Comments

Darci, Forgive me but the formal name of this has escaped my mind. There is a schema in India/Pakistan run by a philanthropist where he lends money to people wanting to start or expand a small business. The whole process is done on trust. I can't quite recall the figure but I believe 97% of the loans have been repaid - and again, it was all totally on trust.

There are a small clutch of other similar businesses doing similarly and reporting similar sound return rates. But how about this one from Radiohead who allowed fans to establish the price point for their music:

http://moblogsmoproblems.blogspot.com/2007/10/radioheads-free-experiment-works-major.html

It seems that, against what many might claim cynically is bound to happen, that when people are allowed to pitch a price or return a loan that most will 'do the right thing'.

I suspect culture is influential however and I would want to know more about that before deciding to follow these paths. I have a friend in an alternative health care practice and he was saying that anyone who owes him always pays up because they are too embarrassed (with rare exceptions) to ask for further treatment when they are in debt to him. However, he always has to be careful about final appointments as often someone will allow their conscience to loosen if they don't feel they may need to return.

Anyone who knows me Darci knows I believe people are seeking a village community. If you'd like to discuss that off list by all means feel free to make contact.

Posted by Susan Plunkett at November 20, 2007 4:55 PM

Darci,
A little bit of psycholoanalysis--why did you visit Madison? My guess is that deep down you are in search of a community that has old fashioned core values--people who are friendly, honest, reliable etc. In Madison it seems there is alignment around these values/beliefs. My bet is the store owners, residents, and visitors all embrace these core values. The community has a very strong "organizational culture." Culture drives behavior. In this environment the "send me a check" trust works. However, implementing that approach in a different culture like what we find in most big cities--the results would be disasterous.
You have motivated me to want to visit Madison.

Posted by Paul Thornton at November 20, 2007 5:10 PM

Obviously 'similar' is my word of the day. :) I trust people here will be forgiving about typos.

Posted by Susan Plunkett at November 20, 2007 6:44 PM

Darci - Following our recent exchange:

*Simplicity Tip Number 1 - Staff at the front line know all the answers all the time
*Simplicity Tip Number 2 - If managers have a job at all in 2007 it is to make it easy for front line staff to do their job with freedom.

What do you think? :-)

Posted by Trevor Gay at November 20, 2007 7:05 PM

The India/Pakistan thing you're thinking of is probably the Grameen Bank. Muhammad Yunus was awarded the 2006 Nobel Peace Prize for his bank which practices microlending to the poor in Bangladesh. There are now many microlending organizations around the world modeled on Grameen.

This "living up to expectations" idea is often called the Pygmalion Effect. I've run into it all over the world. The reason that most large companies won't trust their staff or customers like Darci or her boss is that they're more worried about what they might lose in the short term than what they might gain in the long term.

Posted by Wally Bock at November 20, 2007 7:46 PM

Wally, Thanks for that. Yes indeed. I visited a marketing site recently and saw someone post - a manager I assume - expressing "staff can't be trusted to"... and I honestly felt I was in a time warp. Are marketing managers still saying these things in 2007? Or was this idiosyncratic?

Posted by Susan Plunkett at November 20, 2007 8:54 PM

I've been to Madison, GA on a couple of occasions (and have eaten at the corner coffee store) and can confirm and relate to this story.

I agree with Susan on the culture note--however, what's not lost on me is the passion of the worker at the store and the kind attitude torwards her guests. Wouldn't it be great if you went into a McDonald's and you were treated with the same warmth? We have been conditioned and expect a rude response, so when we experience kind, warm service, it's a shock--and it ends up being a differentiator for the establishment. Hmm. "Be nice to your customers" is a differentiator these days. Scary.

(If you run and you need an excuse to visit, there's a great little 5k there on Dec 8th--no affiliation, mind you):

http://www.active.com/event_detail.cfm?AFFILIATE=0&BGCOLOR0=EEEEEE&RESET=0&CHECKSSO=1&BGCOLOR1=EEEEEE&EVENT_ID=1486703

Posted by Adam Landrum at November 20, 2007 10:05 PM

I don't want to rain on everyone's kum-bai-ya moment, here, with all this "takes a village with a strong organizational culture" nonsense, but this practice is actually extremely common. For instance--manufacturers pay their suppliers by check or electronically at least 30 days after the goods arrive, you pay for your newspaper subscription about once every three months--again, not by cash. Even your phone bill is an example of this exact transaction.

