trust Is the New Leadership In A Flat World

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Thomas Friedman’s book The World is Flat is an absurdly great best-seller.

It was a best-seller when printed in 2005, and as of today it’s still ranked #112 on Amazon. That’s a lotta bananas.

I don’t recall if Friedman ever defines “flat”—but it is an apt adjective.

“Flat” conveys the sense of “level playing field,” as in markets opening up to competitors from everywhere. It suggests a levelling of wages and prices, for the same reason. And it certainly conveys the feeling of lots and lots of interaction between buyers and sellers.

But enough about Friedman. Here’s what “flat” says to me.

Business used to be about stable, vertically organized, fire-walled, corporate entities—which competed against each other. That was business.

Not any more.

In the “flat” world, we don’t have corporations—we have supply chains. The vast majority of the auto industry’s costs are purchased costs. I’m told that when Tata set out to design a sub-$2500 car, they didn’t call a company meeting—they called a supply chain meeting.

The old job of leaders and managers—to organize (largely hierarchical) efforts within the walls of the Good Ole Corporation—is disappearing.

The new job is being done by supply chain managers, customer relationship managers, key account sales managers, and field engineers.

And that new job is not about directing people over whom you have control—it is about influencing those over whom you have absolutely no control whatsoever.

Trust is the new leadership.

It’s no longer about how you measure, motivate and inspire those beneath you or with the same W-2 form as you. It’s about how you connect with, help, and serve those with whom you interact in the Great Outside World.

Trust is the new leadership.

It’s no longer about how you help those who depend on you. It’s about how you help those on whom you depend.

And there’s the rub. Our old leadership models were internal; it was OK to help your people—after all, you all worked for Good Ole Corp.

But in old-think strategy, the customer and the supplier are your competitors too (think Five Forces model). Don’t share your cost information; contract for everything; you get what you bargain for; check with the lawyers.

In a flat world, old-think strategy runs smack up against new-think leadership.

In a flat world, you actually have to trust your supply chain. Your supply chain is your friend, not your enemy.

It’s no mistake Davos this year was all about collaboration. Collaboration is the new competition.

And trust is the new leadership.

Like old “internal” leadership, it comes with a paradox. If you focus on serving others, you will be served yourself. But if you set out to serve yourself by the “means” of serving others, you will be found out.

Decaying Social Trust and Moral Indignation

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Pop quiz!

Who wrote: “This is how the world will end—not with a bang, but a whimper.”

a. T.S. Eliot
b. W. H. Auden
c. Robert Frost
d. e.e. cummings
e. Alfred E. Neumann

Answer at the end; no fair peeking.

I don’t know about the world, but the subprime/mortgage/credit crisis shows how social trust ends. Not with a whimper, but with righteous moral indignation—on all sides.

We are in the midst of the deflation of a debt or credit bubble, itself based on an asset bubble—overpriced houses. As of today, according to the Mortgage Bankers Association, 24% of subprime mortgages are delinquent or in foreclosure; ditto for 4% for prime mortgages; and for all mortgages it’s a record 7.9%, the highest since records began in 1979.

Everyone played musical chairs. And the more frantic the music, the more rightous the talk.

Here’s the Heritage Foundation—mind you, just last November, 2007—demonstrating its utter subordination of logic to ideology, arguing against H.R. 3915, a House bill to reign in predatory lending:

[the bill] would establish an explicit series of credit standards for lenders, which could have the effect of excluding many moderate income borrowers from the ownership market. In sum, the enactment of H.R.3915 would delay the housing market recovery that is now struggling to get underway.

Yup, Congress killed the real estate bubble appreciating market.

A year earlier, in September 2006, the Mortgage Bankers Association stated that

“the subprime market has evolved dramatically in recent years, providing significant benefits to consumers…increasing regulation could decrease competition and increase rates that the subprime market offers consumers.”

But this is not a populist rant.  Consumers were far from just hapless victims.

An FBI Mortgage Fraud report 3 months ago stated that up to 70% of early payment defaults may have been linked to buyer misrepresentation on loan applications.

What about FICO credit scores?  Courtesy of BusinessWeek, meet “credit doctors,” companies who will manipulate credit ratings by blitzing credit agencies with disputes about old reports (which have likely been lost), setting you up as an “authorized user” of an account owned by someone with good credit, or just creating paper accounts.

“All legal,” they protest. Of course. No miscreants here.

So—end game—bang or whimper?

