Will and Resources Framework
Prioritize the human fuel before the financial fuel
In any game, there are two currencies required to play: will and resources. Resources are tangible and easily measured: money, revenues, profit, stock price, venture capital. Will is intangible and harder to measure: morale, motivation, inspiration, commitment, the desire to engage and offer discretionary effort. Both are essential, but they cannot be equally prioritized. There are always circumstances in which one must be sacrificed for the other, and every leader has a bias.
Finite-minded leaders show a bias for resources. They prioritize the score and opt for choices that demonstrate results in a short time frame, even at a cost to the people. When times get hard, they turn first to layoffs and extreme cost cutting. Infinite-minded leaders show a bias for will. They put people before profit as often as possible, exploring alternatives to layoffs even if the savings take longer to materialize. Danny Meyer captured this bias simply: his business is 49 percent technical and 51 percent emotional.
The framework reveals that the actual incremental cost of taking care of people is often zero or even negative. Apple's Angela Ahrendts ran the numbers and discovered that the additional cost of giving retail employees full benefits, education reimbursement, and stock options was completely offset by savings from lower recruiting and training costs. Where finite-minded organizations view people as a cost to be managed, infinite-minded organizations see employees as human beings whose value cannot be calculated like machinery.
- Will and resources can never be equally prioritized; every leader has a bias, and that bias shapes the culture
- Even a small bias for will before resources (51/49) is enough to create dramatically different organizational outcomes
- The right question is not 'How do I get the most out of my people?' but 'How do I create an environment in which my people can work to their natural best?'
- When a group shares in suffering, it brings the team together; when some bear an unbalanced burden, it tears the culture apart
- The actual incremental cost of investing in people is often net neutral because it is offset by reduced turnover, recruiting, and training costs
- Identify your current biasLook at how your organization lists its priorities. If the order is growth, customers, then people, the people come last. The order matters because it reveals which currency you will sacrifice when forced to choose. Be honest about whether your bias is toward the score or toward the players.Pro tipAsk yourself: when times got tough, what did we cut first? The answer reveals your true bias.
- Ask the better questionReplace 'How do I get the most out of my people?' with 'How do I create an environment in which my people can work to their natural best?' The first question treats people as resources to be extracted. The second treats them as human beings to be supported. The answers to each question lead to fundamentally different leadership behaviors.Pro tipWalk the halls. Ask people how they are doing. Ask if there is anything they need. And actually care about the answers. There is zero cost for this.
- Explore alternatives to layoffs during downturnsWhen revenue drops, resist the instinct to lay off employees as the first response. Consider furloughs, salary freezes, 401(k) match suspensions, and other measures that share the hardship across the entire organization. The Container Store froze salaries and 401(k) matches during the 2008 recession, and employees not only accepted the plan but voluntarily found additional ways to save money.WarningWhen you lay off 10 percent of your people, the remaining 90 percent learn that they are expendable. The will damage compounds far beyond the short-term resource savings.
- Run the real math on people investmentCalculate the true cost of not investing in people: recruiting costs, training costs, lost productivity during ramp-up, the drag of low morale on output and customer experience. Angela Ahrendts discovered that Apple's generous retail employee benefits cost nothing net because they were fully offset by savings from lower turnover. Costco found similar results: higher wages are offset by reduced turnover and higher productivity.Pro tipWhen executives report savings from layoffs, ask them to include the costs of rehiring, retraining, and lost institutional knowledge that inevitably follow.
- Build will in good times so it is there in bad timesWill is not built during a crisis; it is drawn upon during a crisis. It must be accumulated over time through consistent leadership behaviors: listening, caring, protecting, and prioritizing people. When the will is strong, people will voluntarily sacrifice for the organization during hard times, as The Container Store's employees did.Pro tipThink of will like a savings account. You cannot make a withdrawal if you never made deposits.
Noah worked two hotel jobs but only loved one of them. At the Four Seasons, managers asked how he was doing and offered help. At the other hotel, managers tried to catch people doing things wrong. Same person, different leadership, completely different output and experience. The Four Seasons gets Noah's best because they prioritize his will.
When sales dropped 13 percent, The Container Store refused to lay off employees. Instead, they froze salaries and 401(k) matches. Employees voluntarily found additional ways to save money: downgrading hotels, staying with family on trips, even declining to submit expense reports. Vendors pitched in too. The will of the people was so strong that the organization weathered the recession without losing a single employee.
Angela Ahrendts discovered that giving Apple retail employees full benefits, $2,500 education reimbursement, $15 minimum wage, and stock options cost zero net additional investment because the money was fully offset by reduced recruiting, training, and turnover costs. Apple maintains a 90 percent retail retention rate versus the industry average of 20-30 percent.
Sinek illustrates this framework through Noah, a barista at the Four Seasons hotel in Las Vegas. When asked if he liked his job, Noah did not say 'I like my job.' He said 'I love my job.' The difference is profound: like is rational, love is emotional. Noah explained that at the Four Seasons, managers walk past and ask how he is doing and if he needs anything. At his other hotel job, managers walk past trying to catch people doing things wrong. At the other hotel, Noah keeps his head below the radar and just wants to get through the day. At the Four Seasons, he feels he can be himself. Noah is the same person in both jobs. The only difference is the leadership environment. This contrast captures the entire framework: it is not the people doing the job, it is the people who lead the people doing the job who make the greater difference.