Who pays? (3)

Last but not least… changing who pays for what can help you to take better care of your team.

In the early years we asked team members to do occasional evening and weekend work as part of their contract. This worked okay, but created two bad incentives.

  1. We had effectively already paid for for the extra time in advance, so we had an incentive to use the resource (out-of-work-hours work) that we’d already paid for more than we otherwise might – it wasteful not to.
  2. To get our money’s worth, we were less careful about arranging work commitments outside office hours. We gained by using (or over-using) our staff – in effect, we were asking them to pay the price of the additional activities we chose to do.

To solve this problem, we started paying our staff a bonus for every night that they spent away from home for work. If the work is important, it’s worth paying for – so we (or the customer) pays, and our employees are happy to be compensated for their lost time.

If the work isn’t important, we’re forced to ask the question “is it worth paying this much to get this done?”. If the answer is no, we don’t do it.

Who pays? (2)

Shifting to a user-pays model had another significant impact on our work – we became more accountable to the people we serve, and the quality of our work went up as a result.

Accountability and Quality

Under our old operational model we received charitable donations and provided our materials and training to partner schools for free. We were accountable to our donors for how we spent their funds. We did our best for our users, but, well, they were getting our service for free. It was infinitely better than nothing, even if there was the odd typo, or the odd part of the curriculum that didn’t really make sense.

When we began asking users to pay (mainly in an effort to allow us to serve more people), an improvement in quality was an unexpected benefit:

“We’ve got to fix those typos – people are paying for this.”

“This curriculum needs to fit together way more tightly, or no-one will buy it.”

Asking your users to pay creates more direct accountability and a tighter feedback loop to your users. The shift from giving to beneficiaries to selling to customers / clients forces you to focus more intently on creating products and services that meet their needs rather than yours or your donors’, and on making something that they think is worth the cost in terms of time, money and attention.

Who pays? (1)

Who pays for what can have a dramatic effect on your work.

Infinite Demand

If what you do is free, and enough people like it, you have a situation of infinite (or as good as infinite) demand. This is fine if you can serve everyone – we all win. Digital products – this blog, things on youtube – are good examples. No-one misses out.

But if your capacity is limited, infinite demand is a problem. Who do you serve? If you could charge a bit more, could you serve more people?

We had a discussion about this today at the charity. ‘Free’ – or rather, ‘we pay’ – was our old model. It was great: we had a long waiting list, and we did good work. But we could only afford to train and equip about twenty teachers a year – on the good years when we didn’t have to shut down operations for a month or so in the summer because we had no cash.

A shift to ‘user pays cost’ (the cost of the materials that they receive, the food they eat during training) means that new users pay for themselves: we can serve as many people as we are physically able, rather than being limited to those we can afford to pay for. We can serve more people, and do more good.

A shift to ‘user pays cost and a bit’ means that we cover our overheads and start to have some space to play with – we can hire new people, invest in new resources that help us improve the quality of what we do, or hire new people to increase our capacity. We serve even more people, and do even more good.

But what about the people who really can’t afford to pay? Do we leave them behind? You might, if you’re not careful. A colleague challenged us about this in our meeting today.

We talked things through, and all agreed that everyone would lose out if we went back to free.

And we all agreed that we didn’t want those with the least to lose out the most.

Reducing our prices isn’t the answer – it makes little difference to those who have the resources to pay. and not enough of a difference to those who can’t.

Our solution: full-price, or free. We price our service at “cost and a bit, and a bit more” as standard – and offer one place in ten completely free – training, materials, meals – as a gift.

Note to self

Writing is a great tool for sharing ideas with other people.

It’s been dawning on me over the last few days that one of the people I’m communicating with is me.

When you take the time to record something accurately, or to express something clearly, or to reference carefully, it’s often a gift to your future self.

So do it often and well – chances are, you’ll thank yourself for it.

Why you?

Imagine someone else made a product very much like yours…

No. Imagine that someone else was selling exactly your product, doing your thing, only slightly cheaper.

What would make your customers still want to buy it from you?

If you can’t think of an answer to that question, think harder, or start looking for the exit.

