Why do round-trip airline tickets cost less than one-way tickets? Do the airline not trust us to come back and do business with them again? Why do wireless companies charge early termination fees if they are convinced that they are uniquely positioned to offer the best coverage, highest customer service, and most extraordinary calling plans? Why do home maid services have a penalty clause if a client does not maintain service with the company for a year? If they are cleaning the house on a weekly basis they have over fifty opportunities to solidify loyalty.
Why does Amazon allow customers to download a book onto their Kindle and return it within seven days if not satisfied? Zappos gladly accepts any item back if it does not meet with our satisfaction and they pay for the shipping. Many a coffee house will remake a drink if it did not meet with our expectations.
Each company has its rational. Some are based on revenue and expense metrics. Others are tied to core values. Reflect on what stories we tell. What stories do we tell about the airlines and wireless companies? And compare that to the stories we share about Zappos? Nordstrom was famous for accepting car tires as a return from a customer. The catch, Nordstrom is a clothier with no history in automotive sales but the story is now legend (or apocryphal).
Do our actions match the stories we tell? And what stories does our community tell about us? Do we consider ourselves artists who understand our art is not for everyone, or are we focused on closing a deal and pointing to the fine print if the customer is dissatisfied?
Prestige unites and divides. Ivy League universities use prestige to define levels of achievement and academic rigor. Military branches display prestige with badges representing qualification and accomplishment. Luxury communities animate prestige with gated entrances, emblems, customized fonts, precious materials, and location.
The tipping point is the manner in which prestige is bestowed. Prestige comes from a group who share a common interest and agree to attributes and qualifications when selecting those who may enhance their standing. The motivation can be narcissistic. Who does not get included is the dark side of prestige. The antithesis of prestige is average and large crowds. Exclusivity is essential to thrive.
We can employ prestige to unite a powerful alliance or create divide. It can boost our ego or devastate trust. Are we using prestige to inspire or segregate? Does prestige enhance your loyalty or focus your independence? Prestige is bestowed on those who posse values desired by others. It must be accepted by those who believe aligning themselves with the preordained prestigious will elevate their purpose.
A donation of time, treasure, talent, or touch is generous. When given with the intention of benefiting others without first consideration for the impact to oneself it can be inspiring. However, a donation given with significant strings attached or a recipient unable to receive the gift without altering the intent, invalidates the formula of trust. A critical component of trust is being able to provide that which is needed and knowing the gift is being put to the best possible use. When one of the parties needs to assure the other one that they should, trust me the circle is already broken. Trust me comes through repetitive actions beating towards a consistent heading and over time. It is not a catch-phrase. Trust me does not mean what you think it does.
A case study to further illuminate the Circle of Safety. I read an article by David Auerbach, a former Microsoft manager who discussed the pitfalls of the employee “stack” ranking system. The stack predated Steve Balmer’s tenure as CEO but was continued as a core assessment process. Mr. Auerbach recounted the fate of employees who were placed in a series of performance buckets on a scale of excellent to awful. The rankings sealed the employee’s future career path at Microsoft and was the basis from which bonus schedules were calculated. The manager’s job was to advocate for their best employees and allow the lower performers to drop as far as necessary in the rankings while maintaining negotiating power for employees they preferred. This process was the antithesis of the Circle of Safety. The stack does not promote human interactions and germinates distrust and secrecy. The Circle of Safety does not avoid employee firings but it reflects on the impact to the community with a more thoughtful and humane approach to help those who may not be able to maximize their talents.
General Electric was the classic model of a company that would let go of the bottom 20% of its employees on an annual basis. If you did not perform, you did not stay. This created a very competitive environment but also one in which trust, innovation, and risk were not worth building. Contrast this with Costco, a company that pays a living wage and invests in its people. The Circle of Safety extends to the edges. The investment community would suggest that GE practices the hard-hitting principles that make for strong quarterly results. However, Costco has actually outperformed GE over long-run (see chart below), providing a blueprint that treating the employees as something other than a commodity is possible and prosperous.
|Costco vs GE
A key attribute of an enterprise that embraces the Circle of Safety is that it does not make employment decisions based on a balance sheet. Instead a Circle of Safety organizations think first about what is best for the community and then secures the resources to support the community.
* A continuation from the Day with Simon Sinek
Why engage philanthropically with causes that hold their programming hostage and offer small trinkets as rewards for making a gift? The premise of the disruption fundraising technique is to annoy people enough that they take action. It is akin to the child pulling at their parents pant leg and chanting, ‘mom, mom, mom…’ The conclusion available to the audience is that the cause can think of no more inspirational way to connect with its followers than to aggressively panhandel.
Is the disruption model reflective of a relationship built on trust and loyalty or manipulation and transactional interest?
If you are building a tribe you need to keep the members informed and allow them a vehicle to communicate with one another without too many obstacles. The above screenshots are from 5:45 PM Eastern on November 2, 2012. The New York Road Runner’s website (promoter of the race) continues to show a countdown clock before the race start while ESPN announces the race’s postponement. A vital step in creating trust is saying what you believe and then acting consistently to renforce that belief. Right now the New York Road Runners are taking a thrashing as they attempts to right the ship before a mutiny is called by those who swore allegiance to the club. Interesting case study in action. Having the right strategy screen in place before an emergency may have saved the NYRR from damaging their reputation.
|Bike rack at Craters National Monument
Do policies dictate our actions or do we trust those in the field to make the best decision to benefit the cause?
How do you develop trust? If you are a pet lover and adopt a dog or cat from your local humane society, what are the critical elements that establish trust between you and your new canine or feline? Is trust immediate? Does it take time in your experience? How consistent must you be in order to maintain it? What breaks trust? When we consider the critical elements to creating trust it is easy to see our successes and failures when we see it through the experience of those we love.
Professionals for Nonprofits released a study about the status of nonprofit employment in New York, New Jersey, and Washington DC. The report released the Top Ten Essentials for nonprofit employees which suggests some interesting priorities. Number one and two are intangible qualities. Trust is a feeling. There is no accreditation process to measure outright trust. The Better Business Bureaus, Charity Navigator, and other certification organizations review past operational behavior but do not award a merit based on trust. Mission statements come in second on the Top Ten list. These narratives provide each organization with the opportunity to define its purpose. Both trust and mission statements speak to the importance of an enterprise being able to articulate what it believes and then acting in accordance with their stated beliefs. Even the trust formulas I offered last month are based on intangible attributes. If you want engaged employees, volunteers, donors, and fans the importance of defining purpose and developing trust cannot be overlooked.
Two potential formulas for developing trust. Which formula best represents how you equate trust? What would you change?
Trust= Credibility + Intimacy
Trust= Credibility + Reliability + Intimacy