The Trustworthy Entrepreneur

Let’s give credit where credit is due. I recently listened to a podcast by Reid Hoffman– he was the co-founder of LinkedIn and an early board member at PayPal. Hoffman made a profound statement that goes like this. “Trust is consistency over time.” As entrepreneurs one of our biggest hurdles is creating trust – trust with our team, our investors, our bankers, our customers and our prospective customers. Without trust, we will flounder around and never gain traction. And trust is a very fragile thing. It takes a while to build trust, but it can be gone in an instant.

Consistency. We all know what it means. We also know how hard it is to achieve . . . consistently (pun intended). We trust McDonalds because every meal in every restaurant around the world maintains the same standard of quality. Forget whether or not we actually like the food – we know exactly what to expect. We trust products from Johnson & Johnson, General Mills, Netflix, Adidas and Dove because we know exactly what to expect. Our enterprise struggles when our standard of quality is inconsistent, which in turn degrades the trust our customers have for our product or service.

I’d like to take Reid Hoffman’s mantra one step further. Commitment + Accountability leads to Consistency. Commitment is where every member of our team agrees to perform at a level that is necessary to always deliver our product or service at the highest quality possible. It’s critical that we clearly define what this level of quality means. It must be broken down in exquisite detail. Training must be directed to ensuring that each team member fully understands the detail and how to execute on it. And then the team must practice, practice and practice some more until delivery of the product or service is standardized. The bottom line – we can’t commit to something if we don’t understand it or haven’t been shown how to do it.

Next comes the Accountability part of the equation, and here it gets trickier. Once every member of the team has agreed to delivering the expected level of quality for a product or service, how do we make sure that each person lives up to his end of the bargain? Part of our responsibility as an entrepreneurial leader is to develop some quality control systems and processes. This serves as a backstop for the customer to make certain that something substandard doesn’t leak out into the marketplace. Should we have to spend time and money to create this redundancy? Maybe not, but if we really care about the customer we have no choice but to do so. This also becomes a method of accountability. We’re able to spot deficiencies before it’s too late, and we can identify the weak links in our system. This allows us to get to the root of the problem. Is it an issue of training? Is it a misunderstanding? Does someone not have the proper tools or adequate resources? Is it the fact that someone on the team simply doesn’t give a damn about what they are doing? We can take steps to correct all of these obstacles which help to further tighten our commitment.

Our Commitment to deliver a standard level quality of product or service, and the accompanying Accountability gives us a fighting chance to reach the holy grail of Consistency. And it’s this consistency that will build Trust with everyone in our orbit. Team members learn to trust each other. Customers trust our product or service. Our investors and bankers trust us because we are doing what we say we are going to do.

We let our consistency do the talking for us. We’ve all seen marketing that includes phrases like, “most trusted,” “your honest car dealer,” “honest and trustworthy,” and on and on. I’ve always been wary of any business that needs to beat its chest about how honest and trustworthy it is. It somehow feels like they “protesteth” a bit too much. Perhaps they think they need to advertise this way because they don’t actually deliver consistency with their products and services.

Trust truly is consistency over time. And consistency is the product of commitment and accountability.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 16 – A Punch in the Mouth.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

Trust Me . . .

There’s a priceless element to an entrepreneur’s success when it comes to his or her customers, employees and investors. This element can be broken. It can be elusive. And it can be very difficult to regain when lost. Of course I’m talking about “trust.” But this isn’t so much a blog about trust as it is one of the foundational components to building trust. Let’s explore the concept of transparency.

Transparency is a word that is used a lot these days – sometimes it becomes a bit trite as well as overused. Don’t you just love print advertising and television commercials that implore us to “trust” the company peddling the product? My guard goes up when I hear this sort of naked appeal – I probably am much more cynical about companies that resort to this messaging. If we start with the premise that “trust” is the given baseline, why then, is there a need to say, “Trust me?”

If I do a poor job of delivering what I promise to my customers, I’d much rather admit in an open and honest manner that I screwed up. Too many times we see companies stonewall, deny and otherwise obfuscate when the train goes off the track. Of course this results in mistrust rather than accomplishing whatever we had hoped for by not being transparent. The old saying that the cover-up is worse than the crime certainly applies here!

