Posts

Why Walter Cronkite Was the Most Trusted Man in America

/0 Comments/in /by

I can’t add much to the list of eloquent obituaries for Walter Cronkite, other than to say I agree with them. 

Cronkite taught all of us the way things were.  But the passing of the man known universally as The Most Trusted Man in America also offers us one last chance to learn from him.

Like obscenity, trust is awfully hard to define; but as Justice Potter said, you can recognize it when you see it.

The definition of trust is even more contextual; there are dozens of meanings of trust, yet we nearly always recognize them when we see them.

And so: when so many people from so many eras and walks of life agree that Walter Cronkite was TMTMA—he must have touched more than a few trust bases.  What were they?

Reading the encomiums in his honor—and watching the raw man-in-the-street interviews Friday night—there is a clear hierarchy of what people meant when they said they trusted Walter Cronkite.  And it wasn’t fluffy—it was very clear.

Cronkite’s Big Three Trust Factors

#1 – Honesty.  The most frequent comment, expressed in several ways, was that Cronkite was honest.  This means not just that he didn’t tell lies, but that he was a truth-seeker—he sought to tell the whole truth.  A reporter of the old school, he believed that there was such a thing as the truth, and his job was to find it. He had no truck with deconstructionists who believe it’s all subjective, he was a midwest pragmatist of the William James school.  "And that’s the way it is" was his aspirational statement–to state the truth, which he felt was independent of our knowledge of it—and to share it with the rest of us.

#2 Selflessness.  The Most Trusted Man in America didn’t get there by calling himself the Most Trusted Man in America.  Not a hint of self-promotion, no self-serving cause, no work in service to his own ego or career.  His only agenda was his professionalism, about which he was quite clear.

#3 Integrity.  He kept his opinions, like his emotions, largely to himself.  This he saw as a natural outgrowth of professional principles; it also fit his personality like a glove.  He was television’s version of Gary Cooper—stoic, his own man, capable under stress of expressing deep feelings—but in a highly controlled manner.  He kept his own counsel; until and unless he felt there was no alternative but to share it.

It was this Cooper-like reserve that gave him such power on the few occasions he did weigh in with a Big Opinion.  LBJ, a great judge of politics, said, "If I’ve lost Cronkite, I’ve lost middle America."  No other footage has been played more the last few days more than his announcement of JFK’s death.  In a world saturated with reality TV and tell-all blogs, you have to look harder to see it—that sense of self-reserve, tough but with a soft center—that used to be middle America’s ideal self-image.  But you can still see it.

And one last thing.  His voice.  A baritone drenched in overtones conveyed each of those character traits. 

Of those attributes—honesty, selflessness, integrity, and vocal cords—perhaps it’s only his voice that we cannot aspire to.   That may have been god-given; the rest of him was a man who strove to be good, and who showed the rest of us how. 

We can all still learn from him.
 

Seller’s Remorse in the Marketing Business

/5 Comments/in /by

Courtesy of Advertising Age,  a peek into a catfight; a domestic squabble; a business story right out of a Hollywood fanzine.  Famous buyer vs. aggrieved seller.

The Famous One here is Zappo’s, beloved by the online set and poster child du jour for customer service.  The aggrieved party (picture them throwing a pair of stiletto high heels at Zappo’s head) is marketing agency Ignited.

With what crime does Ignited accuse Zappo’s?  Disrespect, it would seem. The disrespect of a seller by a buyer. 

The horror.

When Buyers Disrespect Sellers

Seems that Zappo’s sent out an online RFP to some 100 or so of their closest-friend ad agencies, asking for first-round pitches.

Of course, Ignited didn’t make the first cut. Ah, but they had a trick up their sleeve.  Using Google Analytics allowed them to see how much time the reviewer—Zappo’s—had actually spent reviewing Ignited’s proposal.

Zappo’s had reviewed only 20% of the pages, about 15 seconds per page, before relegating Ignited’s work to the digital circular file.  Whereupon Ignited went public with its “gotcha,” announcing the horrible 15-second truth to the world.

Unfair! said Ignited. They didn’t even look at our brilliant methodology, insights, testimonials.  How dare they! And then–as if it were the clincher in an argument–Ignited’s Wolfsohn says, “they never clicked on the page that outlined our approach to measurement. Which may explain why they didn’t know we’d be monitoring how much time they spent looking at our proposal."  Gracious me.

