Trust, Look in the Mirror

We all know what a toxic work environment looks like. We have probably been in organizations where there was very little trust, either going up the organizational tiers or going down. People dread going to work.

I know I've been there, a couple of times.

A few years ago, Harvard Business Review had an article about deciding to trust by Robert Hurley. He identified 10 factors for a person to extend trust. The first three had to do with the person her- or himself. The other seven were more based on the situation.

If a person has a low risk tolerance, they will resist placing trust on others. They will avoid a loss of control and any events that might damage their reputation, emotional health or physical being. Those with high S (stability, security, safety, amiable) or high C (compliance, conscientiousness, analytical) might be slow to trust others till they've proven themselves in terms of dependability, integrity and acceptance.

If a person has a high level of adjustment (i.e. comfortable with themselves), their confidence will allow them to trust others. Otherwise, they might be prone to micromanagement. If a person feels or imagines any sort of threat, trust goes down.

The last of the top three factors is the relative power. It might be easier for those at the top to trust their staffs because they can hold the staff person accountable if he or she proves to be untrustworthy. A lack of trust occurs when you have no power over the other person which is why, Hurley explains, that trust up the chain of command usually has lower results in surveys than trust going down the chain of command. It's difficult for the subordinate to hold the superior accountable. If you're a rebel like me, you may be bold enough to hold your boss accountable anyway. But few are so brash.

If you're in a low-trust environment, it might be worthwhile to look at these factors for yourself and for the others around you.

One Not-So-Simple Thing

I worked in a company with $50 million in revenue, where the supervisors could make the decision to scrap thousands of dollars worth of materials. They couldn't make the decision to buy a tool that cost $65. That decision needed three layers of approvals.

This corporation's systems were wrong on several levels: focusing their resources (the number of signatures needed) on the trivial; no major oversight on the significant (material costs comprised 60% of the total costs); a lack of trust.

The company trusted the supervisors' experience and training to know when they should rework or scrap material worth a lot of money. However, they did not trust that same experience and training to know what tool to buy, and whether that tool was the right choice.

Some leaders will tell you, "The devil's in the details" and quote the ancient proverb "For want of a nail...the kingdom is lost." They use these sayings as leadership mottos to justify controlling all the little details in the corporation. It's a false sense of control.

With the purchasing policy setting spending limits of $50 for some of the management team, requiring three approvals for a $65 tool, there is no more control on the company's expenditures. Most of the money is being spent on the job's operations: the material usage (under-, over-usage), freight, and labor. More money is being spent on the development: marketing, research, developing product or job specifications, work instructions, etc.

Leaders should be focusing on these things, rather than small expenditures.

One wag wrote a few years ago that we trust our car's brake mechanic more than we trust the guy who works next to us. We double-check our teammate's work all the time; there's lots of oversight sometimes. We don't double-check the mechanic's work. We trust that their experience and training is (at least) good enough, if not great. Why don't we trust the guy we know and have worked with?

It's not a simple thing to extend trust. It's also the key thing. If you want to be trusted, you have to trust.If, as a leader, you want to focus on the significant things ("major on the majors"), you have to trust. You know your staff. In many cases, you hired and trained them. My rule is to believe everyone is trustworthy until they prove me wrong through inexperience, poor skills, poor training, poor judgment or bad assumptions/perspectives/paradigms about how the world operates.

What are your policies saying about the level of trust in your organization? (What are they saying about what really matters--$65 tools or $3000 worth of materials?)

Trust Me, I'm Here to Help

I've discussed likeability and trustworthiness before. I've discussed how you gain trustworthiness too. Two recent books try to push us further along the trust spectrum: Trust Inc. and The Truth about Trust. While similar in topic, they diverge a bit. The former book pulls out the hackneyed dimensions of trust: ability, believability, connection and dependability. Many of us think we trust those who have credibility because of experience and integrity. We also trust those who are approachable and accepting of us.

The latter book adds another factor: helpfulness and gratefulness. If we've been helped and feel grateful, we're more likely to trust another person. We might even transfer that level of trustworthiness to another person who was indirectly involved in getting us out of sticky situation. While Trust Inc. tries to collect advice for corporations to rebuild their trustworthy image, it might be as simple as having excellent customer service. Other studies have shown that customers are more loyal to a company that has resolved a problem than to a company with which they've never had a problem.

If you want to build trust in your organization, either with customers, employees, suppliers or other stakeholders, you may not be able to do any better than to solve some of their problems rather than ignore their pleas for change.

Another Take on Our Hypocrisy of Trust

Many of us don't trust the government. Many of us don't trust corporate bosses. Many of us don't trust the media. Many of us don't trust organizations that know something about us, because they can sell that data (e.g. mailing lists) to others.

We do trust...
...food preparers in restaurants
...other drivers on the road
...pharmacists, doctors and others that give us additives for our bodies
...social networks on the internet (no one would ever mis-use all that info we share, would they?)

What really strikes me as odd: corporate executives trusting "cloud computing" (SaaS--software as a service) where a lot of corporate data sits on someone else's computer, whom you don't know, and is an obvious and great target for global hackers. And one of the latest (greatest?) moves in corporate computer security: having all your company's personnel data in a "cloud" server.

