This is a picture of Mary Ellen, Melanie, Brig and Jon–the family that founded and runs Two Men and a Truck, International. Their story is amazing and is prominently featured in our new book, “Trust is Everything: Become the Leader Others Will Follow.” Mary Ellen founded the company and trusted her kids to help her grow this business from a $350 investment into the $200 million company that it is today. The great thing about their story is that the trust that they have in each other extends to their employees and franchisees, as well.

One of their core values is give back to the community. The first year Mary Ellen was in business, she gave away all of her profits to 10 different charities. We are proud to follow in that tradition by giving back all of the proceeds from our book so far to charities that our leaders support to thank them for their willingness to be profiled in our book. The Two Men and a Truck family have been long supporters of the American Cancer Society, so we just sent a check to the Lansing, Michigan chapter in honor of Mary Ellen, Melanie, Brig and Jon.

The first thing to go when times get tough is trust–we tend to hoard information and resources and keep all of the decision making close at hand.  All of these actions reinforce distrust–people wonder why you aren’t sharing information and then they don’t share information either.  People wonder why you won’t share resources and then they hoard their own.  Everyone acts as if life is a fixed-pie and they want the last piece for themselves.

Using the ROCC of Trust, life can be a never-ending pie, instead.  We can act reliably by continuing to share decision making at all levels of the organization–we don’t need to make all of them alone.  We can openly share information, too–whatever information we do have.  In times of change, we might not have all of the answers when others want them, but we can promise to share those answers as soon as we get them–that promise alone can make others feel at ease.  We can demonstrate our competence by doing our jobs well, even if we don’t know what tomorrow may bring.  One quote I’ve always found helpful is “Do the best you can where you are with what you have“.  Finally, if we bring compassion to the ways we talk with others or help them through uncertainty, we will be more trustworthy to them now and this will act as a deposit for the future, as well.

Karen

This from today’s Wall Street Journal:

General Motors Corp., battered by a steep decline in U.S. sales, said Tuesday it will raise $15 billion in liquidity by 2009 through potential asset sales, cost cutting and other financing measures as the auto maker attempts to weather a tough downturn in the U.S. market.

Amid the bleak operating environment, GM plans to cut $1.5 billion in cash costs through adjustments to white-collar headcount and benefits.

GM said it will further reduce its headcount of salaried workers in North America this year, through attrition, early retirements and other separation programs. In addition, health-care coverage for U.S. white-collar retirees over the age of 65 will be eliminated as of January, though they will receive a pension increase. The company will also trim executive compensation, eliminating annual discretionary bonuses for 2008.

The company expects to reduce $2.5 billion in North American structural costs through additional adjustments in truck capacity.

GM also said it will reduce its capital-spending plan for 2009 to about $7 billion, compared with the previous plan of $8.5 billion….Among other steps to shore up liquidity, GM said it will defer about $1.7 billion of payments that were scheduled to be made to a temporary asset account in 2008 and 2009 to establish a health-care trust.

The decision to suspend future dividends on common stock is expected to add $800 million in liquidity through 2009, GM said.

As a former GMer.  I would love to see GM make a successful turnaround.  When I worked there in the mid-1980s, its market share was in the low 40s.  Now it’s at 19 percent.  I applaud the effort to launch a plug-in hybrid like the Volt, but it will take much more than one new product to keep GM from making these all-too-frequent cost reduction announcements.

Aneil

Well, well, well.  It appears that Google is indeed like most other companies, and not an entity unto itself.  It thought I could ignore 1) the Law of Supply and Demand, 2) its own employees’ opinions, and 3) public opinion.  It definitely couldn’t ignore 1).  We’ll see how long it can ignore 2) and 3).

According to Joe Nocera in today’s New York Times, Google first tried to ignore the Law of Supply and Demand:

Meanwhile, someone at Google woke up one day and realized that the company was subsidizing each child to the tune of $37,000 a year — which nobody had noticed up until then — compared with the $12,000-a-year average subsidy of other big Silicon Valley companies like Cisco Systems and Oracle. Faced with this dilemma, Google decided that the way to solve the dual problems of a too-long wait list and a too-large subsidy was — are you sitting down for this? — to get rid of C.C.L.C. and make the Kinderplex more like the Woods! (Google says it was always planning to replace C.C.L.C.) Given that decision, the only possible way to reduce the subsidy was to raise prices through the roof.