What’s wrong here?  Where to begin…

The Customer Owes You Nothing

If you click on someone’s personal ad in an online dating service–what do they owe you in return?  Bupkus.  Zip.  Nada.  The same is true of a seller whose sole connection to the buyer is an online response to a 100-company RFP.

(Why Zappo’s would run a 100-company RFP is another question.  Maybe to screen out those who respond to mass RFPs?  Or those who can’t manage to get ‘round them?  Hey, maybe Zappo’s is clueless (though I wouldn’t put big money on that hypothesis)).

But that’s irrelevant to Ignited.  Or should have been. 

I know what I’d do with 100 first-round sections on qualifications, methodologies, and testimonials.  I’d ignore them completely until I’d seen if they had anything interesting, original, provocative, value-adding to say about me–the customer/client. 

If they do have something to say about me, then I’d go back and check the testimonials to see if I knew anyone.  I might or might not look at the qualifications or methodologies at all.

And if there was nothing in it about me in this first-pass attempt to impress me, the customer?  Then it’d take me, oh, I don’t know, maybe 15 seconds to conclude this act was not going on to Hollywood. Simon may get there faster than Paula, but they both end up at the same conclusion.  And purchasing people can make Simon look indecisive.

And from all that I have seen, my response is the rule, not the exception, on this one. 

Buyers Buy from Trust

One of the biggest fallacies sellers make is that buyers buy based on their own stated rational criteria.  The truth is, a dose of trust overwhelms rational data like methodologies—(which are, frankly, more similar than sellers like to think).

What sells best is a sense that the seller cares about the buyer—cares enough to actually distinguish this buyer from another, to take a risk and make a client-specific suggestion, to focus on the client rather than on oneself–to say something that is of value and that makes the buyer feel heard, seen, recognized, understood.  A sample of your wares, please, customized to me.

Earth to Ignited, a little multiple choice: every client’s favorite subject is:

a.    Ignited
b.    themselves

Think carefully now…

You can recognize sellers who don’t get this.  They confuse sample selling with theft of intellectual property.  Says Ignited’s Wolfsohn: “When I go to my mechanic, he won’t do work on spec. We’re a very rare industry that is willing to give stuff away for free, and it escalates to a point where it’s self-defeating to the industry that we’re all in." 

Maybe that’s true–if you’re a mechanic. (Though I’d love to hear from insulted mechanics who disagree with Wolfsohn).  It’s not true, however, in services businesses like marketing. You’re selling air, for heaven’s sake; give a little away to let them feel you.

Zappo’s response, incidentally—to publicly engage in a dialogue about the event—strikes me as incredibly gracious. 

Yet I suspect it’ll be a long time before Ignited does marketing work for Zappo’s.   

 

Trust in the Online Dating World

/5 Comments/in /by

The realm of romance is a source of intriguing metaphors for trust. Do people really want reliability in a romantic partner? Or is a little unpredictability a good thing? Other than the obvious, what’s the difference between romantic relationships and business relationships?

And, today’s subject—how about truth-telling in the dating world? Do you want someone who tells it like it is? Or do you want them to pull their punches once in a while?

Truth in dating: is it a good thing?

Cut to the NY Times His 50 First Dates (or in her case, 3).

Looking For a Woman He Could Trust to Tell the Truth

Poor Ron James. He joined JDate the month he was divorced, and spent the next year and a half looking for Ms. Wonderful.  Along the way, he found the relationship of Online Dating and The Truth to be problematic. To begin with, a lot of people on JDate—explicitly aimed at Jewish singles, partly as a counter to intermarriage—weren’t Jewish at all. And of course, that was just the beginning.

Over that year and a half, he said, there were women he met who lied about their age, posted photos that were 10 years old, misrepresented their jobs and pretended to be more successful than they were. “A lot of the photos didn’t look like them,” he said. “I learned to watch out for sunglasses.”

Then he met Sheryl.

At Starbucks, Mr. James was struck by Ms. Daija’s looks. Her JDate photo was taken swimming, with no makeup.
“You look exactly like your picture,” he said.
“Is that a good or bad thing?” she asked.
“That’s a very good thing,” Mr. James said. The hour flew.

Cue the violins. They married this past January.

