How Generosity At Work Saved A Local Business

A Generosity at Work story from my hometown!

When I was getting my start-of-the-semester haircut in February, I was surprised to see Hannah, the woman who cuts my teenagers’ hair, working in the hair salon I go to.  

Hannah normally works at Parlor, which has a hipster clientele. Yet here she was at Aesthetica, where they play 90’s alternative rock for us olds.  What was Hannah doing at Aesthetica, I wondered? Had she defected from Parlor to a new workplace?

I asked my personal stylist and informal consulting client, Legia, what was happening.

Just a week earlier, Parlor’s salon had gone up in flames.  Some electrical issues at the wine shop next door. It would be at least two months, if not three, before the salon would be renovated and open for business again. In the meantime, 12 stylists had nowhere to go and no way to serve their clients. None of the stylists could afford two months without a paycheck.

An owner of another salon in downtown Montclair had an idea — why not have Parlor’s stylists work in the empty chairs of the salons nearby?

In Montclair' competitive hair salon marketplace, this idea was a little surprising. Why? 

Salons grow their businesses mostly by luring clients away from one another, not by the growth or change in the local population. Clients can switch easily from one stylist and salon to another. 

For Parlor, there were lots of reasons not to send its stylists to other salons. 

  •   Stylists might defect from Parlor to the salons hosting them. 
  •   Parlor clients might like the temporary salon better, and move their business away from Parlor. 
  •   Scheduling appointments with clients and managing payments would put all of Parlor's customer information in the hands of competitors.  
  •   Clients might just get confused and leave Parlor’s stylists altogether.    

But the alternatives for Parlor, of staying closed, leaving their stylists temporarily unemployed and abandoning their clients, seemed worse. 

For the potential host salons, there were obstacles too. 

Their own clients might see a ‘new’ stylist and consider switching to her. Additional stylists and clients might add to the wait time a the shampoo sink as well as the garbage and laundry. How would their own receptionists schedule appointments for someone else, and manage the payments to visiting stylist not on the actual payroll?   

There was not a lot in it for the hosting salons, but a half-dozen owners teamed up with the owner of Parlor to work out a plan.

For the past two months, pairs of Parlor stylists have been working with their own clients, but at one of the hosting salons. The stylists move to a different salon every week, so they don’t get too comfortable or feel awkward for too long (depending on their fit with the current host salon’s vibe).  Appointments are handled by Parlor’s owner, and payments are handled by each Stylist on her iPhone (thanks to Square).  Each host salon figured out a way to charge the Parlor stylists for the products they used on their clients, not making extra money on this but also not losing money either.  So far,only one of Parlor’s stylists chose to move permanently to a new salon.

Parlor’s business — at least the bulk of it — was saved by the generosity of its competitors.

I asked Legia how she and the stylists at Aesthetica felt about hosting the Parlor folks.   What did they and the host salons get out of the deal? 

They didn’t get any publicity, because the arrangement was not discussed in the newspaper article about the fire. (I had to be curious, and have noticed the new stylists in the first place.)

Well, for one thing, Legia told me, she'd learned a new blowdrying technique by watching one of the Parlor stylists at work.  She and another Parlor stylist had chatted about managing difficult clients, and had collaborated when a client came in for a hair color emergency. (Apparently, blue hair didn’t look good on her. Who’d a thunk?) 

Yes, it was a bit awkward having these guest stylists visit at Aestherica. The visiting stylists kept a little separate, and some of them dressed and styled themselves rather differently from the norm at the host salons.  Some of the stylists were not as quick to clean up after themselves as was the norm at Aesthetica. There was a little awkwardness about how much any of the host stylists should interact with the clients of the visitors, and that sort of thing.  But overall, it hadn’t felt like a burden at all.

Instead, there’d been a palpable feeling of camaraderie, of professionalism, and of local pride in being part of each other’s community.

