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Is Building Trust More Like Baking a Cake, or Like Being a Better Person?

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If you want teach someone to bake a cake, you’d give them a recipe. First, do this; then, do this. The result is ‘cake.’

You can be pretty confident of the effectiveness of your advice. Further, if someone presents you with a cake, you can confidently infer the steps they had followed to bake it.

If you want to teach someone to become a better person, it gets a little trickier. Defining ‘better’ turns out to be the least of it.  Are there Twelve Steps to Becoming Better? Why not five? Or does it take thirty? Worse yet:

  • If someone does the steps – how likely is it they’ll become “better?”
  • If someone is better – does it mean they followed the steps to get there?

And which approach characterizes trust?

Causality and Predictability

Strictly speaking, causality can never be proven. But casually, we infer it all the time. Tell any fool who doubts the power of causality to stick his finger in a flame and see what happens.

So if someone says to you, “Explain to me how you baked that great cake,” you can give an explanation that makes a great deal of causal sense.  “The key is  to whip egg whites just right,” you might say, and “make sure you bake it just a little longer than the recipe says.”

We understand immediately that whipping egg whites causes a change in consistency, and that time-in-oven affects moistness and firmness. On top of that: if they go home and whip the egg whites and bake it just a little longer, they are very likely to get the same results you did.

But if someone says to you, “Explain to me how you became a great person,” you might say, “A lot of suffering went into that.”  Or, “I read the most amazing book.” That leaves a lot unsaid.

First, a lot of people suffer without becoming great people. Suffering causes lots of things, becoming a great person being only one of many possibilities. Most importantly, does it mean that if you suffer, you will become a great person?

Ditto for reading a book. Maybe that’s how you became great, but how does book-reading in particular cause greatness?  And if I read that book, will I become great?

Becoming a great person is probably more like learning to love, or to write a song. You have to learn to be open, to listen to others, to struggle to understand what others mean when they say something. You probably have to get in touch with your feelings, feel the feelings of others, sometimes give up control.

For a million reasons, the dysfunction of our age is applying cake-baking solutions to great-people problems, rather than the reverse.

Snake Oil, Management Gurus and Trust

A lot of advice, wisdom and selling in this world exemplifies that dysfunction.

In the training business, we have baked in (pun intended) this sort of approach, by insisting that trainers supply language like “participants will master the skills and behaviors of X so they can produce results Y at a level of Q.”

But it’s hardly unique to training. Think of most self-help books, and an extraordinary number of blogposts and magazine-rack tabloids.

Here’s a generic formula you can use, with a few examples:

[Number] [Adjective] Ways to [Verb]  [Adjective]  [Object] to [Gerund phrase]

  • Six Key Ways to Attract High Net Worth Clients to Improve your Planning Practice
  • Ten Innovative Ways to Write Powerful Copy to Maximize Your Blog Traffic
  • Five Proven Ways to Attract a Super-Sexy Date to Amp Up Your Love Life
  • Twelve Most Powerful Ways to Deliver Hi-impact Coaching to Expand Your Consulting Practice

How many books do you know that propose to identify the X most critical determinants of a successful company? Can you say Good to Great? In Search of Excellence?

Cake-Bake Great People?  Or Be Great Cake Bakers?

There’s value in both approaches. But we need to be balanced about it, and as I said above, the greater danger of our time lies in mechanist explanations.

Take trust, for example. Here are two contrasting approaches.

The cake-baking example is  a new report from Edelman, on their annual trust barometer, called What Drives Trust. It uses regression analysis on survey data to suggest 16 Trust Drivers, including “offers high quality products” and “treats employees well.”

Fair enough. Of course, few companies set out to produce low quality products or treat employees badly. But there’s value in forcing them to compare their data with others. And the list of 16 as a whole tells a story, as opposed to other lists that might have been created.

More critically, though, is how the information will be used? Will it be deployed in project management fashion, assigning someone the job of treating employees better so that trust can be improved? Or is the value more heuristic in nature, making for richer discussions? In complex cases like trust, the latter is more clear.

The second approach is characterized by this Management Innovation Exchange video by CEO John Mackey, Can You Measure Trust?  He suggests Whole Foods’ primary metric is an output – morale – rather than inputs or causes.  He argues not against measurements, but in favor of feeling, intuition, instinct. We need more of this, he suggests, rather than more cake-baking metrics.  The best tool, he suggests, is to “be able to sense and feel.”

When it comes to trust, the value of metrics lie in getting us to think, rather than to task and manage. Even then, thinking alone is not nearly enough: trust also requires a bit of heart.

So do a lot of things. Not all life is like baking a cake.

Your Trusted Mortgage Broker?

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I know, it sounds like an oxymoron, a setup line for a cheap joke. Indeed, mortgage brokers got a very bad name during the recent real estate bubble and financial downturn.

But that’s my point. Industry is not destiny. You do not have to live down to your industry’s reputation. In fact, a trustworthy approach to business is all the more apparent when you’re surrounded by the opposite.