And, really, what is so great about this girl's boss? All he (or she) did was create a pointless workaround (give customers without cash a card so they can send us a check) to a self-imposed problem (no ability to accept plastic). So c'mon y'all, you have to start THINKING!

Posted by Red Island Rhodes at November 21, 2007 7:21 AM

Instead of self-imposed problem, the owner probably decided it was less expense to lose the cost of an ice-cream cone once in a while than what the set-up and monthly fees for plastic would be. It's easy to use, but it isn't cheap for the merchants. Some will try to force you to buy a minimum amount, but the card issuers frown on that.

Posted by MikeC at November 21, 2007 12:05 PM

Actually, the transactions Red Island Rhodes refers to are fundamentally different cases from selling ice cream to total strangers. In those cases, either the repercussions of not paying are significant, or they're part of an ongoing relationship. Very different from a one-time transaction with people who have no vested interest in mailing you a check when they get home.

Side point regarding "In this environment the 'send me a check' trust works." The woman behind the counter knew she was dealing with strangers; in a small town, you know who's local. She wasn't trusting a local, she was trusting a total stranger.

And to directly answer Darci's question in the article: if I sold a small and inexpensive product here in Sacramento, I'd have no hesitation with my employees letting folks mail a check later. In fact, I'd be willing to wager that the restaurant down the street from us would allow just that. And we're not some small town; it's just the personality the place exudes.

Yes, in a single instance of the Prisoner's dilemma you're more likely to be taken advantage of than in a long-term relationship, but that doesn't change the fact that even then, the option that brings the greatest benefit to all is cooperation, trust.

Posted by Joel D Canfield at November 21, 2007 12:35 PM

We believe in the village concept, high trust, and an excellent customer experience as differentiators. But...as said above, you have to consider the existing culture. We have a small gift shop/gallery in a Mayberry like town and operate with high trust (no cameras, or sophisticated security), but we still experience theft from small percentage of visitors. Risking a few ice cream cones is not the same as risking higher priced merchandise. We still trust highly, but not categorically.

Posted by BillB at November 21, 2007 12:55 PM

So to all the "villagers" commenting, I pose the simple question that if villages were so grand and what humans automatically gravitate toward, why did we stop living in them in the first place? (And you are not allowed to use the word "schema" in your response. It only makes you look pretentious.)

Posted by Red Island Rhodes at November 21, 2007 3:52 PM

All great comments...thank you. Here are a few additional arguments from the debate with my friends when I asked them: could this ice cream shop establish this as a standard service philosophy when they franchise it and would it work in any city?

One friend said no way because it would be too difficult to find employees like Carolyn. She argued that it was Carolyn who had these 'Madison Values' so it works. This argument floored me, really. Wouldn't any employee extend this type of service if they were empowered to do so? I think so. To your point, Joel, I was a complete stranger from a "big city" (ATL) so why would she trust me to fulfill on my promise? I may never see her again.

Another said, perhaps we just looked like trustworthy customers and therefore she extended this service to us, but it wasn't a service that was offered to everyone. (Hmmmm? What does trustworthy look like?) Another suggested that because we were dressed nice and came from Atlanta we were probably "good for it". (Talk about Psychoanalysis - this has stereotype written all over it!)

To your point, Red Island Rhodes, I'm going to have to disagree. I don't believe it is the same as any other payment transaction like paying your phone bill. I'm under contract to pay for goods/services rendered by my phone company. If I don't hold up my end of the agreement, I am penalized with interest fees/late charges. If enough time passes, I am then harassed by collections agents, my phone gets turned off and my credit score goes down. Not quite the same as not paying for an ice cream cone. I am not no-stings-attached trusted by my phone company, I promise you.

And, Mike, I'm siding with you...it wasn't a pointless workaround to a self-imposed problem...it was probably a strategic business decision for a small business owner: do I risk losing on a few unpaid debts on ice cream cones which is not guaranteed to happen or pay fees to the credit card company which will definitely happen.

