Andrew L. Urich, J.D. Puterbaugh Professor of Ethics & Legal Studies Spears School of Business Oklahoma State University Applied Ethics Managing Trust, Respect & Diversity

People Who Trust Other People David Halper, British Sociologist 34% Americans 29% British 31% Mexicans up from 19% in % Dutch 68% Scandinavians

Harris Poll on Trust 22% trust media 8% political parties 27% government 12% large corporations Convicts vs. MBAs

Trust in Business Edelman Trust Barometer 2009 vs US 38% down from 58% China71% up from 58% Indonesia68% even Brazil69% up from 61% end

Take Aways Awareness & Understanding 1. Organizational trust and respect are vitally important to optimizing human resources. 2. All aspects of diversity are crucial to organizational success. 3. Management has a tremendous impact on the level of organizational trust, respect and the embracing diversity.

Big Idea Do you trust your boss? Productivity and ethical behavior Mercer Management Consulting– 60% of Americans do not trust their manager to communicate honestly People at work trust the same people Stacking photos

Good Management = Good Ethics People even things out You are the company If someone is being defensive, you may be offensive

Mass IP & SSC 1

What Happened to GM?

GM History 1950’s - Half of all cars in the US

GM History ,000 to 243,000 worldwide

1 st Q 2009 Passenger cars Toyota19.4% GM15% Honda12.4% Nissan10.2% Ford 10.0% Hyundai6.2% Chrysler5.2% Mazda3.4% BMW 3.2% VW3.2% Kia2.6% Subaru 2.6% Volvo0.8% Saab0.2%

JD Power Top 10 Reliability 2004 Buick145 Buick Lexus145 Lexus Cadillac162 Cadillac Mercury168 Mercury Honda169 Honda Toyota178 Toyota BMW182 BMW Lincoln182 Lincoln Subaru192 Subaru Jaguar197 Jaguar

Focus On What Matters BMW “We don’t make automobiles [we make] moving works of art that express the drivers love of quality.”

$ Billion Strategic Investments 0% 10% Market Value Strategic Investments at General Motors $167 Billion or $332 Billion

Ross Perot

1999 “The most versatile vehicle on earth” “Lifestyle support vehicle”

Sequel: Fuel Cell 9/2006 Due 2010 “Leapfrog the Japanese” “A Game Changer”

Volt: Electric Car 12/2006 “A game changer” “Beat the Japanese at their own game”

Now – Lost over 100 billion in last 5 years – no heads rolled Market Cap November 2008 GM = 1.2 Billion Toyota + Honda = $146.3 Billion

Loss of Trust Trust Issues – Consumers – Dealers – Workers – Banks, Public opinion – Shareholders - Bondholders Truth doesn’t matter when trust doesn’t exist

Loss of Respect Loss of commitment – Playing favorites – Keep you head down and get along – Stop working start having meetings (Sr. VP of Nothing) Beat up suppliers Lack of Fun – Innovation – Creativity

Lack of Diverse Opinion Group think – Stability over conflict – Continuity over disorder – Status quo over change 50 year old decision making structure – Conformity over rebellion Same design centers Run off renegades De Lorean fired at GM -- Iacocca fired at Ford

Lack of Diverse Opinion Bob Lutz Global warming “is a total crock of [expletive].” “Hybrids like the Toyota Prius make no economic sense.” Global Product Development Tom Stephens, who runs the company's power-train unit Carl-Peter Forster London, Germany and Greece BMW, Opel

Distortion of Reality Ask Rick Wagoner why GM isn’t more like Toyota. (69/70) “We’re playing our own game – taking advantage of our own unique heritage and strengths.”

Distortion of Reality “No money” in small cars Fuel economy legislation in 80s Focus on financing cars Marketing & sales to Finance & penny pinching Caught unprepared at the oil crisis of ‘73 Robot automation

Lack of Trust, Respect & Diversity

Why Does Trust Matter?

Showing Respect & Building Trust Winston Churchill’s thoughts on the subject You will never prove them wrong Admit to your mistakes “My child choked on a chicken bone”

Showing Respect

Trust = Profits Trust Equations Trust = Efficiency Costs Sarbanes Oxley Negotiations Community Relations Crisis Management

Trust is Competence Warren Buffett, “It takes 20 years to build a reputation and five minutes to ruin it.” I’m the manager, I can coast while others do the work. What if we train people and they leave? Do you have 15 years experience or one year of experience 15 times? What do you think of people who cover their bottoms? Trust equals candor– if they trust you they will tell you the truth.

