Trusted Advisor

The Limits of Value Propositions

Posted by on Mar 12, 2014 in Trusted Advisor | 0 comments

(This post first appeared on RainToday.com)

The Real Value PropositionValue propositions are unquestionably important in B2B sales, especially for large, complex, or intangible offerings. Some suggest a value proposition is the key component of successful sales. And most would say a value proposition is a necessary condition for success, if not a sufficient one.

But I think we over-value the value of value propositions. Not only are they not sufficient, but sometimes they’re not even necessary. They are frequently less important than classic issues of needs and wants. And discussing value propositions without overtly addressing client confidence in the capability of the seller is not useful.

Value propositions are unquestionably powerful. But if you think nailing down a clear value proposition is going to solve your sales issues, think again.

Thinking About Value

First, some definitions. I’m using “value” in a simple, narrow way to mean economic value. For example, I might offer a client a value proposition that says, “By using a distinctive approach to account development, I can improve top-line revenue by 10% within six months at virtually no cost to margins.” The “value” in that example is “10% of full-margin top-line revenue,” and the total statement includes reference to how I’m going to achieve it and in what realm of the client’s business.

But usually that’s not how clients start out thinking. In my experience, clients go rather quickly from “we’ve got a revenue problem” to “the biggest reason for our revenue problem is sales force turnover,” from whence it’s a quick hop to “we need a salesforce recruiting solution.” In which case, my highly articulated value proposition about the account development process, even if it’s correct and relevant, doesn’t even get invited to the party.

Their problem (“10% top-line revenue gap”) may rhyme with your value offering (10% top-line revenue growth”), but if the buyer is fixated on sales force turnover, game over. You could argue you need to present your value proposition earlier in the buying cycle, but that’s a problem outside the value proposition per se. Call that the “misaligned diagnosis” problem.

Another problem is relative lack of urgency. A 10% increase in top-line growth, while it sounds great, may produce yawns in organizations that are transfixed by products going off patent, or by R&D rejuvenation, or by M&A activity, or by the urgency of a cost-cutting drive.

A value proposition can work its magic only if the client a) agrees on the issue at hand, b) feels a need to address the issue, and c) wants to use the particular value proposition to address the need.

That is not a radical statement. (The value of a glass of water in the desert is greater than when lakeside.) And yet it is violated all the time. Salespeople keen on articulating value propositions to clients risk making the world look like a nail to match their value proposition hammer. We know better than to sell product vs. solution, but it’s so tempting when the “product” is disguised as a total value proposition.

Note: this can work in sellers’ favor. Over half my clients already see what they want in my offerings by the time they contact me. They articulate my value proposition for themselves. And unless they’ve gotten it quite wrong (not very common), there’s little point in forcing them to tweak it. At that point, the imperative to add value as the opportunity presents itself becomes the key task.

Selling Value And Buying Value

Suppose you haven’t productized the value proposition. You’re engaged in a constructive dialogue with an interested client. You’ve articulated your value proposition, they comprehend it, and it meets their needs. However, the same can be said for two competitors, each of whom isalso talking to your potential client about increasing top-line revenue by changing the account development process.

Several issues then arise, such as the level of detail. (Just how does your approach to changing the account development process differ from theirs?) You could call this a deeper level of value proposition, but below some level it starts to look like just product variations.

But the biggest issue for buyers at this point is often not the value proposition at all, but the confidence or trust the buyer has in the seller. Confidence and trust can not only overcompensate for lower stated value, but they can overturn the value proposition entirely.

Expected Value

Consider two firms competing for a bid, with general agreement on the value proposition that the client is looking for. Let’s say the economic value calculated by each firm is about net $5 million. Sophisticated decision analytics might reveal the client has 90% confidence that firm A will deliver fully on the expected value, but only a 75% level of confidence that Firm B will do so.

That’s 15 percentage points variation in expected value—the same as if one firm had quoted a value of $750,000 more than the other! It’s also a discrepancy often sufficient to entirely wipe out the fees difference between the two sellers. Even greater discrepancies emerge when the issues turn to, “what if things go wrong? What will they be like to work with then?”

Yet this discrepancy virtually never gets talked about—at least not in a direct and quantitative way. The discussions are more along the lines of, “I don’t know. I just don’t feel like when push comes to shove they’re going to be able to get with our program.”