Is Trust in Romance a Good Thing?

I was once told by a Match.com date that I was the only 5’11” man she’d met who actually turned out to be 5’11”.  That was also a good thing.  But I met many women who lied about their age, and justified it because–"otherwise, they’d screen me out."  (Which I had kinda thought was the point of having screens.  And yes, I know, we men are pigs, etc.  And yes, we lie too.)

Is the truth generally a good thing? Do we want trust in romance? Or not?

As usual, the answer is, it depends. And the real question is—on what?

Think about these trust statements:

  • I trust that my partner will be faithful—and if not, I don’t want to know about it
  • I want my partner to tell me the truth–unless it’s hurtful
  • I want to depend on my partner—but not so much as to be boring
  • I want my partner to care about me—but not to be dependent on me.

Romantic relationships are one area where we demand both truth-telling of the most intimate nature—but also the ability to hold our tongue, keep a bit of a secret, to once in a while play the Jack Nicholson role (channeling “you can’t handle the truth!”).  In the trust quotient, it’s the low self-orientation factor.

That’s what Ron James seems to have concluded:

“Every day when I leave for work, she says, ‘Drive safely,’ ” Mr. James said. “It warms my heart.”
“Does it really?” Ms. Daija asked.
“That anyone cares,” Mr. James said.

It’s generally not a good thing to subordinate the truth to other values. But caring? Well, that may be the exception that proves the rule.
 

Trust Lessons from Independence Day in Small Town USA, 2009

/1 Comment/in /by

In Ludington, Michigan, on July 3 at 9:30PM, it was still light outdoors (Ludington is at the far western end of the Eastern Standard Time Zone).  So it was easy to see the ten blocks of Ludington Avenue, ending at Lake Michigan, where the next day’s parade would be held. 

Two things stood out.  One was that the street had been planted with edgings of red, white and blue petunias, especially for the fourth.

The other was that virtually the length of the parade route, at 9:30PM, was already blanketed (literally, with blankets) and personal lawn chairs (some of them rather expensive) by way of reserving those particular spots for the 1PM parade beginning on the 4th.  

No one had any doubt that every one of those chairs would be there the next day.  No locks, police patrols or citizen brigades needed, thank you very much.

Nor would that be surprising to Ludington’s citizens.  By a (very) unscientific poll, well over 50% of Ludington households don’t lock their house doors at night.  Of course, Ludington is only 20% the size of the Big City of Muskegon, 50 miles away.  But I suspect it’s not all that different in Muskegon. 

The July 4th parade in small towns in America’s Midwest is a distinctive event.  Having been to parades in my youth in towns like Seward, Nebraska and Pompey, New York, I can personally relate, despite having been citified for a few decades since.

The Fourth happens at a glorious time in the calendar, when summer is just hitting full stride.  It is unabashedly patriotic, small-d-democratic, self-congratulatory, and wildly upbeat.  Half the town marches in the parade (fire trucks, beauty queens, conservation groups, HVAC companies, mayors, school bands, veterans and—in Ludington’s case—the Scotville Clown Band, since 1903), and the other half applauds enthusiastically.  All generations are represented, all consuming copious quantities of ice cream and pop (‘soda’ to you ‘coasters). OK maybe a few beers too.  And it’s curious that the celebration of independence is such a community, collaborative affair.

You can get all fancy with trust—and I do, the rest of the year—but it bears noting that there is one simple, in your face, no-BS version of trust in towns like this. 

You can leave your car and house doors unlocked.  ‘Nuff said.

You just don’t do that in South Orange, New Jersey; which is a small town, by the way.  Nor do you do it in most cities I know of.  Fuggedaboutit. 

For those (including me) who live in lock-the-door areas, it has a faint whiff of the naïve about it.  But not to those who live in no-lock towns.  It’s real.  I know, because I remember what it was like, and I got reminded of it again this 4th.

To be fair, there are some social reasons for this.  No-lock towns usually rank very low in diversity, which means everyone feels like they understand everyone else, and they pretty much do — people most easily trust those whom they most resemble.  In small towns, the degrees of separation are very small.  And I suspect (though without data) that the population is fairly stable.  This all makes it pretty easy to trust, to preach trustworthiness, and to enforce both.

I personally resent Governor Palin and others attempting to politically hijack small town values for their own divisive purposes.  I equally resent big city people who look down on small town folk as unsophisticated; they are sadly misinformed. 

