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Flipping the Company or Flipping Beliefs?

I heard two young spirited entrepreneurs, working their butts off creating a new and wonderful company, totally devoted to clients and to their technology—talking about how they were going to flip the company in a few years.

Is this entrepreneurship at its best, creating and then moving on to let others manage?  Or are these a couple of cynical short-termers?

I think it’s something deeper.

I think it’s a fundamental shift in how we see things—and in what we believe in.

What if this is the new mainstream?

It’s easy to caricature it as a selfish, short-term oriented, monetize-everything approach, to be contrasted with the social good of building a lasting organization.  By that view, it rhymes with abandonment of employees, looking for the fast buck rather than the ongoing value. And let’s thrown in skepticism about the loyalty and dedication of whatever employees are left after the original founders are left.

Passing judgment is generally what generation now-minus-two-or-three does when faced with change.  We condemn the moral decay the change represents.

But—what if “entrepreneurship” becomes the norm?

You’d end up not being able to flip companies for very much, because they wouldn’t last long.  But the people who worked in them after the flip wouldn’t be working very long there either, since they too aspire to flip—their own careers.

Is this a recipe for cynicism? Must it be incompatible with customer service?

Not necessarily—not if you love learning and building a business and helping customers. Which is what I heard going on.

Sometimes, it is our beliefs that drag us down, hold us back. The beliefs from a generation or two ago. What are they? Let’s take stock:

1. Employee retention is good, to be maximized. Not really—the goal is engagement. Retention was always a second-order indicator that’s now fraying.

2. Sustainable competitive advantage is the goal. Sustainable for a bit is all we need; welcome to disposable businesses.

3. Built to Last. No thanks, it only has to last long enough.

4. Boundarylessness. Yes—but not limited to within the corporate walls.

5. Loyalty.  Companies can’t be loyal, only people can. People who are loyal to companies are in one-sided relationships.

If we’re going to critique trust in new businesses, we need to be careful to distinguish the core elements of trust from the ways in which trust happened to be manifested in the past.

Do You Trust Your Boss?

My assistant, Trish, asked me, “When are you going to blog about employee trust?”

I asked her what she meant. She explained that she trusted a great deal in me and her other boss—to do the right things for her, to provide job security, to create a rich experience.

Now, I’ve had a boss, and I’ve been a boss. And if I knew then what I know now—well, then I’d have known a whole lot more.

I think that my experience working for people was probably typical. I liked most of my bosses. Those I liked, I trusted a lot; those I didn’t, not so much.

To those I liked, I imputed wisdom. I would ask them questions if I didn’t know the answer, and I asked a lot. The best boss answered socratically.

(The best single employee lesson I ever got was from a terrible boss; he couldn’t articulate what it was he wanted, and I was finally so frustrated that I did what I thought was right. Which turned out to be what he had been trying to tell me. Lightbulb.)

I thought they were older (true, in my case) and wiser (so I thought; not true in the rear-view mirror). I argued with them, just to engage and to find out their logic. Sometimes, this would piss them off. It didn’t dawn on me they didn’t know.

From the rear view mirror, I see now they were hardly different from me. One was wildly insecure. Another, insecure and alcoholic. One, quixotic. Another, sometimes wrong but never in doubt. Most had charisma. All were genuinely nice people, and all could make some Really Stupid Moves.

I suspect my experience is the norm.

(Though for about 6 months, Jamie Dimon, President of J. P. Morgan Chase, one of Time’s 100 most influential people in 2006, reported to me. Well, administratively anyway; not quite the same as being his boss. Jamie didn’t have quite the awe for his bosses that I did. I suspect Jamie figured he was smarter than all of them, and just lacked seasoning and data. I imagine Jamie still believes that, and by now he’s more than earned the right to say nyah, nyah, he was right, too!)

Jamie aside, the rest of us have met the enemy, and it is us. I am my old bosses, at various times, in various ways. I’m just another sentient idiot on the planet trying to make sense of it all and keep the back foot movin’, hoping the front foot it’s following is generally hewing to a forward-wise di-rection.

A study once queried students and faculty, asking each what they thought of the other group, and how much time they spent thinking about that group. The results: faculty spent little time thinking about students, but figured the students thought a lot about them. The students spent little time thinking about the faculty but figured the faculty spent lots of time thinking about them.