If you lose a bid and are lucky enough to get some post-bid debriefing, you’re not likely to hear, “Well, we just didn’t feel like when the chips were down you’d be able to get with our program.” That would be the corporate version of politically incorrect speech.

Instead, you will hear, “The other guys had a more compelling set of resumes on their team, ” or “We just felt like we had to go with their longer track record in this area.” In other words, the language of value proposition gets cited as post hoc justification even though it was not the basis for the actual decision. More prosaically, people buy with their heart and rationalize it with their brains.

Trust Can Even Overturn a Value Proposition

I’ve been on both ends of this one. I won a job by telling the client they flatly didn’t need to do a significant part of the job they were requesting. I didn’t win because I came up with a better value proposition; I won because I showed I could figure out the right thing to do. And the proof of it was they didn’t bother to solicit other bids around the new value proposition.

Sadly for me, I’ve lost this way, too. It’s not about picking the right game, it’s about picking the person who knows how to pick the right game.

The Role of Value Proposition

Too often it’s assumed that the purpose of the value proposition is so obvious it doesn’t need stating. Doh! We assume clients buy value, clearly expressed, and tightly calculated. After all, that’s what they say they do.

There are seriously valuable roles for a value proposition, of course. They are:

  • To force the seller to have a Point of View: my client may or may not buy what I’m selling, but my statement of it marks a beginning point of discussion, a coherent account—one that suggests other ideas, proves I’ve thought things through, and shows I am worthy of valuable time.
  • To give the buyer “air cover” in justifying a decision internally: a B2B buyer wants to be able to tell anyone who asks, but especially his superiors, that they bought a proven product with a 35% ROI that will provide a 15% CAGR by an experienced-based approach to account management. They do not want to tell everyone they chose vendor A because, gee, they really felt good about them—even if that’s the truth.
  • To undergo a required, universal protocol: like meeting ISO standards, following tax rules, or complying with traffic laws, the tight definitions that come from rigorous thinking about value propositions are an assurance of quality. They may be a little pro forma, they may be subject to some tweaking, and they may not be a guarantee. But if everyone must do them, they form a common denominator by which to compare something of importance—value.

Value propositions are powerful, useful, and often necessary. Typically, however, they are not sufficient. Don’t go to into the sale armed with a value proposition alone.

This post was written by Charles H. Green
Charles H. Green is founder and CEO of Trusted Advisor Associates LLC; read more about Charlie at http://trustedadvisor.com/cgreen/You can follow him on twitter @CharlesHGreen

Read More

Why Some Men Don’t Trust Women In The Workplace

Posted by on Mar 10, 2014 in Trusted Advisor | 0 comments

(And Why Some Women Don’t Trust Men, And How to Break The Vicious Cycle)

Why Some Men Don't Trust Women in the Workplace 23-Feb-2014Nobody, it seems, wants to talk about one of the most important dynamics of the modern workplace: Men quite often don’t trust women, and women with comparable frequency don’t trust men. The breakdown of trust is especially common when the male is a manager and the female is his subordinate. Burdened by stereotypes, myths and other hidden assumptions about female employees, he doesn’t trust her to get the job done. Having repeatedly been marginalized by her male bosses and male co-workers, she adapts in ways that exacerbate the breakdown in trust.

This reciprocal breakdown in trust can torpedo not just one, but two careers. Still, all is not lost. There are ways to sever the dual ring of vicious cycles and reestablish trust between men and women in the workplace.

Cycle 1: Why men don’t trust women

Let’s start with the stereotypes about women as employees. Women always put family and children above their jobs. If there’s a ballet lesson or if school gets out early, the callback to a key client will have to wait until tomorrow. Women always get pregnant and take maternity leave just when a new office is opening. Women take Family Medical Leave to care for an elderly parent with a stroke or a teenage child with mononucleosis just when a new computer operating system is being installed. Women are always on the verge of quitting when child-care responsibilities become overwhelming, and they will no doubt quit right before a crucial deadline.

We move on to another unstated but critical myth. Women are emotional and not analytical. Women will make workplace decisions based on feelings rather than facts. Women worry more about their co-workers’ comfort level than about getting the work done.