Caught in an Interest Rate Updraft

I heard from Daniel Milstein, of GoldStar Mortgage Financial Group, who told me this story:

In 2003, interest rates were near an all-time low—about 4.875 percent for a 30-year fixed rate mortgage. However, they started creeping upwards to about 6.75 percent. Many mortgage originators weren’t overly concerned about locking in rates for their customers. (Later they blamed others and  ‘market conditions’ for not being able to secure rates for their customers’ benefit.

I chose to pay more than $48,000 in rate lock extensions. Most people thought I was crazy. “Why are you doing that?” they would ask. “It’s not as if those customers are coming back,” one of my colleagues stressed. But I felt my reputation was on the line.

As it turned out, every one of those customers continued to do business with me. I delivered on what I promised. As a result, I assisted them with refinances, investment home purchases, second mortgages and new homes, in addition to the second and third generation referrals that resulted. My investment of $48,000 was repaid – many times over.

I was intrigued enough to continue to the dialogue.  Here it is.

Interview with Daniel Milstein

Charlie: What perception do you think people have of the business practices of the mortgage industry?

Daniel: Here’s the thing. The financial meltdown, people losing their homes, the foreclosures and everything that the banking or lending industry has done over many years is still fresh in people’s minds. There was a point where used car salespeople were treated and looked at better than the mortgage people, but the industry has cleaned up considerably. It’s not the same anymore.

Now, it’s difficult to get licensing. With so many rules and regulations, it’s the best of the best and the smartest of the smartest people who are still in business; we saw a decline of 65% in mortgage jobs over the last couple of years. That has had a cleansing effect.

Charlie: What are some of the changes the industry has had to make?

Daniel: You now have to have a clean criminal record, a certain educational attainment level, and those exams are not easy to pass. That has put a higher premium on experience, and I believe on ethical behavior.

Charlie: Do you think people recognize good and ethical behavior when it’s  presented to them?

Daniel: Absolutely. Knowledge is important more than ever before.  Many years ago, loan officers were taking applications on a napkin. There were no regulations or training. It was a wild, wild world out there.

In my book I talk about a loan officer who was convicted of fraud and sent to jail. While in prison, he taught free classes on how to become a loan officer. There was a waiting list for his class, and they had testimonials from people who got out and got jobs in the mortgage industry as to how much money they were making.

Charlie: Wow.  I guess that’s some progress we’ve made. Though, that’s from a pretty low starting point.

Daniel: I’m told that only 55% of people pass the exam on the first try these days. We have disclosure rules now; we have cooling-off periods. These are all pluses.

Charlie: Why do you think more people in this industry don’t behave in the eminently sensible ways that you have described in your stories?

Daniel: I like to say, “desperate people do desperate things.” In our industry historically, the top 10% make 90% of the income, and the remaining 90% are out there scrambling. They do whatever they need to do to get the sale. So, out of desperation, they do things they shouldn’t be doing. Thath’s why we’ve now got safeguards and checks and balances in place.

Charlie: Do you believe that good, ethical, customer-focused businesses are also high-profit practices?

Daniel: Absolutely. Don’t look at a client as a paycheck. If you love what you do, the money will come; and if you do a good job, you’re going to get referrals.

In any kind of sales, it’s all about getting referrals and repeat clients. If you don’t do good by your client the first time around, they will not come back and they will not refer. And you lose. It’s as simple as that.

Over 80% of my business is from repeat clients and referrals of satisfied clients. You don’t make all the money up front, but you make more over the years. You have to take a long-term perspective. And clients aren’t dumb; if you’re in it for the long haul, that’s part of what makes them trust you.

Charlie: Daniel, thanks so much for spending time with us.

Daniel: You’re most welcome.

If you haven’t already, be sure to get your hands on a copy of Daniel’s book “The ABC of Sales: Lessons from a Superstar.”

Trusted Advisors: Are You Joking?

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A doctor, a lawyer and a rabbi all walk into a bar.

The bartender says: “What is this, some kind of joke?’”

Notice: It’s never a manufacturer, a schoolteacher and a dancer who walk into the bar and serve as setup-lines for our jokes.  Instead, it’s those who should be our most trusted advisors: doctors, lawyers, spiritual leaders.

Ever wonder why?

Untrustworthy Advisors?

I am one who trusts.  I strongly believe that the vast majority of people in each of these professions, or callings, can be trusted with my life.  And yet I still find the doctor-lawyer-preacher jokes pretty funny.  Which got me thinking about why these folks are the protagonists of so many stories and jokes.

Here are three reasons I came up with:

1. Because these are meant to be respected professions, it’s easy to laugh at the bad apples and contrarian behavior.

2. Because we need our doctors and lawyers and spiritual leaders to be truly trustworthy advisors, the experience of dealing with them can be pretty emotional.  We are, in many cases, entrusting them with our lives, our money, our most personal family matters and more.

Trust is risky – the very definition of trust means we are taking a risk in relying on the advice, actions or discretion of someone else.  And that can be scary.  With so much at stake, we need the release that humor offers when dealing with serious, scary themes.

3. Perhaps the greatest reason these trusted advisor are so prominent in jokes is that they represent different aspects of ourselves, internal paradoxes we are trying to manage and integrate.  The doctor –the body, or the physical; the lawyer – the head, or the intellectual; and the rabbi/priest/preacher —  the heart, or the spiritual. These jokes are a form of stories—metaphors for aspects of life.

