When the honeybee does her waggle-dance to tell her fellow honeybees where to find food, the truthfulness of that communication is crucial for the hive to flourish. The beehive, like any collaborative enterprise, rests on honesty and disclosure as central to its success.
Competitive situations are different. According to Jeremy Campbell's The Liar’s Tale, deceptiveness and nondisclosure are the norm in competitive situations. The spider doesn't warn a visiting insect about the stickiness of her web. The fox doesn’t give signs of feeling guilty about pretending to be dead, when it is on alert and famished. The leopard lying along a branch doesn't try to warn passers-by of danger. Throughout nature, in the harsh competition for survival, fair play, honesty, and full disclosure are replaced by deception, dissembling, feints, and bluffs.
Since transformational leadership is a collaborative activity, the relevant example from nature is the honeybee. Truthfulness and integrity are essential in leadership. Deliberate shading of the truth is devastating to trust and credibility and it undermines the possibility of enduring enthusiasm.
The marketplace offers an interesting challenge for transformational leaders: On one side, competitors struggle for survival. It’s a world of gamesmanship, outfoxing, and outsmarting the competition. Only the toughest manage to survive and flourish. On the other side, sellers aspire to win trust of customers so that they become return customers and enthusiasts of the brand.
Problems begin when sellers apply the deceptive modalities of competition to their relationships with customers. For example, when they apply manipulative tools: hype, halo effect, spin, bait and switch, groupthink, imposition of authority, celebrity pressure, and artificial scarcity. When sellers manipulate customers to make decisions they wouldn’t otherwise make, they run the risk of undermining long-term trust.
“Surely it’s advisable, on occasion, to be economical with the truth to be successful in selling and marketing? How will we ever make our sales quotas if we are completely truthful? Is everyone else strictly honest? Is this being unrealistic?” The answer is, if the objective is transformational leadership – namely, to achieve the enduring enthusiasm of customers – truthfulness is crucial. However, the temptation of sliding into deceptive and manipulative practices in order to make short-run sales is always there. If earnings depend on short-term sales, with no reference to long-term impact, it is irresistible.
Leaders have no choice: truth is their currency. The practices of deception and manipulative weapons of influence undermine a long-term basis for generating enduring enthusiasm for a product, service or an organization. “Doing the right thing pays off. Storytellers who trick consumers get caught. They become inconsistent and sooner or later they get punished.”
Three ways of communicating distinctiveness in an authentic way
Tell the story of the client: For any strong brand, there is a kind of person who could love the brand. If the seller can understand and tell this person’s story, it can resonate.
For example, Budweiser suggests in a television ad that funny people kidding around and having a good time together are the kind of people who drink their beer The implication is that anyone could be having a good time if only they drank Budweiser. The ads appear to be successful in promoting the brand, even though the logic is not exactly rock-solid.
Tell the story of the firm itself: Where did the firm come from? How did it grow? What values did it acquire along the way, and where is it heading?
Tell the story of the products and services themselves: The problem with this is that in the atmosphere of cynicism and distrust that prevails in today’s marketplace, it is hard for any company to tell credible stories about its products and services.
To overcome this issue, companies often rely on their customers’ responses to their products and services and let them tell that story instead of using advertisements. They focus their energies on providing high-quality products and services that consistently delight their customers, who in turn tell the story more credibly tan the firm’s marketing department ever could.
The objective of these firms is not just to make sales, but rather to convert customers into enthusiasts to that they share the company’s belief that its activities are worthwhile in themselves.
Becoming a Trusted Partner
Many companies try to shift from making sales pitches to becoming trusted partners. These companies aspire to become reliable collaborators with their clients, so that they look to them for advice. The company aims less at achieving immediate sales and more at ensuring that the firm’s products and services will receive positive consideration when the time comes to make decisions about purchases. The object here is: Higher margins, more repeat business, lower price sensitivity, shorter sales cycles. In order to make this transition to a trusted partner, the companies have to reflect on what is involved in the phenomenon of trust.
In the sales pitch the sellers are typically only willing to do something if there is something of value for themselves. IT often amounts to saying what you can get away with in order to make the sale. The competitive practices of spin, hype, and the weapons of influence are used here.