Then, it tried to ignore its own employees opinions and voices:

Although Google is rolling back its price increase slightly and is phasing in the higher price over five quarters, the outline of the original decision remains largely unchanged. At a T.G.I.F. in June, the Google co-founder Sergey Brin said he had no sympathy for the parents, and that he was tired of “Googlers” who felt entitled to perks like “bottled water and M&Ms,” according to several people in the meeting. (A Google spokesman denies that Mr. Brin made that comment.) On Monday, Google began the first phase of its new day care plan, letting go of the outside day care firm it had been using.

Google, I should note, believes that it has handled the day care issue in a “Googly” way and object strongly to the criticism by the parents.

Now, Google is trying to ignore public opinion, but continues to stumble here, too:

But parents who talked to me said that several times during the six-week-long day care brouhaha, Mr. Brin made comments indicating that he viewed the whole thing as a giant economics experiment. “This is a supply-and-demand issue,” he told one group of parents — adding that Google needed to charge what the market would bear. (Through a Google spokesman, Mr. Brin denies making such a statement.)

I think that Mr. Brin should stop denying statements through his spokespersons, start admitting he’s made some stupid comments, and start fixing the problems he’s helped create.  Why billionaires can’t admit they occasionally say something stupid is beyond me.

Full disclosure:  I own no Google stock, but which I’d had the cash to buy some years ago at its IPO price.  Most of my “discretionary” income goes to Durham Academy to pay the tuition bills for Maggie and Jack.

Aneil

Aneil and Kevin are in Toledo, Ohio today, giving a talk entitled “Quality Improvement and Transformational Change:  The Role of the Trusted Leader” to physicians, staff, and health care managers at St. Vincent Mercy Medical Center.

Kevin Lobdell, M.D. is Director of the Adult and Pediatric CV Critical Care, and is Associate Director of the Cardiothoracic Residency Program at Carolinas Heart and Vascular Institute in Charlotte, North Carolina.

Kevin is a fellow University of Michigan alum.  He and Aneil met at the University of Michigan exec education health care program and became fast friends.  They are now a dynamic duo, spreading the gospel of how leaders can build trust and improve health care outcomes for patients and organizations through process and quality improvements.   His most recent research and clinical work has been examining how early extubation following cardiovascular surgery improves a variety of patient outcomes, reducing both morbidity and mortality rates.

Kevin did his his fellowships at Yale Medical School and the University of Pennsylvania, and his residency in cardiovascular surgery at Yale.  Aneil went to Princeton for his A.B.  Even people from tough rival schools can build the ROCC of Trust with one another!

This from a recent Wall Street Journal article by Carol Hymowitz:

Far more than their predecessors, top executives face many demands from many different people. “Where CEOs a decade ago may have had five choices, they have 100 — and because they’re under more scrutiny, they’re more pressured to be visible and make themselves available,” says Richard Wellins, senior vice president of global marketing at DDI, a Pittsburgh-based consultant.

To start with, executives are at the helm of much larger companies than existed even a short time ago. They spend considerable time globetrotting to visit employees and customers dispersed around the world. They are expected to stay in close touch with a growing list of constituents — from directors and big investors to government regulatory officials and potential business partners. They’re also in demand to serve as directors of other companies and other organizations, to appear on television, to give speeches at universities, to headline conferences, and to participate in nonprofit and civic groups.

While the scope of CEOs’ activities may be greater than ever, I’m not convinced that their schedules need to as packed as they are according to this article.  The internet can free up people as much as tie them down, and the extent to which one has more time to do the important work that needs to be done is up to the individual.  Nobody is forcing CEOs to become rock stars or televangelists.  The ability to say “no” becomes more essential as one moves up the food chain, and I’m finally learning how to say it in my 40s.

Here’s what I said on the forum about this article:

There is no substitute for face-to-face communication, which I learned once again when teaching executives from Coca-Cola Icecek, the Turkish bottling group with operations now throughout Turkey, the Middle East and many of the former Soviet Republics.