But all that’s talk for another time.  On the Fourth of July, in a small midwestern town in the US of A, the glory of what it is like to live in a trusting, interconnected community is on full display.

And along with the sunburn and too many hot dogs, it makes you feel real good.   
 
 

The Real Meaning of L’Affaire Madoff

/1 Comment/in /by

It is tempting to dwell on the horror of Bernard Madoff. (Thanks to Robert Scheer for teeing up this issue).  How could he have done it?  What kind of a man does that?  Is 150 years in prison enough?  And so on.

Tempting—but largely wrong. If we lay all the blame at the feet of one aberrant individual, then we avoid taking a hard look at broader issues of institutional trust. 

Remember: Madoff was once the Chairman of NASDAQ and served on SEC advisory committees—he was the ultimate insider.  So it’s relevant to ask: if Madoff was such Evil Incarnate, what does that say about the sea he swam in?

Is Madoff a Bad Apple?  Or From a Rotten Barrel?

Recently the former CEO of the National Association of Personal Financial Planners was sued by the SEC for participating in a kickback scheme.   The current president missed a great opportunity to condemn or announce new initiatives; instead, she sadly bemoaned the negative impression this might cause of the character of others in the profession. 

The bad apple argument begs the question: just who elected the Bad Apples head of the barrel?

One single piece of data convinced me that Madoff was not evil incarnate, but a cheap two-bit hustler who hit it big.  It was his taped conversation with Fairfield Greenwich feeder fund starting with, ‘First, this conversation never happened, OK?”

What industry elects a man like that to positions of high influence? 

Some say financial excesses were caused by misaligned incentives.  But an industry doesn’t become trustworthy by un-tweaking incentives.  Remember Chris Rock’s statement of marital fidelity: “A man is as faithful as his options.”  There’s truth to that, but let’s not confuse it with ethics or trust.

The whole point of being trustworthy is that you have just enough moral backbone to resist temptation.  We expect dogs to eat the roast if left on the counter; fixing the Madoff issue by aligning incentives is the equivalent of moving the roast to the back of the counter.  It may save the roast this time, but the dog gets the message—we are now playing a game of “who gets the meat,” no longer a game of “don’t eat the meat.” 

Which is precisely the problem with too much of the financial sector—the proposed options too often suborn more untrustworthy behavior by focusing only on consequences.    

How Not to Fix the Barrel

The real drivers of trust have got to be the personal beliefs about one’s relationship to others.  Are you in it for them, or are you only in it for yourself?  Are you an individual existing in a state of nature with no obligations beyond self-aggrandizement?  Or do you feel some connection and obligation to others, to society?

If you believe others exist mainly for you to make money from them, then you will find ways to exploit them, within (or slightly outside of) the law.  You will devise short-term transactional behaviors to lower the risk of exposure to others, and to help you do unto others before they do unto you.  You will seek to hide, and to prevaricate. 

You will, in short, violate the (four) basic principles of trustworthiness.

But if you believe you and your business and your industry exist to serve customers, and that you too will benefit in the longer run by doing so, then you’ll behave differently.  You’ll understand the word ‘fiduciary’ is critical to trust. You’ll understand the connection between being trusted and being financially rewarded.  You’ll have nothing to hide because you’ll have no reason to hide.  You’ll welcome long-term relationships, because that’s what it’s all about.

And you’ll never begin a sentence saying, ‘First, this conversation never happened.’

How To Fix the Barrel, and Apples as a byproduct.

I have said before that mass, public shaming is a more effective antidote to low trust than most other solutions being bandied about.

Erecting more airport security measures, more Sarboxes, more Chinese walls, and aligning incentives are all ham-handed, expensive ways to reduce exposure to bad people.  They do nothing to exert social leverage to reduce badness itself.

Social virtues are built by societies.  If we limit our social solutions to imprisonment and walled communities, we’re using our social capital to create criminals.

Principled enforcement—surprise audits and large penalties–is one way society teaches virtues: the IRS uses it very effectively.

Public shaming has a great history too: the muckrakers and activists have achieved great things—think Sinclair Lewis, Gandhi, ML King, the kid in front of the tank in Tiananmen Square, and investigative journalism. All have called on our innate sense of goodness to cause change.