Then there’s the hidden assumption that a female employee is not really committed to the business. In the minds of many male managers, this assumption is reinforced every time a woman requests flexible work accommodations. Working from home means less “face time” with her male manager, and when a woman is out of sight, she must not really be working for the company.

Sometimes a male manager assumes that his female subordinate has gotten her job solely because the company had to comply with affirmative action guidelines. He feels that the pressure from higher-ups to diversity the workforce has lowered the quality of new hires. He looks at the top echelons of the company, sees very few female executives, and concludes that investing in a junior woman is a waste of his time. Better to not trust her to do important assignments. Just let her wither on the vine.

Cycle 2: How women reinforce the mistrust

Let’s start with the natural inclination to trust those who are like us. A male manager may perceive that his female subordinate is just different. She has had different experiences. Perhaps she didn’t play on the high school basketball team. Maybe she could care less about the lack of good relievers in the bullpen or the dubious wisdom of a first-round draft pick. Having experienced harassment or bullying in the workplace, a woman may have her guard up. She may be disinclined to engage in backslapping, deprecating humor. When it’s time to remind a co-worker about an upcoming meeting, she may not tell him to “get your butt over here pronto.”

Let’s move on to the false inferences that male managers draw from women’s inferior salaries. Many women find it difficult to demand higher starting salaries and to negotiate raises. As a result, they end up doing the same work as their male peers for less. Managers are privy to salary information. A male manager may interpret a woman’s lower salary not as evidence of inequity, but as a sign of weakness, as an indicator that she does not really have a long-range commitment to the company.

A male manager may find himself excluding his female subordinate from informal get-togethers where co-workers can bond with each other. He may believe that women don’t want to go out for drinks, take advantage of free tickets to the season opener, or attend industry conferences. He may worry that close familiarity will be interpreted as sex discrimination or sexual harassment. When his female subordinate is excluded from these bonding events, he doesn’t get to know her. Feeling excluded, she lacks the motivation to go the extra mile for the company, and the gap in trust just widens.

Finally – and perhaps most important – you cannot trust an employee if you feel her behavior is unpredictable. A male manager may find it difficult to give critical assignments to a female employee because he’s not sure how she will interact with her co-workers or with customers. He’s not sure how she will handle a crisis. He doesn’t feel confident that she will put in the extra hours when the deadline approaches.

This sense of unpredictability is exacerbated by what I’ll call the toggling strategy that many women are forced to adopt. Having received conflicting signals about how to act in the workplace, she toggles back and forth between the traditional male mode – decisive, aggressive, demanding, career-focused – and the more sex-neutral collegial mode – collaborative, inclusive, less dictatorial. This toggling frustrates her manager, who perceives her as alternately antagonistic and ineffective.

Trust has become a key competency

There’s no need to dwell here on the adverse consequences of this lack of trust for the woman’s career. Nor does it require an in-depth analysis to see the enormous waste of talent and corporate resources. The critical point is that trusting co-workers of the opposite sex has become a key competency for assuming a position of leadership. A breakdown in trust can sidetrack a man’s career as well as a woman’s.

The business world has become increasingly diverse and globalized. A male manager who cannot look beyond the stereotypes of his female employees may be similarly unable to develop trusting relationships with peers and clients of different races, ethnic groups, religions and nationalities. The same goes for a female who has developed self-protective behaviors that exacerbate the breach in trust. Failure to trust will translate into failure to advance to the top ranks of the organization.

Breaking the cycles of mistrust

So how can a male manager resist his stereotypes about women in the workplace? And how can a woman steer clear of the safety strategies that exacerbate the mistrust?

First, he needs to accept as fact that women as a group are no less committed to their careers than men. Take it at face value that a woman who gets an education, shows up every day for work, completes her assignments and is receptive to feedback is, in fact, serious about her job. Understand that everyone has some family responsibilities and that a good manager can incorporate absences into his planning, whether they’re due to pregnancy, tennis elbow or a heart attack. If a woman is taking advantage of some form of flexible work arrangement, focus on the work performed, and not on how often you see her face.

He needs to persist in his efforts to include his female subordinates in the entire range of work-related activities. That means water-cooler conversations, after-work drinks, sports events and industry-wide meetings. She needs to break the habit of refusing any such overtures, to entertain the possibility of loyalty and respect for him as a manager. She needs to recognize that through his efforts at inclusiveness, she will get to know about the business. She will get to know him and his peers. She will trust him.