My Musings and Yours

These are my musings about the doctor, lawyer and rabbi who just walked into my bar.  Seriously, now, let’s share a beer and talk this through.

Trusting Delta

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From Delta Airline’s Website, Delta’s Force for Global Good

“Delta is firmly committed to our environment, safety, and social responsibility. We demonstrate these commitments in hundreds of ways throughout the world on a daily basis as we partner with our employees, vendors, customers, civic, and non-profit organizations to make a difference in the communities where we live and work. Many of our programs are award-winning and industry-leading. We don’t do them for the awards. We do them because they’re the right thing to do.”

Richard H. Anderson
Chief Executive Officer, Delta Airlines

From the Atlanta Business News, July 27, 2011

Airlines Spoil Fliers’ Unplanned Tax Holiday

Airlines have complained for years that taxes added to ticket prices drive up the cost of travel. But when those tax collections stopped last weekend and airlines had a rare chance to give fliers a break, most opted to keep prices the same and pocket the difference.

For Atlanta-based Delta Air Lines, that amounts to be $4 million to $5 million a day in extra revenue, the company said Wednesday.

A Congressional stalemate led to a partial shutdown of the Federal Aviation Administration Saturday, preventing the agency from collecting about $200 million a week in ticket taxes.

Delta and other major carriers then increased base fares to cover the lapsed taxes, saying they need the extra money to cover high fuel costs. The result is that travelers are paying roughly the same total price as before, instead of getting a discount from the unplanned tax holiday.

“It just seems like it was the perfect chance for the airlines to throw a bone in consumer satisfaction,” said FareCompare.com CEO Rick Seaney…

…Delta’s official statement on the matter: “Given the high cost of jet fuel, Delta has been competitive with other airlines that increased their base fares following the expiration of funding for the Federal Aviation Administration to adjust for the taxes no longer being collected.”

What Doctors and Salespeople Can Learn From Each Other

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Jerry Groopman is a medical doctor by profession. He is also an inquisitive person who for many years has been fascinated by the ancillary aspects of doctoring, such as the business of medicine. In his 2008 book How Doctors Think, he explores the varying ways in which doctors approach the need to figure out what’s going on in the human body.

Groopman’s overall message is that medicine is converging on a mechanistic approach to diagnosing. There’s a tendency to rely on “preset algorithms and practice guidelines in the form of decision trees.” (Insurance companies like this approach too). 

Together with an increasing reliance on evidence-based medicine, this drives thinking more and more “inside the box,” with less and less emphasis on the wildly varying kinds of intelligence needed to deal with the wildly varying mysteries of the human animal. 

What Doctors Can Learn from Salespeople

Given the trends above, it’s scary, albeit not surprising, to learn from Groopman this statistic:

 “…on average, physicians interrupt patients within eighteen seconds of when they begin telling their story.”

Eighteen seconds. Now cut to sales uber-guru Neil Rackham, in response to my question, “What’s the single biggest sales problem, and the hardest-to-correct sales problem?”

…the most pervasive one is also the hardest to correct. I’d call it “premature solutions”. [many salespeople] mistakenly believe that the sooner they can begin solving the problem, the more effective they will be.

Our earliest research showed that top salespeople didn’t focus on solutions until very late in the sale. Less successful salespeople couldn’t wait to begin showing how their products and services could solve a customer problem.

So most salespeople don’t spend enough time listening and questioning. The moment they think they have the answer, they jump straight to talking about their solution. As a result they don’t do a good enough job of understanding issues from the customer point of view. And if customers don’t feel that they are listened to and understood, there’s an inevitable loss of trust.

Message to docs: if you start cutting off patients after 18 seconds, you’ll get bad data, you’ll make bad diagnoses, and you’ll get little compliance with treatment. Not to mention low referral business.

What Salespeople Can Learn from Doctors

On the other hand, there are great and not-so-great doctors, just as there are salespeople. Here’s what one great doc had to say:

 “Osler essentially said that if you listen to the patient, he is telling you the diagnosis…Once you remove yourself from the patient’s story, you no longer are truly a doctor.”

The great advantage of open-ended questioning is that it maximizes the opportunity for a doctor to hear new information. What does it take to succeed with open-ended questions? The doctor has to make the patient feel that he is really interested in hearing what they have to say…

…Even if the doctor asks the right questions, the patient may not be forthcoming because of his emotional state. The goal of a physician is to get to the story, and to do so he has to understand the patient’s emotions. 

…You need information to get at the diagnosis, and the best way to get that information is by establishing rapport with the patient. Competency is not separable from communications skills. It’s not a tradeoff.”

Salespeople, you won’t find a more eloquent statement than this about the importance of listening to your customers. 

What Selling and Doctoring Have in Common

It makes a great deal of sense that the skills of a good physician should mirror those of a good salesperson.

First, nobody knows more about the customer/patient than the customer/patient. The danger of subject matter expertise is that you end up thinking you know more than the customer does. The truth is: you both know more than the other in particular areas, and the real power comes from collaboration.