This story made me wonder how many other acts of collective, business-to-business generosity go undetected.


Maybe Generosity At Work is less uncommon than I’ve thought?  Let me know if you see any subtle acts of generosity at the businesses you frequent...

How Etsy's Parental Leave Announcement Demonstrates Generosity At Work

For so many reasons, Etsy has been one of my leading examples of companies practicing Generosity At Work. 

I rely on Etsy’s Code As Craft initiative to illustrate the strategy of Opening Your Learning, but that’s only one way that Etsy demonstrates an expanded culture of generosity. Etsy uses each of the five higher-level generosity strategies, as well as over two dozen specific generosity practices. And, sometimes with one move, Etsy demonstrates several generosity practices at the same time.

That’s the case with Etsy’s new Parental Leave Policy, announced last week in a blog post by Juliet Gorman, the Director of Culture and Engagement at Etsy: “Strong Families, Strong Business: A Step Forward in Parental Leave at Etsy”.

In addition to demonstrating the strategy of Promoting Your Unique Culture, the policy and its announcement demonstrate the generosity practices of Networked Citizenship and Industry & Marketplace Advocacy.  

Here’s how:

Generosity Strategy:  Promoting Your Unique Culture

Etsy’s revised Parental Leave policy is a generously conceived and well-designed effort that strengthens Etsy itself, sets a standard that other similar companies should follow, and aims to influence the conversation about family leave in our society. 

The details of the policy are all wonderful. 26 weeks at full pay is generous, period. The policy is open to biological, adoptive and surrogate parents, of any gender expression or family status, regardless of the country in which they reside. It’s about as inclusive as you could imagine.  Some of the 6 months of paid leave must be taken as a chunk of 8 consecutive weeks so that parents get the maximum psychological benefit of the leave, while other time can be taken in a flexible distribution.   

Etsy promotes its unique culture through the original announcement and a companion piece, 5 Facts That Support Gender-Blind Parental Leave.   Etsy offers the details of its new policy as all as the data supporting its decision to advocate that other companies follow Etsy’s lead. (Recall that I’ve talked about Promoting Your Culture before, using the example of Buffer and its efforts to promote radical transparency and the distributed (aka remote) workforce.)

While it’s certainly true that this new policy will help to keep Etsy competitive in a marketplace where it’s hard to find software engineering talent, its also true that it fits with Etsy’s core values and with Etsy’s vision of the company it wants to be. This generosity towards employees reinforces Etsy’s unique identity.

Generosity Practice: Networked Citizenship

Promoting its Parental Leave policy also helps Etsy remain a leading citizen of its business network.  By proactively taking responsibility for steering the growth and development of behavior in its network, Etsy’s policy reinforces the efforts of other pioneering digital businesses who already announced generous parental leave policies (such as Spotify). 

Especially because Etsy has a public profile that’s much bigger than its actual size (still less than 820 employees), throwing its energy behind Parental Leave -- 

  • Draws attention to parental leave policies at digital companies,
  • Pulls in a broader business audience (e.g., this Time article), and
  • Strengthens the perceived legitimacy of these policies.

Etsy’s efforts are helping its network shift perceptions of its parental leave policies (and “great place to work” reputations) so that these are not ‘exceptional’ within its industry, but normal to the network.

Generosity Practice: Industry & Marketplace Advocacy

But the part I like best, and where Etsy is demonstrating a rare form of generosity at work, is revealed in the final paragraph of the formal announcement:

We (at Etsy) believe parental leave policies like ours are just one step towards a more fulfilling, lasting world. Our policy is premised on the traditional employer-employee relationship in the U.S. We applaud the efforts of leaders like New York Governor Andrew Cuomo, who has proposed a paid family leave program for all workers in the state, similar to programs in California, New Jersey, Rhode Island, Washington, and Washington, DC. We’re also mindful that many Etsy sellers are independently employed, like more and more workers today, which is why we advocate for portable benefits.