Dateline, CBS Evening News February 12, 2008.  Meet Karen T., a married San Francisco suburbanite who bought a condo as a second home for $505K, financing it 100% with mortgage debt. Now it’s worth $340K, and her adjustable mortgage goes up $900 this June.

They own another home. They can afford the rate increase. So—what to do?

Karen’s answer?  Walk away. Default.  Give it back to the bank.

Is Karen distraught? Not really. “I’m not doing anything illegal.  Everything’s negotiable in business—this is just another business decision. I don’t see why this is any different. I’m within my right to walk away from a bad deal.”

And 60% in an LA Times Real Estate blog poll agreed with her.

Karen is morally indistinguishable from a landlord turning off the heat under rent control; insurance companies withdrawing sole-provider coverage from unprofitable markets; banks charging usurious credit rates; emergency rooms turning out the uninsured; de facto mortgage redlining; and a thousand forms of “fine print."  Or—come to think of it—from a banker foreclosing on a never-should’ve-approved-that-loan loan. 

The rallying cry is always, “I’m not doing anything illegal.”

But here’s the kicker.

Karen’s not morally indignant about walking away. To her, that’s “a business decision.”

No, her moral indignation is reserved for the consequences she might face.  She leans her face on her hand, her voice intensifying, as she says, “It is devastating to think that my credit scores are going to drop 200 points," she said.

OMG, it’s just so, like, unfair!

Huh? Devastated because you were educated, had the money, and placed a 100% bet on an overheated market—and lost? And you can afford to pay the piper—but don’t want to?

Take a trip to Vegas, Karen, and see if the blackjack dealers buy it.  Better yet, go tell it to someone with half your education and income who’s been foreclosed on after having spent their last money trying to pay the bank. 

It doesn’t matter who started the food fight.  It seems that the decay of social trust is accompanied by higher levels of self-righteousness and narcissism on both sides.

When business and consumer alike choose moral bankruptcy over financial bankruptcy—without even thinking about it—and then justify it indignantly through Darwinian arguments—well, Houston, we’ve got a problem in trust-land.  Not to mention ethics-land. 

Oh yeah—T.S. Eliot. 
 

Lying to Get the Sale

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Suzanne Lowe, at The Expertise Marketplace, has a provocative post titled I Told the Truth—and Got Hired Anyway.

Briefly, she faced two sales situations in which she knew she’d be asked the inevitable question: what experience do you have working in our business?

The truthful answer boiled down to, “none at all.”  Since we all know this is the “wrong” answer, it took a certain amount of courage for Suzanne to speak the truth, and even more courage to then avoid rushing into the silence to list the dozens of reasons why she was nonetheless the best for the job, etc.

The punch line in Suzanne’s posting was, of course, that she got the job. And she asked her readers to help explain why.

Now, what I find curious is not the fact that she got the job—but her readers’ explanations for it.

To me, the reason she got the job seemed transparently clear, almost self-evident.  She got the job because she immediately proved she was honest, transparent, truthful—and those personal characteristics in this case outweighed the importance of industry experience—as they frequently, though not always, do.

Yet to my surprise other commenters had different explanations.  Their explanations included:

• Maybe the client saw the greater relevance of her experience in other industries
• This may be the rare client who is not risk-averse
• Maybe lack of industry knowledge meant no bias, hence an open mind—ignorance here is a plus
• Maybe her integrity helped feed a broader sense of chemistry about her

My first reaction to these other reasons (I’m trying to be honest here), was one of disbelief.   It’s always shocking to me when other people don’t see things precisely the way I do.  ("How could these people not see"…."Why don’t they understand…"). 

I mean, don’t you know who I think I am?

Yet, I know some of these commenters. They are bright, experienced, knowledgeable people.

Unfortunately, this means I am denied access to my preferred, first-blush, gut-instinct explanation for why they might disagree with me, namely they’re ignorant fools. (“Damn; I have to take these opinions seriously.”)

So, I have two questions for this audience.

1. What do you make of Suzanne’s tale; why do you think her clients in each case bought her services despite her lack of industry credentials?

2. What do you make of my being shocked at the other answers? What’s your first reaction when you find out someone has a different reaction to something you felt was obvious? And what do you do about it?

Carnival of Trust for February is Up

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Carnival of TrustThe February 2008 Carnival of Trust is now online, hosted by Michelle Golden and her blog Golden Practices.

Each month, the (rotating) host selects the Top Ten trust-related blog postings from across the web during the prior month. Subject areas include Advising and Influencing, Sales and Marketing, Leadership and Management, and Strategy, Economics and Policy.