Second, customer/patients are humans first, computers second. If you access them as computers—repositories of data waiting for your diagnosis-seeking brain-suck—then you alter their perceptions and feelings, and you end up poisoning the very data you set out to look for. In old computer lingo, it’s GIGO. Customer/patients’ data is only as good as their ability to clearly convey it to you, and that is affected by your ‘bedside manner.’

Third, soft skills and hard skills are complementary for the salesperson as well as for the physician. You can’t get by with just one, and you can’t spend much time in just one mode or the other. The best salespeople, like the best physicians, are practicing students not only of their product line or their specialty, but of human nature. 

Salespeople: think of your favorite doctor. Does he or she do a great job of ‘selling’ you on the right course of treatment? If so, take some sales lessons from them.

And if not, then perhaps it’s time for you to find a doctor who understands how to sell.

TrustedAdvisor Associates Workshops & Events, Fall 2010

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Join us this Fall at one or more of our 2010 TrustedAdvisor Associates events through globally accessed programs and webinars.

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Mon. Nov. 15th        Global          Charles H. Green & Stewart Hirsch

A new Trusted Advisor Mastery Program group began this week.  This session is full, but you can send an email to [email protected] to be notified when we begin another.

The group is getting acquainted on the proprietary forum bulletin board, downloading customized audio-video content on building trust and relationships, and beginning to work their individual specific client and customer relationship issues in one-on-one personal coaching sessions.

We described the program in a blogpost last week.  Contact us at [email protected] to get on the notification list for the next session.

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 Next Thursday marks the Thanksgiving holiday in the United States. We wish everyone a Happy Thanksgiving and hope they enjoy the holiday well past the stuffing and cranberry sauce. We warn you though, tryptophan does set in! Enjoy the time off with family and friends, as we will be doing the same!

Introducing the Trusted Advisor Mastery Program

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Our business at Trusted Advisor Associates is to help you become better trusted business advisors.

That started when I co-wrote The Trusted Advisor in 2000. It continued with my book Trust-Based Selling in 2005. In 2008, we added the Trust Quotient, a self-assessment survey which has now had over 14,000 takers.

Throughout, we have given practical, real-world advice to thousands of managers and professionals in major corporations throughout the world through our seminars, webinars, speeches and consulting.

On Monday November 15th we are beginning the first session of our new Trusted Advisor Mastery Program, and I want to tell you why we are excited about it–and why perhaps you should be as well.

What Will the Trusted Advisor Mastery Program Do for Me?

What Is the Trusted Advisor Mastery Program?

Who Should Consider Taking the Program?

What Are the e-Learning Modules About?

What Does the Program Include?

When Does the Program Begin?

How Much Coaching Does the Program Contain?

Who Does the Coaching?

How Much Flexibility in Scheduling Is There?

How Long Does It Last?

What Does the Online Learning Management System Do?

How Much Does the Program Cost?

How Do I Sign Up?

What Will the Trusted Advisor Mastery Program Do for Me?

It will make you a better trusted business advisor. That means:

Your clients/customers will be more likely to take your advice. They will be less likely to seek alternate providers. They become more likely to sole-source you going forward. Your opinions will carry more weight. You will be invited to discuss more open-ended issues than in the past, and invited earlier than before. You will get less price-resistance. Your repeat business, customer retention rates, and customer loyalty are all likely to increase as you become more trustworthy, and trusted.

Are these the kinds of benefits your business could use? What are they worth to your business? What are they worth to you personally?

What Is the Trusted Advisor Mastery Program?

It is a three-month program for cohorts of 5-10 people at a time. It combines e-learning modules with personalized coaching, group coaching, and a rich collaborative on-line environment. Each participant has a great deal of freedom to customize the program specifically around their very particular issues.

Who Should Consider Taking the Program?

External professionals (accountants, consultants, lawyers, etc.), internal staff professionals (HR, IT, Finance, Legal), sales and service people from complex product and services industries. The program is particularly attractive for those in smaller companies, including solo and partnership businesses that don’t have access to 20-30 person in-house training sessions in larger corporations.

What Are the e-Learning Modules About?

There are 20-plus modules, all delivered personally by me, Charles H. Green. All the content that I deliver to my major corporate clients I deliver here, in e-learning form, to participants, in ways you can rewind and read again. The materials are annotated, referencing two books, forty articles, and over 800 blogposts.

The modules dive deep into issues like creating trust in the sales process, understanding the dynamics of different trust temperament personalities, practical uses of the Trust Equation, the application of the four Trust Principles, trust-based leadership, successfully creating trust in conversations, creating trust in virtual teams, accelerating trust creation, recovery from trust loss situations, mitigating trust risk, asking difficult questions, and answering the most difficult sales questions.

What Does the Program Include?

You get:

· access to all online content

· 4 one-on-one coaching meetings, about an hour each

· 4 hours of group coaching (with other cohort members)

· unlimited access to the customized Learning Management System

· online forum conversations between your cohorts, coach, and myself

· copies of both books

· your own trust quotient and trust temperaments self-assessment.

When Does the Program Begin?

