While striving for perfection, we may have lost our greatest strategic advantage; i.e., trust.
Paul Feldman understood the advantage of trusting others when he set up a bagel business. Feldman started his bagel days "as a casual gesture: a boss treating his employees whenever they won a research contract. Then he made it a habit. Every Friday, he would bring in some bagels, a serrated knife, and cream cheese. When employees from neighbouring floors heard about he bagels, they wanted some too. Eventually he was bringing in 15 dozen bagels a week. In order to recoup his costs, he set out a cash basket and a sign with the suggested price. His collection rate was about 95 per cent."
"In 1984, when his research institute fell under new management, Feldman took a look at his career and grimaced. He decided to quit his job and sell bagels. Driving around the office parks that encircle Washington, he solicited customers with a simple pitch: early in the morning, he would deliver some bagels and a cash basket to a company’s snack room; he would return before lunch to pick up the money and the leftovers. It was an honour-system commerce scheme, and it worked. Within a few years, Feldman was delivering 8,400 bagels a week to 140 companies and earning as much as he had made as a research analyst."
"When he started his business, he expected a 95 per cent payment rate, based on the experience at his own office. But just as crime tends to be low on a street where a police car is parked, the 95 per cent rate was artificially high: Feldman’s presence had deterred theft. Not only that, but those bagel eaters knew the provider and had feelings (presumably good ones) about him."
"He came to consider a company “honest” if its payment rate was above 90 per cent. He considered a rate between 80 and 90 per cent “annoying but tolerable”. If a company habitually paid below 80 per cent, Feldman might post a hectoring note, like this one: “The cost of bagels has gone up dramatically since the beginning of the year. Unfortunately, the number of bagels that disappear without being paid for has also gone up. Don’t let that continue. I don’t imagine that you would teach your children to cheat, so why do it yourselves?”
Despite losses from theft, not only did Feldman save money by not setting up a bureaucratic system to enforce payment, he appealed to people's most positive, uniting characteristics of trust and integrity.
Feldman scrupulously collected and analyzed data that led to his discovery of two very interesting things that say a lot about people's innate desire to unite and trust one another: (1) offices were more honest when employees like their bosses and their work (2) after 9/11, the theft rate immediately dropped 15% and stayed there.
Most large companies spend thousands of hours and millions of dollars exorting people to subscribe to a "culture" so as to keep everyone in line and increase the bottom line.
What if you created a corporate structure based on the "golden rule", unity, and trust; i.e., democracy? (1) workers would be socially incentivized to be honest, and (2) a small bureaucracy would save a lot of money.
No wonder our founding fathers decided to create a democratic government.
(Quotations from Freakonomics by Steven D. Levitt and Stephen J. Dubner)
How Will You Measure Your Life?
I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.
One of the items that he mentions sticks out to me. It reads as follows:
“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."
I’m sure you can see why it sticks out.