Moral: In the real world, empathy consists of staring at the other guy’s feet almost as often as at your own.

And Trish trusts me. Hoo boy.

But you know, when people trust you, it has an ennobling effect. Yes, I tell her to think for herself, and not to be dependent on others. But, I still try to do right by her. I do want to be a good boss.

After all, she trusts me. Waddya gonna do?

Non – Linear Leadership Thinking vs. Behavior

Once upon a time, in the land of the business gods, an epic battle was fought. B.F. Skinner challenged Sigmund Freud to a duel, the winner to take the hearts and minds of business trainers and consultants thereafter.

Skinner, as we know, beat the crap out of Freud, and ever since then the behaviorist agenda has dominated the field of business advice.

Until, that is, Roger Martin, writing in the June Harvard Business Review, writes:

…this focus on what a leader does is misplaced…a more productive, though more difficult, approach is to focus on how a leader thinks—that is, to examine the antecedent of doing, or the ways in which leaders’ cognitive processes produce their actions.

Precisely.

What do I mean by the “behaviorist agenda?” I mean unthinking recitations of, “if you can’t measure it, you can’t manage it.” I mean training objectives statements that start with, “participants will learn the behaviors associated with…” I mean “just give me the tips and tricks, skip the theory part.” I mean coaching programs that define outputs entirely behaviorally. I mean, most definitely, the question “what are the behaviors of a trusted advisor?”

The behaviors of a trusted advisor, I can assure you, are the behaviors required to be trustworthy by the particular situation. It’s the mindset behind it that drives, else it’s a Skinner box.

Martin, dean at Toronto Business School, says most leaders with exemplary records

“have the predisposition and the capacity to hold in their heads two opposing ideas at once. And then…they creatively resolve the tension between those two ideas by generating a new one that contains elements of the others but is superior to both.”

“…the process of consideration and synthesis can be termed integrative thinking. It is this discipline—not superior strategy or faultless execution—that is a defining characteristic of most exceptional businesses and the people who run them.”

He readily acknowledges this isn’t news, citing F. Scott Fitzgerald. He could have gone back to Kant, or even Plato.

But it might as well be new for today’s business world. The idea that “A and not-A” could belong together drives the average manager, b-school prof or HR trainer nuts. "It can’t be. That’s illogical. It’s crazy."

Not to regular folk. “It was the best of times, it was the worst of times.” Or, “I was never so alone as when in a crowd.” This is common literary stuff. How about, “play the ball, don’t let the ball play you,” or “to hit the golf ball, don’t think about hitting the golf ball.” Common sports stuff.

In the trust realm, I suggest the best way to sell is to stop trying to sell. Sounds like a paradox. Drives most linear people nuts (“but you can’t do that, the whole point is to sell!”).

In philosophy, it’s called thesis, antithesis, synthesis. We had a great example in this blog earlier this week. Two well articulated points of view were put forth. One argued that honesty must serve empathy—another said empathy required honesty.

Which is right? This is not a “have you stopped beating your wife” trick question; there is an answer, and the right answer is “both.”

Martin contrasts the linear, causal thinking so dominant in business today with non-linear, holistic and tension-reducing approaches. The more complex the issue, the better the quality of answer to come from this process. Think Abraham Lincoln. Or Socrates.

What’s Martin up against? Linear regression, powerpoint, process mapping, KPIs, behaviorism, decision trees, compensation systems, and other business infrastructure du jour. Skinner. The rat guy.

I’m rooting for Martin. The human guy.

Does Private Equity provide a social good?

In my circles, I find differing views about private equity. Some see it as the epitome of greed; others, as the vengeful sword of the angel of capitalism. Quite a few don’t quite “get” just what it is.

I’m temperamentally inclined to come down squarely in the middle, but I want to articulate a few positives in the bigger picture of things. Relating to trust, no less.

Private equity is now bigger than the 80s version of corporate restructuring (remember Millken and Drexel, Burham?). And, it’s still gathering steam.

Back in February, BusinessWeek was commenting on a PE slowdown. Last week, however, we read, "So far this year, the value of companies acquired through buyouts has more than doubled to $487.2 billion."