The first session starts November 15, and is fully subscribed. If you send an email to [email protected], we will notify you when the next cohort-session begins. (Your email will be used for no other purpose, and will not be sold or given to anyone else).

How Much Coaching Does the Program Contain?

Each participant gets 4 individual, one-on-one hour-long coaching sessions with a professional, Trusted Advisor Associates coach; either Stewart M. Hirsch, TAA’s head of coaching, or coaches under his guidance. The four group coaching calls include exercises and discussions on issues that arise in the online forum.

Who Does the Coaching?

Stewart M. Hirsch, Trusted Advisor Associates’ head of coaching, is the lead coach for the Trusted Advisor Mastery program; he does much of the coaching, and other qualified coaches work under his guidance. Stewart is a superb and experienced coach, steeped in the Trusted Advisor approach and dedicated to the success of all his clients.

How Much Flexibility in Scheduling Is There?

One of the most attractive characteristics of the Trusted Advisor Mastery program is the extreme degree of flexibility in scheduling it offers you. With the exception of the four group coaching hours, which require minimal coordination with other members of your cohort, you have great freedom. The online learning can be done 24-7; your individual coaching can be arranged at any time that is mutually convenient to you and your coach.

How Long Does It Last?

The program typically last about three months, though the precise beginning and ending, as well as the pace, are well within your control. The modules and online forum remain open for a total of five months, to allow discussion and learning to continue after the formal portion of the program is completed.

What Does the Online Learning Management System Do?

It is a customized environment, built on an Adobe LMS, the same kind of platform used by major universities for large scale delivery. This is not your retail-available webinar-online type software. It offers you forums, special readings, eLearning materials, webcasts, a diary function, and rich controls for customization and privacy.

How Much Does the Program Cost?

The material delivered in this program is exactly the same material we deliver live to groups of 20-30 in-house for major corporations–except that it is priced far less. By combining online learning with designed high-quality interaction and just-in-time coaching, we have been able to keep this program affordable, and yet very high value at the same time.

How Do I Sign Up?

The November 15 session is fully subscribed. We will be doing more programs in the future, though specific dates have not yet been set. To be notified when we schedule the next program, send an email to [email protected].

Ava J. Abramowitz on Essentials of Negotiation (Trust Quotes #15)

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Ava J. Abramowitz is a lawyer, mediator, and author.  She is also an honorary member of the American Institute of Architects and currently is serving as the first public member of the National Council of Architectural Registration Boards. Not surprisingly, she teaches negotiation at George Washington University Law School; was in-house counsel for the American Institute of Architects; serves as a mediator in the Federal courts in Washington, DC; and lectures nationally on negotiation. 

As befits such an interesting woman, she is married to a man who is quite interesting in his own right, Neil Rackham.

But our main interest in this interview centers around a most remarkable book she has written, titled Architect’s Essentials of Negotiation (The Architect’s Essentials of Professional Practice). While it’s nominally about architects, the fact that it’s so readable outside that profession is a guarantor that she’s talking about universal truths. Let’s dig in.

CHG: Ava, thanks so much for doing this interview with us. I’m excited, because I was so taken by your book. Let me start in a very particular place. Outside of perhaps existentialist philosophers, theologians or therapists, you and I are the only ones I know who refer to the Other—in caps—when we’re talking about the protagonist in a commercial relationship. Why do you do that?

AJA: In all my writing and always in my thoughts, I refer to the "Other" and not the "other side" when talking about those with whom we negotiate. "Other side" implies the people are opponents. "Other" implies they are just not us. It is hard to build common ground with opponents, but a bit exciting, invariably challenging, and sometimes even fun to build common ground with people who, although they want a solution to a shared problem as much as we do, view that problem differently because they have different sets of eyes and experiences. A small change in mindset, but it’s an important and useful one to use and remember. Not a friend. Not an enemy. Just an Other.

CHG: Let’s take the readers right to the punch line: in your view, what is the central message of this book?

AJA: In business and in everyday life, it is far more profitable for all the parties to forge strategic alliances with each other to solve the problems facing them. You need not like the Other. In the early stages of negotiation, you need not even trust the Other. But if you and the Other collectively can solve the problem in a way that meets both of your compelling short and long term interests and needs, you should do it. Solid negotiation skills will get you there. They can be learned.

CHG: Reading your book it seems so obvious that that’s how things should work. Why doesn’t it always turn out that way?

AJA: Sometimes the way people analyze the situation leads them to believe that there is no common ground. I don’t want to get into politics, but right now the United States is so bifurcated that people forget that everyone who is running for office believes in “life, liberty and the pursuit of happiness” and in “truth, justice and the American way.” They may differ on the definitions of those values or how best to achieve them, but at the core the persons sitting across the aisle from them are not an enemy to be destroyed. They are just Others with different views of the problem and the solution.

CHG: Notwithstanding what I said above, this book was written nominally for architects. And in one way, they are unique. Unlike most other professions, there are usually three parties involved in commercial discussions: the architect, the contractor, and the owner. Does that make architecture more complicated than, say, the practice of law?

