Management by Trust book review

I recently read Kenn Ricci's Management by Trust (2006). It's a quick read at only 140 pages (according to my e-reader) and a few points jumped out at me that would be fun to share. The thesis of the book is that managers perform better and get performance out of their teams when they are trusting and trustworthy rather than treating their employees transactionally. The money saved catching a few bad actors is far outweighed by the loss of energy and creativity by the part of the team that doesn't abuse their privileges.

I'll start calling this a series of philosophy, having previously written about it here:

I made notes as I read through Management by Trust and I'll address what I highlighted as key points.

Image from http://www.managementbytrust.com/

Self-consistency

I knew that I could never be comfortable trying to be one person at home and an entirely different person at the office. I did not want to check my ethics at the door. The need to be trusted and the need to create trust are important and necessary value propositions in my life.

A benefit of "management by trust" is that it avoids the need to "play the role of a manager": Ricci dislikes management styles that require the manager to compromise their values in order to achieve results. Management by trust instead leverages the personality of the manager so that they can be open with their teams: the manager admits their own strengths and weaknesses to build trust with their team, which can then lead to better performance.

This also affects how the company treats all of its stakeholders: "You can't abuse your vendors and then purport to be interested in [a] long-term relationship with clients." Unfortunately I've seen this asymmetry in past businesses where they've squeezed their suppliers while wooing customers; often its led to not having key suppliers anymore.

At the end of the book, Ricci reinforces the benefits of self-consistency to the manager: it can't guarantee profits or sales, but "when the time comes to review your life's work...you will experience the all-too-rare satisfaction of knowing you aligned your principles with your actions, in business as in the rest of your life."

Management must trust first, and it's permanent

When rolling out management by trust, the onus is on management.

If we as managers are to swim upstream against this river of mistrust and encourage others to do the same, it is up to us to jump into that river first. Leaders must set the tone. Leaders must initiate and create the environment of trust.

Since little in our society has prepared employees to trust, trust, will not miraculously appear in an organization. Of course, at the grassroots level, the organization will create relationships among its members; such as acquaintances who meet through sharing a common experience within the organization and go on to become closer friends. Pockets of trust will also be created through completion of a shared task or goal. Once someone has assisted you in completion of a successful project, a natural reliance and trust is formed. With the concerted effort of management, these pockets of friendship and trust and be built upon to create a culture of trust within the organization. Eventually, slowly, you will begin to see your efforts bearing fruit...But it will take time, and the first step must always be yours! [Emphasis added]

Too many people in corporate cultures are beaten-down by broken promises by senior management to take a new initiative at face value. I'm glad that Ricci requires senior managers to show their vulnerabilities first.

Types of employees

Ricci presented a taxonomy of three employees:

Committed: the "top-shelf workers" who believe in the company and its goals
Stopover: happy enough, but looking for the next step beyond the company
Trapped: unhappy, but can't afford to leave the company

Ricci's ideal company would have a mix of committed and stopover workers and no trapped workers. Having committed employees has obvious benefits. Stopover employees bring new ideas and energy into the business and typically work hard to earn the next job. But trapped employees "have worked themselves into a position where they can't afford to leave. Being trapped makes them disgruntled and bitter, and they are a drag on your company."

I've had a couple times in my career where I've felt trapped; luckily I was able to escape it both times. It happened that I stayed at my company in a new role rather than needing to change companies both times, but that was just how the job-searches turned out. But avoiding trapped employees absolutely is valuable to the company and the employee. Ricci's preferred approach is to overcompensate committed employees and under-compensate trapped employees; it seems rough on the trapped employee, but I have no better ideas and if they're unhappy then an additional nudge could be helpful. I suppose that in practice this manifests as committed employees getting larger raises (e.g. Flight Options' "Senior Flight Officer" program) and the stopovers stagnating before they can be trapped, rather than reducing anyone's pay.

Employee reviews

This section just tickled me because I've experienced the same issues that Ricci looks to solve. He describes an employee review as:

On the appointed day and hour, the employee, a supervisor, and maybe someone from HR file into a conference room, exchange nervous pleasantries for a minute or two, and then run down a checklist of topics that they probably haven't discussed or even thought about since the last annual review. [Emphasis added]

I've already discussed my thoughts on 1:1s and Leader Standard Work which address these issues.

Ricci's discussion of the ideal actual employee review also mirrors my practice: I feel strongly that making the employee (or manager for that matter!) scramble for answers and reactions in the moment is not helpful for either. It's better to start the conversation in writing with the employee's self-assessment and the manager's reaction, after which they can both discuss live. That leads to more thoughtful and fulfilling conversations on both sides. For the same reason, I made a point of sending out annual merit increase information in advance of the meeting to discuss it so that people could get over their first reactions (happy or disappointed) in private.

Conclusion

If you have any comments, please reach out to me at blog@saprobst.com or this page is cross-posted at LinkedIn and you can leave a comment there.

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