Our hope is that policy makers and future business leaders find a way to provide a stable and flexible safety net for all people.  You can read more about the research that informed our decision in our companion post: 
5 Facts That Support Gender-Blind Parental Leave.

With this final paragraph, Etsy is proactively advocating for an approach to parental leave that it believes is good for the economy as a whole.

That's giving big.

Etsy is expressing its values AND practicing generosity by taking a stand that paid parental leave helps everyone, and thus should be universal.

Here’s more, from the companion post mentioned on the Etsy blog (below), where Gorman notes:

At Etsy, we’re working to be a diverse and inclusive company. In sharing our thinking, we hope to advance the conversation among our community  including our employees, business peers, other corporate leaders and policymakers  to build a business culture that’s more enriching and sustainable for everyone. (emphasis mine)

Etsy ties its Parental Leave policy to a much larger mission and purpose.  By promoting its own unique culture, Etsy is generously advocating for something that will benefit every company and every worker in the USA.

Well done, Etsy.

 

On a Related Note:   (here's the extra newsletter section:)

I believe that parental leave, like health insurance, should not be attached to a person’s job or place of employment. We should encourage companies to provide leave while we advocate for universal paid parental leave, as well as universal child care. And, we need to encourage companies of any size and any industry to offer parental leave in whatever capacity they can.

That’s why I was surprised to see this statement, by Fred Wilson of Union Square Ventures (USV), an early investor in Etsy and now a board member. 

I fully support Etsy’s parental leave policy and am proud that Etsy is at the forefront of a movement in the tech industry for more family friendly employee policies.

However, I am not suggesting that all startups or all USV backed startups should do the same.

There’s a vast gap between “a workforce in the thousands or tens of thousands” and the “team of four people working from a co-working space” that Wilson uses to anchor the size of companies that can and can’t offer parental leave. Companies don’t have to have thousands -- or even hundreds- of employees to find ways to offer paid parental leave. 

Remember how, just a year ago,  Mary Ellen Slater shared how her small startup managed to give employees parental leave, and Sara Holoubek of Luminary Labs wrote about planning for her own parental leave?  Rethink those excuses, people.

Two perspectives on Family Leave Policy worth checking out:

Bravo for Etsy, but Its Paid Parental Leave Policy Really Shouldn't Be Exceptional, Inc.com, by Jessica Stillman, @EntryLevelRebel, March 16, 2016.

— I always appreciate Stillman’s perspective --she has a good eye for the meaning behind the stories she reports. Here she shows us the big picture of parental leave in the USA and globally.

These Are the Companies With the Best Parental Leave Policies, Time.com, by Alicia Adamczyk, Nov. 4, 2015.   

--  Do you wonder what it would be like to work at Netflix and actually TAKE your unlimited parental leave? I do.

Sign up to be a Beta Tester of my new newsletter, Generosity At Work.

 

Defining Your Business's Success Using "Net Positive Value"

Here's an excerpt from the introduction to Generosity At Work that defines a concept that's critical for assessing the impact of your business. Let me know what you think!

Defining Net Positive Value

Self-centered businesses care whether their own bottom line is growing.  

Generous businesses care about their own growth at the same time as they care about the growth of their business network itself.

 

Generous businesses want to grow by creating "net positive value".

Net positive value is created when a group of businesses works together to create new sources of value and additional kinds of value while using or claiming for themselves less than they contribute. Any individual business can influence the network's net value by adding more value and/or taking less itself.

Generous businesses think about what they're taking, what they are contributing as they assess whether or not they are really, truly, growing.

In a network with net positive value, businesses are being generous themselves and helpful to each other. Business are growing, and so is the network.

What "Net Positive Value" means

The word ‘net’ does double duty in the concept of ‘net positive value’. It stands for the balance of inputs to outputs while also emphasizing the system's health instead of just the health of the individual business.