AJA: Ah, good question, but no lawyer could say yes and survive. After all, the American legal system is not routinely described as “an adversary system” for nothing.  Here lawyers represent parties who may have entered a negotiation with no desire for a settlement. For example, parties may have retained a lawyer to obstruct a solution because they figure that delay is in their interests. Architecture and construction, at least at the outset, are less conflicted. At the start of every project everyone wants the project to come in on-time, on budget, and with no claims. And everyone wants to make a profit.

Additionally, risk is handled differently in the legal setting than on the construction site. Lawyers are taught to think liability first and foremost and to figure out ways to foist liability on the Other, freeing their client to risk without responsibility. Sophisticated parties in design and construction, however, recognize that risk and reward go hand in hand. To them, the easiest way to achieve success is to assign each exposure to the party most capable of managing it, and to give that party all the responsibility and the power—both authority and fee—needed to manage that exposure well. In other words, they forge strategic alliances with and among the parties with mutual success being the overriding goal.

CHG: You know quite a bit about the psychology of sales through Neil. Are there any sales insights that fit with your sense of negotiations?

AJA:  For many a person Getting to Yes: Negotiating Agreement Without Giving In by Fisher and Ury was their introduction to negotiation. There Fisher and Ury set out a staged theory of negotiation that building on common ground should produce a shared solution that meets the parties’ key interests and needs, and solves the problem that brought them to the table in the first place. The book and many of its derivative works, though, are less eloquent on how precisely do you do it.

For me, Neil’s book, SPIN Selling filled in that missing blank. By asking questions, particularly Implication and Need/Payoff Questions, one can uncover the explicit needs of the Other and address them. With that knowledge common ground can be more readily identified and built.

How powerful a tool are questions? Inestimable. Questions reveal the Other’s needs, values, and priorities. They help with elegant option development. They expose problems in your own thinking. Questions are a solid alternative to saying no. They help you manage the negotiation, giving you time to process the information you hear and figure out how you want to deal with it.

Questions help you build trust. There is nothing more powerful than listening and using the information you are hearing to build common ground. Nothing convinces the Other more that you care and are worthy of their trust.

CHG: Part of why this book resonated so well with me is the fundamental stress on relationship; that’s what trust is so much about, too. I know you’ve thought about trust, presumably about trust as it relates to negotiation and mediation. Do tell us what you think about it?

AJA: Trust is a matter of choice.You can choose to trust, or not. You can choose to be trust-worthy, or not. You can negotiate with people whom you trust and with those whom you do not. Trusting appropriately just makes negotiation easier.

Clients use proxy measures when deciding whom to trust. It is clear from research that clients look for competence, candor, and concern in the professionals they retain. The more the client sees the consultant being competent, candid, and concerned about the client, the more the client tends to trust the consultant. It is easy to say, “Be candid, concerned, and competent,” but it is not always easy to do and even harder to prove that you are being candid, concerned, and competent.

Try proving you are trustworthy by saying to someone, “Candidly….” Saying that invariably puts the Other instantly on guard. Additionally, it raises an issue where none existed: Were you not being candid before? When will you deceive again? There are clearly ways to prove you are Other-focused. Asking questions helps prove to the Other that what they say, think, and feel is important to you. Disclosure of internal information helps, too, particularly when it makes your motivations and perceptions transparent.

Your book brings this all home. In one of the best books on earning and deserving trust, The Trusted Advisor, you and your colleagues, David H. Maister and Robert M. Galford, take these earlier findings one step further, developing what you called the trust equation where trust is a function of credibility, reliability, intimacy, and self-orientation. You found that the more credible, reliable, and intimate one is with and about the Other and the less self-oriented they are, the more they will be trusted by the Other. Words to live by.

CHG: Let’s get beyond architects alone here. Is there a Single Biggest Mistake people make in thinking about negotiation? Or a Big Three?  

AJA:  To answer that question, let us pin down the kind of expert negotiator I have in mind. Based on Huthwaite research I have come to classify as “expert” those negotiators who share three characteristics: They have a track record of reaching agreements, a track record of their agreements being implemented successfully, and a track record of the Other being willing to negotiate with them again. In other words, I value, as experts, people who, time after time, successfully resolve their principals’ long-term and short-term problems through negotiation and in such a way that the Other is willing to work with them again.

What do these experts have in common? They prepare and strategize for the negotiation before the negotiation so that when they sit down with the Other they have freed themselves to listen, and they listen hard and well. They use the information they hear to locate an idea they can support and build on, ultimately yielding common ground. And even as they close in on a negotiated agreement, they prod. “How will that work?” What if x happens?” “How will it play out if all things go well, and if they do not?” "Is there anything we can do to build success into the effort?"

These negotiators are committed to long-term success of the parties and the agreement. If the agreement is to fall apart, they want it to fall apart before it is signed, so that they can pick up the papers, shake them off, and try again. And that is why they and their clients succeed and the Other is willing to negotiate with them again.

CHG: Ava, this has been a delight. Thank you so much for ‘stopping by’ to chat with us, and for sharing your wisdom and insights.

Disclosure: I am an Amazon affiliate and receive a very small commission for products purchased through my Amazon links.

Trusted Transactions, or Trusted Relationships?

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Justice Potter Stewart once remarked, with respect to pornography, that it was virtually impossible to define it, but, "I know it when I see it."

