Another Recommended Book: The Speed of Trust by Stephen M.R. Covey with Rebecca R. Merrill

It’s good to see an important and well-promoted book on business ethics coming out of a major New York house (in this case, Simon & Schuster’s Free Press imprint).

Coveys basic thesis, peppered with lots of examples from his own and his famous father’s life and career as well as the business world in general, is that when people trust you, business gets transacted a lot faster, more smoothly, and less expensively.

He notes that almost every action either increases trust–creating what he calls a “trust dividend”–or deceases it, imposing a “trust tax.”

Covey identifies a number of factors leading to increased trust, and they basically break down to two key principles embodied in “4 Cores”: character (subdivided into Integrity and Intent), and competence (Capabilities and Results. It’s not enough to offer just one of those two. If you are good at what you do but people have reason to mistrust your ethics, you pay a penalty. But also, you can be a model of integrity, and if you’re not good at doing what you commit to do, you’ll pay a trust penalty there as well.

Building from those four core attributes, he identifies 13 specific behaviors that build trust, and spends a chapter on each:

• Talk Straight
• Demonstrate Respect
• Create Transparency
• Right Wrongs
• Show Loyalty
• Deliver Results
• Get Better
• Confront Reality
• Clarify Expectations
• Practice Accountability
• Listen First
• Keep Commitments
• Extend Trust

When evaluating these behaviors, in yourself or in others, it’s important to fid the “sweet spot” where distrust is overcome but judgment comes into play so you don’t get burned. And in that process, it’s important to recognize that each of these 13 behaviors has “counterfeits” that look on the surface like they’re building trust, even as they actually undermine it. As an example, flattery is one of several counterfeits to straight talk.

Like my own book Principled Profit, Covey repeatedly demonstrates that high-trust environments, based in both character and competence, wildly outperform the traditional hierarchical micromanaged corporate environment. Trust, in other words, is very good for business. It’s why all the local McDonald’s were left untouched during the Los Angeles riots–because McDonald’s had shown itself as a concerned community partner, for years. It’s why Johnson & Johnson is one of the only pharmaceutical companies that has a reputation for genuinely caring about its customers. It’s why when an IBM executive who had lost the company $10 million expected to be asked for his resignation, founder Tom Watson Sr. responded, “You can’t be serious. We’ve just spent $10 million educating you!”

My favorite chapter is toward the end of this substantial book: “The Fifth Wave–Societal Trust: The Principle of Contribution.” Spiraling out from previous chapters about trust within an organization (built around the concept of alignment: the messages reinforce the desired behaviors) and within a market (where the key element is reputation)–these are the third and fourth waves–the fifth wave is about “conscious capitalism,” a/k/a social responsibility: the idea (and the statistics to back up the claim) that making a difference in the world is good for the soul, and also for the bottom line. And the key principle is contribution–doing things specifically to improve the lives of others.

This is one of the most important business books I’ve read in a long time, and a complete validation of the points of view I’ve been promoting for years. Strongly recommended.

I learned about this innovative and very customer-focused Irish supermarket chain in Stephen M.R. Covey’s book The Speed of Trust (reviewed elsewhere in this issue), where he’s quoted: “Genuine listening ability is one of the few true forms of competitive advantage…Listening is not an activity you can delegate.”

Founding CEO (now President after the family sold the company), Feargal Quinn has earned the sobriquet “Pope of Customer Service.” Apparently a rather colorful character, he’s also a long-serving member of the Irish Senate and author of Crowning the Customer.

In his own words,

If you look after getting repeat business, profit will largely take care of itself. When faced with any business decision, any call on your time or resources, you need to ask, What will this do to help bring the customer back?”

This philosophy has generated consistent innovation since the company’s founding in 1960. The firm has a strong environmental consciousness too, and was an early pioneer of reusable cloth shopping bags designed specifically for maximum customer convenience (and which make even more sense since a tax was instituted on plastic grocery bags in Ireland). The store was also a pioneer in loyalty reward programs and online shopping, among other areas.