One intelligent observer, blogger Epicurean Dealmaker, raises some ominous noises.

He may be right about timing, but I also think private equity is here to stay, in a big way, and that’s not all a bad thing by any means.

First, think about what ails corporate America. Lots of things, but a few of them are sloth, bureaucracy, inertia, underpriced assets, and greedy managers who serve their own interests at the expense of shareholders. For these particular ills, private equity is a powerful solution, and one that serves society.

PE at its best, that is. It’s also true that a whole lot of PE is just re-leveraging companies and sucking fees out of them, without doing fundamental fixes. And debt levels are way up for today’s deals. Still, that’s hard to get too worked up about; if there are crashes in the PE world, the pain will be disportionately visited on gunslingers in zipcodes like 06830.

Second, private equity also forces the issue of regulation. Some argue that Sarbanes Oxley is prohibitively expensive for public companies, hence companies are far more efficient if taken private. That smacks of ex post facto rationalization, but never mind; the issue is valid enough. Unlike some societies, we have an escape valve for bad government regulation.

A more fascinating peek at the social engineering issues it raises is the recent post from the delightfully vicious Equity Private . Nobody can bemoan like her the encroachment of HR and PR into the heretofore merciless realm of the private equity long knives. She could make you feel bad for Atilla the Hun.

She’s got a point—PE is big enough business now that its Gekkos are worried about softening up their image. So the pressure isn’t just to ease up SarbOx on the public side, it’s to ease off the Darth Vader thing on the PE side. Classic socio-political compromise, writ large.

But there’s one more way in which PE is a net plus. The world economy is doing two things: getting more linked, and getting more outsourced. That means more links between companies, rather than within them. It gets easier to have the world expert in XYZ do that for you, while you focus on being the world’s best at ABC. Transaction costs will be externalized, to get all economist on you. The world will get better at horizontal, linking relationships, replacing vertical lines of command and control.

That means the world is moving toward breaking companies up, not putting them together. Which means trust will be a key business success factor. Another long-term reason why PE plays a net plus role.

And as long as I’ve got my financial hat on, I might as well point out that on May 21 I suggested it was a good time to go short a few stocks. Not that you should trust me on investments; even a broken clock tells time right twice a day. I’m just sayin’.

How Marketing Can Destroy Sales Trust

I like to believe there can be professionalism in sales.

So I was struck the other day when I ran across an article that talked about “selling on message.” (Pharma Voice, May 2007).

It has always seemed a curious phrase to me—sort of the opposite of customer focus.

Who talks that way? The three Ps, it turns out—that’s who.

The first P is politicians. Robert S. McNamara, Secretary of Defense during the Vietnam War, gave this advice for dealing with the press: “Never answer the question they ask; only answer the question you want to talk about.”

McNamara’s view has since been echoed by Clinton (“it’s the economy, stupid”) and by Bush ("it’s 9/11, stupid!"). Good politics? I’ll defer to others. But it sure isn’t trust-enhancing—look at pols’ polls.

The second P is public relations and marketing. Google “selling” with “on message” and you get “A major concern for marketing and sales executives is that they are always ‘on-message’ with all of the communications that reach their prospects and customers—helping to create, establish and build a customer relationship that will ‘competition-proof’ their customers.”

This seller-centric view of sales comes from a self-described “provider of sales-oriented public relations and marketing services—” which, ironically, lists a “customer-centric selling program” as a key client.

Another source from the same search says, “Less than 27% of CMOs report confidence in having adequately prepared sales to be on-message,” and "How do we enable salespeople to be “on-message” and empower marketers to do what they do best? "

(Those darn salespeople, always wandering off to what customers want to talk about, when they should be doing marketing’s bidding.)

This helps explain the third P, which is the pharmaceutical industry. The article quoted at top, “Sales Training: Moving Beyond the Message,” says “it’s become vitally important for sales representatives to provide value beyond the marketing message.” It quotes Peter Sandford, “in the regulated healthcare environment in which we work, selling on message is vital, but it is the additional knowledge that the representative has that can also be useful to the physician. This allows them to essentially sell beyond the message, but still within the guidelines.”