And, finally, to your point, Adam, isn't it such a sad state of affairs when we get excited about service providers being friendly and happy to see us? Unfortunately, I think that's where we are these days. Ho hum :(

Posted by Darci at November 21, 2007 4:35 PM

Nice point Adam. I do agree that sometimes when we encounter wonderful service that we can feel shocked. I had a similar experience recently and I was so impressed I also wrote a blog piece about the employee!

Posted by Susan Plunkett at November 21, 2007 5:10 PM

Red Island Rhodes. Trying to control the expressions in other bloggers posts doesn't progress discussion.

Yes, I do believe that what people are generally seeking is a village. As one research team put it re the online community: People seek the malt shop and not the mall. They want to stand around the green and the village pump. It's obviously an analogy. Blogs and our presence here is village creation. You may not feel part of the village community and I am not part of it per se but I see folk who clearly know each other well and who will seek each other's commentary out. They will come daily as a part of their normal schedule and look. Just because one might have ten blogs that one frequents doesn't mean you're not seeking or in a village of sorts.

If you're asking about why the village broke down that's fairly easy to understand and it kicked in around the time of the industrial revolution.

Discussion about village in terms of corporate organisational issues is not where I've gone. Maybe it's where others have and I think that's a topic unto itself.

Posted by Susan Plunkett at November 21, 2007 5:23 PM

'humans automatically gravitate toward' villages? I don't see anyone saying that.

I'm only commenting on what I'd do, and what I like seeing done, when it comes to trust. Is it common? I don't think so.

But should it be? I think so.

No, I don't think you should loan a total stranger a car to drive to Canada and hope they'll send it back. We're talking about an ice cream cone; a few dollars.

As for humans no longer living in villages: it's estimated that, just last year, for the first time in human history, over 50% of mankind lives in cities.

The other half must be living somewhere . . .

Posted by Joel D Canfield at November 21, 2007 11:24 PM

Joel, Village as a concept (as I refer to it) defies traditional definition of a cluster of homes in a rural setting. I mean village as a sense of the familiar and a collective or community. Some 'place' we gravitate towards and that leads us to feel secure, safe and (relatively) comfortable. Where we pull up a chair and chat and know the experts to call upon and so forth. In Sydney however you're starting to see local Councils now having signs along the lines of: Welcome to the Village of (name of shire or suburb).

So, as a generalisation I do believe humans gravitate towards village or community. I think there are societal highs and lows in the desire for this and of course individuals love to be hermits or hermit-like.

Posted by Susan Plunkett at November 22, 2007 1:49 AM

Ah, of course you were using 'village' metaphorically, Susan; as was the bulk of the commentary here.

For some reason the comment that jumped out at me seemed to assume a literal application of 'village', and being easily distracted by shiny objects, off I went ;)

Posted by Joel D Canfield at November 22, 2007 11:13 AM

:) We have bowerbirds here that do that. Generally they like anything blue.

Posted by Susan Plunkett at November 22, 2007 5:06 PM

As someone who was brought in a rural English village in East Anglia for the first 20 years of my life I'm with you Susan on 'village' and on ‘community.’ I agree that people fundamentally want to belong. How sad then that Margaret Thatcher is considered a good leader by some (not by me I hasten to add). Her ‘leadership’ led to destruction of that sense of ‘community’ in many parts of our great country. If I remember she said something like ‘there is no such thing as community.’ She was driven by a concept that individual ambition is everything …. And we wonder why we have no harmony in communities 25 years later? - It’s a no brainer.

Posted by Trevor Gay at November 23, 2007 5:20 AM

I feel that trust is a symptom of a village, not a driver. In a real village working and living happen within a common space for most of its inhabitants. They can then predict each others behaviours; with that they can know what is what is worth listening to and attending to, and they get fast feedback.
Seperating living and working into different locations breaks up those patterns. It particularly breaks up the patterns for children when they cannot see the work of their parents validated by their neighbours. Think how Atticus Finch in "To kill a mocking bird" is respected by his neighbours and how important this respect is in 'Scout's' development.
My feeling is that the village community cannot be replicated in a city. But it is important.

Posted by Finnegas at November 23, 2007 3:15 PM