Transparency begins with the basic core value of integrity. Either we have it or we don’t. We use this core value to guide us in the actions we take to fulfill transparency. I know that there are those who will say, “I’d like to be more transparent but in today’s litigious society I can’t say what I really want to say – I’ll be sued if I do!” However, there are ways to be open and honest without creating legal jeopardy.

We must also remember that most people don’t like surprises – at least not the negative kind. This is especially true when we’re working with our team members and investors. A number of years ago we acquired some land and launched a residential subdivision which turned out to be a bad idea. Shortly after we completed the purchase, installed the streets and sold our first three lots, the financial world came to an end (2008 – 2009). Our lot sales came to a screeching halt and remained very anemic for several years thereafter. We had raised substantial investor equity for this project and needless to say, the lack of sales was a difficult thing to report. Nevertheless, we dutifully wrote and sent investor reports every year laying out the facts. There was no sugarcoating nor did we try to sound overly hopeful. Eventually there was good news to report and we were naturally pleased to do so. I’ve been told by several of our investors that they never lost confidence or trust in us because we were totally transparent throughout the process. It also helped that we explained in detail what we were doing to try and solve the problem.

Transparency means getting in front of the message rather than being behind the curve. Here’s an example. We learned that a major employer was about to close its doors in a market where we had an apartment property. Immediately, we contacted the investor and let him know that this was happening and apprised him of how we thought this closure might impact the property. We also laid out our plan of action for minimizing the negative impact to the investment. He was also an investor in another property in the same market that was handled by one of our competitors. He told us he never heard from the competitor and appreciated the fact that we delivered bad news as soon as we knew it. Our transparent approach built trust and enabled us to do more business with this investor.

Transparency is one of the cornerstones of trust. By operating with integrity we are never afraid to deliver good news or bad, and share all that is relevant with our customers, team and investors.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 24 – Disruptive.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

transparency

The Bermuda Triangulation Effect

Allow me to set the stage. Don, Shirley, Frank and Jessie all work for the same company. They are peers and interact on a daily basis. Let’s pull back the curtain momentarily and observe what is happening.

Shirley has stopped Frank in the hall. They have an exchange that goes like this.

Shirley: “Frank, you won’t believe what Don did. I’m so frustrated with him! He was supposed to prepare graphs for the PowerPoint slides to insert into the Magruder presentation and he totally blew it off. How are we going to get these graphs?”

Frank: “Wow, Shirley! It’s incredible that he didn’t hold up his end of the bargain. You know, he’s done that before. What a bozo!”

Later, Frank runs into Jessie and their conversation went like this.

Frank: “Jessie – Shirley told me that Don completely booted the graphs for the Magruder presentation. She’s about to blow a gasket. I wonder if Don should even be on our team.”

Jessie: “That’s awful! Don seems to have a history of doing things like this. He’s being extremely selfish and doesn’t care about anyone but himself.”

What is happening here? I call it The Bermuda Triangulation Effect. The Bermuda Triangle is a region covering roughly 500,000 square miles in the Atlantic Ocean where ships and aircraft have seemingly vanished without a trace. In other words, it’s akin to a mysterious black hole, sucking in the unsuspecting. Unfortunately there’s no mystery to The Bermuda Triangulation Effect. Triangulation is a no man’s land where different parties whine, moan and groan about another party without speaking directly with that party. In our example Frank, Shirley and Jessie are triangulating about Don and the problems he has caused. Yet, no one bothered to talk to Don about the issue.

Triangulation is bad for business and bad for relationships. It’s pure poison and can dramatically and adversely impact the chemistry of a team. Why does all of this grousing happen among teammates in the first place? I believe that it’s indicative of a team that does not hold mutual respect as a cornerstone. Team members also don’t trust each other to the point that they can have conversations directly with the party who is causing issues. I’ve heard many people explain that they feel like such a conversation could be confrontational and they want to avoid conflict.

Here’s the truth. Entrepreneurial leaders must take all steps necessary to eliminate triangulation. This starts with identifying clear roles and accountabilities for each team member. And everyone must clearly understand how they are accountable to each other. This accountability should include a process for addressing issues and concerns that are encountered from time-to-time. Team members should understand that it is incumbent upon them to speak directly with another team member should a challenge arise with that individual. Discussions among peers should be taboo as they are counterproductive and accomplish absolutely nothing. And team members should be discouraged from trying to resolve their issues via e-mail. E-mail is a one-dimensional form of communication and is one of the worst ways to try and sort out problems within a team.