A May, 2006 article in the same publication called “Rebuilding the Trust—Sales Managers Lead the Charge,” says, “… representatives need to differentiate themselves by delivering more distinct messages, tuned to the needs of the healthcare providers they’re dealing with. They also need to better understand what creates value and align the messages with that goal.”

All this is the language of a sales culture and community that has been mugged and drugged by marketing. Only in such a business can it actually sound radical to suggest that salespeople give customer-specific attention, as opposed to staying “on message,” or “within guidelines.” You don’t hear this kind of talk at IBM, or Nordstrom’s, or Starbucks, or Goldman Sachs.

Marketing is, by its nature, a monologue—it tells things people want to hear to the people who want to hear them.

Sales is, by its nature, an infinitely customized dialogue.

Nothing wrong with either one. Each has its place. But they are different.

When sales is overly-subordinated to marketing, you emd up with “selling on message.” Kind of like the stereotype of telemarketing, or scripted sales businesses like ballroom dancing, or pump-and-dump brokerage houses. It can create puppets reading canned speeches, or at least feel that way, because—the "message" is, above all, about the seller.

The folks at PharmaVoice are right; they are doing their bit to drag pharma sales (forward) into the late 20th century. It must be the most sophisticated business in which marketing chokes off oxygen to sales.

I suppose this is because in recent years pharma—for a variety of structural reasons—has come to be dominated by the marketing function. It has tended, then, to frame other issues—customers, trust, selling—in terms familiar to marketing and PR.

More’s the pity. Marketers do not help the trustworthiness of sales reps by urging “selling on message,” and trust isn’t something the pharmaceutical industry is long on right now.

Now, about McNamara…

My Client is a Jerk: Three Keys to Transforming Relationships Gone Bad

(Following is an abridged and partial version of my latest article just published at RainToday.com)

Have you ever had a really difficult client?

• Who won’t take the time up front to share critical information
• Who just cannot make a decision,
• Who is frozen by politics or fear or ignorance,
• Who argues, rejects, and is disrespectful.

There is a common thread to all of these cases, which—if we understand it—can help us succeed.

The common thread has nothing to do with the clients.

The common thread is us.

The Client Situation

Let’s get some perspective—about our clients, and about ourselves.

We’ve all said, if only in our heads, "My client is a jerk." Unfortunately, "my client is a jerk" is a terrible problem statement. For starters, clients don’t usually buy into it.

People successful enough to hire us typically have achieved some degree of success in life. While it’s popular lately to describe the prevalence of "a**holes" in business (see Robert I. Sutton’s book, The No A**hole Rule: Building a Civilized Workplace and Surviving One That Isn’t), their frequency is overestimated.
Most clients have spouses, or parents, or siblings capable of loving them. Most have a boss who has promoted them.

Truly bad behavior, more often than not, comes from decent people who are stressed out. If someone is behaving badly, it’s a good bet that they are afraid.
Identify the fear, and you can find a real problem statement.

Manage to talk about that fear with your client, and you can create a lasting bond.

Our Own Situation

What’s true of clients is equally true for us, especially in selling. We fear not getting the sale.

We’re afraid of our boss, peers, loved ones and clients judging us.

But we carry the ultimate judges around in our own heads. We allow ourselves to be hijacked by our own ideas of being "good enough.” There’s a thin line between having high standards and beating up on oneself.

If we act from fears, we will run from judgment—usually by blaming others. “This sale was doomed because I had a difficult client. If you’d had my client, you would have failed too. My client is a jerk.”

At first blame, people will commiserate with you. But when blame turns into resentment, people move away. Misery may love company, but company doesn’t return the favor.

Blaming a client never got you the sale, and it never will. But it can kill the next one.

Self-Diagnosing and Fixes

For more on diagnosing the problem (and examples of reframing it), and for three fixes for difficult clients situations, read the rest of the article at RainToday.com.

There aren’t any difficult clients. Not really. There are only relationships that aren’t working well. And nearly all of those can be fixed. But it must start with us.

As Phil McGee says, "Blame is captivity; responsibility is freedom." To get free of "difficult clients," take responsibility for fixing the relationships.
 