He needs to avoid pat assumptions about how she will react to others, as these assumptions rarely hold up in practice. He needs to make a genuine effort to get to know her, to understand why she acts the way she does, and she needs to allow him to understand her. She needs to send him the message that he can be confident about her reactions to future deadlines, mishaps and crises at work.

She needs to tell him straightaway when an assignment is unclear or when his expectations about her performance are fuzzy. He needs to tell her if she is acting in ways that make him uncomfortable.

He needs to realize that most women suffer from lack of adequate feedback, and not from poor motivation or bad intentions. He needs to tell her when she’s erred, to suggest mentors and coaches, and to model behavior. When there is a problem, he needs to no longer be reluctant to address it. And she needs to accept his advice. Don’t write her off. And welcome him into the bargain.

 

 

 

This post was written by Johanna Harris
Johanna Harris has been a trial attorney with the U.S. Department of Labor and in-house labor counsel for two multinational corporations. She is currently the CEO of Hire Fire and Retire LLC. Her new book is “USE PROTECTION: An Employee’s Guide to Advancement in the Workplace,” available as iBook, Kindle, and Amazon Paperback. For more information, go to http://hirefireandretire.com.

Read More

Building the Trust-based Organization, Part II

Posted by on Mar 6, 2014 in Trusted Advisor | 0 comments

The Elephant In The OrganizationIn my last post, Building the Trust-based Organization Part I, I suggested that approaches to trust at the organizational level fell into several categories. Like the parable of the blind men and the elephant, all captured some part of the puzzle, but none grasped the entirety of the issue.  The five categories I listed were:

1. Trust as communication
2. Trust as reputation
3. Trust as recipe
4. Trust as rule-making
5. Trust as shared value.

I suggested a holistic approach would have a Point of View, a Diagnosis, and a Prescription.  Here is my attempt to offer such an approach.

Organizational Trust: A Point of View

Trust relationships are asynchronous – one party, the trustor, is the one who does the trusting, and who takes the risks. The other party, the trustee, is the one whom we speak of as being trustworthy. “Trust” is the result of a successful interaction between these two actors.

Trust is largely an interpersonal phenomenon. Trustworthiness is mostly personal, though we do speak of ‘trustworthy’ companies as having a track record or being reliable. Trusting, however, is a completely human action, not a corporate one.

Risk is necessary to trust: if risk is completely mitigated, we are left only with probability.

It follows that the most powerful meaning of “organizational trust” is not an organization that trusts or is trusted, but an organization that encourages personal trust relationships:

A trust-based organization is an organization which fosters and promotes the establishment of trust-based relationships between various stakeholders – employees, management, shareholders, customers, suppliers, and society.

Organizational Trust: Diagnosis

What is needed to create a trust-based organization? Since ‘trust’ is such a broad concept, it’s clear that themes like communications, regulations, and customer relationships will have a role. But to avoid a mere laundry list, what’s needed is some kind of primus inter pares relationship; or perhaps some necessary vs. sufficient distinctions.

My nomination is simple: an agreed-upon system of Virtues and Values. Virtues are personal, and represent the qualities sought out in employees and managers. Values are organizational, and reflect basic rules of relationship that ought to govern all relationships within the organization.

Some typical trust-based virtues include: candor, transparency, other-orientation, integrity, reliability, emotional intelligence, empathy.

I have suggested elsewhere Four Trust-based Organizational Values. They are expressed below in terms of customer relationships just to be specific, but they apply equally to relationships with suppliers, fellow-employees, and so forth.

  1. Lead with customer focus – for the sake of the customer. Begin interactions with other-focus rather than self-focus.
  2. Collaboration rather than self-orientation. Assume that the customer is a partner, not in opposition to us.  We are all, always, on the same side of the table.
  3. Live in the medium-to-long term, not the short term; interact with customers in relationship, not in transactional mode. Assume that all customers will be customers in perpetuity, with long memories.
  4. Use transparency as the default mode. Unless illegal or hurtful to others, share all information with customers as a general principle.

Advocates for Values.  I am not alone in citing Values as lying at the heart of the matter. McKinsey’s Marvin Bower put values at the center of his view of business, and McKinsey for many years was run from his mold. As Harvard Business School Dean McArthur said of Bower, “What made him a pioneer was that he took basic values into the business world.”