If you believe this is a good move, you must trust that their hardware is more reliable (no hard drives or server crashes), their software is more reliable (no lock-ups), their back-up system is immediate (how often??), and their security was developed by people that are trustworthy.

In some ways, it all comes back to trusting people outside your own company more than you trust people you hired and with whom you work.

Strange? Yeah.

How Do I Lie to Thee? (Part 2)

I had quite a list the other day of the ways we add costs to our operations through distrust, lies and deceit. I'm sure you thought of many other cases. At the end, I'll encourage us all to make changes so that we can reduce our expenses. Here are a few more ways it costs us a lot to operate a business:

• We maintain elaborate time-keeping systems because we don't trust people to give an accurate record of the time worked. We have supervisors and managers 'running around' to verify and approve the time cards, time sheets, and other mechanisms. In the professional services, we have people report to the nearest 'fifteen minute mark' exactly what they're working on so that we can precisely bill (and frequently overcharge) our clients. You know it's often overcharging because the time is rarely rounded down--e.g. 19 minutes always becomes 30, rather than 15.
• We lie to our employees so that false information gets to the competition. "Yeah, business is going well. We've landed several new clients..." Because they think business is going well, they don't look as hard for opportunities.
• We lie to suppliers to get bigger discounts or better terms. In response, they might match prices or terms or delivery requirements but it'll mean they're less secure. If they go under, then you've incurred costs to find and qualify new suppliers. Also, if they don't go under, they're going to inflate their offer so they have room to negotiate. If they can cut prices deeply, don't you wonder if they've been enjoying huge profits on your business in the past? Have they been lying to you about not making any money on your sales?
• We lie to customers about "Made in America" and at the same time, we have sourced the manufacturing of many components and sub-assemblies to off-shore locations. We legally meet the criteria to say that it's domestically produced, but that's just legalism. In the meantime, we have administrative efforts keep track of this, file the paperwork with Customs, and double-check all this in case some investigation finds out we might be falsely making the claim. (I saw recently that the Toyota Camry is the most US-made car being offered right now--not Ford, GM or Chrysler. Go figure.)
• We have to check our suppliers good and services because we don't trust that they're meeting specifications. Likewise, our customers do the same. We certify that our stuff meets the requirements. I've known too many companies who don't even check to see if they're in compliance with all the requirements. They/We assume that the product meets those particular specs--and no one's checked it yet. When it is checked or a problem occurs, then all kinds of expenses are incurred to audit, test, requalify, recall, and rework lots of product. Also, don't forget there is a loss in sales revenue when customer confidence drops.
• If you're advertising looks too good--airbrushed models, mashed potatoes instead of ice cream, school glue instead of milk--consumers may not trust your brand. You lose.
• And then there's the little games we play: leaving a coat in the office and the screen active so people think you're around when you've left to go to the coffee shop for the next few hours; carrying a stack of papers so people think you're on a mission or heading to an important meeting but you're really just unwinding by getting a bit of exercise; extending breaks by talking to someone else about something that might be considered work-related so that it's 'not really a break'.

All of this erodes cohesiveness in the organization. The great 18th century poet Samuel Johnson somewhere said something like 'even demons don't lie to each other otherwise the whole efforts of hell would break down'. (I tried to find the attribution and exact quote but failed.) A corporate culture that perpetuates the types of behaviors above is less effective than it could be. In order to build trust, you might have to first ascribe trustworthiness to others first. Trust your co-workers and staff more than you trust your nameless brake mechanic. Start offering the best deal to your customers. Give people the benefit of the doubt. Some people will take advantage of you, but almost all people will respond in kind.

People and Puzzles

We re-organized today. We did it in a great way though. We started with noting the strategic gaps in our customers' experience, and strategic gaps in what makes internal success. Then we looked at our resources. We noted their skills, experience and strengths (as in Strengths Finder 2.0, the book).

We then re-positioned people in the places where they may fit. We think they'll have more energy because we paid attention to what's important to them. We think we'll be more successful because we've augmented some strong points and closed off some weaknesses.

The important thing about this story is not so much the re-organization. The important part of the story is building trust. It's important to maintain trust in the organization. Every decision needs to take into account how much trust will be built, maintained and not destroyed.

If we treat people as "assets", "resources" (a term I had to use above) and just pegs to fit into the organizational chart pegboard, then we're overlooking the power of what they can offer. Henry Ford only wanted his employees' hands. Today, we can't afford not to option their creativity, innovation, experiences, etc. We need everyone and all of each one.

When we interview candidates, the paradigm is that we're trying to figure what shape puzzle piece they are. Our organization at the moment has a missing piece of a certain shape. No person comes to us exactly filling that shape. However, each candidate will fill a shape. Our task during the hiring process is to figure out how much of the empty spot they fill, how much they don't fill and how much extra they bring to us. When we can figure out as much of that as possible, we build trust with the candidates and with the team those candidates will join.