Trustworthiness worthy of the name is an internally felt response to an externally-taught relationship. Don’t cheapen it by just moving the cheese.
 
 
 

Trustworthiness? Or the Appearance of Trustworthiness?

/2 Comments/in /by

I received an email from my friend (and ex-colleague) Martin, who retired to the Caribbean more than ten years ago.  He makes a point I agree with in language more accessible to him than to me (British, that is).  Since he’s brilliant (by which of course I mean he agrees with me), I thought I’d let readers hear another voice.  

Charlie, we’ve emailed a number of times about words like trust (which you pretty much own), trusting (i.e. when a buyer is trusting of the seller), trustworthy (i.e. what a buyer hopes the seller is).  As I read the commentary on Obama’s plan to improve the regulation of the financial services sector I am getting somewhat depressed. Not, I hasten to add, because I do not think Obama’s heart is in the right place.

My concern is that his regulatory approach doesn’t mandate nor does it seek to combat untrustworthiness. Too often this ‘Nation of Laws’ falls back to the common defense that ‘nothing I did was illegal’ even if it broke all sorts of ethical boundaries with the nadir being reached with the apocryphal words ‘it depends on what the meaning of is, is’.

I am reminded (and this was more years ago than I care to remember) of my initial exposure to the English Legal System in the 17th and 18th centuries where, because of the rigidity of the ‘common law’ (i.e. I didn’t do anything illegal), a Court of Chancery grew up where by the Chancellor could grant some type of relief ‘in equity’ which was essentially "a manifestation of the ideas of justice entertained by individual chancellors."

While one could argue that the plaintiffs attorney business is a sort of surrogate for relief against the ‘nothing I did was illegal’ defense, I wonder if the US needs something similar to the Court of Chancery where there is some body where a person aggrieved by financial creativity could ask the question, "OK, I know what they did to me was technically legal, but was it ‘right’?"

I fear that unless the Obama approach to regulation adopts this sort of philosophy I feel sure that the brilliant students coming our of Law Schools and Business Schools will continue to act in an untrustworthy manner by finding ways of disadvantaging the unsuspecting and trusting buyer.

I know many of your clients are in the financial services industry. Is their aim to BE trustworthy or to appear to be trustworthy?

Best,
Martin

Martin, I could not agree with you more.

As a (lawyer) friend of mine points out, there is no concept of “truth” in the law as it exists in the US today – there is only evidence.  For the MBAs’ part, they (OK, we) replaced relationships with outsourced business processes, and management with metrics, effectively removing any sense of “ethics” by depersonalizing the behavior of human beings.  (Maybe it began when we started calling people ‘human capital.’ Note which is the adjective).  

The combination has been devastating, as you point out.   Look at any corporate org chart where you see “ethics,” and the next two words are “and compliance” – as if they were the same thing.  As you point out, they are–or ought to be–very different concepts.   

And while I too think Obama’s heart is in the right place, this effort was all too predictable.  He is doing precisely what America’s “best and brightest” are taught to do as “best practices,” namely create mechanical solutions to issues of human behavior.  Alter the incentives, redesign the institutions, create more Chinese walls, and–especially–more procedures to comply with.

Commonsense suggests that if you treat ethical violations with procedural solutions, you negate the very conscience that made us call it unethical in the first place.  Do that long enough, and the word "ethical" will become listed as "archaic" in the dictionary.

If you prefer the language of academics and empirical proof to commonsense, try this from Roderick Kramer of Stanford:

Gatekeeping measures may actually have contributed to declines in public trust in business.  These studies have found that “innocent employees” who are subjected to additional compulsory oversight measures often “become less committed to internal standards of honesty and integrity in the workplace.”

To flip Ronald Reagan’s words, the act of constantly verifying destroys trust.  Excessive compliance measures ruin ethics.  Big Brother is death on the human conscience.  The trouble with regulatory answers to misconduct is that they foster more cynicism, more degradation of the real issue into mere gotcha contests.  They trivialize issues that are, or should be, ethical at heart.  As you said.

Martin, I honestly believe that the best answer to the decline in trustworthiness lies not primarily in shifting incentives, or in classical regulation.  It lies in mass shaming of the untrustworthy by the consuming public.