Trusted Transactions – Credit Card Processing

Loyal Trust Matters reader Jim Bullock is author of maybe the best piece I’ve seen on the structure of negotiated contracts. It’s called “Chinese Contracts,” and I recommend it.

But Jim has a recommendation of his own to make: a small credit card processing business in Seattle.

Now turning blog control over to Jim…

Charlie, I came across a company I think you’d appreciate. Called Gravity Payments, they do payment processing for small to medium sized businesses. They are growing like crazy & profitable. They are interesting because of the way they do business.

Payment processing statements are opaque. The industry is built around a pretty big assumed churn, and a pretty high advertising- and marketing-driven cost of new customer acquisition. By offering transparency, essentially some consulting on what it all means, and limited guarantees on cost of service, Gravity Payments has much lower churn, and essentially word of mouth driven marketing leading to much lower costs of sale.

Because this gives them a typically longer (and I suspect less costly) relationship with each customer, they can charge less.

Thus, customers move over because they are dissatisfied with their previous service, and now can feel cared for. Then they stay forever because they also save money.

I haven’t given the trust aspect of this business enough play, nor have I done justice to how the need to be fair and do right shines out from the remarkable young founders of this company. I saw these guys at a business plan competition I went to (they took second place).

The thinking behind the business is crystal clear. I wasn’t expecting to find a couple guys trying to do well by an under-served segment, there in among the sharks.”

[Charlie re-taking blog control]

In an article on the founders – I’m struck by this:

Price says he and Gravity’s employees feel passionately about local businesses, saving their customers over $1,000 per year depending on the size and revenue of the business.

How does Gravity Payments choose employees? Currently employing 15 full-time employees, Price attributes their excellent staff to choosing employees using the method of axiology.

Axiology is a "branch of philosophy dealing with ethics and values." The Price brothers applied this idea to Gravity, taking a person and fitting a job to them rather than fitting the person to a job.

This attitude toward employee management is apparent as an integral part of how the Price family applies their values in the business world. Axiology was introduced to Dan and Lucas by their father, Ron Price. Ron Price is an organizational consultant working through his own business, Lifequest. His clientele include Hewlett Packard, Pacific Steel and Recycling, and First Bank of Idaho.

Axy, smaxy, whatever. Sounds like it works, and one can see why.

Thanks Jim for another case of the paradox of trust: do right by your customers, and they’ll do right by you. As long as you make it the outcome, not the goal.

 

Are You a Trusted Advisor?

The phrase “trusted advisor” has almost become a cliché. Since I co-wrote the book on the subject, I have some standing to say that. And to say a few other things about it. So I think I will.

First, ubiquity. Today’s “trusted advisor” of popularity metrics—a google word count—shows “about 706,000." Digg—the new kid on the block—shows 292 pages at 15 per page, for a total of 4,380 entries.

But that’s just mentions. When it comes to assertions that so and so is, or wants to be, “your trusted advisor,” it gets interesting. Let’s start with the oddity of a website, declaring to the indeterminate masses, that its author is your trusted advisor. Brings to mind such chestnuts as “I’m from the IRS and I’m here to help you…”

But boldly going where many have gone before, a full 39,500 Google entries contain “your trusted advisor.” Who, pray tell, are these noble souls?

Well, would you believe Rudy Giuliani? The law firm of Bracewell & Giuliani (when he joined in in 2005 it was Bracewell & Patterson) pens a newsletter called Your Trusted Advisor. It’s about things like estate planning. (I wonder if Patterson trusted Rudy…)

There’s Morales & Associates, an insurance broker-dealer firm whose website is called YourTrustedAdvisor.com . The website (or Bob?) genially says, “Thank you again for visiting ‘Your Trusted Advisor.’” You’re welcome, uh, Bob.

FutureNow, a website design company, says, “An engine ‘hitting on all cylinders’ best illustrates the look and feel of the unique relationships we have with clients who have hired us as Trusted Advisors.”

Huh? You can hire trusted advisors? Apparently so. Craigslist has 80 job descriptions that contain “trusted advisor.” Tom Gegax says, “Retain Tom as your trusted advisor; Tom Gegax is a trusted advisor to CEOs and business owners around the world.” He must be, because he says so, and he’s a trusted advisor.