In this world, people do things out of generosity and make contributions without clear expectations of a return. A scientific community is an example of this kind of interchange. People contribute to conferences and write papers but they have no guarantee of getting anything back. They may receive eventual benefits such as respect or be offered an academic position. But none of it is guaranteed or agreed in advance.
In a scientific community, certain behaviors are respected because they lead to trust, for example:
• Being transparently honest
• Being careful about what is being claimed and what is not being claimed
• Being careful not to overstate benefits or to understate costs or risks
• Being on the lookout for alternative interpretations
• Being careful to give credit to the work on which they are building
• Talking confidently only about what you definitely know
• Speculated guesses are described as such
• Admitting ignorance, if you don't know
• Any hint of oversell is anathema in this world
Similarly, strict laws and careful enforcement by agencies like the FDA in the pharmaceutical industry have lead to analogous practices. Drugs are rigorously tested for effectiveness and side effects before they are put on the market. Drugs that fail to deliver significant new benefits are withheld from the market, even if huge expenditures have been made in their development. Claims made for a drug are required by law to be supported by rigorous scientific testing. Supplementary actions needed to garner the benefits of a drug are made explicit at the time of sale. Risks are quantified and made explicit to doctors and consumers at the time of purchase. Side effects are stringently scrutinized and quantified. Discovered flaws are communicated systematically and promptly to doctors and consumers. Drugs can be withdrawn from the market if newly discovered flaws put in question the original hoped-for benefits. Claims made for any particular product must by law be supported by rigorous, objective evidence.
In the software industry, products are tested for effectiveness before they are put on the market, but it is normal for bugs to appear after the release of the product. Successive versions are launched to fix those bugs, sometimes forcing users to upgrade both software and hardware, even if the benefits are not obvious to them. Claims made for software are not always supported by rigorous scientific testing. Supplementary actions needed to garner the benefits of the software, such as training and support, are not always made clear at the time of sale. Sales presentations do not always highlight the risk involved in realigning an organization’s entire business strategy or in marketing the major shifts required to realize the promised benefits.
Information provided on the levels of failure to generate expected benefits are rare. Flaws, when discovered, are not always systematically and promptly communicated to all users. Software is rarely withdrawn from the market or refunds offered, even if newly discovered flaws put in question the original hoped-for benefits.
However, the reasons for these practices in the software industry are understandable. The interaction of products with many other types of software and hardware is so diverse that bug-free software is impossible. Users are often more interested in getting timely updates of software than in avoiding risks from flawed product releases. Experienced users understand the level of oversell in this industry and usually adopt the attitude of “buyer beware”. Nevertheless, the level of trust generated by such practices is unlikely to be high. Companies wishing to become trusted partners will need to review their appropriateness depending on the extent that these behaviors are being used. Customers that adopt a “buyer beware” mind-set take everything a vendor says with a grain of salt and are unlikely to view the relationship as a partnership.
In order to establish a relationship of trusted partnership, known trust-building behaviors can be used systematically and encouraged by companies. Leadership entails inspiring everyone to adopt the new practices.
Showing real concern for the interest of counterparts: In trusting relationships, participants show interest in the problems of the other party, even if there is nothing in it for themselves.
Revealing vulnerability: Trust entails asking people to put their faith in someone, even though they have no certainty that that faith will be honored. Therefore, participants make themselves vulnerable. If the party seeking to be trusted holds itself invulnerable, never risking anything, then the lack of reciprocity may raise a question in the listener.
Sharing something of value early on: Bringing a small gift to signify that you come in a spirit of friendship, when you visit someone’s house for the first time can help encourage trust to develop. A company can offer free knowledge or samples of new products to initiate trust.
Meshing with what has gone before: Instead of telling a story, the focus lies on listening to the clients story and understanding what is being said as well as what is not.
Willingness to learn: Readiness to learn from and understand the listener’s story helps build reciprocity and mutual trust. The attitude: “I’m not interested in what your situation is and I am here to tell you what you should know.” is likely to undermine trust.