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Trusted Professions

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Consultants’ News and the Institute of Management Consultants USA report on a survey about how much clients trust consultants.

Say CN and IMC:

Survey results…reveal that the consulting profession is viewed as trustworthy. When respondents were asked to rank a list of 10 representative professions from most trustworthy to least trustworthy, they ranked consulting as the 5th most trustworthy profession, behind nurses, doctors, teachers and accountants. Rounding out the list of professions were sales representatives, corporate executives, attorneys, journalists and politicians.

Hmmm. If you’re ranked fifth out of ten, you’re “viewed as trustworthy.” Presumably, sixth place gets you “untrustworthy.” There but for grace of sales representatives and journalists…

Want to know why nurses consistently rank #1 on these kinds of lists? Meet the President of the American Nursing Association. She could sell me a used car. Why? Because she virtually bleeds low self-orientation. You’d have a hard time finding less than six degrees of separation between her and anyone with a selfish bone in their body.

Similar results come from an Australian survey of trusted professions done annually since 1970. Tops are nurses, pharmacists and doctors; the bottom four—numbers 26 – 29—are various salespersons. Just above them, at 24 and 25 (out of 29) are TV reporters and newspaper journalists.

In Australia, unlike the CN poll, politicians barely outrank journalists. Pretty scary, for both countries, if you ask me.

In neighboring New Zealand, the top three trusted professions are fire fighters, ambulance officers, and—you guessed it—nurses. The bottom three (of 30) are psychics, car salesmen, and politicians. Wow—below psychics.

Edelman’s Trust Barometer , in 2006, reported:

Global opinion leaders say their most credible source of information about a company is now “a person like me,” which has risen dramatically to surpass doctors and academic experts for the first time, according to the seventh annual Edelman Trust Barometer, a survey of nearly 2,000 opinion leaders in 11 countries. In the U.S., trust in “a person like me” increased from 20% in 2003 to 68% today. Opinion leaders also consider rank-and-file employees more credible spokespersons than corporate CEOs (42% vs. 28% in the U.S.).

In 2004, the Public Broadcasting System was “the most trusted institution on a list of nationally known organizations in the country…” Hey, I’m a fan too. But shouldn’t the most trusted institution tell us who was second, how many there were, and who was in last place? Come on PBS, dish a little—you’ve got your credibility to defend here!

In India, media is the most trusted institution. In the Ukraine—at least in 2004—it’s the church.

While polling about trust in Serbia, there were problems:

"Concerning trust in Milosevic", Bogosavljevic continues, "it is notable that many people simply didn’t want to answer questions about him. For years ordinary people were taught that Milosevic was the greatest, and now they are told that they are supposed to be against him. Many of them simply can’t do this, so their response is simply to say ‘I don’t know’ or refuse to answer."

What’s it all mean?

Sometimes trust stays the same for a long time—part of our trust for nurses is that we’ve always trusted nurses. When trust changes rapidly, it can be disorienting to us.

There are few surprises in surveys—they almost always “make sense” when we hear results.

Most of all, trust touches our lives broadly—people, professions, and institutions are only a handful of arenas in which trust plays out in our lives. It’s neither simple, nor one-dimensional. And it’s all very human.

Is Neuroleadership More Than Reinventing Wheels?

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The man was dining alone. He looked up from his menu and asked the waiter, “What’s the soup du jour?”

Beaming with pride, the young waiter answered, “Soup of the day!”

Something like that joke is playing out in the buzzy new field of “neuroleadership.”

Business Week, July 28, “The Business Brain in Close-Up,” introduces David Rock and Jeffrey Schwartz, who are using EEGs and MRI scans to “explain” how leaders think.

One cited example: ethical dilemmas get weighed in parts of the brain associated with early memories, suggesting that moral thinking is formed early in life. Now there’s a surprise!

(In a related story, just-convicted Conrad Black, at age 14, was expelled from a private school for stealing exams and selling them to students. Thanks to neuroscience, we’re able to divine a pattern).

Another insight: to change, focus on the to-be state, not the as-is. Are you listening, change managers? Got that, personal growth teachers? Or did you already get that from, say, Buddhism, or Gandhi?

Final insight: focus on a few key ideas, not on too many. Wow.

See, here’s the thing. In our opening joke, the waiter thought he was offering new information—an explanation—to the customer. Of course, he added absolutely nothing. So it often is when “science” gets hyped as an “explanation.”

