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The Case of the Untrustworthy Managers

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The Power of Deduction and TrustA long time ago, in a land far away (known as “Texas”), I once had a consulting client. They operated a chain of convenience stores, and we had been brought in to address a serious case of high store manager turnover.

Turnover was running about 150%, which meant the average store manager lasted only about 9 months. It was a tough business. Most sales came from gasoline and beer, and the clientele wasn’t the most genteel. So obviously the company was doing a poor job of selecting managers.

Obvious, that was, until a clue smacked me in the face. As with many retail businesses, shrinkage was a problem. Therefore, every month, every store manager was given a lie detector test. And sure enough, a great many managers eventually flunked the test and were fired. On average, this happened at about the ninth month of employment.

Nice Work, Sherlock

The astute among you can already see what took me an embarrassingly long time to figure out. The lie detector tests, intended to uncover deceitful behavior, in fact induced that very behavior. Management practices were suborning thievery.  After a while, each manager would figure, “Well somebody must be getting away with something, maybe I should try,” and another self-fulfilling prophecy would come to pass.

Put another way – management’s distrust of its store managers caused them to behave in an untrustworthy manner.

Cause, Effect, and Reciprocity

Herman Melville’s novella Billy Budd was about a completely honest, trustworthy young man. But rare it is that character alone can withstand the attacks of low expectations; the environment we live in plays a key role as well. Employee trustworthiness isn’t purely bought through hiring. It can be reinforced, or incapacitated, depending on the corporate culture that new employees encounter.

The case of the convenience store highlights the vicious circle of low expectations resulting in low trustworthiness. But it works the other way too.  “The fastest way to make a man trustworthy is to trust him,” said Henry Stimson. And apparently Hemingway. And maybe Gandhi, too. And Steven M.R. Covey. In other words, it’s pretty much received wisdom now.

As someone else once said, “Whether you expect good or ill of someone – that’s what you’ll get.”

If you want a trust-based company, start trusting the stakeholders all around you.  That means your customers, your partners, your employees, your bosses, your suppliers. And expect them to return the gesture. The power of reciprocity in human relations is such that you will, far more often than not, have your expectations fulfilled.

The SEC Chose Wisely in Goldman Case

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The SEC earlier today announced a civil suit against Goldman Sachs.  This act was the talk of Wall Street—the DJIA dropped 125 points, Goldman’s stock lost 12.6%, and CNBC broadcast a special evening show called “Fraud on the Street.”

The suit charges Goldman with not disclosing information. I won’t bother with the detail, you can read that in the above links—the point is, the charge is non-disclosure.

Now, that’s an interesting charge. It amounts to some form of misrepresentation. In the non-legal world, that’s generally known as lying. In that same world, the teenager defense of “I didn’t actually tell a lie, I just let you think what you thought” is considered a distinction without a difference.

The point is, the SEC chose to charge Goldman with something that’s not only illegal, but resonates easily with Main Street as also being unethical. Since the gap between the illegal and the unethical is one of the main casualties of the recent financial debacle, this is a welcome sign—a charge that re-unites the legal and the ethical.

The Spin–Red Herring Issues

Goldman itself responded that the charges are “completely unfounded in law and fact.” Look for a splitting hairs defense a la “it depends on what the meaning of the word ‘is’ is.”

Goldman and others make several arguments that are pointedly red herrings. One is that they didn’t do this transaction to short the market (non-responsive). Another is that the buyers of the CDOs were big boys, and should know what they were getting into (ditto). Another (by Goldman) is that they themselves lost money on the deal (again…).

The pro-Wall Streeters are not alone. NBC News led with “if the government is right, people all across the country are still paying the price for schemes like this that we’re only learning about this now.” Their commentator presented the charge as betting against a carefully constructed product; not the SEC charge. Lisa Myers said, “essentially Goldman Sachs is accused of helping rig the game against investors.” And Robert Reich said the real crime is not what was done illegally, but what was done legally. Fair point, but not a commentary on the crime. CNBC’s Erin Burnett tried to get commentators to say it was suspicious timing, to buttress financial legislation in Congress or to deflect press attention from the SEC’s shortcomings in the Stanford case. Again—not on point.