I want to say pointedly how great this Carnival thing is.  Maybe you never heard the word "carnival" applied to blogs before.  All it means is a compilation of other blogs.

But as with all things internet-related—there are compilations, and there are compilations.  If you like casually searching the web for interesting stuff, the best click you can make is onto a really good Carnival.  And here’s why this one is turning out so well.

First, we limit the posts to 10.  This is the Top 10 list, the very best of the blogosphere, for anything vaguely related to trust last month.

Second, we get great hosts.  It’s not me that picks the Top 10, it’s the fine people who bring their own special expertise—marketing, consulting, intellectual property, selling, communications—and apply that expertise to the selection.

Third, those great hosts have a Point of View.  They add zing and zest and perspective to the already-good material they’ve selected.

Think of reading the Carnival of Trust as like skimming the NYTimes Book Review, if you like that; or the category leaders in Amazon; or some kind of Google-scanning with mind-reading software that filters out everything but what is Really Great for You and You Alone (if you like trust, that is).

If you can’t tell, I’m excited about the way the Carnival of Trust has been evolving.  Do yourself a favor and pop over to the carnival, hosted by Michell Golden this month,  and treat yourself to a good quick  read.

Banks Behaving Badly: Or Is It Just Me?

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You know how it goes.

The phone rings. It doesn’t show a caller ID, just a number. There’s a lag between when I say “hello” and someone comes on the line.

Why don’t I hang up right then? I really don’t know. My motives are opaque to me, but probably diseased.

This time it’s BankAmerica. They tell me there’s nothing wrong, my credit card has not been compromised—but hey, you never know!

Because they care about my security, they’re going to send me a credit report—free! Which I can then examine, and send in any corrections required.

In addition, they will send me—with no obligation! –an identity theft insurance policy, to protect all my cards. And all I have to do, if I foolishly decide not to take them up on this amazing offer, is to phone them within 30 days to say no thanks.

Otherwise, of course, they’ll bill me, in simple monthly installments, renewable automatically on an annual basis.

I assume that BankAmerica (and anyone else pulling this passive-aggressive “gotcha” marketing strategy) must have a high complaint rate, as people notice that it’s an opt-out, rather than an opt-in offer, and find an unexpected bill in their statement. And I assume that they end up reversing a lot of those “misunderstandings.”

Is it just me? Or does anyone else find this tactic not only annoying, but self-defeating?

What does BankAmerica (or any other bank) gain by having its name linked to a “sales” tactic associated with old record clubs and internet porn subscriptions?

Who is the analyst in the back room at BankAmerica (or any other bank) crunching the benefit/cost ratio of insurance fee income to the cost of processing returns?

Does it occur to him to factor in the cost to the brand? The drip-drip of negative reputation? The effect on BankAmerica’s deposit accounts? Its mortgage business?

And if not, why isn’t he being fired for destroying shareholder value? Because the market honestly does know how to distinguish between companies with good customer reputations, and those with bad ones.

Then again, BankAmerica just bought up Countrywide Financial, the nation’s largest subprime mortgage borrower—because, at these prices, it was a “good deal.”

Not for B of A’s mortgage business’s reputation. Countrywide’s own reputation can’t have added to BofA’s reputation among consumers.

Does reputation matter? I’d like to think it ultimately does. Read the comments to the above ABC News link, and see how many people are down on BofA as a lender. They can vote with their feet.
And now here I am complaining about their telemarketing, letting my fingers do the walking.

What about you?

If you decide not to continue reading this wonderful blog, all you have to do is write in and comment, and there’ll be no charge whatsoever.

Otherwise, I’ll simply bill you in painless monthly installments, renewable automatically every year unless you decide to notify me otherwise, whenever you want.

Trust me!

Call for Submissions for the February Carnival of Trust

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carnival of trust image

Every month the Carnival of Trust highlights ten of the best posts on trust, whether business related or not. The next carnival will be Monday February 4th. If you’ve written a post you think would be a good fit, or if you have read a post by someone else that you think would be great for the carnival I’d like to encourage you to submit it for the carnival. This month’s host is Michelle Golden of Golden Practices.

Carnival Submission Guidelines:

  1. The Deadline for submissions is midnight, Thursday, January 31st.
  2. Posts do not have to be business related. Trust in personal relationships, politics, or any other sphere of life are more than welcome, and, indeed, encouraged.

Posts can be submitted here.

If you’d like to read a sample Carnival of Trust, both the Carnival of Trust homepage lists all prior carnivals. I look forward to another excellent edition with your help.