#5 The Law of Addition

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Leaders Add Value by Serving Others

This is certainly one of the most beautiful laws and one that could likely make the biggest difference if more of us lived it on a consistent and habitual basis.

Whether we believe it is right or wrong, it seems we live in a world where we accept that CEOs of large corporations have tremendous power and are expected to enjoy prestige, lavish lifestyles, and astronomical incomes at the expense of many.

That is why it is refreshing to learn about Jim Sinegal, the former CEO and founder of Costco. Although Costco is the fourth largest retailer in the United States  (5th in the world), Sinegal had one of the single shortest CEO employment contracts. He made sure it stated that his salary was to be capped at $350,000 a year and that he could be “terminated for cause”. Granted, today he has a net worth of $2 billion, but that salary put him at the bottom 10 percent of CEOs of large corporations.

Even more impressive is that in 2011, his last year before retirement, Sinegal took a pay cut. He essentially paid the new CEO in training with his bonus. In his very last year with Costco, Sinegal’s take home salary was just $100,000.

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Sinegal wears a name tag at work, has an unremarkable office, and answers his own phone. He is clearly more interested in adding value to people by serving them than on serving himself or making himself richer with an excessive salary.

Sinegal claims his formula for success is to offer a limited number of items, rely on high volume sales, keep costs as low as possible, and not spend money on advertising. But what truly separates him from competitors with similar strategies is how he treats his employees.

Costco employees are paid an average of 42 percent more than the company’s rival and Costco employees pay a fraction of the national average for health care. Sinegal believes that if you pay people well, “You get good people and good productivity.”

Some would say that he is altruistic, he says, “This is not altruistic. This is good business.” I think you can also say, this is good leadership!

Imagine the course of our economy and lives if Costco business practices and Sinegal’s leadership style was the standard practiced by all businesses over the last 25 years.

Many people believe that leadership is achieving a high position and success is climbing the ladder as high as possible. John Maxwell argues that “the bottom line in leadership isn’t how far we advance ourselves but how far we advance others.”

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Whether your leadership is exercised at the office, on the field, or at home, there is only one important question to ask: Are you making things better for the people who follow you?  

All relationships and interactions either add to or subtract from a person’s life. If you lead others, then you are either having a positive or a negative impact on the people you lead. Unfortunately, natural human behavior is to be selfish. To add to another takes a much more conscious effort and often is beyond our comfort zone.

Great leaders are adders and although the specifics as to who they lead and where they lead may differ dramatically, one thing is constant — they intentionally add value to others. When you add value to others, you lift them up, make them a part of something bigger than themselves, and you become a leader others want to follow. The longer you add value to others, the more it begins to multiply.

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Albert Einstein said, “Only a life lived in service to others is worth living.” Great leadership means great service.

Maxwell gives four guidelines for adding value to others:

  1. To add value to others, we must truly value others
  2. To add value to others, we must make ourselves more valuable to others
  3. To add value to others, we must know and relate to what others value
  4. To add value to others, we must do the things that God values

As a little girl, my parents established high standards but really only asked that we live by one basic 4,000 year old rule:  “Do unto others as you would have them do unto you.”  Yes, the Golden rule. Admittedly, I was probably 8 or 10 years old before I realized it wasn’t the “Goulding Rule”. Nevertheless, it is no accident that this one rule has stood the test of time.

Consider how you feel when someone goes out of their way to be kind or simply acknowledges you with a smile. Even small acts of service leave lasting impressions. Going the extra mile for others, particularly those you lead, can have tremendous dividends.

Challenge for all of us:  work to develop the habit of serving others each week to accomplish something they couldn’t do on their own. Do it without seeking credit or recognition. Watch for what it attracts to your life.

Watch the way this one big brother serves his little sister who is following him.

http://www.youtube.com/watch?v=uI4svJnSG_0

You may not lay down and become a human bridge for those you lead, but as you add value to others you will become a better leader and you will help others to accomplish goals beyond what they believed they could achieve.

That is the power of the Law of Addition.

Have fun serving!

21-irrefutable

The Law of Addition is the fifth law of the 21 Irrefutable Laws of Leadership. Look for Law #6 next week, the Law of Solid Ground.

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