From a book by Dan Price, CEO Gravity Payments
Back in 2016, I published a blog about Dan Price, a CEO who cut his pay to give his staff a £50,000 minimum wage. The reaction was huge. Workers from other companies reported pay rises from sympathetic bosses. Thousands applied to join the company. New customer enquiries went through the roof.
I updated this blog in Feb 2020, The headcount had doubled and the value of payments that the company processes had gone from $3.8bn a year to $10.2bn. More than 10% of the company had been able to buy their own home in Seattle, one of the US's most expensive cities for renters. Before, the figure was less than 1%. The amount of money that employees were voluntarily putting into their own pension funds had more than doubled and 70% of employees say they'd paid off debt.
Dan Price subsequently published a book, Worth It where he details his life story, his values and the attacks, trials and pressures he has gone through to keep to his vision. He shares the experiences and events that shaped his pay decision - from his conservative, Christian upbringing in rural Idaho to the milestones that made him rethink the true purpose of business. It shows how taking a huge risk ultimately helped his company become more resilient and competitive. He calls on business leaders to set and execute on their own purpose-driven visions, questioning traditional market-centric business wisdom in favour of a more human and much more sustainable approach.
Here are a few edited excerpts:
Stephan Aarstol, CEO of California-based Tower Paddle Boards reached out to Dan after being inspired by Dan's minimum wage decision. Instead of raising his team's salaries, he took a different path to employee wellbeing. Realising that his people would likely be more satisfied at work if they were fulfilled in their personal lives, he reduced the standard workday to five hours instead of the standard eight-plus.
A year later, Stephan appeared at a conference that Dan was speaking at and. as a surprise item, came to the platform and addressed the audience. "I'm here to show my appreciation of Dan and his team. You've changed the lives of my employees and made a huge positive impact on our company."
After Stephan had finished speaking, Dan hugged him and felt they both understood that the old way of treating employees as an expense to be minimised was not effective as treating them as valuable assets and human beings. It hindered growth and kept everyone from realising their full potential.
It was a new mentality. It was a shift in thinking from, "How can I reduce expenses more today?" to "How can I invest more in my team today?".
Talking about the benefits of increased wages or reduced working hours was one thing but actually putting them into practice was another. The old ways are so entrenched, the profit-driven motive so pervasive that going against the grain requires not only a shift in perspective but also a healthy appetite for risk and ridicule. You can't be a leader and only follow the status quo. You have to think for yourself and be your own CEO.
And that is what everyone is at Gravity and an acquired company, ChargeItPro - "be your own CEO". It is a philosophy that has invigorated the workforce. Not only do the flexible work arrangements and minimum salary allow them to do their work and live lives that are productive and satisfying, the employees have seized opportunities to suggest ideas, make improvements and take on new roles.
The above is backed up by research and sources are quoted in the book. It also mirrors the experience of Dr W. Edwards Deming, who helped rebuild Japanese industry post-war. The highest award for quality there is the Deming Prize. His 14 points for management significantly improve the effectiveness of a business or organization.
All managers should go through such training in order to serve, empower and help their colleagues to 'be their own CEO'.
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