In an age of cynicism and irony, Northwestern Mutual is a throwback to a more innocent time. The company is the antithesis of “cool.” It has the kind of culture in which people embrace plain suits and sincere handshakes, take pride in wearing achievement ribbons, kick off conferences with patriotic music. It’s the very portrait of wholesomeness and earnestness—the Boy Scout of the insurance and financial services industry. There’s no place for hipster lingo, inside jokes about customers, snarky tweets.
Oh, and Northwestern Mutual has been in business for over 157 years and is worth $25 billion in sales. It might not be hip to be square, but Forbes publisher Rich Karlgaard says it’s very good for business.
“Mocking irony, snark, and cynicism are very much in vogue, but they are also toxic to your company’s culture,” says Karlgaard, author of the new book The Soft Edge: Where Great Companies Find Lasting Success (Jossey-Bass/A Wiley Imprint, 2014, ISBN: 978-1-118-82942-4, $28.00, www.richkarlgaard.com). “Once cynicism gets a foothold in your culture, it spreads—just like an ill-advised tweet or blog post. You need to proactively fight it.”
Most of us can agree that cynicism is ugly. It trivializes the gravity of bad behavior and normalizes superior attitudes toward customers and, often, coworkers. But Karlgaard insists that widespread cynicism is also a red flag that something is seriously awry in your company. And that “something” centers on trust.
“Cynicism is the defense mechanism of people who feel unsafe and powerless,” he explains. “It’s an expression of the uncertainty that comes from working in an environment where ethics are lax, employees don’t feel valued, and information is withheld. When it thrives in an organization, it signals a lack of employee trust—a problem that’s gotten significantly worse over the last generation.”
The example of Northwestern Mutual makes it clear: Building trust is not just a nice thing to do. It’s a strategic thing to do.
“Trust underlies effective working relationships,” says Karlgaard. “It improves group effectiveness and performance. It underpins organizational credibility and resilience. All of these factors contribute to creating a sustainable competitive advantage, because trust attracts talent, strengthens partnerships, and retains customers.”
The good news is you can tap into the strategic power of trust by consciously shifting your company’s culture. Here’s how:
Know that trust has two dimensions: external and internal. First, there’s the external trust between an organization and its customers: Will a company stand behind its products? If something goes wrong, will they do the right thing? The second dimension is the internal trust between employees, managers, and top-level management. Do leaders keep their promises? Can employees speak up without censure? Do people have each other’s back (or stab them in it)? Generally, what’s true externally is also true internally.
“When employees can trust leaders and each other, customers can trust employees,” says Karlgaard. “And vice versa, of course. Cynicism cannot be eradicated if trust doesn’t extend in all directions. But know that you need to start internally, with the employees on whose commitment and engagement your success depends. If they don’t feel that they can trust your company with their careers, you’re in trouble.”
Get clear on what a culture of trust and earnestness looks like. No doubt your employees have (probably very strong) opinions on trust within your company and where they’d like to see improvements. Hold a company-wide summit where everyone can share those opinions and include an anonymous component like a suggestion box or survey. Get everyone’s input, from the C-suite to the custodian. Your goal should be to pin down exactly how a culture of trust translates to leader and employee behaviors.
“Ask, ‘Who do we want to be?’” says Karlgaard. “Identify the ways cynicism manifests—for instance, through snarky comments, manipulating customers, talking behind coworkers’ backs, and so forth. Then, together, establish some ground rules aimed at dissolving cynicism and promoting old-fashioned values.”
Then, get the “rules” in writing.
Then, get the “rules” in writing.Put the results of your trust summit in writing and ask all employees to sign this document. It should spell out actions like, “I will not badmouth customers,” or, “If I have something to say to an employee, I’ll say it to their face.” Some companies have even gone so far as to prohibit blind cc’ing in order to promote a culture of trust.
“Of course you can’t simply outlaw cynicism and snark or talking behind someone’s back,” Karlgaard points out. “Trust can thrive only when employees are treated like the self-respecting adults that they are. However, you can ‘formalize’ values and ask people to abide by them. That’s the need these contracts serve.
“Creating an official ‘standards of behavior’ document helps crystallize the attitude you’re hoping to cultivate,” he adds. “Just saying ‘let’s all be trustworthy now’ means nothing. Creating the document shows that your organization is willing to go beyond mere lip service. Plus, people are just more likely to abide by an agreement if they’ve signed their name to it.”
Let only “Boy Scouts” lead. (And Girl Scouts too, of course!) People will emulate leader behavior, whether it’s good or bad. It’s just human nature. Leaders who roll their eyes when a certain customer calls are giving permission for employees to be similarly disrespectful. Complain about your boss in the break room and you can expect to overhear your own team making fun of you as you approach the water cooler. The key is to hire and promote leaders who truly do live the values your company espouses.
“It doesn’t matter how intelligent, charming, or technically capable leaders are if they don’t uphold the agreed-upon values,” says Karlgaard. “The negative impact they have on your culture will more than offset any talents and skills they bring to the table.”
Never lie or hide the truth. There are many things you’re thrilled to share with your employees. “Our customer satisfaction scores are 15 percent higher this year!” Or, “Our first quarter profits exceeded our goal!” Yet there are other things you might not be so eager to share, like, “We’re going to have to downsize,” or, “There aren’t going to be any raises this year…and by the way, we may have to reduce your benefits.” Tell them anyway, says Karlgaard.
“Even when the news is bad, people should never feel they’re being kept in the dark,” he insists. “Transparency and trust must coexist.”
