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Why Experts Are Bad at Sales

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Why Experts Are Bad at SalesIf you’re a lawyer, accountant, management consultant, VAR, systems engineer, financial advisor, CRM expert, architect, IT services consultant or even an HR consultant – odds are that you’re ineffective at selling.  That’s the bad news.

The good news is – it isn’t hard to get better.  If you do,  you’ll compete far more effectively against those who haven’t learned the trick. The trick is dialing back the emphasis on expertise.

Trust Sells

Let’s start with the commonsense observation that trust sells – powerfully.  If your customers trust you, many good things follow – higher close rates, lower price sensitivity, greater client loyalty, to name a few.

Trust isn’t one monolithic quality.  In the Trust Equation, we deconstruct trustworthiness into four components – credibility, reliability, intimacy, and low self-orientation.  Data collected over the years (see the Trust Quotient Self Assessment) identify the relative importance of those four factors in creating a perception of trustworthiness.

Trustworthiness Data

For example – gender and trustworthiness. When asked to guess which gender is more trustworthy, about 85% of my workshop audiences guess women; and 12,000 datapoints say they’re right.

Further, nearly all the gender difference is due to different scores on one factor. I also ask workshops to guess which factor that is, and again, they are overwhelmingly right – it is intimacy.

Score two for commonsense backing up the data.  And there’s more. Surveys of trustworthy professions show shifts over time in the least trusted professions – used car dealers one year, lawyers another, politicians another. But the most trusted profession is remarkably consistent – nurses. Again, audiences find that this “makes sense.” And tying the data together, note that of the four attributes of trustworthiness, the one most easily identifiable with nursing is, again, intimacy.

Finally, we were able to isolate six “Trust Temperaments” – differing combinations of high scores from each of the four trust equation components. The three highest-scoring pairings were the three that contained Intimacy as one of the factors.

The combination of high Credibility and Reliability scores is what we most associate with subject matter experts.  And that combination was tied for least trustworthy among the six pairs.

The level of technical mastery required by the professions, for example, is considerable, and necessary. It’s not surprising that people in such lines of work would score highest on the attributes of credibility and reliability, the two “rational” and “hard” components of trustworthiness.

The problem comes when they assume, implicitly, that what their customers most want is a massive display of that expertise. Selling in those businesses, more often than not, is dominated by exhibitions of mastery, methodology, intellectual performances, credentials and references.

But technical mastery is the least effective approach to trustworthiness.  The most effective component of trustworthiness is precisely the one that so many experts shun – intimacy.

The Cure for Expertise

There’s nothing wrong with expertise; it’s necessary. It’s just not sufficient. What’s needed are some basic intimacy skills. That means, above all else, listening.

The listening that’s required is not listening as in being quiet, or even listening as aggressively pursuing questions. It’s listening as a sign of respect; listening with no objective beyond understanding the customer.

This kind of listening is part skill, part attitude. It requires the ability to suspend the overwhelming desire to solve problems. It isn’t easy to do – but it is simple. It is accessible; it can be learned.

Another intimacy skill is the ability to take an emotional risk.  Examples of such risks include saying you don’t know when you don’t know (very difficult for experts, whose careers are based on avoiding such moments), and acknowledging feelings – your own, and those of your customers.

Most technical professionals will remain expertise-based – and ineffective at sales. And that spells great opportunity for the few people and firms who are capable of recognizing the power of soft skills in producing hard results.

This article was first published in RainToday.com in a longer form. 

Trustworthy Occupations

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Quickly now – which are the least-trusted professions and occupations?  If you think about it a moment, you’ll probably make pretty good guesses.

Now for a tougher one: which profession is the most trusted? This one, I find, less than half of respondents get right.

Your Profession Conveys an Image of You

The annual Gallup poll of Honesty and Ethics in Professions came out this past November. First, let’s get the fun stuff out of the way.

The next-to-least trusted profession is (drumroll…envelope please) – Members of Congress! Only 10% of respondents rate congressmen as high or very high.  And the big prize for absolutely least-trusted profession? Car salespeople. Aw, and it was so close; they came in at 8%, just two percentage points behind Congress. In fact, last year they were tied.

Well, that was easy. But who was most trusted? Engineers? A respectable 70 points, but not highest. Doctors? Tied with engineers at 70. Pharmacists outperformed doctors, with a rating of 75%.

But the profession that takes the cake for most trustworthy – for about the 13th year in a row – is nursing.

That’s right, nursing. And it makes sense, if you think about it.

