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BOOK REVIEW: Why it pays to be a business giver

Jan 12 2016 07:42
Ian Mann

Give and Take: A Revolutionary Approach to Success, by Adam Grant    

“GIVERS”, “Takers”, and “Matchers” are three fundamental styles of interacting with others. “Takers” use other people solely for their own gain. “Givers” focus on acting in the interests of others, even when the benefits to others exceed the cost to themselves. “Matchers” operate on the principle of fairness by seeking reciprocity.

Which one best describes you in business?

Of course, in marriage and friendships we contribute whenever we can without keeping score. We also shift from one style of behaviour to another, across different work roles and relationships. However, we all have a primary style and it has been shown to play as much of a role in our work success as hard work, talent, and luck.

Which style of relating is most likely to end up at the bottom of the success ladder, and which style on top? Pause here for a moment and reflect on your personal experience.

Research demonstrates that givers sink to the bottom of the success ladder - they make others better off, but sacrifice their own success. In a study of more than 160 engineers in California, the least successful engineers were those who gave more than they received.

A study of more than 600 medical students in Belgium showed the lowest grades going to those described as givers. Salespeople were no different, with givers generating two-and-a-half times less in annual sales.

“On average, givers earn 14% less money, have twice the risk of becoming victims of crimes, and are judged as 22% less powerful and dominant,” reports author Professor Adam Grant, the youngest full professor of the Wharton School of Business.

Givers at the top of the ladder

If the givers are at the bottom of the success ladder, who then is at the top - takers or matchers?

The data reveals a surprising pattern – the givers again! “This pattern holds up across the board,” Grant reports. “The top performers were givers, and they averaged 50 percent more annual revenue than the takers and matchers.”

It was only at the start of medical school that givers underperformed. They increased their scores each year and by the sixth year, the givers earned substantially higher grades than their peers. When the givers became doctors, they climbed still further ahead. And this pattern holds true across occupations.

David Hornik, a venture capitalist, is admired for his commitment to acting in the best interests of entrepreneurs. When he gives an entrepreneur a term sheet - a bullet-point document outlining the material terms and conditions of a business agreement - he also suggests that they shop around to ensure they get the best deal for themselves.

Other investors, and if it is a promising deal there are always others, give entrepreneurs a tight deadline to respond to their offer in order to prevent shopping around.

The best venture capitalists have an acceptance rate of nearly 50% of the term sheets they offer. In the 11 years as a venture capitalist, Hornik has offered 28 term sheets and 25 have accepted.

“In this book, I want to persuade you that we underestimate the success of givers like David Hornik,” Grant asserts.

Giving can be more powerful and less dangerous than most would believe. “Givers reverse the popular plan of succeeding first and giving back later, raising the possibility that those who give first are often best positioned for success later,” Adam explains. The venture capitalist Randy Komisar remarks: “It’s easier to win if everybody wants you to win… (If) you don’t make enemies out there, it’s easier to succeed.”

Success is less about raw talent or aptitude, and more about the strategies givers use. Givers are not necessarily nice, and they’re not necessarily altruistic.

In a purely win-lose interaction, giving rarely pays. Most of life is not win-lose. People who choose giving as their primary reciprocity style end up reaping rewards. One reason why givers take time to succeed is that it takes time for them to build goodwill and trust, and to establish reputations and relationships that enhance their success.

“Being a giver is not good for a 100-yard dash, but it’s valuable in a marathon,” says Chip Conley, founder of Joie de Vivre Hotels. Today, speed is making the long-run shorter, and technology is amplifying the advantages of being a giver. In the past, most people worked in independent jobs that rarely required collaboration, so it was fairly inefficient to be a giver.

Today, more than 80% of Americans work in service jobs where giving is not a choice, but a business necessity.

Steve Jones, the former CEO of one of the largest banks in Australia, commissioned a study of successful financial advisers. It was not financial expertise or effort that made for success, it “was whether a financial adviser had the client’s best interests at heart, above the company’s and even his own”.

All this needs to be calibrated by observation, that too many givers become pushovers and doormats, and fail to advance their own interests. What differentiates successful givers from failed givers is the degree to which the givers expressed two key motivations: self-interest and other-interest. Self-interest involves pursuing power and achievement, and other-interest focuses on being generous and helpful.

This is well illustrated by a study of “Caring Canadian” award winners. The award is made by the governor general of Canada to honour volunteers.  In their life stories, these highly successful givers mentioned a quest for power and achievement almost twice as often as the comparison group. They also had roughly 20% more objectives related to gaining influence, earning recognition, and attaining individual excellence.  

Takers score high in self-interest and low in other-interest, and selfless givers score high on other-interest and low on self-interest. Selfless giving is a form of pathological altruism, an unhealthy focus on others to the detriment of one’s own needs.

“If takers are selfish and failed givers are selfless, successful givers are “otherish”: they care about benefiting others, but they also have ambitious goals for advancing their own interests,” Grant concludes.

Much food for thought.

Readability:     Light --+-- Serious
Insights:         High +---- Low
Practical:         High --+--Low

* Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. Views expressed are his own.

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ian mann  |  opinion  |  book reviews
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