Take Strategy + Business’s most-downloaded-article-of-2006—surprise, it’s Rock and Schwartz’s “The Neuroscience of Leadership.” A direct quote:

“Cognitive scientists are finding that people’s mental maps, their theories, expectations, and attitudes, play a more central role in human perception than was previously understood… This can be well demonstrated by the placebo effect… the mental expectation of pain relief accounts for the change in pain perception… Dr Price and Dr Schwartz are currently working to demonstrate that the Quantum Zeno Effect explains these findings. [italics mine]

Since the placebo effect was named back in 1955, the power of mind over matter was pretty well known by the Greeks milennia ago, and probably by witch doctors for longer than that—this doesn’t strike me as a news flash.

Back to the waiter and the soup. Drs. Price and Schwartz’s "explanation" does not explain.

A valid "explanation" is more than translation. It may add context, suggest a cause, offer an exegesis, or give a definition.

Telling me that emotional distress or ethical thinking is associated with particular brain wave patterns is the exact equivalent of "soup of the day." It replaces a useful, common-sensical emotional vocabulary with one based in chemicals. Nothing good or bad about that—but certainly nothing new.

For anyone who’s ever done management or leadership training, Rock and Schwartz do get one thing right. They say that change must come from within, and it comes only when one pays attention. Bingo on both counts. That raises the question—whence cometh attention?

Trainers know it means you’ve got to create compelling experiences.  But I’m not sure the neuroleadership crowd gets it.

Michael Rennie,  a McKinsey Organization Practice leader, apparently thinks this is leading edge stuff.  As he puts it in the BW article:

"When you start talking about things like behavior change and psychology, executives’ eyes glaze over. What helps them change their behavior is a cognitive frame."

I am honestly not clear here.  Does Rennie mean the new vocabulary of neuroleadership is itself a "cognitive frame?"

If so—trainers, back me up on this—the last thing that changes behavior is a cognitive frame. What changes behavior is an epiphany, a moment of insight, a recognition, a shock, a surprise.  A theory of epiphanies is not a substitute for ephipanies themselves.  Describing epiphanies in terms of neurons activities adds little to explanation, and even less to real change.

In my experience, Rennie is right in one respect—the more uptight and Type-A and left-brain the audience, the more likely they are to demand a cognitive model, and to claim that cognitively "understanding" the model equals change. They are deluding themselves.  (A colleague described one audience of lawyers: he was told by the client, "don’t try to engage them; just talk, they’ll decide what’s important.")

Leadership guru Warren Bennis, in the BW article, says neuroleadership has potential but is "filled with banalities."  I like his instincts.

What would actually make neuroscience interesting to leadership?  To get beyond mere translation, it would have to show us something new or interesting, beyond things like "focus more."  Here are some themes that would make me sit up and take note:

* a taxonomy of leadership "moments" of differing types, distinguishable by brain waves
* linking of specific leadership moments to parts of the brain that deal with poetry
* linking of specific leadership moments to other parts of the brain that deal with deductive logic
* linkage of selfish vs. altruistic behaviors to other aspects of cognition
* more detailed description of some general concepts like "self-awareness" or "self-actualization"

Until then, to paraphrase Kierkegaard:

It is like seeing a sign in the store that says Sale: you go in to buy, but find it is only the sign that is for sale.

FUD – Why Sell Is Still a Four Letter Word

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Greg Milliken tells us about the origin of FUD—Fear, Uncertainty, and Doubt.  Think “Nobody ever got fired for hiring IBM.”

In other words, it’s selling by spreading FUD  about your competitor, rather than by focusing on helping the customer.

FUD-based selling, as Milliken eloquently points out, rots the soul.  And while I ultimately think that trust-based selling is more powerful, let’s give the devil his due—appealing to fear is a pretty powerful drug.

FUD is one manifestation of why “sell” is still considered a four-letter word in many parts.  Why don’t people trust a whole lot of salesmen?  Because a whole lot of salesmen aren’t trustworthy!  And many of them use FUD.  But FUD is just a subset of a larger category.

The biggest reason for not trusting a salesperson boils down to this: if they’re in it for themselves, they are not in it for you. And if they’re not in it for you, then you are perfectly right not to trust them.

Great salespeople live with a great paradox:  IF you are able to focus on other people and get them what they want, then—paradoxically—you get what you wanted all along too.  But—here’s the key part—as a side effect, not as a goal.

The modern corporate ethos is almost diabolically designed to thwart this kind of good sales thinking.  It tells us, over and over, in a million ways, to figure out what we want, then figure out how to get it.  Break it down.  Design a process.  Do a needs analysis.  Do competency modeling.  Define metrics.  Measure.  Reward.  Tweak, fine-tune, and repeat. 