Team members should be educated on how to speak directly with another team member in what might be perceived as an uncomfortable situation. Had our fictitious team been properly educated, the following exchange might have occurred with Shirley going to Don directly.

Shirley: “Don – I was looking for the graphs that you were preparing and found that they weren’t in shared folder. I need to drop them in the PowerPoint for the Magruder presentation. When do you think you’ll have them ready?”

Don: “Shirley – “I’m so sorry. I spent the night in the emergency room with my daughter and wasn’t able to finish them like I promised. I’ve been working on them and will have them completed in about 30 minutes.”

Shirley: “I’m so sorry to hear about your daughter. I hope she’s OK. If you need any help, just let me know.”

No triangulation occurred. The team continued to move forward to achieve its goals. Feelings weren’t hurt and time wasn’t wasted with angry chatter.

As entrepreneurs we must endeavor to create a culture of mutual respect where team members are totally comfortable having conversations of all sorts with each other. Stamping out triangulation should be a priority to this end.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Audio Episode 14 – Obstacle Proof.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

bermuda-triangle

Nice to Be With You

In 1972 an American soft rock band called Gallery recorded the song, “Nice to Be With You.” I’ve always liked that song and believe it could reflect the personality of successful entrepreneurs. Think about all the people in your life and who you like most to be around. Is that person always complaining and negative? Or, is he/she upbeat and positive? A Harris Poll reported in 2013 that only one in three Americans were very happy. Obviously there’s a lot of progress to be made. We entrepreneurs can lead the way.

Entrepreneurs often get a bad rap. They are portrayed in the media and the movies as cold, heartless, ruthless and conniving. Certain politicians may characterize entrepreneurs as money-hungry and corrupt. We need to change this narrative and can do so every time we interact with someone else. How? I submit that when we’re nice to be around we can easily dispel the myths and stereotypes about entrepreneurs.

Now if you are rolling your eyes right now think about a single word . . . trust. Who do you trust more – a genuinely happy and friendly person, or someone who is sour and inconsiderate? I haven’t done a scientific survey on this question but informally asked a number of my friends and colleagues. It was nearly unanimous in favor of trusting someone who is nice. Our success is built on others trusting us, our team, our products and our services. Why wouldn’t we want to stack the deck in our favor?

Let’s take stock and see what we can do to ensure that others see us as nice to be around. I used a word in the last paragraph that is of critical importance, and that word is genuine. If we contrive our niceness it will be apparent and will cause others to think we’re slick and manipulative. We must be real about who we are and develop the traits and tendencies of a happy person.

Here are some ideas that can endear us to others:

  1. We think of others first. When we can make someone else feel valued and appreciated, their happiness quotient increases exponentially. In a restaurant when the service is great, I like to look the server in the eye, call them by name, smile and tell them what a great job they are doing. And the enormous grin (and sometimes tears) I get in return absolutely makes my day. Taking a servant’s attitude – where I’m here to help and serve you – helps me avoid the feelings of entitlement that afflict some successful entrepreneurs.
  2. Be an optimist and positive. No matter what happens I see no point in wallowing around in despair and negativity. It’s like being in quicksand – no one wants to get in it with us! We want to attract people with whom we can build trust and relationships. That’s much easier to do when we are giving off good vibes rather than being a Gloomy Gus.
  3. Avoid the limelight. Have you ever known someone who does nothing but talk about herself/himself? I’ve been to more than a few cocktail parties where I’ve been cornered by these individuals. And I’m reminded how much I don’t want to be like them. In fact, I prefer to ask questions about other people and what they do more than I care to talk about myself. It’s not that I have anything to hide. I guess it’s just that I was taught as a child that the world doesn’t revolve around me.

When we are genuinely a nice person the odds increase for building a trusting relationship. We can make this happen by thinking of others first; being optimistic and positive, and avoiding the limelight.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

gallery band

The Kelly Factor

My wife and I ate dinner at an old 1960s vintage diner while on vacation recently. Our server was Kelly and she was absolutely terrific. In fact I told her she should come and work with me. Why was I so impressed with Kelly? She was genuine and authentic. This translated into her being very personable. Not only was she friendly but she clearly was very interested in providing us with the best dining experience possible. Kelly checked on us regularly, was witty and her countenance literally beamed.