Perhaps the coolest innovation is a hand-held scanner program that saves time by letting you check yourself out as you add items to your cloth totes in your shopping cart (note the trust factor there), and keep a running total for you. When you’re done shopping, your bags are all packed and you go to a cashier to run up any items you couldn’t scan and make your payment. This could easily shave 10 or 15 precious minutes off the typical shopping trip, and it sounds so much more pleasant than the horrible automated checkouts at my own local supermarket (which hardly anyone uses).

Web 2.0 is a lot more than social networking sites. Here’s a great example: LaborFair.com uses Amazon-like Web 2.0 features to build a database of service providers based on reputation. Founder Jenna Raby started the service as a kind of domestic arm of the fair trade movement, with a specific stated goal of helping people in the lowest economic strata pull themselves up out of poverty.

Her site plays matchmaker between consumers and often-underpaid workers such as housekeepers and gardeners (as well as much higher paid specialists such as web designers and event planers).

Hiring through LaborFair, a consumer pays a living wage, directly to the service provider–a much greater wage than typically paid by an agency, although less than the consumer would have paid that agency.

So…the consumer saves money, the service provider gets paid more, and the choice is made on the basis of trust-building features like reports back from actual consumers about the quality of service.

LaborFair supports itself by charging the service provider a small fee: either $5 per job accepted or $25 per month for unlimited matches.

Fairly well established in the Bay Area, the service has just begun expanding into Las Angeles, Presumably, it will spread organically to other parts of the country.

(My thanks to my friend Kare Anderson for steering me to Jenna)

Positive Power Spotlight: Chelsea Green Publishing

Today, I had a reason to get very angry with a large New York publisher–and it got me thinking about how lucky I was to work with Chelsea Green for my fifth book, Grassroots Marketing: Getting Noticed in a Noisy World.

There are of course many highly ethical publishers, but I’m profiling Chelsea because I have personal experience. Maybe I’ll profile others in the future.

Some of what I like:
* Every book they publish tries to make the world a better place. Their line emphasizes environmental sustainability, social change, viability of small agriculture, and eating well
*  They’re not afraid to take on very controversial topics and aren’t intimidated by the political climate of the day
* They are nimble enough to scale up quickly, as they did with George Lakoff’s bestselling Don’t Think of an Elephant in 2004
* It’s easy for an author to reach senior executives, even the publisher–and that stayed true even when the publisher who’d bought my book stepped down and was replaced
* Contract negotiation was remarkably painless, despite my requests for some very nontraditional clauses–and even the original contract draft (before my changes) was among the most author-friendly I’ve ever seen
* As an author, my input was valued at every step, and the company was very open to suggestions such as awards to enter
* The design and editorial staff worked very collaboratively with each other and with me, and gave me their best work even though I was far from a superstar (something that did not happen with other publishers I’ve dealt with)
* Chelsea keeps the book in print almost eight years after publication and has become my only US publisher to pay me royalties beyond the initial advance
* Every single person I’ve ever met, phoned, or e-mailed, including people staffing a book table at a conference where I wasn’t even speaking, has been gracious, friendly, and helpful

Ah, if only all publishers were like this! If I ever publish the work of others, I’ll use Chelsea as my model.

Here’s a 10-point program for greatness:

1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble

These are the core values of Tony Hsieh, CEO of Zappos.com, “a customer service company that happens to sell shoes.” Lots of shoes, at that: 1,080 brands, 155,725 styles, and 2,885,850 separate products–including, for instance, 15 pages of vegetarian-friendly shoes containing no leather! And it’s easy to navigate the site, drilling down for example from shoes to men’s dress shoes for wide feet in just a couple of clicks.

Add to this huge selection a low-price guarantee, free shipping on both purchases (overnight, at that) and returns, a one-year return policy

Zappos is a powerful example of delivering such a good experience that people have to tell their friends (something I discuss extensively in my award-winning sixth book, <a href=”http://www.principledprofit.com”>Principled Profit: Marketing that Puts People First</a>).

In fact, I learned about the company because of a post in the LED discussion list (highly recommended) by listowner Adam Audette, who happens to manage the Zappos discussion list. Thousands of people learned about the company from that post, or from a blog post on voodoventures.com about touring the company and discovering such perks as a blow-off-steam room, a substantial lending library, as well as extremely accessible senior management (often another hallmark of successful ethical companies.

Does it work? The company expects to break $1 billion next year. I’d say that’s pretty good!