The act of mass shaming galvanizes the public’s conscience.  Whether or not any particular Madoff then “gets it” or not is beside the point: a community itself needs to articulate, for itself, that there are standards that lie well above and beyond the common law of “I did nothing wrong.”  The best Chancery court may be the blunt instrument of public opinion.

Your concluding question should be read by every financial services senior exec, and passed out in the form of a quiz to the general employee base of his or her firm, in the following form:

“Your CXO has said that the aim of your company is not just to appear trustworthy, but to be trustworthy.  Do you believe he means it?” 

Now that’s a scary question.
 

Why Trust is Asymmetrical, and What that Means for Trust Strategies

/4 Comments/in /by

Much of the talk about trust is just that – talk about “trust.” We forget that trust is a word for a relationship between two parties, each doing different things. Further, it’s an unequal relationship.

What we call “trust” results from one person (or entity) trusting another. One party trusts; the other is trusted. The result is what is properly called trust.

Unlike other relationship words (like ‘love’) the quality of trust is asymmetrical. To trust is very much not the same thing as to be trusted.  Just ask a traveler in a new foreign country.  Or a Madoff client.

The asymmetry is all about risk—the one taking the risk in a trust relationship is the trustor, the one doing the trusting—not the one being trusted. 

When we describe degrees of trusting, we use precisely that word: ‘He is very trusting.’  While an adjective, ‘trusting’ derives from a verb—it tends to describe a behavior, the act of trusting.

When we describe degrees of being trusted, we use a different word: ‘She is trustworthy.’  ‘Trustworthy’ is also an adjective, but it tends to describe character, an attribute one possesses.

If we’re going to be precise in talking about trust in a useful way—whether it’s personal trust, business trust, or social trust—we need to clear about the risk-asymmetry between the two parties to trust. Absent that simple clarity—who’s doing the trusting, who’s being trusted, and in what realm—there’s not much that can be usefully said.

Here are some examples.

Trusting Strategies.

Trusting someone is very useful—if your trust is justified. Things happen faster, better, with higher quality and lower cost.  Life is richer.  Of course, if your trust isn’t justified, you get burned. Reasonable risk assessment, then, is a valuable skill in trusting.

But trusting cannot obliterate risk, and risk management alone has its limits. To trust only those we have vetted as trustworthy is to make a mockery of trust. Ronald Reagan’s statement “trust but verify” was cynically manipulative. If you can verify, you don’t need trust–you just need an auditor.

Trustworthiness Strategies.

Being trusted by others is at least equally useful, and of course the combination is best of all.  How can one become more trusted—by customers, employees, friends? There are two basic strategies: the first is to trust the other party, the second is to become more trustworthy.

Oddly, the most powerful strategy for driving increased trustworthiness in others may be the act of trusting them in the first place.   Marlon Brando’s Godfather character knew this: so do successful networkers.  Like homeopathic medicines, a little trust given can innoculate against large doses of untrustworthy behavior by others. This is due to the deeply embedded human propensity to reciprocate–good for good, bad for bad. 

Being trustworthy toward others drives their propensity to trust you—and it’s a less risky strategy than trusting them, since most risk is borne by the trusting party.  The effect of trustworthiness on trusting doesn’t rely on reciprocity—it is a unilateral action by the trustee that alters the  risk perceived by the trustor.

Remember the asymmetry of trust is all about risk: it comes in many forms, such as asymmetry of information, or of power.  Many trust issues present as issues of the asymmetry of power: think asset managers trusting rating services, or consumers trusting credit card issuers.  It’s what’s behind jokes like, "I’m from the IRS and I’m here to help you." 

There are several ways to manage risk so that the asymmetry is acceptable to both parties. One is simply transparency: the exchange of information.

At a personal level, the decision to reveal information that would put you at a “disadvantage” in a competitive situation is an act of trust. If your client is 58, you are 32, and your client asks your age, do you say, “I’m in my mid-30s?” Or do you say, “I’m 32.” The latter is an act of trusting; it usually makes you seem more trustworthy, and of course it carries some risk.

At a business level, when companies fight greater transparency (presumably to prevent competitive advantage), they are simultaneously destroying the inclination of their stakeholders to trust them, because to withhold information for self-oriented reasons is intrinsically untrustworthy. Too many industries and companies simply do not get this, hence they invite far stronger regulation than need be the case.