It was obvious from the minute we sat down that Kelly was fully invested in her job. She had “skin in the game” so to speak. She greeted every customer that walked in the door, even if she wasn’t their server. And when a customer departed she acknowledged them similarly. There is a great lesson here for us entrepreneurs. When someone throws themself into their job like Kelly did, it not only is obvious but it is infectious. My wife and I both left the diner feeling more upbeat than we did when we walked in.

While sitting in the booth listening to some great old rock and roll tunes (from the 60s of course) I got to thinking about what makes Kelly tick. As Simon Sinek would say, what is her WHY? It was pretty apparent from what she said and her demeanor that Kelly is all about building trust and lasting relationships. Thus, everything she does for her customers is foundational in this respect. At one point she stopped by to see if some barbecue sauce had been delivered – it had not. She ran off to the kitchen and got it. When she returned, she explained that someone else was bringing it and then there was a minor disaster in the kitchen that caused the sauce to get waylaid. The fact that she felt a need to explain what had happened told me that she really wanted to earn our trust.

As entrepreneurs we need to have “skin in the game” as do all of the people we work with. It’s pretty evident when someone is simply going through the motions. While on the same vacation, we ate at another restaurant where our server was nice, but it was obvious she was just doing her job. She made no effort to engage us in conversation and build a relationship of any sort. Our experience in this restaurant and with this server was fine. But it serves in stark contrast with our Kelly experience.

Skin in the game means doing whatever it takes to make the customer happy. Skin in the game means going the extra mile for everyone involved – customer, company and other team members. Skin in the game means taking the wins and losses personally. Skin in the game means sometimes doing something that is less advantageous for us and more advantageous for someone else.

We know when we’ve become fully invested in whatever we’re doing. The results will be evident when we see that everyone involved had the kind of WOW experience that we did with Kelly.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

waitress

The Bond

Question: I’ve noticed that some people aren’t following through and doing what they say they’ll do. Does it seem like this has become more of a problem over the years?

Answer: What you are describing has been occurring for time in memoriam so I wouldn’t necessarily say that it’s become worse. And it’s not only a crucial issue for entrepreneurs but for everyone else as well. At the root of this is a simple word . . . commitment.

I’m an old school kind of guy and believe that a commitment is the same as a promise. It’s about trust and a my-word-is-my-bond mindset. How we deliver on our commitments to others begins with how we deliver on commitments to ourselves. My parents instilled in me a deep sense of discipline and pride when I was growing up. I had a wide range of chores – some of which I did not particularly like. I practiced the piano for 30-minutes at 5:30 AM on weekdays. I wasn’t given the option of scrapping a practice session. I know I was driven not to disappoint my parents – but in the process they taught me to take pride in what I did and not to disappoint myself. Thus, I learned how to make commitments to myself and keep them.

How can we learn to make meaningful commitments to ourselves? It starts with simple things. Perhaps we say, “I’m going to commit to an exercise program five days a week.” How seriously do we take such a commitment? If we exercise for a couple of weeks and then fall off the wagon, we undoubtedly may rationalize quitting. But are we being true to the bond we’ve created with ourselves? If we can’t even keep the commitments we make to ourselves, how will we fare when we make commitments to others – commitments that others trust and count on us to keep?

If we say to ourselves, “I will try,” or “I think I can,” that’s not really a commitment. When we say “I will,” it is. When we frame commitment to “my word is my bond” and “I will,” we can now set clear standards of accountability for ourselves. I can ask myself, did I keep my word when I said “I will?” This is a very easy question to answer – it’s either yes or no.

Finally, are we prepared to go above and beyond our “legal” obligation to deliver on a commitment? In other words, do we say we’ll do something and if we fail, do we point to the “fine print” and say we’ve measured up anyway? Years ago, one of our sales associates ran into financial difficulties. We loaned him some money and told him to pay us back when he got back on his feet. He was very appreciative and assured us that he would do so. We chose not to put anything in writing and instead operated on the basis of trust. A year later, this associate was closing transactions and making good money. Not once did he ever acknowledge his commitment to pay us back. Because we had no formal contract with him, I suppose the case could be made that he had no legal obligation to pay us back. We never really defined what it meant for him to be “back on his feet.” But he knew what it meant and so did we.

We make commitments only when we are intentional about delivering on them 100%. And when we meet the obligations we commit to ourselves, we are then ready to take the sacred step of honoring the trust placed in us by others.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

commitment