If you’ve got an answer, probably something about who you are and the way you do what you do, about how you make your customers feel, and about how they know they can trust you…

If you’ve got an answer, keep getting better at those things.

Pretzel. Coffee.

I liked the look of the pretzels. I fancied a coffee.

There were a range of combination deals featuring pretzels and iced drinks, but none with coffee.

Seperately, they were overpriced. They would have been overpriced anyway, but in the absence of a deal I was definitely no longer willing to pay, and they lost a customer.

A combination deal featuring pretzels and coffee is worth more than the sum of its parts.

How can you combine your products of services to make them worth more to your customers, at little or no cost to you?

Offering exactly what your customer is looking for not only adds value – it also builds trust by showing that you’re thinking about them.

A second score

A tip on learning to take criticism well from Adam Grant’s Worklife podcast:

Every time I get feedback, I rate myself now on how well I took the feedback…

When someone gives you feedback, they’ve already evaluated you. So it helps to remind yourself that the main thing they’re judging now is whether you’re open or defensive…

You don’t always realise when you’re being defensive.

The second score is the score you get for how well you deal with failure, criticism, disaster.

Your first score might not be what you hoped for, but you can always give yourself a second score.

With thanks to Sharky for the recommendo.

On Assignment

Kevin Kelly went to Asia in the early 1970s having never held a pair of chopsticks.

He took a change of clothes and 500 rolls of film in his backpack, because he was, as he puts it, “on assignment” to photograph daily life and traditional culture wherever he went. He stayed for most of the decade.

He was 19 years old and going to visit a friend in Taiwan. He had some experience as a photographer but hadn’t really held much in the way of chopsticks, professionally speaking. But he was on assignment. From himself. Aged 19.

I am going to make a badge and wear it every day:

Driverless Crocodile: On Assignment.

KK was interviewed on Ralph Potts’ Deviate podcast.

Time Travel (2)

The Future is here, it’s just not very evenly distributed.

William Gibson

There’s a second way to look at this. If looking at other places can help us see the future, it can also help us see the past.

One of the things I love about Jakarta is that sometimes it feels like living in Blade Runner (shiny buildings, giant LED screens, life in air conditioned bubbles) and Dickens’ London (dingy alleyways, door-to-door tradesmen, whole families sleeping packed into tiny rooms, pointless death from preventable causes) at the same time.

More on that another time – today I’m interested in how looking ‘back’ can throw our values into sharper relief. I notice:

  • More time, and less rushing – time to pass the day with people. It’s rude to rush.
  • Generosity that’s sometimes hard to get your head around, especially from the poorest. I’ll never forget the generosity of friends who have almost nothing but will give me a snack, a drink, a meal almost every time I visit. I’ve learnt to receive more easily here.
  • People who live so close together often have a better understanding of just how contingent life is. They see more babies born, live and sometimes sleep alongside three or four generations of their family, prepare and bury their own people. Closer to life, closer to death.
  • There’s a DIY ethos here – the men of the neighbourhood butchered their own animals at the feast of the sacrifice. They’re not professionals – but it means a lot more for it.

I hope to come back to this theme – there’s more to say. Each of these values – and others like ‘tradition’, ‘family’, ‘community’ – have their wonderful upsides and their suffocating drawbacks, and we see plenty of both.

Can we keep more of the good parts of our culture as it changes?

Can we reclaim the longed-for things we’ve lost?

What can I do to make your job easier?

I ask each member of my team this question at the end of the ‘Any Other Business’ part of our meeting.

I used to think of it as a management question: what can I do – or stop doing – that will make you better at your job?

And it’s a great management question.

It’s also a really helpful question to bear in mind when you’re working on a product or process, and when talking to customers.

  • How can our skills help you achieve your goals?
  • How can we make our curriculum (product) easier to use? Could we make it fun to use?
  • Can we change our training materials (product, service) so that training is easier to deliver, and teachers learn the most important things better and faster?
  • How can I organise information so that it’s easy for my team to tell customers what they want to know: what we offer, how much it costs, what they get in exchange for their money and time, and when and how they can get it?
  • What can I do to make reporting (process) as easy and as light touch is possible, and generates information that is useful – and actually gets used?

Everyone wins when you ask questions like these, listen, and take action.