Why We Trust Nurses the Most

The Trust Equation breaks trustworthiness into four factors – credibility, reliability, intimacy, and low self-orientation.  In studies we’ve done on the four factors, it turns out that Intimacy has the strongest correlation with high aggregate levels of trust.  That is, we tend to put more weight on that one factor than on the others.

Think about which of those four traits nurses most clearly represent.  It is intimacy – the sense that we can share our most open, vulnerable selves to another.  More than anyone else, we are willing to stand naked – metaphorically as well as literally – before nurses.  It only makes sense.

The same data suggest that women – on the whole and on the average, though not person by person – are more trustworthy than men. And almost all of women’s better scores have to do with higher scores on the intimacy factor. Need I mention that nursing is primarily a female profession? Again, it just makes sense.

Is Industry Destiny?

Are we doomed to low trust if we’re a lawyer?  A politician? A marketer? Male?  Conversely, are we guaranteed high levels of trust if we graduate from pharmacy school?

No. Trust is experienced at a personal level, and trustworthiness is primarily an individual, human trait. There are highly trustworthy salespeople, and an RN doesn’t guarantee trust.  But there’s no doubt that you have two strikes against you if you’re in a low-trust profession, and you’re spotted more than a few points if you’re in a highly trusted profession.

In the end, though, trust is personal. You have to live up to the world’s expectations – or confound them, as the case may be.  It’s up to you.

Trust Metrics: Breaking It Down

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How can you measure trust?

Consider a simple equation:

Trusting  x  Trusted  =  Trust

In other words: if someone is trusting enough to take a risk (the trustor), and if someone else is trustworthy enough to be worth that risk (the trustee), then when the two parties are a “match” – and you get “trust.”

Suppose you could quantify each.  Note that there is more than one way to get the same result for “trust.”  For example:

  • a “trusting” rating of 8/10 and a “trustworthiness” rating of 3/10 might give a “trust” score of 24 out of 100 – 8×3;  and
  • a “trusting” rating of 4/10 and a “trustworthiness” rating of 6/10 would give the same “trust” result – 4×5, or 24.
But what does this mean?

Most of the Data Doesn’t Support Decisions

Most of the trust data out there (think Edelman Trust Barometer, or Pew Research) isn’t about either “trusting” or about “trustworthiness.” It’s simply about the end result, trust. And that’s not very enlightening.

Suppose we get a series of data points about trust, and that they show a decline over time, from 26, to 24, to 20. Does that mean that the trustors got more gun-shy and less willing to trust?  Or does it mean that the trustees became more shady, and less trustworthy?

Measuring only the result – trust – is like saying the results of the Yankees vs.Tigers game was 3-2 – without telling you the winner. It’s like saying that the average household income of a small town is $500,000 – without mentioning that one of the residents is a billionaire. It’s like saying that unemployment is down – without mentioning how you count those who are not looking.

If you were to pass laws about regulation – you might want to know the driver of decreased trust. If you were building a marketing campaign – you might want to know which factor shifted. And if you were observing a pattern between two firms,  you might want to know why trust declined – was it because of less trusting, or because of less trustworthiness?

There’s a lot more to be said about this rarely observed but simple distinction: let me just point out that there are in fact some sources of data that are actionable and help us get at causal drivers, rather than just identifying results.

The Trust Matrix

The matrix below shows some of these relationships.

1. In the upper left box – Individual Trusting – academics are well aware of the General Social Survey, a fifty-year database with an impeccable pedigree, which permits some fascinating conclusions about our propensity to trust others. Hint: it’s gone down. We’re becoming more and more suspicious in principle.

2. In the box Trustworthy Individuals, the pre-emininent database may be my own company’s Trust Quotient. With over 25,000 data points, a time-proven insight called the Trust Equation, we can now state categorically which gender is more trustworthy, which of the four trust factors are harder drivers of trustworthiness, and the relationship of trustworthiness to industry.

3. What about the critical question of organizational trustworthiness? This is a question  we keep trying to answer by reference to trust surveys, which are unable to yield the answer.  The best source I know of is Trust Across America’s database of publicly traded US companies (they’re working on expanding it). They have a composite definition well-grounded in commonsense and objective databases, and some compelling data about the correlation between corporate trustworthiness and economic performance.

4. The bottom left box – an organization’s propensity to trust – is something for which I’m not aware of any data.  Would someone please correct me if I’m in error?  My working hypothesis is that this box has declined considerably.

