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APRIL 2014
Issue: 58
        SMALL BUSINESS

             SUCCESS  


Welcome to Vantage Business Support & Insurance Services

 

We all know how important small business is to the U.S. economy. Some statistics that you may not know are:

(1) they represent 99.7% of all employer firms, (2) they employ just over half of all private sector employees,  (3) they pay 44% of total U.S. private payroll (4) have generated 64% of net new jobs in the past 15 yrs.

 

VANTAGE has been servicing the small business community for over 35 years. Over the years we have accumulated much knowledge, contacts and experience in helping to protecting small businesses and help them become successful and grow. As such, we will be publishing a semimonthly newsletter geared toward providing small businesses with the latest news, products, and guidelines to assist in their success and growth. Please feel free to comment and/or request topics that are important to you for us to research.
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How to Create a Culture of 'Paying It Forward'

Everyone wants an office culture where employees pitch in without being asked. Here are some concrete ways to encourage the behavior.

Restaurant drive-throughs--of all things--can be uncommonly friendly places. At a Tim Horton's in Winnipeg, Manitoba, a customer spontaneously paid for the order of the person behind her in December 2012. That person turned around and paid for the next customer, spurring a chain of 226 people to "pay it forward." Similar, albeit shorter chains, have appeared at other Tim Horton's and at Chick-fil-A and Heav'nly Donuts drive-throughs.

But if you're not in the fast-food business--or even if you are--how do you create a culture of spontaneous generosity? Everyone wants an office culture in which people step up to the plate without being asked, but there are a few key elements of paying it forward that make it hard to adapt such thinking to a business setting.

For paying it forward to really take hold, current research suggests, the initial good deed has to be anonymous, and the people in the community shouldn't know each other. Yet other people in the community have to have some way of finding out that the good deed has occurred in the first place, or they won't be motivated to repeat it.

I spoke with Milena Tsvetkova, a Cornell doctoral candidate studying spontaneous generosity, about how entrepreneurs can create a culture of paying it forward. Below is a condensed and edited version of our conversation.

Why does anyone pay it forward?

I think there are a few mechanisms at work. One has to do with a concept called generalized reciprocity. When someone anonymous does you a favor, you cannot return the favor directly, so you repay it to someone else. The other is simply that we're influenced by what others do. So if we see people doing favors, we're more inclined to do so ourselves. Both these mechanisms are stronger when people don't know each other.

When you observe a good deed but don't actually get the benefit yourself, you might do someone a favor just out of pure conformism. This is more likely to work in a situation in which there's a lot of uncertainty. Say you start a new job, and you notice that people take turns bringing breakfast in the morning. You think, Oh, this is how things work in this office. I don't want to be different. I'll do what others do. I want to fit in.

Chains of paying it forward are usually started by an anonymous good deed. Does that make it particularly hard to create an office culture in which people pay it forward?

When you have an office, especially a small office, probably other factors are playing a stronger role. In an office, you're probably dealing with things such as fear of exclusion and peer pressure. People will be observed, and have a reputation, in a small office. I think that effect is stronger.

There is nothing wrong with fear of exclusion or peer pressure. If you want a nice office environment where everybody is helping everybody, fear of exclusion or peer pressure will get the job done.

Maybe in a larger office there could be a situation in which somebody anonymously helps a colleague in need, and maybe this starts a process of paying it forward.

In that case, how would other employees know a good deed had been done?

Well, in an office there is a lot of gossip. Gossip is helpful here.

Sometimes, in a closed environment, all you need is one persistent altruist that anonymously keeps on giving, and gossip. That could be enough to get one of these chains going. People don't know it's the same individual being generous. They think, Others do favors around here, and I should do it, too.

If you have a relatively stable group, if people continuously receive, at some point maybe they'll start giving.

When you say "relatively stable group," that makes me think it's harder to get employees to pay it forward if there's high turnover. Is that correct?

Maybe. If people keep leaving, they don't have enough exposure to the pay-it-forward environment to want to contribute to it. We were trying to stimulate an office environment, but I wouldn't jump to conclusions about turnover just yet. The research hasn't been peer reviewed.

Are there any business models that use the phenomenon of paying it forward?

There are some that seem to be trying to. One is this idea of the "suspended coffee," or sospeso, in coffee shops in Italy. I know it also happens in Russia, but it started in Italy and has happened in Spain, Canada, and the United Kingdom.

The idea is that any customer can buy a coffee but not consume it. The business announces it, and generally they log these coffees on a board anyone can see. Anyone who enters the coffee shop can claim one of these suspended coffees. Lots of people claim the coffees. The coffees are meant for people who are homeless, or in economic hardship, but of course sometimes people just forget their wallet.

Generally, there's an oversupply of coffee--more coffees are bought than claimed. That's good for the business, of course, but mostly it's a good signal of community involvement.



SOURCE: KIMBERLY WEISUL  @WEISUL 
 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
 
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Please contact one of our 
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2363 Mariner Square Dr., Ste. 240 / Alameda / CA / 94501
30251 Golden Lantern Ste. E376 / Laguna Niguel / CA / 92677 
 

 

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