The Alberta Business Family Institute teaches a program called, fittingly, the Trusted Advisor Program. It “provides the skills and knowledge needed to enhance an advisor’s role to be the most trusted.” Hmmm, skills and knowledge. Kind of like getting a CPA, I guess.

An awful lot of financial people are your trusted advisor, but it’s not an exclusive club. GMAC Real Estate has 22,000 agents, one of whom is Brian Matthews, your trusted advisor.

You also have a trusted advisor in the feed business. And you’re in luck if you need someone to trust in broadband services.

Nobody owns the term, least of all me. But for what it’s worth, let me offer a few thoughts.

1. The two most trust-destroying words you can say are, “trust me.” Never say you’re someone’s trusted advisor, much less say you want to be, much less build an ad campaign around it. It is inherently non-credible and insincere. (I try on my own website—which of course uses the term—to say "helping people become trusted advisors"—and not to claim that I are one).

2. Trust worth the name has a personal component to it. Impersonal trust isn’t quite an oxymoron, but if it relies on credibility or dependability alone, it has more in common with predicting the weather than with being a trusted advisor.

3. The deepest trait of a trusted advisor is focus on the other, not on oneself. Low self-orientation. Not in it just for oneself. Driven by connection, not competition. Someone who actually, really, genuinely cares—just because. Caring, I suggest, is at the heart of the matter.

Care to rate yourself? Take the quiz here. Don’t forget to click on the “interpretation” button to see everyone’s results, and my comments on the test.

What do you think? What is a trusted advisor? Is the term getting overused? And what does that mean for trust?

Insurance Fraud, Short-Selling and Why You Can’t Trust Stock Analysts

8AM, July 17, 1989: I’m driving on Route 2 outside Concord Massachusetts, lights flashing and horn honking, fighting rush hour traffic. My son is nearly being born in the back of the car. We reach Emerson Hospital; nurses rush my wife to the ER; I park the car and run back.

Birth time: about one minute after reaching the hospital. Delivery: by the good nurses, a minute before the obstetrician on duty arrives to bless what’s now history.

Two weeks later, the bill arrives. It includes several thousand dollars for the obstretrician. I call to complain. “What do you care,” the office says, “it’s all covered by your insurance.”

9:20AM May 12, 2007: I’m flying from Amsterdam Schiphol back home, reading Joseph Nocera in the Herald Tribune, Why Short-sellers Should Have Their Say. Think of short-selling as the “opposite” of buying stocks—betting that a stock will go down, rather than up.

Since precisely 50% of stock trades involve selling, you’d think Wall Street would put roughly the same emphasis on when to sell as on when to buy. Of course, you’d be wrong. There are few short-sellers, and they are often reviled, harrassed, even sued.

Reasons often given for the dearth of short-sellers are that losses from short-selling are potentially unlimited (true), that short-selling goes against the long-term natural rise of the market (true so far), and that human psychology is basically optimistic (debatable). But those are weak explanations.

The real reason is—wait for it—money. Wall Street gains more when you buy and trade than when you sell. This is one reason securities analysts overwhelmingly issue positive, not negative, ratings. But there’s more.

Companies don’t like negative ratings. To be more precise, CEOs and senior managers of companies with compensation tied to stock performance don’t like negative ratings. Many leaders call the analysts’ parent company to complain, even issue veiled threats to switch to other providers of financial services. Even sue.

And voila, the analysts either withdraw the negative rating or just stop covering the company.

The analyst will blame management for telling him to emphasize positive reviews. Thus he justifies his lapse in professionalism: the devil made me do it.

The poorly rated company blames the analyst for “unfair” analysis (meaning it hurts the CEO in the wallet). Easier to blame the analyst than to take responsibilty for the shortcomings identified.

Management of the analyst firm also caves in, blaming the blackmail tactics of the rated company.

Fingers point everywhere but back. Blame instead of responsibility And blame feeds the rot.

Our social “solutions” propagate the problem. We opt for an expensive regulatory program like Sarbanes-Oxley, to protect everyone from their presumed innate selfish tendencies. Our approach resembles airport security—“somebody will always cheat: let’s constrict everyone’s freedom, in order to stop the few.” But securities markets are not airports.