There are a lot of tools to help with this. Vision One benchmarking process is one way. ZeroRiskHR has some tools as well as Profiles International. Don't use the tools if you're seriously "walking the walk" with regard to valuing your employees. The tools will be misused and trust will be lost.

Margin of Error

Is trust and collaboration beneficial? Seems doubtful from the results of one group's survey as reported in Forbes. In a comparison of high performing organizations with low performing organizations (as it relates to increase in profits):

• 41% of survey respondents said they had effective leadership in their high-performing organization, while only 26% in low-performing organizations said the same.
• 38% at high-performing organizations trusted management, while 24% at low-performers did.
• 37% at the better performing companies reported highly collaborative environments, while 30% did at the other group of companies.

The survey group shows that these numbers have slid downward dramatically in the past three years. However, it's not compelling evidence that trust, collaboration and effective leadership work because...

• 59% of high-performing organizations are thought to have less than stellar leadership
• 62% of those organizations have management that is distrusted.
• 63% of those organizations practice some less than stellar levels of collaboration.

Now, I believe high levels of trust and collaboration are necessary to succeed in the long term. However, this survey seems to indicate otherwise.

They surveyed 300 companies and only 440 people. The margin of error in this kind of survey is huge. The swing is 7% in one direction. In other words, the real answer to high performing collaborative companies could be anywhere from 30-44%, while low performing organizations have a range of 23-37%. With that much overlap they could be 'equal' in likelihood to have highly collaborative environments.

The number of US companies is 22 million. Assume that half are active, so we can reduce the margin for error. That means we have a total population of 10 million. If we want to survey them for these factors and have a margin of error of +/-2%, we would need to sample 4,159 companies. That narrower margin is necessary to prevent any overlap on the collaborative dimension.

At the proportion they used for their sample, it would be like guessing the composition of the longest ever tapestry/embroidery (Prestonpans) by looking at 300 random stitches over hundreds of feet, and being correct about the proportion of the 21 colors and the hometown of the stitchers based on 200 possibilities.

I'm not disputing their results. I can't. But I am cautioning that their conclusions are not necessarily telling us what's happening in the real world. As much as they'd like to say collaboration, effective leadership and trust lead to high performance, they can't. Not based on this survey.

What if the Quarterback is Disengaged?

 A friend recently posted a good article on the importance of communicating your organization’s and your team’s purpose. While it certainly is important, it is not everything. It solves one of an organization’s problems according to a Harris Poll:

• 60% don’t know what the business goals are i.e. only 4 people know they’re supposed to be moving the ball into the other end zone—communicating the purpose can certainly solve this problem
• 82% don’t know exactly what they’re supposed to accomplish and how their activities relate to the goal i.e. 9 of 11 people aren’t sure what they’re supposed to do on this play—maybe how you communicate the purpose can mitigate this problem

If you combine these probabilities, chances are you only have one person who knows the goals and exactly what they’re doing to accomplish the goal. And on a football team it’s probably the quarterback. However, without the offensive linemen, running backs and receivers, it’s impossible to be successful. So it’s important that the business purpose is communicated and that there’s a line of sight between what each person does and how the goal is to be achieved.

But the problems don’t stop there: 82% don’t care to be on the team. Not only does the Harris poll describe this incidence rate, but look at the history of Gallup’s Engagement studies. The level of disengagement is essentially the same despite decades of organizations paying attention to it. And what’s worse, 82% probably want to be on a different team. [The only good news in this is that your competition has the same problem.]

Also engagement—commitment and enthusiasm—is not going to change nor is corporate alignment to be highly successful without a lot of extra effort unless…leaders pay attention to the foundation of any organizational dynamics, change and improvement: trust throughout the organizational levels. The team needs to believe others are dependable, have integrity, accepting of strengths/weaknesses/mistakes/victories, open and vulnerable with each other (e.g. willing to ask for and offer help) and have sufficient levels of competency. Without this, Gallup’s prescription is fruitless. 

So how bad is it? Trust Edge (www.trustedge.com) reports that 87% have less than full trust of leadership.

Until we rebuild trust, everything else will be seen as manipulative and engagement is going to stay low. And you can communicate your team’s purpose well, but your team won’t care. They’re ready to jump ship.

Selecting the Corporate Culture

If you can't tell from other posts, I have a particular bias towards the type of corporate culture I believe leads to success. I've seen it work in many organizations. The business press has picked up on it in the past decade with books like Servant Leadership (Robert Greenleaf).

The moral principle is treating others as you want to be treated: honestly, with respect and dignity, and with fair (not necessarily equal) treatment. When you're dissatisfied with the current culture, how would you describe the way you want the organization to look, feel and sound like with a different culture? Remember the ripple effect: you can affect change by being the change you want to see.

Me? I want to see cultures where the boss is not king, not even a benevolent dictator (which assumes the boss knows our needs and motivations better than we do). The boss is there to provide the tools, education, and resources (including cash) that the everyone else needs. The boss is to make sure the "engine is humming along" with the right mix of people and skills on the team. The boss sets the vision for the future and defines the journey. The boss has to "walk the talk" by practicing the level of engagement, he or she wants to see throughout the rest of the organization. The boss realizes that the journey is never done.
You could be the boss of your shift team, work group, your little task force, your truckload of people, your department, your business unit, your branch, your plant, your company. No matter what level you are, I suggest you operate per the above.