I have elsewhere written about the Four Trust Principles: they apply to people and to organizations, and are largely about enhanced trustworthiness.
Personal and business approaches to trustworthiness overlap in the arena of leadership. The general who personally leads his cavalry troops into battle shows that he will take risks on their behalf; the troops’ powerful response is to trust him in return.  Trusting given yields trust returned.

Explored carefully, this simple framework tells us how to better navigate the worlds of romance, business, friendship, business regulation and socio-governmental institutions.

Increasing trust starts with asking: who does the trusting, and who is to be trusted?  Where’s the risk, and how can we manage the asymmetry?

The Trust Reader Volume 2

/0 Comments/in /by

Greetings.

This is the second in a series of ebooks I’m releasing called The Trust Reader. Each issue will feature a full-length article on trust-related issues, plus synopses and links to two other articles.

The Trust Reader will be published roughly every few months. Articles introduced here will be available thereafter on the trustedadvisor.com website, but you’ll see them here first.

Get the Trust Reader volume 2 here

In this issue, the featured article addresses a key question: Does Trust Really Take Time? Here’s why it’s key.

Purportedly, one of the great economic advantages of trust is the time it saves in the conduct of business. I make that claim, as does Steven H.R. Covey, Jr. Yet, the phrase "trust takes time" is routinely asserted by most businesspeople—including those who agree that trust takes time.

Well, does it or doesn’t it? The lead article answers that question, and is contained in its entirety in this issue.

The other two articles are:

Discounting, Price, Value and Psychology — a look at how buyers really think about money in buying. Worried about price cutting? Read this one.

Client Focus vs. Client Focus Lite — are you really client-focused? Or just faking it. Take a hard look in the mirror before you answer, and read this one.

Both these articles are abstracted in this issue, with links provided. All three articles will now join the permanent collection of trust-related articles on Trustedadvisor.com.

The Trust Reader series joins the Trust Matters Primer series—an occasional selection of the best from from the blog Trust Matters.Download the first edition of the Trust Reader here

Trusted Advisor Associates ebook Series on Trust

You can also find previous issues of the Trust Reader here, as well as copies of The Trust Matters Primer here:

Trust Reader Volume 1

Trust Matters Primer Volume 1

Trust Matters Primer Volume 2

Trust Matters Primer Volume 3

If you would like to receive email updates for the Trust Reader and Trust Matters Primer, please subscribe here.

You can find previous articles published by Charles H. Green at http://trustedadvisor.com/cgreen.articles/

As always, if you prefer not to receive our series, simply email me or click the unsubscribe link below to let us know.

 

Trust Reader Volume 2

/0 Comments/in /by

Greetings.

This is the second in a series of ebooks I’m releasing called The Trust Reader. Each issue will feature a full-length article on trust-related issues, plus synopses and links to two other articles.

The Trust Reader will be published roughly every few months. Articles introduced here will be available thereafter on the trustedadvisor.com website, but you’ll see them here first.

Get the Trust Reader volume 2 here

In this issue, the featured article addresses a key question: Does Trust Really Take Time? Here’s why it’s key.

Purportedly, one of the great economic advantages of trust is the time it saves in the conduct of business. I make that claim, as does Steven H.R. Covey, Jr. Yet, the phrase "trust takes time" is routinely asserted by most businesspeople—including those who agree that trust takes time.

Well, does it or doesn’t it? The lead article answers that question, and is contained in its entirety in this issue.

The other two articles are:

Discounting, Price, Value and Psychology — a look at how buyers really think about money in buying. Worried about price cutting? Read this one.

Client Focus vs. Client Focus Lite — are you really client-focused? Or just faking it. Take a hard look in the mirror before you answer, and read this one.

Both these articles are abstracted in this issue, with links provided. All three articles will now join the permanent collection of trust-related articles on Trustedadvisor.com.

The Trust Reader series joins the Trust Matters Primer series—an occasional selection of the best from from the blog Trust Matters.Download the first edition of the Trust Reader here

Trusted Advisor Associates ebook Series on Trust

You can also find previous issues of the Trust Reader here, as well as copies of The Trust Matters Primer here:

Trust Reader Volume 1

Trust Matters Primer Volume 1

Trust Matters Primer Volume 2

Trust Matters Primer Volume 3

If you would like to receive email updates for the Trust Reader and Trust Matters Primer, please subscribe here.

