As an executive coach, I have a unique compensation system -- I only get paid if my clients get better. "Better" means my clients achieve positive, measurable change in behavior, not as judged by themselves but by their key stakeholders. This process usually takes about 18 months and involves an average of 16 stakeholders.
My coaching approach has been described in several major publications, such as Forbes and The New Yorker. I have been asked many times where I came up with this "pay only for results" idea. The answer is from Dennis Mudd, who was my boss 46 years ago.
Growing up in Valley Station, KY, my family was relatively poor. Dad operated a small, two-pump gas station. The roof on our home was very old and starting to leak badly. We had no choice but to get a new roof, although this would be a painful expenditure for us. Dad hired Dennis Mudd to put on the roof. In order for us to save some money, I worked as his assistant.
Putting on a roof in the middle of the summer in Kentucky is incredibly hard work. I never have done another job (before or since) that required this degree of physical exertion. I was amazed at the care Mr. Mudd put into the laying of the shingles. He was patient with me as I made mistakes and helped me learn how to do the job right. After a while, my attitude toward this project changed from "grudging acceptance" to "pride in a job well done." In spite of the heat and pain, I looked forward to working with Mr. Mudd every day.
When the project was finally over, I thought the roof looked great. When Mr. Mudd presented my Dad with the invoice for our work, he said quietly, "Bill, please take your time and inspect our work. If you feel that this roof meets your standards, pay us. If not, there is no charge for our work." It was very obvious he was very serious in his request.
Dad carefully looked at the roof, thanked both of us for a job well done and then paid Mr. Mudd, who then paid me for my help.
I will never forget watching Mudd when he asked Dad to only pay for results. He wasn't kidding -- he was dead serious, and my respect for Mudd skyrocketed. I was only 14 years old, but I will never forget this event. I knew the Mudd family. They didn't have any more money that we did. I thought, "Mr. Mudd may not be rich, but he is not cheap. This guy has class. When I grow up, I want to be like Dennis Mudd."
Although I have received many honors for my work, I doubt I will ever match the dedication to quality and the integrity Mr. Mudd showed. In the past 32 years, I have not gotten paid on a few assignments and have never asked for money I felt was undeserved. Financially, how much has this hurt me? At the time, it caused me some pain and embarrassment, but I knew I was still going to have a very prosperous life.
How much would not getting paid have hurt Mr. Mudd? A lot. Not paying him would have meant that his family would not be eating very well for the next couple of months. This sacrifice didn't matter, though. His pride and integrity were more important than money.
Mr. Mudd never gave any pep talks about quality or values. He didn't use any fancy buzzwords such as "empowerment" or "customer delight." He didn't have to -- his actions communicated his values better than any buzzwords he might have used.
We can all learn a lot from this man. The next time you are working on a project, ask yourself, "What would happen to my level of commitment if I knew that I was only going to be paid if I achieved results?"
How would your behavior change?
Mr. Mudd taught me a lesson I will try to live up to for the rest of my life. What is important is not how much he impressed me. What is much more important is that he could look with pride at the person he saw in the mirror every day.
Follow Marshall Goldsmith on Twitter: www.twitter.com/coachgoldsmith