I have a unique compensation system in my job as executive coach: 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. My coaching process usually takes about 18 months and involves an average of 16 stakeholders.
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 43 years ago.
When I was growing up in Valley Station, Ky., my family was 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. Dad hired a man named Dennis Mudd to put on the roof. To save some money, I worked as his assistant.
Pay Us What It's Worth
Putting on a roof in the middle of the summer in Kentucky is incredibly hard work. No other job I did before or have done since then required this degree of physical exertion. I was amazed at the care that Mr. Mudd put into laying 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 spite of the heat and pain, I looked forward to working with Mr. Mudd every day.
When the roof was finally finished, I thought it 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 meant what he said.
Dad looked carefully at the roof, thanked both of us for a job well done and paid Mr. Mudd, who then paid me for my help.
I will never forget watching Dennis Mudd when he asked Dad to pay only if he was pleased with the results. I knew he was dead serious and my respect for Mr. Mudd skyrocketed. I was only 14 years old, but the incident made a huge impression on me. I knew the Mudd family. They didn't have any more money than we did. I thought: Mr. Mudd may be poor, but he is not cheap. This guy has class. When I grow up, I want to be like Dennis Mudd.
I've received many honors for my work, but I don't think I will ever match the dedication to quality and the degree of integrity Dennis Mudd showed. In the past 29 years, there have been a few assignments for which I have not been paid, and I have never asked for money I felt was undeserved. Financially, how much has this hurt me? It caused me some temporary pain and embarrassment, but I knew I was still going to have a very prosperous life.
How much would not getting paid have hurt Dennis Mudd? A lot. If my dad hadn't paid him, it would have meant the Mudds wouldn't have eaten very well for the next couple of months. Mr. Mudd's pride and integrity were more important to him than money, and he had enough faith in the quality of his work, and in my father, to make the offer he did.
A New Way to Look at Commitment
Dennis Mudd never gave any pep talks about quality or values. He didn't use any 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 I was only going to be paid if I achieved results?" How would your behavior change?
Dennis 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.
Life is good.
My recent book, MOJO, is a New York Times (advice), Wall Street Journal (business), USAToday (money) and Publisher's Weekly (non-fiction) best seller. It is now available online and at major bookstores.