Ephesians 6.9 says, "...masters, treat your slaves in the same way [serving wholeheartedly, as if you were serving the Lord, not men, because you know the Lord will reward everyone for whatever good he does, whether he is slave or free (v. 7-8)]. Do not threaten them, since you know that he who is both their Master and yours is in heaven, and there is no favoritism with him."

How do we threaten, and how do we show favoritism and how do we focus on "them" serving us instead of the other way around?

CEOs are often tempted to ask for favoritism. For example, sometimes they ask for favoritism by breaking a policy because "they work hard" or they ask for special favors ("please get me a cup of coffee", "mail this package", "don't start the meeting till I get there", special parking spots or types of offices). Favoritism is also shown in our reward systems--e.g. performance appraisals that are more subjective/qualitative than objective/quantitative, commissions and bonuses based on organizational results but given to a certain class of employees only.

When the business is not quite as strong as you'd like, who gets hurt the most--CEO or the lower ranks who are often furloughed? What message is created when results aren't happening? "We can't provide any more benefits till...." Doesn't this sound like a threat? Passive threats can happen when merit increases are promised for certain behavioral changes.

Do you provide for your organization's needs before your own? The organization should be king (see Breakthrough Company).

One company I was involved with, during a slow period, reduced hours for the production staff. We had run out of other projects. People were frustrated trying to figure out how to contribute. We reduced hours but offered to make up the pay if they volunteered at a non-profit organization (school, food shelf, etc.) The company could afford the hit in profits more than the employees' families, so we made the decision to help them in a way that benefited lots of people.

A lot of leaders have trouble describing the culture they want. They just want more engagement from the staff. My belief is that engagement goes two ways. If you show care for them and are concerned for their needs, they will care about what's important for your organization. If that's the kind of culture you want, then start the journey. I've described five (5) steps. Get started, have fun...and repeat. (Call me if you need help.)

I know there are engagement surveys out there, but think about the results of the survey before you issue it. Are you prepared to take action on the results? If the answer comes back that leadership needs to change, will you change in a significant way that's demonstrable to the rest of the organization? Will you trust the results if the organization has low levels of trust now? And a corollary question, will the employees trust that their responses on the survey will be valued, in a low-trust organization, and therefore will be apathetic with regard to their level of honesty on the survey?

If you desire a high engagement culture, you as the boss need to be highly engaged and mindful of the needs of the organization. I quoted Christian scripture above, and we have an extreme example of servant leadership in the person of Jesus himself. There are also numerous examples in the Jewish scriptures. These are enduring "organizations" and successful by many measures, surviving and thriving through persecutions (worse than any economic recession). Most of the functions of these institutions is voluntary with no tangible compulsory efforts for favoritism or threats (can you "fire" me from the church or synagogue to the point that I cannot participate anywhere?). (Collins' book Built to Last has no benchmark comparable to the Jewish and Christian institutions and their longevity. I am less aware of the Islamic culture of servant leadership so I cannot speak to the reason for its endurance.) Therefore, pick a servant leadership culture and bring honor to those who are working to bring in the results. Remove the hindrances (see steps 1-5, again), and watch the organization accelerate beyond your dreams.

Customers and Trust

At a recent leadership summit, the head of a service organization described three kinds of customers: dissatisfied, satisfied and loyal. Dissatisfied customers sabotage your brand. You want them to sabotage someone else's brand or become satisfied customers. Those familiar with Net Promoter Score know that one way to improve the score is to transform Detractors into Neutrals (i.e. satisfied customers). Satisfied customers are nice but they don't do much for your brand.

Loyal customers will stick with you. They aren't 'created' overnight. Loyal customers trust your organization and its brand. That takes time. And like other trust relationships, it occurs over several dimensions: dependability, acceptance of your customers' needs and wants, reliability, competence, integrity and approach-ability. These things only happen if all your employees know what to do, what sets your organization apart and are committed to meeting the objectives and/or exceeding customer expectations.

I also recently taught Haitian small business owners on this same point. If your employees don't know what is key for the organization success and what creates loyal customers, they're like a soccer team that's just kicking the ball around. Occasionally it might go in a goal; even less frequently it'll be a goal for your team instead of your opponent's team.

source: concordmonitor.com

Anytime this particular organization opens a new property, the head of the company is there training the first group of employees. "You are the most important people in our guests' lives. If I don't show up, they won't notice. They will notice if you're not here or here completely," he tells them. Their on-site team is so important they focus a lot of energy on selection and orientation. They also spend time on reinforcing the organizational values. As he says, "Coke still advertises even though everyone in the world knows about them."

A and B before C

"Every sales has five basic obstacles: no need, no money, no hurry, no desire, no trust." -- Zig Ziglar

If you're leading a team or a company, you're in sales. We all negotiate all the time. Very rarely does anyone give you something without asking for or earning it. And getting an extra effort out your group requires sales.