Problem is, this way of thinking destroys other-focus from the outset. You will never be hugely successful at selling if you believe the modern corporate litany, because it can only, and always, be about you and your objectives.  That logic leaves no room for the paradox of caring about others.

FUD, of course, fits very well with a goal-oriented, self-aggrandizing methodology.  If the purpose is to gain sustainable competitive advantage over a competitor, then the customer becomes simply a metric, a vehicle, a means to an end.  FUD is a straight line that bypasses any genuine concern for a customer.

FUD fits the unexamined approach to corporate selling.  Which is why sell is still such a four-letter word.

Except, that is, for the exceptional salespeople, who recognize an eternal verity—the best way to get what you want is to focus first on helping others.

The July Carnival of Trust

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Carnival of Trust logo

Welcome to the July edition of the Carnival of Trust.

I specifically invite you to read it as a whole, not as simply ten selected parts. There are themes that weave between the ten postings.

That’s what we promised you: an intelligent winnowing down to ten of some excellent writings on trust—in business, in sales, in government, in personal life.

But I hope this goes beyond. There are several story lines connecting the postings. I have tried to point out a few. Please have fun finding others, and add your own commentary here.

Thanks to all the contributors, including a number of excellent submissions that didn’t make it to Top Ten this time. Please don’t be disheartened; if you’re on point, keep submitting. Next month, the Editor at the Blawg Review has kindly consented to host the Carnival of Trust; guest hosting will be the rule going forward. Please stay tuned for details.

Trust In Sales and Marketing Logo

Is Big Pharma Shifty?

John Mack is a respected newsletter writer and blogger in the pharmaceutical sector, a major part of global industry and a critical one these days. Mack analyzes a Harris Interactive poll that shows "consumers think Big Pharma is shifty as well as greedy." No, no, not shifty too? Mack interprets for us.

A Little Knowledge is Great Marketing

Is it possible for a mega-corporation to act transparently and in the best interests of the consumer, in the belief that doing so will generate wiser customers first, and, later, higher profits for the company?

Ron Shevlin, at MarketingROI, would like to think so, and suggests that Bank of America’s recent educate-the-consumer initiative is such an effort—at least on face value.  Not unlike what Brad Burnham’s point of view B argues in Who Do You Trust to Edit Your News, below.

I share Ron’s hopes, though I’m sceptical that a major company like BofA can achieve escape velocity from the mass of company-centric, short-term metrics that have hijacked terms like "customer focus" in recent years.


Web Commerce, Trust and Akerlof’s Law

What do used car advertisements and dating services have in common? Allan Patrick educates us about Akerlof’s law about the asymmetry of information. Basically, absent independent brands of rating systems, "liars drive out buyers." What can a small quality website without brandname or a massive rating system do? Patrick has a few ideas. Interestingly, one of them—give the customer more information—would appear to be exactly what Ron Shevlin is talking about in A Little Knowledge is Great Marketing—see above.

How is Marketing About Relationships

Economics 101 tells us markets are about products and prices; in Econ 201, you hear about advertising and bargaining and bluffing, and in industrial economics, you learn about power dynamics in industry sectors.

But in Life 101, you learn how haggling over rugs creates relationships and societies, as well as efficiencies and long-term customers.

Dawud Miracle draws from a story in the Cluetrain Manifesto to explain how. Think about how it applies to the pharma-consumer relationship in John Mack’s post, Is Big Pharma Shifty?

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Agreement and Trust

Scott McLeod applies a great two-by-two matrix concept from Peter Block. The model is for analyzing leaders’ relationships with their essential people. For each relationship, how much do you trust them, and how much do you agree with them? Not all 2×2 grids result in useful diagnostics; this one does.

Credibility as a Core Company Initiative

Ardath Albee talks about relationship marketing minus thought leadership in her blog Marketing Interactions.

"I was speaking with a VP of marketing who said thought leadership was low on her priority list because it didn’t have an immediate impact on revenues…

The problem with only focusing on the near term is that when it runs out, what have you got left? To build credibility, every B2B company that’s in the game for the long-term should focus on thought leadership as one of their initiatives. Relationship marketing is a focus of many marketing initiatives these days, but without credibility, how strong a relationship can you build?"

Quite right, Ardath; high relationship can’t excuse zero content.