Far from stopping a culture of blame-throwing, this approach enables it by assuming bad motives.

Instead, we should selectively prosecute the hell out of individuals who behave badly. Prosecute analysts who won’t honor their role, CEOs who blackmail bankers, and bankers who cave in, and who lack the guts to call the cops.

A vibrant community of short-sellers would have seen Enron coming. A few people could have spotted the lies, and made a lot of money by publicizing the rot—saving a lot of lifes’ savings and careers. An MBA class at Cornell did just that—analyzed the numbers and recommended shorting Enron well before it imploded. No one was listening.

Business has no right complaining about government intervention if it can’t bring to bear the pressure of capitalism upon itself. Greed and lies aren’t the stuff of business—they’re the death of business, as long as they stay in dark rooms.

July, 1998, Madison, New Jersey: I go to a collision damage repair shop.

“I’ve got a dent in the back door of my car, can you punch it out? It doesn’t have to be perfect."

“Nah, we’d have to replace the whole door.”

“No you wouldn’t—the gas station will do it for me for a hundred bucks, I figure you guys could just do a better job. It’s a simple job to punch it out, I’d do it myself if I had the tools.”

“Buddy—god alone couldn’t fix that door, we’ll replace it or do nothing at all.”

Translation: “what do you care, your insurance company is paying. And we’re not about to ruin a good scam by being customer-focused.”

We don’t have to put up with this crap. Call your better business bureau. Call your state regulatory agency. Call your insurance company. Write a letter to the editor. Rat these people out.

With the market in nosebleed territory, you might want to short a few stocks yourself. If your broker doesn’t know how, then help create trust and integrity in the market while you make money—by getting a new broker.
 

Hostage Negotiation – Lessons for Selling, Customer Service and Business Relationships

Pierre Cerulus steered me to Hostage at the Table by George Kohlrieser, now a professor at IMD, and a former hostage negotiator. The metaphor of hostage taking is one of the best I’ve seen for thinking about leadership and personal development.

Are you a hostage? Or a hostage taker? Or—both at once?

Here’s a remarkable statistic—professional hostage-negotiators have a 95% success rate. 95% of the time they persuade potential killers drenched in adrenaline to change their minds.

Compare that with your success rate in closing sales or persuading clients. (And they’re not even homicidal. Yeah yeah I know).

Kohlrieser’s most compelling vignettes, however, are about amateurs. The lady in Atlanta who talked down her abductor. The grandmother who, with her 9-year-old granddaughter at her side, talked down the blood-drenched escaped convict who had killed a neighboring family minutes before entering her bedroom at 3AM.

The “trick” is to make a human connection with the hostage-taker. Simple to say, hard to do. This is one of the better books I’ve seen on just how to do it. For more—read the book.

Of course, we’re not likely to be in a hostage situation. But metaphorically—we are all the time.

Hostage-taking is an alienated act of desperation—a cry for help. The failing of most hostages, and most amateur hostage-negotiators, is that they cannot see past the threat to themselves, to see the desperation in the other.

Apply that to work. The angry customer. The resentful co-worker. The “gotcha” performance review. All are driven by states of mind others—which we choose to experience as personal attacks on ourselves.

We let them hold us hostage. But there are no guns here. Our response is within our control. It is not that they are attacking us—it is that we are feeling attacked. We own our own oppression.

In Mel Brooks’ hilarious Blazing Saddles, the sheriff faces a hostile mob. He realizes he can escape by taking a hostage—himself. Pointing the gun at his own temple, he shouts, “No one moves—or I’ll blow his head off,” then slowly backs out of the room.

That’s what we do, when we allow ourselves to be hijacked by the emotions of others; when we react to those emotions, rather than acting from our own true selves. We become hostage-taker, with ourselves as hostage; a double-bind, with no win-win possible.

But the angrier or more distressed someone is, the more they want to find someone to relieve them of that anger of distress – someone to care. Passion gives you something to work with.

The answer is the same in the metaphor as in life. See the person beneath the fear—first the customer/co-worker, then ourselves. Connect with that real person. Engage in a true dialogue.

It is the same principle that governs the creation of trust, and it disproves an old myth about trust—that trust takes time.

It doesn’t. It takes connection.