Nonetheless, the more trust a CEO has engendered with the firm’s key stakeholders, be they employees, customers, suppliers, or the communities in which they operate, the less there is a need for constant physical presence. In our newly-published book, we document how leaders have been abe to go from meeting with all of their key stakeholders face-to-face to developing technological substitutes (e.g., Bob Lintz at GM using videos in the 1980s and videoconferencing now), and using surrogates as the charismatic founder institutionalizes her values and principles throughout the company (e.g., Mary Ellen Sheets of Two Men and a Truck, International).

Trust is initially built from direct interactions between people, but over time, the leader can enhance the trust developed through informal close connections using formal, less direct mechanisms. The leader’s reliability, openness, competence and compassion (ROCC of Trust) becomes the firm’s, and is more durable, compelling, and less dependent on any one encounter.

One executive quote in the article by Ms. Hymowitz supports this point very well:

The single most crucial element for surviving such a schedule, she believes, is to have a competent team to which you can delegate important jobs. “At my level, you can’t get caught in the weeds,” she says, “you have to move back to a more strategic position.”

Aneil

In my teaching, I emphasize the need to overcome the status quo.  That not only applies to your organization, but yourself, as I said in today’s Wall Street Journal:

Pay attention to metrics. Lackluster progress reports and not hearing feedback from a supervisor is a good way to tell if your work has become routine. Aneil Mishra, an associate professor at Wake Forest’s Babcock Graduate School of Management, suggests you constantly look at how you’re helping the organization improve. Doing so can prevent you from getting complacent in a position.

Make time for career research. Set aside time to explore new avenues. “Think about your career like you do going to the dentist and getting a checkup every so often,” says Mr. Luzzo. If getting out of your comfort zone isn’t possible in your current company, look for a challenge elsewhere. If you stay long enough, you “become wedded to the culture,” says Mr. Mishra.

Aneil

I’ve got a very tough beard, and I hate to shave, so I’m always looking for products to make the chore of shaving less time consuming and arduous.  Karen first bought me this product, Gillette Multiglide Shaving Gel, over a year ago, and I’ve loved it.  Not only did it make the shaving easier, it also really did leave my skin in better shape.  Now Gillette has stopped making it, leaving me and other customers puzzled as to why.

Manufacturers are always trying out new products and removing those that aren’t accepted in the marketplace.  I don’t have a problem with that one bit.  I do wonder why great products are completely removed from the marketplace without any information as to why they have been discontinued.  At a minimum, it causes some irritation.  It can also raise suspicion as to why it was removed, perhaps not because of lack of consumer acceptance, but maybe because something was wrong with it.

Have you ever had this experience?

Aneil

P.S.  I recently ordered the following product, on which I’m now conducting “Stage 3 clinical trials” (efficacy):

I just returned from a week in Istanbul, conducting an executive education program for Coca-Cola Icecek.  While the air trip was long, and Munich is an airport to avoid, the stay itself in Istanbul was wonderful.  I was able to make a new friend in fellow Princeton alum Mehmet Ali Neyzi, who was a wonderful host for my first evening in Istanbul, and took me to a fabulous restaurant, Mikla, with wonderful views of the city and the Bosporus Strait.

I was only able to do a little bit of sightseeing before my teaching work began, but I did get to visit the Sultanahmet Camii or Blue Mosque, the Hagia Sophia, Topkapi Palace, and the Grand Bazaar, all within walking distance or a short tram ride from one another.  I took the tram for one stop just to experience it (more crowded than the trams in Vienna, but easy to get on and off) and walked for the remainder of the day.

Throughout my stay, the people were very friendly and helpful, it was relatively easy to get around using English, and the food was fresh and delicious, although blander than I expected.  (Maybe that’s just the Indian in me.)  The climate in mid-June was terrific:  temperature was in the 70s (F) and low humidity near the water, a bit hotter inland.  I only was able to sample the many cultures and complex history represented in Istanbul and Turkey, and I can’t wait to go back!

Aneil

Make that the Michigan Business Beat.  Karen was interviewed last week about our book on the WJIM’s Michigan Business Beat program with Chris Holman.  Chris was especially interested in our discussion of Two Men and a Truck, International.  Here’s the podcast of Karen’s interview last week which was broadcast on June 14.

And yes, Maggie and I love the music group The Go Gos!

Aneil