Ditto for trust. It’s both a verb and a noun. Its objects are implied and contextual, as in "I trust my dog with my life–but not with my ham sandwich."

Increasingly, we need to make explicit another dual-meaning of trust. We trust relationships, and we trust transactions.  I trust John—to have my best interests at heart. I trust eBay—to create trustworthy transactions with strangers. It does not follow that I trust an eBay customer to go out on a date with my daughter.

Much of the public dialogue today confuses these two distinctions. Is it Congress that people don’t trust? Or is it members of Congress who themselves are considered untrustworthy? To the average voter, it’s a distinction without a difference. I suspect the inability to tease them apart is itself a source of anger. But if we fail to separate them, we doom ourselves not only to nasty public discourse, but to failed solutions.

Trusted Relationships in the Mortgage Business.

In 1970, the US mortgage industry was still adequately described by the perennial Frank Capra Christmas movie “It’s a Wonderful Life,” with Jimmy Stewart as George Bailey, president of the Bedford Falls Savings & Loan. Bailey (for he and the company were inseparable) made loans to people he knew personally.

The bank’s depositors were Bailey’s friends and neighbors. The depositors were also the borrowers; likewise, the employees. The loans stayed on the S&L’s books, presumably to term. Those who took out mortgages had no intention of doing anything other than paying them off, with burn-the-mortgage parties at the end.  No moral hazard here.

This was relationship trust. The strength lay in personal ties, cemented over time. A man’s word was his bond, and anyway you knew where he lived. His reputation was everything, at least until it wasn’t. Relationship trust served business and society well.

But relationship trust was about the only kind we had, and it had its limits.

Transactional trust in George Bailey’s world was shallow and fragile indeed. The S&L was at risk of being forced out of business by a single competitor, the evil Mr. Potter. It was at risk of the low-tech deposit processes of Uncle Billy. Most importantly, it was at risk of a bank run. It was a good thing George Bailey worked the relationship trust game well, for he had precious little else to depend on.

Trusted Transactions in the Mortgage Business.

In 1995, Dwight Crane, Robert C. Merton and others published The Global Financial System: a Functional Perspective. A masterpiece of what sociologists knew as “functionalism,” this book laid out the case for transactional trust, viewing the mortgage business as one part of a complex and, ideally, integrated financial system.

In the chapter on mortgages, they ran down the characteristics of a system you could trust. It would have markets—markets for deposits, markets for mortgages, markets for loan originations. The book listed the costs of not having a systemically integrated system: risk of meltdowns, differential pricing within very narrow geographic regions, low liquidity, gross inefficiencies.

In short, George Bailey’s relationship-driven-trust was too risky, too costly, too uncreative and too unresponsive. Above all, it was too expensive. Consumers–the would-be purchasers of mortgages—were subjected to higher prices than necessary, driving up the cost of home ownership, and therefore driving down the economic livelihood of those seeking the American dream. 

You simply could not trust such a system, the good professors opined.  “It’s a Wonderful Life” was now half a century old. George Bailey was quaint. No one noticed that only one year before the 1995 book, contributor Robert C. Merton became a Board Member of a little hedge fund called Long-Term Capital Management L.P.  

In business, Progress was synonymous with all these terms: systemic, low-cost, efficient, market-based, liquidity. No one was about to cast doubt on the important and positive nature of all these terms.  The academics and wunderkind of Wall Street were creating institutions you could trust.

The new trust was almost entirely cast in terms of systems and transactions. Transactions replaced relationships. Where markets couldn’t handle the job, models could.

In a few short decades, the “trust” pendulum swung from a man’s word to the solidity of a system. We went from high personal trust to high systemic trust–each extreme without the moderating influence of the other.

We Need Rich Trust.

The transactional revolution in mortgage banking indeed delivered on most of its systemic promises. Markets were established, costs were lowered, liquidity was raised. But it all, as we know, ended very badly.

The confusion over trust went way beyond semantic. Alan Greenspan himself in 2008 famously said:

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms."

In other words, Greenspan thought that transactional trust would have the same sort of reputational bias that relationship trust had. He was, sadly for all of us, mistaken. 

Transactional trust absent relationship trust had its own internal seeds of destruction. The absence of long-term relationships was crystallized in the Wall Street acronym IBGYBG—I’ll be gone, you’ll be gone, let’s do the deal. Just as personal trust doesn’t scale easily, so transactional trust doesn’t easily foster ethical behavior.  

George Bailey wasn’t wrong, he just had no system. The professors weren’t wrong, they just assumed relationships. The truth is: we can’t afford just one form of trust or another, we need a rich mixture of both.

Well Beyond Mortgages.

The mortgage industry is but one example. As recently described in a New Yorker article on the US Senate’s inability to develop energy legislation, the political process has become as ugly and dysfunctional as anything involving collateralized mortgages. Lifetime politicians are continually compromising principles and relationships for another shot at enhancing their power.