In 1953, Bower said, “…we don’t have rules, we have values…”

In 1974, he wrote, “One of the highest achievements in leadership is the ability to shape values in a way that builds successful institutions. At its most practical level, the benefit of a managed value system is that it guides the actions of all our people at all levels and in every part of our widespread empire.”

Bower’s biographer noted that Bower believed that “while financial considerations cannot be ignored, business goals must not be financial; if they are, the business will fail to serve its customers and ultimately enjoy less profit.”

The alumni of McKinsey – some, anyway – learned well. Harvey Golub said, “[values are] a powerful way to build a business…it worked for McKinsey and it worked for IDS and for American Express.”

IBM’s Lou Gerstner said: ‘“I believe that I learned from [Marvin] the importance of articulating a set of principles that drive people’s behavior and actions.”

[Note: McKinsey itself had some noticeable hiccups post-Bower. In my view, this is not an indictment of values-based management, but a sad example of how it requires constant values-vigilance].

The Case for Values.  The use of values as the basis for management is well-suited to the subject of trust, and this advantage shows up in numerous ways.

  • Values scale, in a way that performance management systems never can do.
  • Values are about relationships, in a way that incentives never can be; this makes them highly suitable to the subject matter of trust.
  • Values are infinitely teachable, in a way that value propositions or communications programs alone cannot aspire to.
  • Values are among the most un-copyable of competitive advantages.

Organizational Trust: Prescription

Managing a values-based organization will center around keeping the values vibrant. This is pointedly not done mainly through compensation and reward systems, corporate communications plans, or reputation management programs. Instead, it is done through the ways in which human beings have always influenced other human beings in relationship.  To name a few:

  1. Leading by example: trustworthy leaders show the way to their followers by their actions, not just their words
  2. Risk-taking: trusting others encourages them to be trustworthy, and, in turn, to themselves trust others
  3. Discussion: principles undiscussed are principles that die on the vine. Discussion, not one-to-many communication, is key to trust
  4. Ubiquitous articulation: trust principles should underpin many corporate decisions and actions; trust-creating leaders seize the opportunity for teaching points in every such case
  5. Recognition: Public praise for values well-lived is intrinsically motivating
  6. Confrontation: Trust-building leaders do not hesitate to overrule business decisions if they violate values, and to do so publicly in ways that teach lessons. Values, not value, are the ultimate arbiter of all actions.

To sum up: it’s a simple concept. Trust in a corporate setting is achieved by building trust-based organizations. Trust-based organizations are built to consciously increase the levels of trusting and of trustworthiness in all organizational relationships. The best approach to creating such an organization is values-based management and leadership. This is different from most approaches to management and leadership in vogue today.

The quotes about Marvin Bower were taken from:
Edersheim, Elizabeth Haas (2007-12-10). McKinsey’s Marvin Bower: Vision, Leadership, and the Creation of Management Consulting. Wiley.

This post was written by Charles H. Green
Charles H. Green is founder and CEO of Trusted Advisor Associates LLC; read more about Charlie at http://trustedadvisor.com/cgreen/You can follow him on twitter @CharlesHGreen

Read More

Building the Trust-based Organization

Posted by on Feb 17, 2014 in Trusted Advisor | 0 comments

handshake isolated on business background SalFalko via Compfight

Do your eyes glaze over at that title? Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So I set out to tighten up the perspective.

Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. More often, however, it’s more a situation of the blind men and the elephant: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

This is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into these categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.

Trust as Communication. “Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”

This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.

However, the communication approach begs one huge question – the content begin communicated.

Trust as Reputation. The Edelman PR firm’s annual Trust Barometer has been a major communications success.  A sample statement:

Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the 2012 Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.

This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee.  It is also inherently corporate, and therefore impersonal.

Trust as Recipe.  There are probably more approaches that fall into this camp than any other.  It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.

A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language.  They offer  four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.

Trust as Rules-Making.  In Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.” According to Matignas, careful following of the SEC’s Code of Corporate Governance will ensure that “if properly embraced, good corporate governance is the practice that ensures a company does what is right. Trust is now further supplemented by effective corporate governance practices to ensure that it will last.”