In his book, Enchantment, Guy Kawasaki deals with likability and trustworthiness before he even discusses the product, the presentation, pricing or any other marketing parameter. He believes enchantment is critical in lots of relationships including those with employees and bosses.

If you're going to build rapport with your team, you need likability and trustworthiness. Now, likability doesn't mean that you give them whatever you want. It means that you're approachable, empathetic, authentic, expecting the best in people and people feel good when they're around you--so a little joy and steadiness is good too.

You know about trust. You build it through dependability and reliability, being principled and acting on those principles (ahh, the integrity word) and 'majoring on the majors' but having tolerance for minor mistakes and differences of opinions. Oh, and steadiness is good here too so as not to appear too volatile and unpredictable.

Kawasaki writes about some superficial forms of likability as a means of creating enchantment (smiles, handshakes, etc.) but he also talks about creating win-win solutions and meeting demands with either a 'yes' or a 'not yet' (rather than no). This latter suggestion might seem superficial but it really changes the heart of the matter if you can stop using "No, because..." and instead reply with "Yes, if...". It means you have listened earnestly to the other person's position, you're open to providing the solution if an agreement can be found, and you're asking them to reciprocate. If your "yes if..." is realistic and well thought-out, you're creating trust.

If you're working with your team, you need likability and trustworthiness before you talk about the issues, like purpose (vision, goals), mastery and autonomy (or collaboration, content and choice). When you get there, the levels of engagement will skyrocket. And there'll be no stopping your team.

Leadership Playground

 A synopsis of a Fortune magazine article intrigued me.  It described how Legos’ Leadership Playground increased engagement and motivation. The mantra around the “playground” is be brave, curious and focused.  Then it had a quote from the Chief People Officer saying this increased empowerment and accountability. Does empowerment and accountability increase engagement and motivation?

As I’ve written before from noting key research and my own experiences leading successful teams, empowerment can go a long way towards engagement. Because you’re giving others some (or a lot) of decision-making power, it increases motivation. (See Alfie Kohn’s work and more recent narratives like Daniel Pink’s Drive). Of course, this assumes a lot of mutual trust. Otherwise, leaders will jump in and tweak the new endeavors and then it’s not the team’s idea but the leader’s. Empowerment goes down. Team decision-making goes down. Trust in leadership goes down.

The curiosity factor of the “playground” encourages people to explore new ways of doing their work, overcoming obstacles. This fits in well with The Progress Principle, a critical aspect of improving motivation.

Gathering around the “campfire” in the playground, team leaders can be vulnerable and ask for help. This builds trust. And the thrust of the gatherings is to engender creative collaboration, another key component to improving motivation. Collaboration forces us to look beyond our particular role and realize we each are part of a bigger vision, strategy and customer delight effort.

So at first, I was skeptical that a “leadership playground” could improve engagement but, if handled well, it could.

Servant Leadership Practice--Watch Out for the Slippery Slope

Often I prefer to take the 'red-eye' flights. I don't like to waste a perfectly good work-day sitting in the airport or in the metal tube in the sky. If I can travel at night, then I'm available to work during the daylight--on both ends of the trip. Even with all the road-warrior tools, it's not the same as being with a client or in the office with the rest of the team.

Of course, towards the end of the day, no matter how many cups of coffee I had, I would be tired...and perhaps a little foggy. My staff used to joke that the day of my return on a red-eye was the best time to convince me to make decisions in their favor. They would be the Radar to my Colonel Blake from M*A*S*H, asking me to trust them as they held out forms to be signed.

More importantly, it's important to stay alert for slight deviations from a policy path. Often when I was faced with a sticky situation, I found it important to take time to think about the implications of the decision. Was I setting a precedent? Would I be consistent with my values regarding people, the purpose of the organization, the treatment of customer & supplier partners and the organizational culture? Not many situations were unique in outline. However, the particulars always wanted a thorough evaluation toward fairness.

It's easy to write policies that treat every situation equally. It's impossible to write policies that treat every situation fairly. You cannot write a policy that can cover every possible scenario. If you tried, it would cover a whole wall. Treating people and partners equally is not the same as fairly. In fact, treating someone just like someone else could compromise an ethic that you hold. You might have to deduct pay from a single mother who needed to be with a sick child if you're policy ignores the reason for leaving work early. And then it might depend on how much you trust that person to return in a timely manner or the verity behind the reason for departing. There are many factors that often need to be considered.

Today, watch for an example of fairness versus equality and how it relates to your values, principles and corporate policies. Abiding by a policy, would you end up treating some equally but not fairly and not in keeping with your ethics?

For C12 and Truth@Work members, in the scriptures, we are advised to be alert (I Pet 5.8 and others) lest we slip into sin. The letter to Romans suggests that there are many ways to honor God through our actions that don't necessarily have to be the same as someone else. Acting different from one set of guidelines is not sin. However, we have to be consistent with what we believe is honoring. This is the heart of integrity--acting in congruence with your beliefs and values.

Popular Leaders?