Blogging and Transparency Build Trust

Michele Martin works at the intersection of new media and the non-profit and government sectors. Trust works there too. Michele highlights an adept use of blogging by Six Apart CEO Barak Berkowitz to create trust—legitimately. You can tag this under transparency and candor as well as blogging and trust. (See also Alex Todd’s post, one selection down from this one).

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Creating Trust in Government

Alex Todd is a thoughtful writer and consultant on trust, particularly on his concept of trust enablement.
A good example of Alex’s thinking is this post, about a current proposal in the Canadian legislature called the "Federal Accountability Act." Says Todd:

you cannot defend against a loss of trust unless trust already exists. Creating sustained trust – in government, commerce or our private lives – requires a balance of two approaches: both building trust and creating mechanisms to ensure that trust will not be abused.

A fine example of solid thinking applied intelligently to real and current issues.  Listen up, Ottawa. And Washington.  Trust isn’t just about prohibiting conflicts of interest; it’s also about engineering trusted relationships. (See also Dawud Miracle’s entry about markets and relationships, above).

Who do you Trust to Edit Your News?

Brad Burnham reports on his personal power-take-away from the Personal Democracy Forum in New York.

Point of View A: The lack of editorial control on the web leads to a dumbing down of media and culture, wherein YouTube makes television look positively BBC-like and facts are wildly out of control.

Point of View B: The web instantly corrects mis-statements of fact.

Brads post says more about this. He feels POV B wins on the media point.  I feel persuaded on that point, but the case for dumb and dumber at the cultural level still stands, IMHO.

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How to Keep Your Word, Tupelo Kenyon

How should you keep your word?  Impeccably.

So argues Tupelo Kenyon, concluding "your word is your bond, your character, your reputation, and your integrity.  Your word is your opporutnity to practice being impeccable."

He argues it tightly.  And at length.  And in terms ranging from logic to history to poetry. You might say, impeccably.

Not an obvious choice for this carnival, but I hope you’ll agree a good one.

Trust, Politics and US Health Care Policy

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The ability to trust is not an unalloyed virtue. It opens one up to the possibilities inherent in a relationship. It can also make one scam-candy for the unscrupulous. Yet trust without risk is not trust.

So we have evolved to make snap judgments and hold them strongly, even in the face of contradictory evidence. We also extend trust, via a trusted agent, to new arenas.

Which is why it’s so hard to de-politicize big policy issues. We tend to trust one party line or another on major issues. Answers to “Do you hate Hillary’s health care proposals” are highly correlated with “Do you hate Hillary?” Thus, when it comes to complex issues, our blind ideological trust serves us badly.

What we need in such cases is a Nixon-to-China personage; someone to shake and confuse our ideologies in ways that lead us to look afresh. May I suggest Regina Herzlinger in the field of US health care policy.

Ms. Herzlinger is a Harvard Business School professor whose career focus has been on non-profit organizations—particularly health care. Her third book on the subject, Who Killed Health Care? , has just been written, and she’s interviewed in Is Health Care Making You Better; or Dead, part of the HBS Working knowledge series.

Depending on which quote you take out of context, you’ll think you’re reading either Michael Moore or Milton Friedman. Put them together in context, and you’ll think you’re reading blindingly obvious commonsense. It’s that good.

She succeeds in using the tools of capitalist analysis to create an indictment of our health care system—as a system that is bad for health and bad business at the same time. She pulls no punches, as she outlines the chillingly bad-business practices of the five health care “killers” (her term); health insurers, the US Congress, employers, hospitals and academics. (Pharma catches a break finally).

Another Nixon-to-China component of Regi’s approach is that she demonizes very few individual human beings; in fact, she clearly respects the devotion of many in all five “killer” systems. Yet this doesn’t detract from her indictment of the system. She also offers specific suggestions which, unlike Michael Moore, are quite hard to label as one or another ideological –ism.

I’ve never understood why Regi Herzlinger’s health care work hasn’t gotten the attention that went to, say, Michael Porter or Ira Magaziner. Perhaps it’s because they were easily classifiable into trust-proxy ideologies; she is not.

Joseph Califano, after the Clintons’ ignoble shot at health care in the 90s, said that health care reform wouldn’t come until after campaign finance reform, because of the same power-sustaining characteristics that Herzlinger points out. Perhaps her health care work may actually contribute to campaign finance reform, the new Supremes notwithstanding.

Sometimes our trusting instincts get complacent, and we need someone like Herzlinger to shake them up.

Full disclosure: Herzlinger was a professor of mine, I’m very proud to say.

Flipping the Company or Flipping Beliefs?

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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?

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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

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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?

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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

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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…