You can find previous articles published by Charles H. Green at http://trustedadvisor.com/cgreen.articles/

As always, if you prefer not to receive our series, simply email me or click the unsubscribe link below to let us know.

Why Trust Improves Your Bottom Line

/1 Comment/in /by

Let’s just face it head on.  Many of you think all the recent hoo-ra about trust is lefty-liberal, softy, wishful thinking. Nice to have, but not the stuff of serious bottom line impact.   

If only the world could be freed of terrorists and Madoffs and Wall Street’s relentless pressure for quarterly performance, then maybe we could afford some trust; but right now, with this economy?  Gwanwidja, Charlie, it ain’t happening.

Or, the most common variation: Hey Charlie, I’m down with the program, but the problem is my boss.  Or the Executive Committee.  Fix them first, then come talk to me.

Well, this is the blog to forward to your boss and the Executive Committee.  Because whoever doesn’t “get” the raw economic power of trust isn’t acting in the best economic interests of the organization.

Let’s break it down into the economic benefits of

•  trusting
•  being trusted (not the same thing)
•  building an organization along trust principles.

How Trusting Adds to the Bottom Line

If you trust someone, you greatly increase the odds of their behaving reciprocally—that is, they become trustworthy.  Don’t trust me on that, read Robert Cialdini, who posits reciprocity as the number one factor driving influence.

If you trust, and the other party behaves reciprocally, all kinds of time and cost can be cut out—mostly time and cost that was engineered in to protect against untrustworthy people.

Specifics?

Trust your suppliers: with advance order information, with cost information, with pricing, with materials requirements, with new design information.  (Don’t, by contrast, create enemies of them by using purchasing as a blunt instrument). 

Trust your customers: develop price and product quotes together with them, share your advance product information, make a point of listening to them, allow them to spend time with you at your offices, get your people to theirs.  (Don’t, by contrast, create enemies of them by surprising them or trying to squeeze the last nickel out of each contract).

What you gain by trusting:  Less due diligence time and cost, shorter elapsed time-to-market, better design quality, higher sales hit rates, lower sales investment cost, more forgiveness of errors, better pricing, higher customer retention.  (Steven HR Covey Jr.in Speed of Trust focuses heavily on the trusting part of trust).

That all adds up to real money.

How Being Trustworthy Adds to the Bottom Line

Take a look at the Trust Equation; take the Trust Quotient self-assessment test yourself.   Being trustworthy means being credible, reliable, safe to be with, and focused more on others than yourself.

Trusting people may be the fastest route to being trusted, though it’s also higher risk.  Being trustworthy also produces reciprocal trustworthiness—it may take a little longer, but it’s lower risk.

Specifics?

Tell the whole truth, don’t just don’t lie.  Don’t over-perform, or under-perform—just do what you said.  Be prepared to recommend a competitor if it’s the right thing.  Don’t manage your earnings, just be transparent about your accounting policies.  Don’t try to control others.  Comment on feelings—yours and others’. Do your level best to actually care—don’t fake it.  Don’t Always Be Closing.  If you don’t know something, say so.  (There are a raft of specific things to do in response to your Trust Quotient, free).

What you gain by being trustworthy: Higher sales closing rates; shorter sales time, more repeat business.  Higher employee retention.  Customer loyalty.  Fewer lawsuits.  More honesty from others.  Fewer competitive bids, more likelihood of your advice being taken.  Higher confidence in your quarterly earnings statements.  Higher customer sat ratings. 

That all adds up to real money too.
 

How Building a Trust-Fostering Company Adds to the Bottom Line

I have suggested  four Trust Principles: these work at the individual as well as the organizational level. The principles are:

1.    Other-focus for the sake of the other
2.    Collaboration
3.    Relationship, not transaction, focus
4.    Transparency

These are not new concepts. If your company conducts all its affairs with these principles in mind, then you live in an organization that creates trusting and trustworthy people, processes and relationships.  And makes a ton of money.

Unless you have brute monopoly pricing power, and don’t care about your reputation or your legacy in the world, then trusting and being trusted at the personal and institutional level is about the best profit guarantee you can get.

It may sound like a Buddhist mantra or a Beatle song, but it’s also an economic model.  Trust pays—as long as you treat profit as a byproduct, not the goal itself.