Early in my career, I was accused of seeking policy changes merely in the effort to be popular with the employees. That was the argument to shunt the focus from any logical, ethical or financial shortcomings of the current policy. And it's unlikely that leaders can become more popular just with policy changes. They give us a temporary bump but, like bonuses and increased productivity/morale, it's pretty short-lived. "What have you done for me lately?" comes up again very soon after the policy change. The popularity level returns based on its innate organizational trust levels--based on perceived and actual levels of integrity, openness, approachability, credibility, competency, reliability.

President John F. Kennedy's net approval (% approved less % disapproved) rating barely took a hit from the Bay of Pigs catastrophe within 3 months of his presidency. In fact, it might be argued that his approval rating jumped over 80% because he acknowledged the error in judgment. Meanwhile, our current president's net approval rating hasn't been above 0 since the early days after inauguration. The only other post-WWII president to have such low ratings was Jerald Ford.

As leaders, we might be able to manipulate popularity but we can only substantially and enduringly improve it by improving trust. If distrust has gained a significant foothold, maybe a crisis (like 9/11) can create a bounce...if you handle it correctly...and you use it as a means of purging the reasons for distrust. Otherwise, after the crisis, the levels of distrust will return and unpopularity reigns. This is the lesson from heart disease patients who continue their detrimental lifestyle after the crisis has been dealt with.

Strategic Benefits?

What is your planning horizon? One year? Three? Five? Ten?? Chances are we’re clear about the effects of our decisions in the near-term: mostly one year, sometimes three if it’s a general policy issue. We might even appreciate that benefit choices are enduring. I wonder if that was the case for employers during WWII and after. When wages were frozen, one of the ways to attract employees was to provide health insurance benefits—which previously had been purchased by individuals. Over the last 6 decades, those benefits are assumed by current and potential employees.

Once a benefit is given, a benefit is hard to take away. I once removed a Perfect Attendance benefit, which added a half-day of vacation for each quarter of perfect attendance, and replaced it with two extra holiday days—floating holidays freely chosen by each employee. It saved a lot of supervisory effort spent to track—and negotiate as in whether there was adequate notice for an excused absence rather than an unexcused absence—those who wanted to have perfect attendance...and instead focus on performance improvements. I received some push-back because I had eliminated a benefit. It seems benefits only have additive policy directions, not subtractive policy directions. I didn’t reverse the decision because it was strategic that we needed to redirect the supervisors’ time towards process improvements, education, problem resolution, etc.

With regard to health insurance, even before the ACA (“Obamacare”) provisions, we were re-thinking the provision of health insurance benefits. In 2008-2010, we weren’t extravagant in the portion we paid but it was a big cost. It was running close to 25% of payroll. What other strategic things could the money be used for that would better insure organizational success? I’m not talking about stock prices. I’m talking about long-term growth through investments in product development, acquisitions, expansions, capital equipment, and so on. Then and today, it was assumed that health insurance premiums were just another cost of doing business, like leases and utilities. Medical costs are out of our company’s control. There aren’t price lists to choose medical procedure, device or prescription options. Many places don’t have provider choices—either you only have one option in your area or you’re locked into one choice by the insurance plan. It’s one area that we don’t control and we have limited solution options—increasing deductibles is one of the most utilized. I’ve even seen arguments that smarter health insurance choices improve employee engagement, which in turn improves productivity. Not so sure about that. For one thing, employee engagement does not improve if organizational trust is not high; health insurance benefits can’t fix low trust levels.

Attracting employees is important. It’s why employer-sponsored health insurance was originally promulgated. What else could we do with 10-25% of payroll to attract candidates and not tie us into a system we don’t control? How much has the cost of health insurance influenced our move towards more part-time employees and how much has that move hindered our employees’ productivity, effectiveness, customer service levels, growth, etc.?

Having healthy employees is important, not just physiologically but also mentally. Peace of mind that there’s a safety net through health insurance can be important for individual productivity as well. But is health insurance the only way to do this? If the benefit/cost ratio is greater than 1, shouldn’t we offer it to the part-timers as well.

What strategies need to be executed for your company to survive, thrive and grow exponentially? How much does providing health insurance help or hinder your ability to succeed?

No End Game in Business

Sports analogies for business are wrong. This was the intriguing point Simon Sinek recently made in a leadership summit. In his talk, he used some war analogies, which might be closer...but not quite.

In business, we're involved in an "Infinite Game". However, we think we're in a 'finite' game, one with:

• clear rules, 
• defined ways of keeping score and knowing if you're ahead, 
• clear playing field, and 
• known opponents who're following the same rules.

