ROLE MODELS featured the Love Summit in the March-April issue. One of the Summit’s keynoters was Dan Price the CEO of Gravity Payments. You will probably remember Dan from the press surrounding his announcement that the minimum salary for Gravity employees would be $70,000. I (Jerry Wagner) asked Dan if he would write an article for ROLE MODELS that further elaborates upon “why?” Here what he wrote.
If you had to guess, what do you think one of the most brutal killers in history, Che Guevara, said when asked, “What do you look for in a guerilla fighter?” The answer may surprise you. He didn’t seek brutality, strength, or training. Instead, he sought a more powerful force: love.
Love causes us to do things that go against logic, but it’s the one thing that has propelled our company, Gravity Payments, to a higher success. There have been many moments when our team should have played by the rules, but when we chose to make decisions with our hearts, the results were extraordinary.
Love spreads quickly from person to person. Its power and influence give it a contagious property, unmatched in its ability to generate positive energy. For much of my life, I believed love was a completely irrational force. I made decisions based on love, convinced these choices would have a negative impact on my business. But over time, I started to realize that maybe there was more logic and reason to love than I initially thought. Let me take you through my journey.
The first act of love happened after my high school band split up. I was chatting with a coffee shop owner, Heather, who was having trouble with her credit card processing and point-of-sale system. She was not the most business savvy person, but she had a tremendous amount of love and passion for her clients. I recognized she needed help, so I rolled up my sleeves and did whatever I could.
Heather was not alone. There were many other independent businesses being taken advantage of by huge, faceless credit card processors. These were the very same businesses who supported and opened their doors to my high school band when we first started out. I couldn’t let this happen to them. Soon, I found myself improving the situations of many businesses in my community.
Thirty one Gravity team members participated in a Red Cross blood drive.
When I ultimately started my own company, most of the business owners I worked with joined Gravity. I was baffled they trusted a 19-year-old with every dollar that went through their business. It took a lot of love for them to believe in me.
A few years later, I began repaying that debt by lobbying Congress to implement a huge decrease in credit card processing fees. After the Durbin Amendment was passed, a competitor pointed out that I had every legal right to keep the money saved by the legislation and beef up our bottom line. But our clients entrusted us to protect them. Withholding money that rightfully belonged to our clients went against everything Gravity stood for. We decided to give that money back.
I am certainly not the only one at Gravity making decisions motivated by love. When Gravity initially started, all I could afford to pay one of our first hires, David, was $24,000 with no benefits. David could have taken a job somewhere else that paid him much, much more, but he loved and believed in what we stood for.
I knew the sacrifice he and other members of our team were making. It took a huge leap of faith to work here, so I made it my mission to try and provide the best learning and development opportunities.
When the recession hit in 2008, I was advised to lay off the team and raise our clients’ prices – typical business procedures during times of economic duress. Love made me do the opposite. I took a pay cut, kept every person on our team, and doubled down on our efforts. Our illogical move worked. We emerged from the recession without making a single layoff. We also acquired a level of financial discipline that sustained us in tough times. Before I knew it, Gravity was doing well again, the economy improved, and profits rose, but I initially failed to pass that success on to the team. Logic would suggest not messing with a good thing. When I finally realized I was taking advantage of the people at Gravity, I knew I had to forsake logic in favor of love.
In 2012, I decided there would be 15 percent raises across the board. This raise was supposed to eat up the “rainy day fund” we had built up after the recession, but I didn’t care. It was the right thing to do. We met our goal of raising everyone’s pay, but then something unexpected happened – our profit didn’t go down. Instead, it went up. Once again, irrationality had prevailed. I was ready to throw away everything I had learned about business. I kept investing more in the team, and business continued to improve.
This love-influenced strategy eventually led to one of the most illogical moves I have ever made – implementing a $70,000 minimum wage. The move has been called crazy, naive, and irresponsible (all terms used to describe love). I agreed with all of these assessments, but I just couldn’t shy away from this moral imperative.
Although it’s too soon to tell if the $70K minimum wage policy will be a success, we’ve seen some early indicators. Profits have doubled, employee and client turnover is at an all-time low, we’ve received over 30,000 resumes, added 50 new team members, and had the opportunity to share our story with over 500 million people.
Shortly after the $70K announcement, a VP at Yahoo named Tammi reached out asking to meet for coffee. So inspired by our irrational act of love, Tammi made what some might call an irrational act of her own. She committed to taking an 85 percent pay cut to work at Gravity. I didn’t feel comfortable letting her do that, but she reiterated time and time again that she just wanted to be part of what we were doing. Tammi desired to be part of something more meaningful.
I thought this was an outlier, but then I received messages from other business leaders who offered to leave money on the table. They, too, wanted to throw customary thinking to the wind, to follow their hearts and better the lives of those they were leading.
There was Josh Ledbetter of LEDbetter who took an 82 percent pay cut so he could bring a part-time team member on full-time while also raising the salaries of his other two employees. Stephan Aarstol of Tower Paddle Boards implemented a five-hour workday to increase productivity and encourage his team to go out and be active. Tony Tran of Third & Loom raised all his employees’ wages both in the US and Vietnam to $70,000.
What was the common thread that tied all their decisions together? It was love.
As this contagion of love was spreading like wildfire, a new thought dawned on me. Love isn’t so irrational after all. Look at what happens when one person, one company, one team decides to lead with love instead of following the rules. Imagine what could happen if we all chose love instead of profit. The results could be extraordinary.
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