Approach to Trust Paul English credited to Robert Fisher

Selling the Bug 2

Trust Busters Flaunt the Privilege of Leadership Rely on Your Authority Fail to Give Power Away Fail to Show Appreciation Avoid Making Hard Decisions Exhibit a Self-Serving Nature Deal in Partial Truths Use a One Size Fits All Leadership Style Take Yourself Too Seriously Be Unwilling to Admit a Mistake

Why Do We Believe What We Believe?

The Bubble Boy

Selective Perception Limit the Impact of Your Point of View Single out information to support your prior beliefs. Filter out information that does not confirm that belief. This process perpetuates halo effect and stereotyping.

Don’t Worry! I’m Not Going to Talk About Politics

The Brain’s Inner Workings The Wiring 100,000,000,000 neurons (brain cells) 15,000 synaptic connections each By age 15 half are gone and the super-highways are up and running. These mental pathways become the filter–producing recurring patterns of thinking, feeling and behavior. Examples: Empathy–confrontation–authoritarian– dogmatic–emotions–tolerance for uncertainty.

The Brain’s Inner Workings The Wiring Here’s what we can change! Core beliefs New skills and knowledge Alter your values Develop self-awareness Greater capacity for self-regulation

The Brain’s Inner Workings The Parts The brain is full of zero sum games Ever find yourself feeling conflicted? Competing modules MRI research Stanford study on aging Buy now pay later Railroad switch Parts of the brain – Amygdala-fear responses – Prefrontal cortex–recently evolved–controls voluntary actions – Limbic system-oldest physical part of the brain The Rat Brain Impulses and gut reactions The Rat Brain loves short cuts (heuristics)

Beliefs Are Acted Out Where do our beliefs come from? How do we know they are true? Where do other’s get their beliefs? How do we know they are wrong?

Punch-line Early in life we get theories of the world–the theories make sense–but making sense is not the same as being correct. "Common sense is the collection of prejudices acquired by age eighteen." (Einstein) Beware of your Brain’s wiring! – Letting the tape run in your head is not living your life – The Frog and the Scorpion

The Consulting Conundrum 3

Management Practices Management has a tremendous impact on trust, respect and diversity.

Show Respect & Build Trust Influence NOT Authority Use competence and commitment instead of position and status. Team building and leadership are not based on authority. We are influencing all of the time – positively or negatively. The sign in PS 101 My daughter wants to go to Vegas Authority at Tinker Air Force Base

Show Respect & Build Trust Avoid De-motivating Lou Holtz at Notre Dame, “It’s not my job to motivate my players…” Should you treat everyone equally?

Show Respect & Build Trust Dealing With Irrational People Step 1: Assume the person is rational. – Is there a misunderstanding? – Have you hurt their feelings? – Do they feel powerless? – Are they just cranky?

Show Respect & Build Trust Win/Win Attitude

Show Respect & Build Trust Keys to Showing Respect Everyone wants to be appreciated. Focus on the issue – don’t make it personal. Be very considerate.

Promote Diversity You Will Never Prove Them Wrong Have you ever done it before? Would you rather be right, or would you rather be happy? How would you feel if someone proved you wrong?

Promote Diversity Diversity of Worldview Open-mindedness Things are exactly as people choose to see them. Is it important enough to care? Bloomberg (meetings, titles, contrarian)

Priorities of Management Andy Roddick Work Hard Have fun Be a good teammate Learn from mistakes Win

Most people end up where their behavior indicates they want to be. “The best time to plant a tree is 20 years ago. The second best time is today.” Chinese Proverb

Top 10 Action Items Show respect Seek to accept – if not understand Avoid trust busters Don’t “de-motivate” others Adopt a “big pie” world view Help others to prosper Foster a sharing of diverse ideas and perspectives Question your beliefs – they drive actions Acknowledge your selective perception Heighten consciousness and awareness

Thank You Please keep in touch.

References Cialdini, Robert B. Influence: Science and Practice. 3rd Ed. New York: Harper Collins, Covey, Stephen R. The 7 Habits of Highly Effective People. New York: Simon & Schuster, Covey, Stephen C.R. The Speed of Trust, New York: Simon & Schuster, Fisher, Roger and William Ury. Getting to Yes. New York: Viking Penguin, Inc., Johnson, Spencer. The One Minute Sales Person. William Morrow, N.Y, Karrass, Chester L. Give and Take. New York: Harper Collins, Karrass, Chester L. The Negotiating Game. New York: Harper Collins, Kozicki, Stephen. The Creative Negotiator. Pyrmont, Australia: Gower, Lewicki, Roy J., et.al. Negotiation. 2nd Edition. Burr Ridge, Il.: Irwin, Nierenberg, Gerald 1. The Art of Negotiating. New York: Barnes & Noble, Paul, Richard. Critical Thinking. Santa Rosa, CA: Foundation for Critical Thinking, 1993.