(Perhaps unsurprisingly, Matignas heads the risk and governance practices and is the chief risk officer of SGV & Co.)

While Matignas’ view may be slightly narrow, it’s part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.

Society sanctions business, says this view – there is no Natural Law that says business has any right to stand alone outside society.

Trust as Shared Value. In Michael Porter and Mark Kramer’s notable 2010 HBR article Creating Shared Value, Porter auto-performs a conceptual sex-change operation on his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.

Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. This radically updates Adam Smith.

They are not alone. The Arthur Paige Society a few years ago published The Dynamics of Public Trust in Business, which similarly stated:

…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.

Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.

Seeing the Elephant Whole

All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”

So what would constitute a good answer?  It must have three parts: a Point of View, a Diagnosis, and a Prescription.

Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.

In another post upcoming soon, I’ll offer my suggestion for how to best answer the question across all three dimensions.

This post was written by Charles H. Green
Charles H. Green is founder and CEO of Trusted Advisor Associates LLC; read more about Charlie at http://trustedadvisor.com/cgreen/You can follow him on twitter @CharlesHGreen

Read More

Can Trust Scale? Interview with Stephanie Ann Olexa

Posted by on Feb 13, 2014 in Trusted Advisor | 0 comments

Getting to The Core of ValuesI recently got to meet Stephanie Olexa, a renaissance woman whose most recent incarnation is as an executive coach, at her company Lead to the Future. She has quite a bit to say about trust, and about two organizations in particular.  Here’s our conversation.

Charlie Green: Stephanie, you’re hard to pigeonhole. You’re an author, teacher, entrepreneur, PhD, patent-holder, scientist, professor, angel investor – and that’s not even half of what you do. How did you come to be so multi-faceted?

Stephanie Olexa: You might say I haven’t figured out what I want to do when I grow up.  But in reality, I followed my curiosity.  I started as a teaching and research scientist in a medical school, then evolved to work in the business of science at two Fortune 100 companies, then jumped into entrepreneurship by forming my own company in a scientific field, followed by a short time applying business principles to nonprofit organizations and now using everything I learned along my journey to work as an executive coach, consultant and teacher.

C. You and I met through Trust Across America, and we got to talking about the issues of increasing trustworthiness in business. You had a fascinating story about how decisions get made in a Pennsylvania company you know; could you tell us about that?

S. I met one of the co-owners of the business at a dinner sponsored by the Delaware Valley Family Business Center.   (I asked, but he prefers not to be mentioned by name or company).

He, his brother and brother in law are equal owners of the company and equally share the title of President.  All major decisions are made by consensus.  Of course this goes against everything I learned in Business school so my curiosity was piqued.  I asked him to describe their decision making process.

They have a conference room in the company with a basket at the door.  The word “ego” is on the basket.  This, he said, is to remind everyone to leave their egos at the door. Also in the room is a sign with the company core values.  For every decision, they ask which alternative best meets their core values.  When he told me that after thirteen years they never had a disagreement there was a calm and peaceful look on his face.  I wanted to hug him!

C. The ability to manage like that – doesn’t that come from a homogeneous culture? Isn’t that virtually impossible to replicate?

S. First, I believe that business leaders are responsible for creating and maintaining the culture and that the culture must be based on shared core values. It’s not impossible to replicate, but it is hard to maintain and takes commitment.

C. This sounds like a small, private company. Can you really scale up this kind of management to bigger companies?

S. It is a private company, but not small.  They have over 370 retail outlets spanning Eastern United States from Florida to Maine, with over 5000 employees.  Layer on top of the size the challenges of leading remote teams and it is even more impressive.

C. Wow. So, how do you see what’s going on here? What makes it work?

S. It works because the leaders have consensus on their core values, the courage to live in accordance with them, and the commitment to demand that the business is managed in  a way that promulgates them.

C. So, why can’t we scale up larger companies in the same way? Or can we?

S. We can.  I believe that we need to have the leaders in those companies to commit to shared values and to be proud of those values.  The values can’t be in a strategic plan on a shelf but have to be demonstrated every day.

C. What are some of the benefits of increased trust in business that you see?

S. The literature has statistics on financial benefits but I have witnessed the human benefits, happiness, peacefulness, generosity, compassion and caring.  Trust in business spills over into trust in families, industries and communities.