Show employees that you care. When people don’t believe their leaders care about them, not just as workers but as human beings, of course trust can’t thrive. And while it’s true that fake or contrived caring only increases cynicism, genuine caring dissolves it. This means leaders must be “people persons” who stand up for their employees’ best interests and don’t mind showing (appropriate) affection.
Karlgaard cites NetApp as a company that truly gets this. Consider the following quote from its president, excerpted from The Soft Edge:
“I believe in leadership rather than management,” Tom Mendoza of NetApp explained. “You can be loud, you can be quiet, but leadership is what you are, not what you say. So my overriding principle of leadership is people don’t care what you know unless they know that you care. All industries have one thing in common, which is people come through for their leaders not because they’re afraid, not because they’re intimidated, but because they just don’t want to let them down.”
Aspire to predictability. It sounds a little dull, doesn’t it? Most of us want to be known as creative, outside-the-box thinkers. We don’t want to be bound by routine or limited by “the way everyone else does it.” And that’s fine, says Karlgaard—embrace innovation to your heart’s content in areas like product development and marketing campaigns. Just don’t be unpredictable in your behavior, priorities, and values.
“Unpredictability destroys trust,” he explains. “The couches of psychotherapists are filled with people whose parents were unpredictable. As a leader, your team should have total confidence that you’ll do what you say you will. They should have no doubt that you’ll keep your promises, act with integrity, and look out for their best interests.
“By the way, predictability in the matter of trust is different from predictability in tactics,” he adds. “Good leaders and coaches will shake things up. Legendary basketball coach Phil Jackson once held a Chicago Bulls practice in the dark. He wanted to see how well his players really knew the plays he was teaching!”
Make it safe to speak up. When your employees make an honest mistake, can they admit it without being scolded and belittled? What about input and ideas? Can they share those things and expect to be taken seriously? Hopefully, the answers to both questions is “yes.” Everyone should feel confident that they can participate in meetings and projects, say what’s on their mind, be respected for their opinions and ideas, and admit mistakes.
“Either trust rules your organization, or fear rules it—you have to choose,” says Karlgaard. “A fear-based culture kills employee curiosity. It quells exploration, dulls creativity, and stunts growth. In a climate of fear, people are afraid to make mistakes. Fear saps performance, synergy, teamwork, and morale. It makes people feel powerless—and if you have no power over your own work life, of course you’ll be cynical.”
Celebrate grit and gumption. If you want employees to be worker bees—performing the tasks you designate, on a timeline you set—compensate them with paychecks only. But if you want your employees to be partners, you’ve got to reinforce them when they act like partners. In other words, take notice when they display passion and motivation (grit) and initiative and guts (gumption).
“When employees do the things you want them to do—persevering through tough tasks, innovating, taking calculated risks—reward them,” Karlgaard instructs. “A simple thank-you can go a long way. So can public recognition at a meeting or through a company-wide email. And of course perks like ‘free’ vacation time or bonuses are always welcome. The point is, notice and celebrate the behaviors you want more of.
“When people are truly engaged, they can’t be cynical,” he adds. “Engagement and cynicism can’t coexist in the same moment.”
Constantly drive home the “meaning” of the work people do. One of the best methods to increase trust is to identify your greater purpose, your “true north,” as Karlgaard calls it. Why do you exist? What meaningful value do you offer to employees, customers, or society? A great purpose should be aspirational, not merely financial. It should create a common cause and promote a collective effort. It should answer all the tough questions of why: Why commit? Why persist? And, most important, why trust?
“At Northwestern Mutual, employees with whom I’ve spoken say they aren’t driven by dollar signs,” he shares. “They truly feel that their life’s work is helping people. When clients call and ask, ‘Am I going to be okay?’ they take pride in being able to say ‘yes.’ They’ve found a meaning in selling insurance that goes much, much deeper than balance sheets and profits. And, ironically, that’s why so many Northwestern field reps are the millionaires next door.
“My point? Figure out what meaningful things your company provides customers, whether that’s peace of mind, easier lives, reliable support, or something else, and look for ways to convey that purpose at your company,” he adds. “It’s hard to be cynical about your work and your customers when you actually do believe in what you’re doing.”
“The next time you’re considering how to make your organization a better place to work, think beyond an in-house masseuse, climbing walls, and free fresh-baked cookies,” Karlgaard concludes. “While employees will certainly appreciate ‘fun’ perks like these, they don’t mean anything if your culture isn’t grounded in trust. Trust is, and always will be, the foundation of creating an award-winning environment and culture that leads to high performance and success.”
About the Author:
Rich Karlgaard is author of The Soft Edge: Where Great Companies Find Lasting Success(Jossey-Bass/A Wiley Imprint, 2014, ISBN: 978-1-118-82942-4, $28.00,www.richkarlgaard.com). He is also the publisher of Forbes magazine, where he writes a column, Innovation Rules, known for its witty assessment of business and leadership issues. He has been a regular panelist on television’s Forbes on FOX since the show’s inception in 2001. Karlgaard is also a serial entrepreneur, having co-founded Upside magazine, Garage Technology Partners, and Silicon Valley’s premier public business forum, the 7,500-member Churchill Club. He is a past winner of Ernst & Young’s “Entrepreneur of the Year” award. Karlgaard’s 2004 book, Life 2.0, was a Wall Street Journal business bestseller. A graduate of Stanford University, Karlgaard and his family live in Silicon Valley.
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