When we apply sports analogies, we think business is conducted this way. In modern war--especially guerrilla warfare--many of these sports analogies don't apply. Instead, like the North Vietnamese in the 1960's and 1970's, they were playing for the long-term. Even though they were 'losing' by many scorecards--e.g. casualty rates 40x greater than the US--they outlasted the US because they were in an Infinite Game:

• rules change all the time
• there's no ahead or behind; there's only getting better at your efforts
• as strategy changes, the playing field boundaries change
• unknown opponents and allies

In an Infinite Game, an ideological rival is of more value to you than a tactical rival. An ideological rival is one that challenges why you're still in business. A tactical rival only challenges how you do your business and what business you decide to grow. The corporate culture that will help your team succeed at the Infinite Game:

• Just Cause: the purpose, vision of your business stated in the affirmative, is inclusive, resilient to changing conditions, is customer-focused and is defined such that all members of your organization know how they can meaningfully and significantly contribute;
• Trusting Teams: a high level of organizational trust is needed to progress (and is especially important for engagement on the mission of the organization) and is evident when people are open about mistakes, doubts, and needing help;
• Worthy Rival: one who pushes you to get better than you were yesterday, because they too are focused on getting better against their own performance and not focused on you (Sinek says he knew Microsoft was in trouble when they were focused on beating Apple and Apple was focused on providing better customer experiences for people using digital devices);
• Existential Flexibility: the Why won't change, but the How and What may e.g. Wells Fargo is still in the connecting people, money and goods and the How changed from stagecoaches to banking
•  Courage to Lead: to go into new territory of behavior, marketing, development, autonomous teams ("trust your people enough to believe they know when to break the rules"--Sinek)

Servant Leadership Practice--Treat Them Like Owners

Skeptics can discount recent surveys that show a majority of people want to change employers. However, there's a lot of discontent out there (in your own company?). Owners, CEO's and others bemoan the lack of engagement and loyalty evident from the troops. In the trenches, most will say there's little engagement and loyalty because "the company" or "they" (the executives) are not loyal to them, or engaged with them.

If a person has committed to giving you time, in exchange for a paycheck, they could be engaged. They're already in a "dating" relationship. Of course, if there's no reciprocation of trust and loyalty (exclusiveness), then employees will be free to go to (date) another company. How do you win over a person to be your significant other? You woo them. You make them feel important. You share something of yourself and are as vulnerable and open as you can afford to be.

Many companies are practicing open book management. One company that's spearheaded this effort--Springfield Remanufacturing Company--has had tremendous growth. Their stock value not only leaves the Standard and Poor 500 behind, but they make Warren Buffet's holding company (Berkshire Hathaway) look like amateurs at increasing shareholder value. SRC treats their employees like adults. They share the books and educate everyone on how they can improve results and increase the enterprise value.

Even if employees don't have ownership shares, they want security. One survey I've done with employees asked them to trade one benefit for another. Job security was the least traded away aspect of the employment package. One of the surest ways to increase job security is to have growth and increased value. Getting all of them engaged is the best way to create alignment. Engaging them gets them engaged. (The key lesson of the famous Hawthorne Works experiments in productivity was that it improved because people were involved and it appeared to them that management cared enough to ask their opinion.)

You may have to go first. Engage them, in order for them to engage back. Someone has to propose, you know, in order for a wedding to be planned. Otherwise, it's just a perpetual dating relationship with no commitment, no stakes, no chance for growth. They've already invested some "sweat equity" by staying with you and working hard. Invest something back into the relationship.

A profit-sharing program sweetens the deal too.

Today, find a way to share some of the financial results. Trust them enough to know your company's good points and its weak points (the blemishes). Not everyone will understand right away. It will take repetitive "investments" in the relationship to teach them how to understand the information and how they influence it.

For C12 and Truth@Work members, we know a lot about our spiritual forefathers. In fact, some wits claim the first five books (Pentateuch, Torah) were written by a female because the male protagonists were such dunderheads, making many mistakes and looking like idiots at times. Yet, they are our role models. Similarly, employees will appreciate knowing what and who they're involved with.

Spirit of the Law

In religious and legal circles, there's often a discussion about the spirit of the law. Look at some of the debates about the US Constitution and what the founding fathers intended. Do we read it literally or as a set of principles? Sometimes the rules, regulations, commandments and laws are ambiguous or it's tough to discern how to apply it to today's situation. Therefore, we want to understand the principles behind the rules, to understand the spirit of the law.

Jesus of Nazareth showed this in his teaching about some Old Testament laws: "You have heard 'thou shalt not commit murder' but I tell you that anyone who hates his brother is guilty of murder..."

Similarly, in business, we should want people to understand the reasoning behind our policies and rules. It's impossible to write a policy that will cover every possible scenario in order to be fair with people. Such a rule would cover all 4 walls of a medium-size room, and still miss an exception or loophole. If you teach people why the policy is in place, and what it's intended to accomplish you do several things:

• They learn how to apply the principles behind the policy to similar situations. I've had discussions with staff members after asking what to do with a customer who hasn't paid yet. I give them the answer and often they will then ask, "Why?" I can explain the reasoning behind this circumstance and why a different customer might be treated differently in a similar delinquent incident. Not everyone wants to know why. Some just want to know what to do, for various reasons related to their personality or learning style.
• When you have people who want to understand more, they can become informal leaders and advocates of the values and principles under which you want the organization to operate. You've cloned yourself and expanded your network in creating the culture that acts on similar values that you hold.
• It allows others to hold each other accountable to the organization's goals and intentions. This can increase their sense of contribution, involvement, commitment and engagement.
• It builds trust because you are transparent, and willing to hold your integrity accountable based on your actions. If you never explain the values and principles behind your decisions, no one can say you've violated them and you haven't lost any integrity. Of course, this is cowardice. It also leads to situation ethics, complaints of favoritism, wishy-washiness, arbitrariness and other vices of poor leadership.
• Not developing your staff in this way gives a false sense of your authority and power, a reliance on you and neediness on their part. It is at best paternalistic and at worst oppression.
• It indicates a level of trust in that you don't need to micro-manage every situation or every individual through a rule or policy. You're trying to focus on the priorities and the real needs, and not worrying too much about every rare exception that may arise. Don't create a rule that effects everyone if everyone is not influenced by it or involved in it--like attendance, internet usage, etc. If you have a few bad apples, deal directly with them without creating a rule that's going to stymie others or show distrust in the majority that are trustworthy.