C. Are there some other examples that come to mind that illustrate the trust opportunities in business?

S. I ran my company, a network of analytical labs, for twenty years.  It was built on shared core values.  We always told employees that if they made a mistake in a test, the problem could be solved but if they hid the problem there could be long term issues.  Mistakes of the hands can be fixed but mistakes of the heart were not tolerated.

A few years ago we hired a young woman right after her  graduation with a degree in Microbiology.  She was near the end of her six month training in a test for total coliforms in drinking water.  The method has strict quality control requirements but this is a test that is dependent upon the analyst looking at the results and recording them in a lab computer.

One Saturday morning this analyst saw that the QC requirement failed.  The correct thing to do was to invalidate all forty samples and recollect them.   She was alone in the lab and could have easily just checked the box that everything was ok.  She didn’t.   She called her supervisor at home, who then called me.  We had to call all of the customers and send out two collecting teams to get new samples and run them that day.  The expense of redoing the work was really high and the young analyst knew it.   I thanked her for her honesty.  Not one employee complained about the inconvenience or increased work.

But the best part is that the following month the young employee was voted employee of the month by her peers, citing her courage and honesty.  They wanted her on the team. So what was the benefit to me of the trust in the company?  I had no doubt that every employee would do the right thing even if nobody was watching.

C. This is timely; I’m just reading a 10-year old book, McKinsey’s Marvin Bower, wherein author Elizabeth Haas Edersheim describes the same utter devotion to values-based management that he instilled in McKinsey. I suspect Bower would completely agree with you what you’re saying, and I’ll note that while McKinsey was far higher visibility, your friend’s organization is larger than McKinsey was at the time.

S. Values-based management is not just a pretty phrase.

C. Not at all. Stephanie, thanks so much for taking time to speak with us, and best wishes to you. Where can people reach you?

S. My website is Lead to the Future, and my  email is solexa1776@aol.com

 

 

This post was written by Charles H. Green
Charles H. Green is founder and CEO of Trusted Advisor Associates LLC; read more about Charlie at http://trustedadvisor.com/cgreen/You can follow him on twitter @CharlesHGreen

Read More

Do You Trust Yourself? Should You?

Posted by on Jan 19, 2014 in Trusted Advisor | 0 comments

Scared lady iStock_000019585748XSmall copyIt’s a compelling headline: Stop Trusting Yourself.  By Northeastern University psychologist David DeSteno, it’s featured in today’s NYTimes, and ostensibly shows that we mistakenly trust ourselves – that if anything, we mis-estimate our own trustworthiness more than that of others.

Compelling indeed; but like sugar water, the headline high is brief. The problem is not bad psychology – it’s bad meta-psychology.  The studies he cites merely describe a part of the puzzle of self-trust, and not necessarily the biggest part at at that.

This is not the first time that “hard” scientists have gushed over “findings” that amount to little more than semantic confusion. The worst offenders are the neuroscientists, who constantly mistake chemical descriptions for higher forms of “explanation.”  But this one doesn’t require much knowledge of science.

Trusting Yourself

First, props to Mr. DeSteno for correctly noting something many trust students miss – that trust is an asynchronous relationship between two parties. Trusting “yourself” makes no sense unless we can posit two identities within the self, one of which can be said to trust the other. (This is similar to the issue of consciousness in philosophy).  DeSteno quite rightly recognizes the need to define those two selves.

The problem is, he picks one definition and one alone – the “present you” and the “future you.”  The rest of his article cites studies about how the “present you” constantly mis-estimates the future you. He cites two “cognitive glitches” to describe this, both of which deal with present and future states.

Well and good. This all makes perfect sense – except that time is only one way to posit the “two-you’s” necessary to make sense of self-trust.  Here are three more. I suspect a bit more thought by the reader would yield more still.

1. Trust Your Skills. As in How to Trust Yourself Over Every Golf Shot,  where the author offers the definition, “Trust is the ability to suspend one’s judgment about one’s performance (swing).”

Here the two selves are the cognitive, self-observing self, and the instinctual, acting self. Anyone who plays golf, or any sport (or engages in sex as a male) knows the debilitating effects in the here and now of over-thinking things.  The same is true for leadership, acting, storytelling, public speaking, and any number of other human endeavors.