JP Morgan himself may have lent on the basis of character, but the industry he left behind lends only on secured assets. Except, of course, when they lay off risk through ever-increasingly complex transactions.

Companies routinely won’t even trust small subcontractors, insisting that they self-insure against things like falling on sidewalks. It seems to me that corporations consider a propensity to trust to be roughly tantamount to stupidity. It’s hard to be a trusted organization if you systemically and systematically distrust your stakeholders.

5. Finally, the last column – measurements of trust itself – needs conceptual clarification.  When we look at data that says “trust is down,” there are four meanings.  We might be referring to trust between individuals, trust between organizations, or trust between organization and individual (with two variations depending on which is trustor and which is trustee).

To Mean What You Say, Say What You Mean

Any of us – not just researchers or academics or survey-takers – can contribute significantly to the discussion of trust simply by being clear about what we mean. If you want to say that bankers have become banksters, then point to data about the decline of trustworthiness on the part of banks – not to composite data that blurs the trustor-trustee distinction.

If you want to say that trust is up in the sharing economy, then use data that talks about the propensity to trust, not just the end result of trustor-trustee interactions.

I have a feeling that some significant chunk of the debate about trust could be improved by simply using clearer language to reflect clearer thinking.

Trust is Down? Wait – What Does That Even Mean?

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We hear it all the time. Trust in banking is down. Trust in Congress is down. Trust in the educational system is down. We hear these statements, we say, ‘tut-tut what’s the world coming to,’ and we go on about our business – in large part, because we don’t know what to do about them.

Well, no wonder.  These seemingly obvious statements mask a fundamental confusion about the nature of trust – a confusion that prevents us coming up with basic solutions.

The problem is this. When trust in banking is down, does that mean:

a. that banks are less trustworthy than they used to be?  Or,

b. that people are less inclined to trust than they used to be?

Those are very different problems. Typical solutions to the problem of trustworthiness have to do with ensuring the behavior of the trustee.  Think regulations, penalties, enforcement, behavioral incentives and the like.

We too often neglect the other side of the equation – the propensity to trust. The problem is simple enough to state: you may be the most trustworthy partner in the world, but if the other party is unwilling to trust you, nothing will happen.

The propensity to trust is critical. It amounts to risk taking. Despite Ronald Reagan’s famous quote to the contrary, there is no trust without risk. The dictum to “trust but verify” in fact destroys trust by sanctioning acting on suspicion.

The Hitchhiking Problem

In the 60s, hitch-hiking flourished. By the late 1980s, it was dead.  Partly, hitchhikers were afraid to hitch; but mainly, drivers were afraid of hitchhikers. And it wasn’t due to an epidemic of violence; it was due to a fear of violence.  We lost a great deal when we lost hitchhiking – economically and culturally.  (The move to collaborative consumption, interestingly, is a contemporary resurrection of that idea).

Why is hitchhiking relevant to trust in banking?  Because one common response to low trustworthiness – perceived or otherwise – is a reduced propensity to trust. Which will kill trust just as surely as will low trustworthiness.

There is a huge cost to low propensity to trust; look at The Cost of Fearing Strangers by the Freakonomics folks. We are great at articulating the risk of doing something; we are awful at noticing the cost of doing nothing.

Want a really Big Example? Next time you’re in an airport, look at the social cost of us not being able to trust grandmothers from Dubuque on their flight to Grand Rapids.

The Laws of Trust

To people schooled in free-market economics ways of thinking, trust is hard to make sense of. If the propensity to trust declines, you’d think the market would respond by creating more trustworthy offerings. In fact, just the opposite happens. Suspicious people tend to attract con artists; skeptics get sucked in by fakes.

The reason is simple: trust is not a market transaction, it’s a human transaction. People don’t work by supply and demand, they work by karmic reciprocity. In markets, if I trust you, I’m a sucker and you take advantage of me. In relationships, if I trust you, you trust me, and we get along. We live up or down to others expectations of us.

We have been teaching and practicing business according to the wrong Laws of Trust. The solution for low trustworthiness is not necessarily to trust less, but to trust more, and more intelligently. Maybe you’ve heard, “The best way to make someone trustworthy is to trust them.”

We’re Teaching the Wrong Laws

Our public education and culture is loaded with the free-market versions of trust. We teach, “If you’re not careful they will screw you.” We passcode-protect everything. We are taught to suspect the worst of everyone, be wary of every open bottle of soda, watch out for ingredients on any bottle.