In accounting, the term ‘net’ means an entity's income minus cost of goods sold, expenses and taxes. It tells accountants whether profits are growing, or not. An entity has net positive, net neutral or net negative outcomes. The idea of "net" gain or loss can be used outside of financial accounting, to consider any kind of resource or value. It’s a way to understand, when it’s all said and done, whether the entity is growing, maintaining status quo, or declining in value.

When self-centered companies focus on their own growth, they think about net value the way accountants do.

They want to end up with more value than they had when they started, and more value than they burned through to get here. Indeed, that’s what competitive businesses are supposed to do— they are supposed to maximize the value they claim for themselves by efficiently using the least amount of resources necessary to create that value. They try to be efficient with their resources and aggressive with their pricing, so that the net effect of their efforts is a positive number on the bottom line.

But what’s good for the bottom line of the self-centered company can be bad for the net positive value of the group.

Consider what happened in 2002, when Walmart introduced an inventory management system powered by RFID tags. Walmart wanted to save money by shifting away from the labor-intensive process of taking inventory by hand. They also wanted to increase sales by eliminating out-of-stocks. Both goals could be addressed by the RFID system, and the savings generated for Walmart by this system would show up as increased profits. For Walmart.

Walmart mandated that every one of its product suppliers put these RFID tags onto their products — at the suppliers’ expense — before Walmart would accept shipments from them. Walmart wasn’t concerned with the impact of its mandate on the bottom line of anyone but itself.

Walmart could have put these tags on pallets of inventory once products arrived in its own warehouses, using Walmart’s own workers, equipment and time. Instead, Walmart used its power to push the costs of these RFID tags onto its suppliers. By aiming to reap the benefits of an RFID-managed system all for itself, Walmart decreased the net value (bottom line) of each and every supplier whose products Walmart sold in its stores. Worse still was that few if any suppliers were able to use this RFID technology to make their own internal systems more efficient.

The added expense of the RFID technology for the suppliers became the cost of doing business with Walmart.

If the costs to suppliers were about the same as the additional value Walmart received, then the overall impact on the network was neutral. More than a decade later, however, the jury’s still out on how much and even whether this move to RFID actually helped Walmart’s bottom line. We know that for many of Walmart’s suppliers, the shift to RFID damaged their bottom line for years.

A self-centered business might think that it is generating net positive value of the accounting kind, because it is taking and claiming more value than it spent. But from the big picture, there isn’t any net positive value created overall.

Business that take a network point of view (NetPOV), however, understand that looking at their individual balance of contributions and claims is not quite enough to evaluate their success. They need to consider the the network as a whole. When companies with a netPOV think about their growth, they pay attention to the outcome for the system. These businesses look beyond their own balance sheets to include in their calculations their effects on the businesses around them and on the network itself.

From the perspective of the individual business, the goal is to ‘claim’ as much as you can of the value you help to create.

Does your business introduce other businesses to your customers?
Then charge these businesses when you offer them your mailing list.

Does your business help customers understand an entire category of products?
Then, to every business in the industry, send a bill for p.r. ‘services rendered’.

Do other businesses adopt a software tool that your designers made?
Then charge them a subscription fee for every month that tool is in their service.

That’s how business is done. That’s how a self-centered company can ‘capture’ more of the value that it helps to create within a network.

But in these examples, as in so much of "business as usual", the value has been moved to the bottom line of one company right from the balance sheet of some other business. The impact is net neutral at best.

Generous business, because their are network-focused and concerned about all kinds of value, recognize that they need to assess the health of the whole network before they can tell whether or not the value they are claiming on their balance sheets is fundamentally new value.

New value, that didn’t exist before and that the generous business has helped to create, leads the network's value towards net positive.

That’s why the assessment of value at the level of the network is so important:

We can only tell if our business is growing in a sustainable way if it is contributing to the network's net value as well as our own. 

 

Inclusion & Diversity In Tech

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Building Authentic Organizations

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