The Truth about Trust – the cheap and direct key to team building

The Truth about Trust – The cheap and direct key to team building 

Truth
definition (www. websters.com)
A verified or indisputable fact, proposition, principal, reality

Trust
definition ( www. websters.com)
Rely or depend on; to believe

Why are team building exercises minimally effective and sometime downright annoying? They all assume the people you work with understand and then state reality and that inter-personnel issues are creating friction. No, I’m not calling people liars, because you’ll deal with that in real-time. But, let me give you two examples:

A sophisticated IT group was under-delivering based on the estimates of the Applications Development Director. Strains emerged because the other IT Directors, CIO and CEO did not trust these overly optimistic estimates based on true history. A team building consultant was brought in who created communications-contracts between these seemingly warring Directors. The truth about trust was that the Development Director was weak on estimating and fixing communications did not address that. Establishing a Project Management Office reporting to the CIO did.

A new Sales team repeatedly blew their forecasts, which the President, Board and Financial Analysts did not appreciate. They held a last-chance group forecasting meeting using a new sales methodology. Since they did not understand the reality of why and how someone buys their product, the new consensus was just as good as any other guess even if it was in a new format. They were not mis-representing; they just had no concept of the reality in their sales cycle and this loss of truth killed off trust.

The key takeaway of this blog entry is:

You cannot build a team solely by communicating or cooperating better – every interaction has to reinforce trust by being based on truth. In virtually all cases, the lack of truth is based on a need for knowledge or skills. Treat the causes and you’ll get better results, cheaper and faster. Team building exercises are great – once everyone has truth and trust.

PS – you may need an objective outsider to identify the causes, but you can almost certainly implement the fixes by yourselves. Save the money; get better results.

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached atrichard.eichen@growroe.com

There is one Operational Improvement factor that you can control – and it’s FREE

There is one Operational Improvement factor that you can control and that will either make or break your company.

Groups, from families to companies large and small, all develop a series of behaviors and permissions that allows for trust and predictability, called a Social Contract. Every Management decision, no matter how small, is viewed by your employees through this lens. How will you know when you’ve breached this agreement? You’ll know virtually immediately and all the team building sessions in the world will not overcome it – only consistent tangible actions can – hopefully. Or, look at it this way –if your employees are so gullible or stupid that you can pull the wool over their eyes, would you want them involved with your customers?

Those departments most affected will simply vote with their feet. Cut the sales plan and watch your best producers ‘check-out’ and then leave (and take their best producing buddies). Say you can’t pay a bonus one year and then drive up in a new company car and you can see the snickers. Treat staff like they are beasts of burden while proclaiming they are your best assets and feel the smirks. Have a strategy du jour and watch people nod in seeming agreement.

Costs to you? Think of it this way – if you have 25 employees in an affected department or division and it takes 60 days for a new employee to settle in, then in a 33% employee turnover scenario, you’ll waste over 2 years worth of productive time (and dollars) PER YEAR.

Lost business? I was shadowing a sales call for a client where their customer (a senior manager in a Global Investment Bank) said to my client’s sales rep, “if you stay for 6 months, then I’ll learn your name”. Ouch.

What are the earliest leading indicators that your workforce feels the Social Contract was broken? There are 3:

Excessive discounts.
A company was acquired by a larger competitor and the employees all expected to be fired or at least have to share their accounts with the new parent’s reps. The company sale had been performed in total secrecy and the Social Contract was obviously broken the moment the announcement hit the Wall Street Journal (which is how the employees found out they were being sold). The result – the acquiring company inherited a series of last-minute large orders averaging 92% discounts off list.

Growing Days Sales Outstanding
Happy customers pay their bills. Are your support and A/R personnel being rude or curt with your customers? Are your sales reps getting ready to bolt and stuffing the channel with merchandise to pump up sales and their commissions while offering bizarre credit terms? Do you have a quality problem and the customer feels they have to manage your repairing it at their site?

Employee Turnover
Every company has some turnover. Actually, you can say that a company without some turnover is stagnant and subject to groupthink. If you have turnover approaching 33% in any job area, it should be easy to see if new employees go through the following 6 steps if the Social Contract is broken:

  • Initial Laughing (they think it’s just some jerky fellow employees)
  • Denial (there must be more to it I don’t get)
  • Anger (how did that headhunter do this to me?)
  • Internal Negotiating (how can I make this work?)
  • Checking Out (‘whatever’)
  • Flight

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached atrichard.eichen@growroe.com

When you have to see the world for the way it really is

Denying the Outside Truth at your own risk

Just about every company I have ever run or advised had one thing in common –it took an Outside Truth which could not be denied to force them to action.

Their cultures have a groupthink orientation and everyone who wishes to remain in good graces will adhere to the accepted ‘internal religion’ until an undeniable outside event takes place, such as a new competitor. An example:

A Sunbelt bank thought its local contacts, comfortable feel and long standing in the community was all they needed to keep their private banking customers. Service was fine, and the Bank was doing well, unless you looked at the leading indicator of Trust Prospects Lost to Competitors, which is hard to calculate.

After years of good local growth through their home state and surrounding states, a migration of retiring babyboomers started to move in. These people went into the retail branches, opened accounts with some pretty big initial deposits and that was that –the Trust Bank was never notified that a new high net worth individual had moved in and was a new customer entitled to the very best service. The internal groupthink was that the new customer would call the Trust Bank because they just knew it was the only thing to do.

Then the OUTSIDE TRUTH occurred:
A national competitor, much more aggressive, entered the market to mine this new customer base.

The end result was a scramble to link the Retail and Trust Banks (2 separate legal and operating entities) into a common push for new Trust customers. Unfortunately, they had let a major predator into their barnyard and within 24 months, the Bank was sold. If they had not waited for the Outside Truth of the new competitor, this could have been avoided.

 

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached atrichard.eichen@growroe.com