Then in business school, we are taught that if customers don’t trust you, you need to convince them you are trustworthy – partly by insisting on our trustworthiness.  You can’t protest enough for that to work: in fact, guess the Two Most Trust-Destroying Words You Can Say.

By teaching distrust and confusing trust recovery with messaging, we are teaching entire generations to be suspicious of anyone and everything. By teaching suspicion and distrust, you can make book on it: what we’ll get is a reduction in trustworthiness. Read the Tale of the Thieving Convenience Store Managers.

This doesn’t mean we shouldn’t teach trustworthiness; much of my career has been built heavily around that. But by itself it’s not enough.

We need also to be teaching risk-taking, relationships, and the values of being connected to other human beings –not just than calibrating the dangers of hitchhiking.

Don’t tell me there’s no data.  The General Social Survey has been collecting data on the propensity to trust since 1972. One interesting finding: the propensity to trust is strongly correlated with educational attainment.  What does that say about the social and economic costs of cutting educational investment in the name of lowering taxes?

And don’t tell me I’m naive. I was in Denmark a few months ago. I left my wallet in a taxi. By the time I discovered it, my client had left me a message to say the taxi driver had returned it to their offices, and they’d paid him to bring it to my hotel. Which he did.

I expressed amazement at how well it had all worked out. My client said, “Nothing to be surprised at. Anything less would have been surprising.”

I bet the Danes hitch, too.

Three Things You Need to Know About Trust: Part 3

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There are really only three things you need to know about trust. You can pretty much deduce the rest. The three parts are:

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

Part 3: Trust is Reciprocal–and What You Can Deduce From It All

Trust is created when one party takes a risk, and the other reciprocates positively. Think of a handshake offered, and returned.

Trust is AC, Not DC

We saw in Part 1 that one player does the trusting, and the other is trusted; the one doing the trusting is the one taking the risk.  That’s true – but only for the instant of that trust transaction. Trust is rarely built on one exchange alone, and the roles cannot stay fixed.

If you focus on being trustworthy, and your client trusts you, good for you. You can play that game for a while, but eventually your client will notice, ‘Wait, I’m taking all the risks here – what’s up with that?’ And at that point, they will stop trusting you.

You cannot escape the need to trust, as well as to be trustworthy. You have to take a risk too. Virtue may be its own reward, but unless you season virtue with risk-taking, you won’t get trust out of the recipe. To use an electrical metaphor, trust is not like direct current, moving in one direction – it’s alternating current, constantly changing direction.

Trust: Deducing Everything Else

In this brief series, I’ve claimed that “all you need to know” about trust is these three propositions – trust takes two players, it requires risk, and it must be reciprocating – and that you can deduce the rest. Let’s test that claim.

Organizational trust.  You may have noticed all my points have been about personal trust. What about organizational trust – trust in corporations, congress, the professions?

House Speaker Tip O’Neill famously said, “All politics is local.” In the same sense, all trust is personal. Trusting is something we do with our hearts and brains, one by one, personally; and trustworthiness is an attribute we ascribe almost entirely to individuals. (An exception is reliability: it makes linguistic sense to say that “GE is reliable,” or not. It is nonsense to say “GE is emotionally intelligent.”)

You can design corporate cultures to either encourage or discourage trusting and/or trustworthiness. And that’s pretty much it. Corporations may legally be people, but in the court of human nature and trust, they are largely environments which condition trust – they are not agents of trust themselves, only people are.

Trust, Virtues, Values, and Risk. The tools of individual trustworthiness can be found in the Trust Equation. The tools of individual trusting are about socially acceptable risk-taking. The tools of organizational trustworthiness and trusting – because organizations are environments for trust enhancement – can be found in the celebration of virtues and values.

Virtues are the personal attributes of trustworthiness – encouraged socially.  Values, or principles, are a set of guiding beliefs that govern interactions with others. Since trust is about relationship (remember Part 1), values drive the environment that creates or hinders trust. Among the most powerful trust-enhancing values are collaboration, transparency, and a long-term perspective. Organizations run along those lines create trust wherever they touch.

Trust Recovery. The business world frequently confuses “trust” with reputation, image, or poll ratings. This leads companies with trust problems to seek PR firms to focus on improving their reputation.

  • When your real trust levels exceed your reputation, you have a communications problem.
  • When your reputation exceeds your real trust levels, you have something a lot more serious, and throwing communications-only solutions at it is like throwing water on a grease fire.