What the SEC Did Right

I’m no lawyer, but I’m guessing the SEC could have pursued many other charges. It chose to pursue this one—the legal equivalent of what laymen call ‘lying.’ Lying is the most trust-corroding thing that can be done. It not only ruins credibility, it casts motives into doubt. Lying kills trust.

A charge of failure to disclose is exactly the kind of charge a responsible regulator should be pursuing. It reunites the legal and the ethical—a casualty of Wall Street’s actions—and aims at restoring trust.

Greed is not illegal, though it may be unethical; ditto for fleecing one’s customers. But misrepresentation—or the near-equivalent of selective disclosure—is both.

Good for the SEC for taking this route.
 

25 Behaviors that Foster Mistrust

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Please welcome Peter Vajda, a frequent commenter on this blog, and a respected thought leader, coach, writer, and co-founder of SpiritHeart.  I’m delighted to yield the floor to him for one of his many fine articles.

“Trust men and they will be true to you; treat them greatly, and they will show themselves great.” —
Ralph Waldo Emerson  

All of life is relationship – even life at work. And the most critical, foundational building block of a team is trust. Without trust most teams are really disparate collections of individuals called groups. The element that creates or erodes trust is your individual behavior.

Trust can support teams to go the extra mile, work for the greater good of the team and the organization, foster open and honest communication and engender mutual respect and support.

Distrust, on the other hand, often stems from a “me first” mind-set that leads to destructive conflict, egoism, and a “going through the motions” attitude.

Trite and worn it may be, but “There is no ‘I’ in team”  is a fact of life at work.   When trust is lacking among team members, they spend inordinate amounts of time and energy resisting others’ inappropriate behaviors, reacting to others’ disingenuousness, playing politics, resisting meetings, and feeling reluctant to ask for, or to give, support.  In a culture characterized by mistrust, relationships suffer.  And when relationships suffer, performance, production and profits suffer.

How might you be contributing to mistrust on your team?

Here are 25 behaviors that contribute to creating team mistrust:

1. You fail to keep your promises, agreements and commitments.
2. You serve your self first and others only when it is convenient.
3. You micromanage and resist delegating.
4. You demonstrate an inconsistency between what you say and how you behave.
5. You fail to share critical information with your colleagues.
6. You choose to not tell the truth.
7. You resort to blaming and scapegoating others rather than own your mistakes.
8. You judge, and criticize rather than offer constructive feedback.
9. You betray confidences, gossip and talk about others behind their backs.
10. You choose to not allow others to contribute or make decisions.
11. You downplay others’ talents, knowledge and skills.
12. You refuse to support others with their professional development.
13. You resist creating shared values, expectations and intentions in favor of your own agenda; you refuse to compromise and foster win-lose arguments.
14. You refuse to be held accountable by your colleagues.
15. You resist discussing your personal life, allowing your vulnerability, disclosing your weaknesses and admitting your relationship challenges.
16. You rationalize sarcasm, put-down humor and off-putting remarks as “good for the group”.
17. You fail to admit you need support and don’t ask colleagues for help.
18. You take others’ suggestions and critiques as personal attacks.
19. You fail to speak up in team meetings and avoid contributing constructively.
20. You refuse to consider the idea of constructive conflict and avoid conflict at all costs.
21. You consistently hijack team meetings and move them off topic.
22. You refuse to follow through on decisions agreed upon at team meetings.
23. You secretly engage in back-door negotiations with other team members to create your own alliances.
24. You refuse to give others the benefit of the doubt and prefer to judge them without asking them to explain their position or actions.
25. You refuse to apologize for mistakes, misunderstandings and inappropriate behavior and dig your heels in to defend yourself and protect your reputation.

By contrast, when you authentically show up in integrity, and allow your vulnerability to show, others see you as genuine, warts and all.  As such, your teammates will begin to trust you and gravitate towards you as you have created a personal container of safety in which others feel they can relate to you in an equally genuine fashion.

Communication and true teamwork are functions of trust, not technique. When trust is high, communication is easy and effortless. Communicating and relating are instantaneous. But, when trust is low, communicating and relating take effort, and are exhausting, and time and energy consuming.

Are you guilty of contributing to mistrust?

“The chief lesson I have learned in a long life is that the only way to make a man trustworthy is to trust him; and the surest way to make him untrustworthy is to distrust him and show your distrust.”
–Henry L. Stimson