Why do I leave money on the table? It’s for the long run.

Leave money on the table

One rainy morning in 2005, I walked out of class in Popovich Hall on the campus of USC. Next to the Starbucks coffee cart, I saw a floor sign, “Dennis Bakke. CEO of AES. Speaking at 11am.” I followed the arrow to an auditorium packed with MBA students. I was an undergrad, and I had happened upon something great. I found an open seat. What I heard next made an impact on me that has lasted to this day.

A few months earlier, I had traveled to the city of Acapulco. There, I often passed street vendors who offered all kinds of beads, crafts, street tacos – you name it. I learned in Acapulco that stuff was negotiable. I enjoyed getting the best deal. It made me feel powerful. I thought negotiation was supposed to be a win-lose thing. Then, I looked down at the stage. Dennis Bakke moved to the podium.

Dennis Bakke was introduced as the CEO who took his company, AES, from a $0 to a $8 billion a year company. At AES, the employees closest to the work made important decisions – not executives. Dennis shared stories about how­ this approach created a win-win culture where employees felt Joy at Work. He named his book after it.

Instead of hogging all the money and power for the C-suite, Dennis left it on the table for his employees. This made employees invest their best efforts in AES. The company had its challenges. It faced a liquidity crisis after its largest competitor, Enron, failed. But AES stood the test of time. Today, the company earns yearly revenues of $15 billion.

A year later, I saw a poster near the Marshall School of Business that said, “Learn from leading entrepreneurs.” I jotted down the email address for the Southern California Entrepreneurial Academy. The program took me and other students to Quicksilver to hear from its founder, Bob McKnight. We heard from 10 founders over 10 Saturdays. A theme that I kept hearing was, “Leave money on the table.” It pays over the long term to take care of the people around you. These early lessons at USC changed my mind and instilled in me a win-win negotiation style.

Years later, I hired a branding consultant for my second company. She charged $700 an hour. Her staff forgot to add a time entry to the invoice. Money was tight for my young company, but I stuck to my values and pointed out the mistake. I hired a data mining firm. They quoted me a licensing price that I knew wasn’t profitable for them. I told them to raise it.

Over time, an ecosystem has begun to form around me of clients and vendors who also see value in leaving money on the table. This has translated into profitable business outcomes. My projects finish on time and on budget. When everyone’s needs are met, we spend more time focusing on the big picture, which is stopping lead decay. When we stop lead decay, the client makes more money. This grows the pie, and everyone gets a bigger piece next time around.

My emerging ecosystem works best when everyone seeks a win-win outcome. But sometimes, people do not. I have learned painful lessons working with the wrong people. Because of these lessons, I have learned to walk away from deals where our values are at odds.

I would like to hear your philosophy on leaving money on the table. If you could, why don’t you take the new few minutes and share your story in the comments below.

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