Trust broken can be recovered, by the three basic principles above. It requires engagement by both parties, it requires risk-taking (particularly on the part of the offender), and it must be reciprocal. The biggest threats to trust recovery are an inadequate acknowledgement of the degree of rupture, and a refusal to accept the values required to change the state of trust.

Restoring Trust. The social issues facing us from lack of trust are real, and important. They can be addressed using the three principles above.

First, our trust crisis is not due to a global increase in the birthrate of morally impaired people. As noted in Part 1, trust is two-party game. It is about relationship. Trust failures are failures of relationship. Where we have lost trust, we have lost the ability to interact in relationship with others.

There are many reasons for this, including business thought leadership, an over-reliance on market solutions, and increased wealth disparity. All of them have emphasized the individual over the group.

The way to restoring social trust does not lie in better gun laws, tweaked incentives, stepped-up financial sector enforcement, or religion in the schools. It lies in Gandhi’s dictum to ‘be the change that you want to see in the world.’

It lies in the three trust facts: trust is a 2-player game of reciprocal risk-taking.  That means:

  • Trust is a personal job, not just one for leaders
  • Leaders must lead personally – by example, not by exhortation
  • Design environments that encourage people to trust and be trusted
  • Trust is about relationship – the Golden and Platinum rules apply
  • Trust is about relationship – anti-trust behavior is immature and socially poisonous
  • No pain no gain – there is no trust without risk
  • Trust is AC, not DC – you can’t always just be trusted, sometimes you have to trust
  • Trust is reciprocal – to make someone trustworthy, trust them
  • Blame and an inability to confront are the death of relationships and of trust
  • Run your life like you’d be proud to have it on the front page of the paper

If a trust issue sounds complicated, you’re over-thinking it. Go back to basics. There are only three things you need to know about trust, the rest you can deduce.

 

 

 

Three Things You Need to Know About Trust: Part 2

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There are really only three things you need to know about trust. You can pretty much deduce the rest. The three parts are:

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

Part 2: Trust Requires Risk.

First, there is no trust without risk. Second, only one player takes the risk; this sets up a particular dynamic.

No Trust Without Risk

Ronald Reagan was blowing smoke when he famously said, “Trust, but verify.”  The truth is, if you have to verify, it’s not trust. If it’s trust, then it’s not about verification. (Tellingly, Lenin was fond of the same phrase).

At one extreme, trust is bordered by blind faith, which is unbounded by data or reason. At the other, we have statistics, where risk is strictly a matter of probabilities and assumptions, governed by the rules of mathematics.

Trust lies curiously in between faith and probability – and a little off the straight and narrow of the continuum as well.  A psychological relationship, it involves one party willingly putting itself in harm’s way of the other, with a significant but not perfectly quantifiable chance that the other may abuse the situation. No wonder we speak of it often with metaphors.

People say trust mitigates risk. That’s true, but it’s also true that risk creates trust. Without risk-taking, there can be no trust. We forget this when we try to create trust by eliminating risk.

Why is this important? If you remove temptation or risk, you create an artificial dependence outside of the critical trust relationship. For example, if you render financial institutions completely non-risky by over-doing tick-box compliance, you will also choke off trust. Trust eats risk for breakfast, and becomes stronger for so doing.

As with many things trust-related, this is paradoxical. Trust reduces risk, but it also thrives on risk. Robotic safety and predictability are components of trust, but small ones. A completely mechanical world may be risk-free, but it’s also trust-free.

One Player Takes the Risk

In its pure form, one party trusts, while the other is trusted. In my classes, it’s a running joke I play: would you rather get better at trusting? Or at being trusted? So far, every class has opted to get better at being trusted. Doh! That’s the non-risky choice.

It’s human nature to wish others to take the risk. Sometimes, we’re lucky. The other person asks us out first; the customer shows their hand first, reducing our fears about price; the interviewer shares something personal about themselves, setting us at ease.

If you’re willing to run your business dependent on the kindness of strangers, that’s fine. But if you prefer to make your own luck – or trust – you’re going to have to learn to take risks. As Wayne Gretzky said, you’ll never miss a shot you don’t take; but of course, you’ll never score a goal either.

One of the biggest barriers to trusting is the cult of trustworthiness. The professions in particular like to cloak themselves in the idea of a Trusted Advisor that is strictly about trustworthiness – but not about trusting.  Such ideas include the high-minded virtues of integrity, tell-it-like-it-is courage, and a professional remove. But they frequently don’t encompass vulnerability and emotional risk-taking.  They should.