When you do explain the principles and values behind the policies, procedures, rules and regulations, do so after the main content is given. Thus, those that don't want to know haven't fallen asleep by the time they got to the relevant portion of the communication.

It's Not a Supply "Chain"

For the last 10 years or so, consultants and big corporations have been talking about controlling and managing and leveraging the competencies in the supply chain. What they fail to realize is: there's no such thing. Even if there was, it would not work the way they say it does.

There is no chain. It's a chain link fence, unmanageable and uncontrollable. It would take a super-computer of super-computers to calculate all the interactions and optimizations. Start with the company that sells to the end user. Let's say they have 100 suppliers. Those suppliers have 100 suppliers, and those suppliers have 100 suppliers. You have 100,000 suppliers in one supply "chain" whose operations need to be optimized, whose inventory needs to be managed and everyone of them needs to be linked by an information system in order to make it happen. It ain't going to happen.

You can work the problem from the other direction also. Each of the bottom tier suppliers has 100 customers, all trying to manage, control and optimize the supply chain. Those customers each have 100 customers, trying the do the same thing. Who gets to determine the priorities for any of the tiers? No one. Each supplier is autonomous and always will be, ignoring the "push" from any one supply chain.

Forget the consultants, forget the supply chain directors and VP's. The only opportunity that will actually be leveraged are the ones inside your own doors. That's plenty of work. Break down the barriers, build trust within the corporate functions. There's enough waste inside the organization because of distrust and inadequate communication (the quality, the content, the frequency and the amount). If you can't fix the trust and communication issues inside your own walls, you certainly are going to compound the problems in the supply chain link fence through 100,000 suppliers. Man, that's a lot of waste.

The Real Secret to Employee Engagement

In a mini-workshop today on Servant Leadership, I was asked if Best Workplaces surveys can provide a hint to whether the organization follows Servant Leadership principles (or Transformational Leadership or other nuanced forms of this style of leadership). From what I've seen--and I'm open to learning more about the best/better of the workplace surveys--they ask questions regarding workplace environment and related to a 'happiness' index. It might be indicative of good leadership or at least an absence of toxic leadership--narcissists, bullies and psychopaths.

However, if you believe Wiseman's research on Multipliers, there's not much difference in the behaviors between those that 'multiply' the talents of their teams and those that 'diminish' the talents of their teams and see a drop in performance. Diminishers don't rise to the level of toxic but they're not challenging themselves to serve the team by helping them do their best work. Surveys won't bring this out. Are most of the leaders Multipliers? Do they practice the principle that 'noboby wins unless the team wins'? Are they Level 5 (Collins) taking the blame for failures and sharing the credit for successes? Is the organization's success more important than their own reputation? Do they practice more consult/join decision-making rather than tell/sell?

My question about these surveys is whether they're measuring the level of engagement (enthusiasm, commitment to give their best effort to the organization). Many of the engagement surveys are sort of measuring the 'happiness' index too. I've seen those surveys and at times in my career I could have answered positively to all of the questions but would have been out the door as soon I could leave. Because I didn't trust the organization and its top managers.

Instead, the secret to engagement doesn't have anything to do with communication, recognition/feedback, incentives, benefits, clear goals, interpersonal support. It has everything to do with first having a foundation of organizational trust, good leadership and understanding mechanisms that support change. And then realizing that engagement is a daily event...and needs daily attention. This is the heart of the real secret to employee engagement.

Each day, we decide just how enthusiastic and committed we are when we get in the car, bus or whatever mode of transportation we use. At the end of the day, we make the same decision. It's been shown that the days we're still motivated are the days that we make progress or a contribution to success. Yet managers don't pay attention to this. There are also other aspects that lead to high levels of engagement: choice (autonomy), content (mastery), collaboration (purpose). Those other things--listed at the beginning of this paragraph--don't sustain motivation. In essence, they're just components of good leadership.

Here's the hierarchy of improving engagement--start at the top to reinforce your team members daily decision to:

• Help your team make daily progress/improvement on their work (or stay out of their way)
• Give them opportunities to make decisions (choice)
• Adjust work to fit their skills and expertise and educate them on one more needed skill or bit of information that will help them succeed
• Encourage collaboration with other team members and other teams.

The leaders who pay attention to these things on a daily basis with have employees want to be at work. They'll be making the decision each day that "Yes, I'm excited to go to work and can't wait to give my all!" Managers who focus only on recognition, incentives, communication and other forms of motivation will not see much of a budge on their team's engagement levels.