Friday, May 04, 2007

Work, part 2: What is pay?

Do you do it for money?

Some say that if you do, that makes you a pro. Some say that being a pro means you do things that are right, even if doing them costs you money. In other words, it's your integrity that's important, not your bank account.

But what is integrity good for? It gets you more business and a higher rate of return. Customers will come to you because they know that they can trust you, and that you will do for them what they can't do for themselves. And they will pay more for your goods or services than for those from someone else because they have a sort of guarantee.

Your integrity removes one more variable from the process. You provide dependability and that can be important, because it means preventing a whole bunch of things.

It means preventing a whole bunch of things from suddenly rising out of the ground like the evil spirits of the dead in one of those horror films. The ones where a nice suburban house has been built on a graveyard by unethical developers. And then the dead get irritated. And then get even. Customers don't like it when they have to deal with armies of the angry dead.

So, because you provide dependability, you also provide simplicity.

Your extra thought, and work, and integrity heads off a lot of bad things and removes the possibility that they can happen. This removes you from competing as a commodity provider. You are no longer working on the basis of providing the lowest price.

Thinking about professionalism just brings us back to pay. But no matter what, pro or no pro, you need to be paid. Money in the business world is like food for an organism. No food, no life. No income, no business.

A business needs to eat, and so do the people who make up the business. You can say that there are two levels of need here, one for the business, which has to make a profit, and one for the employees, each of whom has to earn a living. Profit goes to the business owners, and pay goes to the staff.

Thinking a little deeper you can see it involving three entities: the business, the staff, and the owners of the business, each with their own needs. And customers on the outside looking in.

But it's even a bit more complicated than that.

There is really no business. A business is an abstraction. If we stop thinking about it, it goes away, because a business exists only in our minds.

The reality is that there are just people, and the business is an idea that all of them agree to hold in their minds. The reality is that there are just lots of people linked by relationships to one another, and all of them want something from the relationships that they are in.

A person I once worked with told me that the purpose of business was to provide jobs for people. Not everyone would agree with that. I didn't, at the time. There is a common understanding that the purpose of a corporation is to maximize shareholder value, and there have been many legal rulings that poked at this issue. *

But the more I've thought about what my colleague said the more I agree with it. Not fully, since there are more people involved in any business than just the employees, but taking a broader view, it makes more sense.

The two fundamental ideas to keep in mind are that any business is solely human relationships, and that no one ever makes a profit.

Human relationships: Without humans, there is no business. Of any kind, by any name. The sole value of any business lies in the people who work at it (not just those who "own" it, not just those who "run" it, and not just those who are "employed by" it).

Remove the people and there is nothing left whatsoever. Don't think that you can fire all the staff and keep it going with different "hires". We're talking about permanently removing all the people. It is much clearer when you think of it that way. Remove the people and there is no residue. Only emptiness.

Profit: (A) Everyone dies. (B) You can't take it with you. (C) End of story.

Passing along wealth to others, again, does not count because you no longer exist, therefore you have no profit. Inherit money or other property, or just find a box of hundred dollar bills in an alley, and it may be fun, interesting, confusing or something else entirely, but you still make no profit. As Homer Simpson once said about beer, you can only rent it.

Everything is temporary. This means your profit too.

And this means you.

So that kind of makes money or other property look a little strange. And business as well.

What is pay, after all, then?


* See "The cyclical transformations of the corporate form: A historical perspective on corporate social responsibility" for some background http://www.law.umich.edu/centersandprograms/olin/abstracts/discussionpapers/2005/05-003aviyonah.pdf

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