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In the third part, I’ll talk about the reciprocity of trust – how the role of trustor and trustee gets traded back and forth, and what that means for the development of trust.

Three Things You Need to Know About Trust: 1 of 3

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There really are only three things you need to know about trust. You can pretty much deduce the rest.

I’m going to write about each of them in a separate blogpost, but here’s the one-liner version of each:

  1. Trust is a Two-player Game
  2. Trust Requires Risk
  3. Trust is Reciprocal

If you understand those three points, you can figure out things like trust recovery, rapid trust creation, and trust-enhancing cultures.

Trust is a Two-Player Game

For trust to exist, one party must do the trusting, and the other party must be trusted. That sounds dirt-simple, until you pick up the paper and realize how much talk about trust simply doesn’t mention it.

How many articles and surveys have you read that talk about “trust” as if it were some simple, unitary phenomenon?  Answer: most.

Those articles that say “trust is down,” “trust in banks has declined,” “people I know are more trusted–” all suffer one great defect: they don’t tell you why the trust is up or down.

It’s simple, if you ask the question correctly. If surveys show that trust in banking is down, is that because banks have become less trustworthy? Or because people have become less inclined to trust? One is a problem of ethics and trustworthiness; the other is a problem of risk-taking, education and fear.

You can’t design policies or laws or actions if you don’t know which problem you’re trying to solve.

If you can’t directly address trusting and trustworthiness, then measures of “trust” alone can’t be trusted – they could be influenced by exogenous factors like GDP growth.  And they are.

Trusting and Being Trusted

Trusting is about intelligent risk-taking.  Being trusted is about trustworthiness.

When someone says trust is really an issue of character or integrity, they’re talking about being trusted, not about trusting.

And when someone says, “trust but verify,” they’re talking about trusting, not about being trusted. (Though notice: if you have to verify – it’s not really trusting).

When you talk about trust in your organization, or with your clients or customers, you would probably prefer that others get better at trusting – to save you the trouble of getting more trustworthy!

We don’t have a lot of control over others’ propensity to trust, though we can certainly influence it.  But we have a lot of control over being trusted. And by far the best way to be trusted is to simply be trustworthy. One way to think about that is through the Trust Equation.

Trust is a Relationship

Trust is a relationship? Well, that’s what being a “2-player game” means. Before you think this is another “Doh” moment, note what it implies. It means the absence of trust is the absence of a relationship. It means when we think about business outside the framework of relationship, we are not thinking about trust.

What do market share, competitive advantage, markets, cost reduction, and value chains have to do with relationships? Not much. And therefore they have little to do with trust.

One driver of the level of trust is, simply, how we view business. Our view of business for the last several decades has been about competition, not about collaboration; about opposition, not about relationship.

A big reason those articles show that “trust is down” is because we have stopped thinking about relationships, and focused instead on competitive marketplaces.

Wanna know why trust is down? Start with the absence of relationships.

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Next post: Trust Requires Risk

Reputation Recovery

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When you are more virtuous than your reputation would suggest, you have a communications problem.

When your reputation for virtue exceeds the facts on the ground, you have a ticking business problem.

When Image and Reality Part Ways

When you have a communications problem, the communications team should hire a PR firm. Most firms do this.

But in the second case – where the reputation is better than the truth – most firms do not do what they should. They don’t even thank their lucky stars for having a better reputation than they deserve.

Instead, they begin to believe the hype.

Then one day, It Happens. The subsidiary defaults. The pipeline springs a leak. Animal byproducts show up in the food. Someone comes forward to testify.

Let’s be clear. These things just kind of seem to happen more often to the non-virtuous than to the virtuous firm. If the event truly is an anomaly, it doesn’t last on the front page. Acts of god don’t make good news for long.

But what about the non-virtuous firm?

When Disclosures Accelerate

When it turns out the smoke really did indicate fire, the non-virtuous firm all too often behaves predictably.  Having believed their undeserved hype about being virtuous, they then do what the virtuous firms did – they hire a PR firm.

Which is all too often the wrong thing to do – and hardly ever the main thing to do.

In an interesting display of PR sensitivity,  BP chose to hire Dick Cheney’s former campaign press secretary as head of PR, and a Wall Street PR firm as outside advisors.

Of course, there is a role for communications experts even in a crisis. With multiple constitutencies and tons of experience at keeping things secret, perhaps it made sense for Penn State to hire two outside PR firms.