Yet they are not wholly to blame. They are caught up in a system which insists on money and soundbites, with ever shortening cycles of time. The press, caught in its own compressed cycle, competes with reality TV and blogs to capture the public’s insatiable desire for more intensity, faster. The Shirley Sherrod case—a grievous rush to judgment for the sake of ratings—dramatically showed how compromised the press has become. And another case—a Bloomberg news reporter’s bizarre attack on Prudential—shows how blasé we’ve become about it.

And the electorate, reflecting it all, ends up exerting single-issue us-vs-them pressure on its own.

———– 

The polls are basically right: we do have a crisis of trust. But what crisis? It is not just a failure of morality. We cannot fix it solely by getting back to ‘family values,’ or seeking out leaders of impeccable morality. Those are, in fact, necessary conditions, but they’re not sufficient.

On the other hand, those who insist that the system is sound, it just needs tweaking, are dead wrong as well. This is not a matter of incentives needing adjustment. This is not a matter solely of transparency in markets. Those too are necessary conditions—but not sufficient.

We live in an interconnected world: transactional trust is critical for us to do live a life built on global commerce without it. 

At the same time, there is no social structure or business process that can work without humans. There is no lock that can’t be picked, no code that can’t be broken. There is no inhuman system that can’t be perverted by humans. 

Trusted transactions? Or trusted relationships? Yes. We need ‘em both.   

How to Convince Your Boss You’re Right

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Your boss gives you an important job to do. You are good for the job, you know what you’re doing, and you’re clear about the right answer. And then–your boss won’t go along with it. 

Worse, you’re really qualified to make this judgment call. And your boss’s logic is goofy. His/Her reason boils down to ‘we’ve always done it that way,’ or ‘just do it by the book,’ or maybe just personal preference. Your boss won’t listen, just digs in his/her heels.   

And it’s getting really irritating.

What can you do to convince your boss you’re right?

Surprise surprise, there is no guarantee.   But you can dramatically improve the odds. Here’s how.

Convincing Starts with Right Thinking

You start by getting really clear on two ideas—in your own head.

Idea 1. You are not the boss of your boss.   Your boss is the boss of you. So if it ever really comes down solely to who’s got the power, you can hang it up. 

Deal with that.

Idea 2. You will rarely convince anyone—particularly your boss—that you are right, as long as that equates to convincing them that they are wrong. If “I’m right” rhymes with “you’re wrong,” you can also hang it up.

Are we clear? 

If so, then you’ve figured out that “How do I convince my boss that I’m right?” is entirely, 100%, the wrong question. Really—completely wrong. If you got sucked in by the title of this blog, then you have to do some re-defining of your objectives—right now.

Think about it. If your objective involves “I’m right” then you’ve got an ego problem. I mean, why is this all about you? If you’re a serious team member, shouldn’t the question be “what’s the right answer” rather than “who’s got the right answer?”

And if your objective involves “convincing someone else” then you’ve got a control problem. I mean, why should you assume the issue is one of changing someone else to think like you, rather than of creating new joint collaborative thinking?

Redefine “Convincing Your Boss”

Imagine—even though it’s extremely unlikely—that, just for the sake of argument—your answer isn’t fully perfect. And imagine, though equally unlikely, that you actually could convince your boss of the correctness of your flawed recommendation. That would not be the optimal ending, would it?

That’s one small reason for you to engage in a dialogue, rather than a wrestling match. But here’s a much bigger reason.

The Paradox of Influence

It turns out, one of the best ways to convince someone is to listen to them first. That’s the gist of what a world expert on influence, Dr. Robert Cialdini, has to tell us. If you listen to someone first, the tendency of humans is usually to reciprocate—which means, to then listen to you.

But this reciprocal listening must have a genuine quality about it. It can’t be just, ‘OK I’ll let you blab for a while as the price for letting me give my pitch, so let me just grit my teeth, OK off you go…”

It actually has to be a genuine act of respect. It has to come from true curiosity, not from a kit-bag of carefully pre-designed questions. You actually have to, for lack of a better word, care.

To Convince Your Boss, First Give Up on Convincing Your Boss

If you want to increase the odds of convincing your boss, first—give it up. Completely. Give up on the objective of ‘convincing your boss.’

In its place, commit yourself to an attitude of curiosity. Go ask your boss:

Boss, I know we’ve been cross-wise on this one. And you know what, I have to admit, I could, of course, be wrong. And if so, I probably don’t even understand how I’m wrong. So please, do me a favor. 

I would really appreciate it if you’d tell me all about how you see this issue—from start to finish. I want to completely understand how you come at it, and how you came to see it that way. I am truly curious, and want to know.

And that’s it. If all we do here today is help me learn from you how to think about this, it will have been a great day. Period.

Then listen. And plan to say ‘thanks,’ and walk away. 

Yes, walk away. 

Because if your boss has any interest in discussing your point of view, (s)he will ask you about it at this point. And if they don’t have any interest, go see Ideas 1 and 2 at the outset of this article, the part where it says they’re your boss, not vice versa.

Here’s the paradox. Assuming your idea really was pretty good, going through this process will considerably increase the odds of it being accepted by your boss. But only—only—if you are willing to completely give up your objective of bending another person’s will to the force of yours.

If you’re willing to give it up, you’ll increase the odds of getting it to happen.  The secret is: It’s not about you.