Proof that this is an even more common meaning of “self-trust” than DeSteno’s now-future me?  Consider the ubiquity and instantly understood Nike slogan, “Just Do It.”

Note that, in these important realms of life, “trust yourself” has nothing to do with time.

Note also that the advice from this definition of self-trust is to “trust yourself” – exactly the opposite of the “don’t trust yourself” advice that DeSteno posits from his time-based example of self-trust.

2. Trust Your Identity.  Clinical psychologist, therapist and author David Schnarch incisively describes the self-trust that comes with what he calls differentiation:

Differentiation is basically the ability to balance humankind’s two most fundamental drives. One is our urge to be connected with other people, and the other is the urge to be free and autonomous and direct the course of our life. So both wanting to be in a relationship and wanting to be our own person are the two most fundamental drives and the two fundamental problems that couples have in emotionally committed relationships.

[we have developed] a theorem that helps clients and therapists stay on track, and earns credibility with people who trust no one: Only the best in us talks about the worst in us, because the worst in us lies about its own existence. 

The inability to trust oneself leads us to fear others; the inability to trust others leads us to over-rely on our selves. Here the two selves are my self-reliant self, and my other-engaging self.

Proof that this too is an even more common meaning of “self-trust” than DeSteno’s now-future me? Try Googling “I trust myself to” and you’ll get first page hits like this:

When I trust myself to love & take care of myself, it’s easier to trust others because they can’t harm my inner well-being.

And once again – the best advice from this meaning of self-trust is not to distrust yourself, but the opposite – to trust yourself.

3. Mastery over life.  In Trusting Yourself, Barbara O’Brien talks about the Buddhist perspective on trusting oneself to stop worrying.  The key to trusting oneself is to let go of the chokehold of expectation.

The vibration of trusting/having confidence in your ability to create enjoyable experiences for yourself and what is in line with your highest good. A very good frequency for anyone who is stuck in victim mentality.

Again, this is on the first page of results from Googling “Trust Yourself.”

From the Twelve Step literature comes a similar concept, reflected in the witticism, “An expectation is a pre-meditated resentment.” Detachment from outcome is the key to living in the present, which in turn is the key to living over time.

If you think Buddhism is too esoteric, then let’s go to Harvard Business School.  Also on the first page of search on “trust yourself” is an article from the business mainstream HBR Blog Network, How to Teach Yourself to Trust Yourself. In it, author Peter Bregman suggests:

There is a simple remedy to the insecurity of being ourselves: stop asking.  Instead, take the time, and the quiet, to decide what you think. That is how we find the part of ourselves we gave up. That is how we become powerful, clever, creative, and insightful. That is how we gain our sight.

Again: a very common piece of human reality. Also, not dependent on time. And, yet another piece that admonishes us to trust ourselves, not to not-trust ourselves.

Science and Philosophy
To make a gross over-generalization – we have come, in recent years, to err on the side of methodology, data, behavioralism, and metrics.  That has come at the cost of clear problem definition and common sense. This is most noticeable in the softer social sciences, but it shows up even in economics. And it most certainly shows up in social sciences with the trappings of “hard” science – like studies in behavioral psychology.

No branch  of science – not even physics – is immune from the need to properly define questions. Newtonian physics wasn’t wrong; it was just answering one particular set of questions, not all questions.

If you want to examine a social phenomenon – like, say, self-trust – the right place to begin is not with empirical studies, but with doing exhaustive search engine work (the modern version of anthropological field research). How do real human beings, operating in the real world, think about an issue?

In logic, a false premise renders all conclusions logically true. In science, a bad problem definition can support any conclusion whatsoever. In our haste to use all the tools of modern analysis, we have allowed sloppy problem definition. (I won’t go so far as to say we need more philosophers in science. Oops I just did.)

Professor DeSteno is almost certainly not wrong. But that’s not the key question.  The key question is – what problem was he solving?

He says he’s solving the problem of self-trust. I say he’s solving the problem of one aspect of self-trust – an aspect that is not likely to be more ubiquitous or relevant than other aspects, and which notably has a different answer than the other aspects.

Caveat reader.

This post was written by Charles H. Green
Charles H. Green is founder and CEO of Trusted Advisor Associates LLC; read more about Charlie at http://trustedadvisor.com/cgreen/You can follow him on twitter @CharlesHGreen

Read More