But most non-virtuous firms aren’t looking for technical expertise; they’re looking to follow the lead of Muammar Gadaffi in seeking spin.

PR: a Delicate Balance

It cannot be an easy thing to tell clients seeking spin that the solution is to become virtuous. Clients want virtue now, and backdated if possible, thank you very much.

In such a milieu, the temptation for ambulance chasing is high. How can you keep on teaching virtue when the clients are paying you to shut up and stop the pain?

Yet that is what must be done. Arthur Page, the poster child for “good” public relations, had it right. He had a list of seven principles, the first of which was “tell the truth.” What a concept.

He also said that public relations is 90% doing and 10% talking about it. In other words, if you are virtuous, you’re not going to have much of a problem explaining crises.

Recovering Virtue

The fallen firm wants to know what they can do now to recover. After all, they always sought fast fixes in the past, and they worked. But there simply is no fast route to virtue recovery if you’re coming from a history of un-virtuous behavior.

At a personal level, it’s conceivable that someone could have an instant conversion and become virtuous, though I don’t think I’ve ever seen it – most conversions I have seen have come through pain and hard work.

And at a corporate level? Fuggedabout it. The fastest route to serious change is to change all the top leadership, and even then you’ve got habits, policies and cultures to change. Minimum 6-12 months, and I can’t off-hand think of an example where change has happened that fast.

Non-virtuous leaders who’ve been caught with their pants down don’t want to hear it, but the best way to handle crises is to prevent them happening in the first place. The best way to be trusted is to be trustworthy.

Spin is not the solution; spin is the problem.

You may not be able to change by tomorrow, but you can always start the journey today.

 

 

 

 

Lake Wobegon Syndrome: Believing We’re All Above Average

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Garrison Keillor’s fictional Lake Wobegon is that Midwestern enclave where:

…the women are strong, the men are good-looking, and all the children are above average.

Lately, there are curious signs of incipient Wobegonism – at least the part about the kids. On average, we’re all looking just a little too above-average.

Unconditional Positive Self-Regard

I once watched Marshall Goldsmith ask a room of conference participants to lower their heads, then raise their hands if they thought they were in the top 50% of performers in the room. Then, to keep their hands up if they were in the top 25%; then, the top 10%.

When he finally asked people to raise their heads, all could plainly see that over half the room had indicated they were in the top 10%.

The concept of unconditional positive regard is well-known among therapists. There’s something to be said about positive self-regard as well, in the simple sense that if you can’t accept yourself you’re going to have trouble dealing with other people.

But what happens if your sense of self-regard begins to diverge from reality? What happens if you begin to believe you’re All That – and honestly, you’re not?

Reality Bites

Generation Y, famously raised on a sense of entitlement, is having a tough time confronting today’s horrific economic environment. 60% think they have the right to work remotely, with flexible schedules, despite the economy.

Worse, Gen Y’s much-vaunted computer skills may have been overstated; social media savvy doesn’t translate well to spreadsheets, or even to navigating hierarchical menu structures.

Perhaps recognizing an inflection point, the Wellesley High School graduating class recently made news for being told in a commencement speech that “You are not special…you are not exceptional.”

But it’s not just about Gen Y – not by a long shot. Here at Trusted Advisor Associates, we’ve noticed a distinct case of “grade inflation.” Scores on our Trust Quotient (TQ) self-assessment, have been creeping up over the past year or two. There are several possible explanations, including:

  1. people are becoming more trustworthy,
  2. people think they are becoming more trustworthy.

I have a sneaking suspicion it’s the latter.  Stay tuned.

Overstating our importance is a natural consequence of ignorance. Believing the world is flat was understandable in a world without airplanes or telescopes. But when a modern nation like the US has 46% of its population who believe in creationism, some cognitive dysfunction is afoot.

Politicians bear some blame.  The Speaker of the House declares that the US has “the best healthcare system in the world,” which defies logic unless you exclude the other developed economies.

Many pols publicly support the fiction that balancing the national budget is fundamentally the same as balancing a household budget. Any undergrad econ major can tell you the rules of national economies and households are precisely the opposite. It’s hard to tell if this statement lie is cynical, or just grossly ignorant, much less which is worse.

In our social haste to abandon low self-esteem, we have overplayed the power of a positive attitude. We once heard phrases like “you make your own luck,” “smile before you dial,” and, “the glass is half full.” Corporate training once taught that you could act your way into right thinking.

Somehow, those morphed into, “Hold fast to your dream and it will come true,” saying affirmations until they “manifest,” and best sellers like The Secret. We’ve gone way past “thinking your way into right action,” all the way to “envision reality until reality changes to fit our thinking!”

One of the biggest instances of hubris in our time has to be finance. Efficient market theory, the agency theory that led to private equity, and the various financial engineering “innovations” we have seen in recent decades – all are testimony to a belief that we have found revealed (financial) truth. Yet time and again, it seems we have not.

Two Flavors of Humility

There are two kinds of humility. One consists “not in thinking less of ourselves, but in thinking of ourselves less.” The other amounts to, well, thinking less of ourselves – realizing that we’re not, in fact, All That.

We need a little of both.

Thinking of ourselves less drives relationship thinking; it civilizes us, focuses us on other people. It is the root of social behavior, charity, and most of the higher virtues.

Thinking of ourselves less drives other-focus, collaboration, and connection. It enables client focus, allows us to see value adding potential, and creates the basis for reciprocity and customer loyalty.

Thinking less of ourselves is neither sin nor virtue except insofar as our starting point is delusional. Thinking we know it all is a cyclical affectation, a very human failing we are nonetheless good at forgetting.

Until once again things blow up, revert to the mean, and we get our comeuppance, or our karmic smackdown, or our luck runs out.  What we call it depends on how much we still believe we understand what just happened.

Here’s what we need a whole lot more of:

“I really am not sure; what do you think?”

Stupid Crazy Trust

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Sometimes I get annoyed. Usually, that means I’m thinking like an idiot. Sometimes, however, it produces useful ideas.

Lately I’m annoyed by the constant repetition of a myth about trust. You know this one: “Trust takes a long time to create, but only a moment to destroy.” There’s no need to name names here, but you can see examples of it here and here and here and here.

This time, my annoyance produced some good: I can now explain why that myth isn’t merely annoying, but positively harmful as well. Here goes.

The Truth.

Let’s start with the truth. Most human relationships, like most emotions, take roughly as long to get over as they took to develop. Marriages or friendships don’t end overnight. There may be a flash point, a straw that breaks the camel’s back. But we cut slack for people we trust. We don’t dump them abruptly.

If trust were lost in a minute, battered women wouldn’t stay with the men who beat them; things are a little more complicated than that.

If trust died quickly, the SEC would have investigated Bernie Madoff when Harry Markopolos first lodged charges against him. If trust died quickly, the steady drip drip drip of evidence at Penn State, Enron, Toyota, and Johnson & Johnson would have ended at the first drip.

Most examples of “trust lost quickly” turn out to be either just the last drip in a long series of drips or a delusion about trust’s existence in the first place. You don’t “violate the trust” of a subscriber to your email list by sending them a worthless referral. The relationship you have with a name on your email list may be many things, but “trust-based” is probably a stretch.

Trust formed quickly can be lost quickly. Trust formed at a shallow level can be lost at the same level; trust formed deeply, or over time, takes deeper violations, or a longer time, to be lost. The pattern looks more like a standard bell curve than a cliff.

But, you might say, so what? Why are you annoyed? Why is that harmful? 

The Harm

If you believe that trust can be lost in a moment, then you likely believe you must be cautious and careful about protecting it. You are likely to think about trust as a precious resource to be guarded against being tarnished. You are inclined to institute rules and procedures to protect it and to give cautionary lectures about the risk of losing trust.

Yet these are precisely the kinds of behavior that result in trust lost.

I don’t trust the man who talks with me while pointing a gun at me‬—partly because he looks threatening to me, but also because he clearly does not trust me.

Trust, at a personal level, is like love and hate: you tend to get back what you put out. You empower what you fear. Those afraid of getting burned are the most likely to get burned.

This totally works at a corporate level too. I remember vividly the convenience store chain that gave monthly lie detector tests to store managers to prevent theft—and then wondered why the theft kept on happening.

Trust is a Muscle

Thinking of trust as something you can lose in a minute makes you cautious and unlikely to take risks. But the absence of risk is what starves trust. There simply is no trust without risk—that’s why they call it trust.

If your people aren’t empowered, if they’re always afraid of being second-guessed, then they will always operate from fear and never take a risk—and as a result, will never be trusted.

Trust is a muscle—it atrophies without use. And the repetition of the mantra “trust can be lost in a moment” just tells people not to use it.

Turns out the stupidest, craziest trust is the trust you never engaged in because you were too afraid of losing it. The smartest trust is the trust you get by taking a risk.