
From rags to Richer: A business success story built on treating people well - js2
https://www.economist.com/business/2019/10/03/from-rags-to-richer
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neonate
[https://outline.com/WBeYRT](https://outline.com/WBeYRT)

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pmarreck
Thank you!

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Ididntdothis
“we have more than enough already”.

I wish more people would adopt that attitude.

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cscurmudgeon
Couldn't read that behind the pay wall.

Meanwhile:
[https://www.economistgroup.com/results_and_governance/result...](https://www.economistgroup.com/results_and_governance/results_at_a_glance.html)

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johnr2
> Couldn't read that behind the pay wall.

Works fine here in Dillo (no JS support) and Firefox with NoScript.

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folkhack
I'm a proponent of this mentality of investing in your people. I'm a huge
Louis Rossmann fan because I feel he builds his business in a way that puts
his people first. Recently this was clear when one of his board repair
specialists got hurt in a hit-and-run accident (was literally ran over by a
truck).

The way that Louis is taking care of his employee is nothing short of
inspiring to me. As I understand from the videos, he's covering his salary
during recovery, has supported him in the legal case, is accommodating his
injuries by sourcing very expensive special equipment (microscope), and has
visited him multiple times in the hospital.

He'll sit on camera saying "I'm a tough boss, I'm hard to work for" etc. While
I'm certain that's true I just see it as high expectations + wanting to retain
top performers. Nothing wrong with that when you put your money where your
mouth is and treat your team like family IMO. I'd kill to have a boss like
that because that's a person I'd be happy to get behind and support!

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EricE
Yes, Louis is the real deal. Authenticity counts. I'm always astonished at the
excuses people make for bad behavior as being "normal". Just look at what he
went through with real estate brokers looking for a new storefront. It's no
accident he ended up taking a space that was brought to him from a broker
(Alan) that had a similar philosophy as to him. That so many people went and
hunted Alan down shouldn't have surprised him - people crave authenticity,
even if they don't know what it is.

Like him or not, a huge factor in Trump's success is he's Trump. What you see
is what you get, warts and all. It may be ugly by most people's standards, but
it's authentic. A candidate keeping campaign promises? What?!?

One would think it would be easier to be authentic but apparently for
politician/authenticity is the same as vampire/holy water.

Always doing the right thing often isn't the easiest path in the short term.
However in the long term it's invaluable. One of the favorite phrases Jude
Judy tossed around is "if you always tell the truth you don't have to
remember!" \- there's a lot of depth and truth there (and I'm sure she got it
from somewhere else, I just heard her say it multiple times).

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js2
Another company renowned for treating its employees well is Patagonia. The
founder, Yvon Chouinard, wrote a book about it ("Let My People Go Surfing")
and speaks about it here:

[https://youtu.be/EHS2X-KoN_w](https://youtu.be/EHS2X-KoN_w) (edited version)

[https://www.youtube.com/watch?v=EHS2X-KoN_w](https://www.youtube.com/watch?v=EHS2X-KoN_w)
(full version)

I can't think of any other companies off the top of my head, but I'm hope
there are plenty that I'm just ignorant about.

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gumby
I often see the word “company” and “corporation” used interchangeably. But a
corporation is just a machine invented by humans; a “company” is a group of
people.

A company, of run properly, is a great way to get people together to
accomplish a complex objective. A corporation is merely one of the tools they
use.

If you think of people / companions (same roots) as, you know, actual humans,
your business will typically be more effective.

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ksdale
Your point is well taken, but in the US, at least, a limited liability company
is also an entity that you can form like a corporation, or a partnership, so
the words don't necessarily conform to their dictionary definitions and are,
perhaps, more interchangeable than you suggest.

I also think there's a broad divide in the world between those who think that
corporations are dehumanizing and those who think of them as simply a group of
people, like the dictionary definition of a company.

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redtexture
A company is a partnership of individuals, on many dimensions, legal and
otherwise.

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WalterBright
Of course. The most successful businesses are ones that give people what they
want. The same goes for how you treat your employees.

It's why slavery is hopelessly unable to compete with free markets.

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Judgmentality
> It's why slavery is hopelessly unable to compete with free markets.

This sounds incredibly wrong, but obviously as someone who finds slavery
morally reprehensible I would love for it to be true. There are so many
industries that, as far as I can tell, could never have begun without slave
labor - tobacco being the obvious one that created a boon for the burgeoning
United States. Sugar cane in Brazil is a modern example. Chocolate from the
Ivory Coast is also interesting, because there is fair trade chocolate you can
buy - the fair trade chocolate is a rounding error compared to the industry as
a whole.

If you're trying to produce a product in bulk that doesn't require highly
trained employees, how would slavery not help your bottom line?

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WalterBright
> This sounds incredibly wrong

I know it's not the conventional wisdom, but read up on the economies of the
US free Northern states and the slave Southern states. The failing southern
economy juxtaposed with the prosperous north was a major factor leading to
war.

> how would slavery not help your bottom line?

1\. slaves hate you, and would like to kill you

2\. slaves will do as little as possible

3\. slaves will not make any constructive suggestions

4\. slaves will run away

5\. slaves will require armed guards

6\. slaves will sabotage your operation at every opportunity

7\. slaves will spit in your food (and much, much worse)

8\. slave economies tend to make it illegal to educate slaves, even illegal to
teach them to read, making them very unproductive

9\. you wouldn't want to be in a room with a few of them without armed guards

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Judgmentality
Without more evidence, I think we just have to agree to disagree. I believe
everything you've listed is a second-order effect, and depending on the
situation (such as sugar cane in Brazil) many of them do not even apply at
all. The sugar cane example is so unique I'm not sure _any_ of them apply, the
only one I think might is #8. If you have Netflix and are interested, watch
season 2 episode 3 of Rotten. There are other episodes on other industries as
well involving what is essentially slave labor that I believe do not apply to
many of your rules as well.

I am not saying slavery is always the best way to get an edge in a competitive
market, but sometimes it is. Otherwise, why would people still be using it
today? There are literally billions of dollars to be made every year in
multiple industries if what you're saying is true.

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WalterBright
> Otherwise, why would people still be using it today?

Generally because there is something else going on that interferes with the
free market operating.

There's a good reason that slave economies used to be commonplace, and when
free markets appeared they disappeared, one by one.

Do you think the US became a superpower because of slave labor? (Recall that
the wealth produced by the slaves was demolished in the Civil War.) In example
after example, countries that ditched slavery and turned to free markets
became much, much wealthier.

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Judgmentality
> Do you think the US became a superpower because of slave labor? (Recall that
> the wealth produced by the slaves was demolished in the Civil War.) In
> example after example, countries that ditched slavery and turned to free
> markets became much, much wealthier.

I feel like China, while an extremely complicated example, is a good
counterpoint to this.

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WalterBright
China switched to free markets.

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Judgmentality
That's a very controversial statement without a lot more context. You can even
google "is china a free market?" and see people arguing about it today
(multiple articles from 2019). Many sources disagree with you, including
Wikipedia. I realize this ignores almost all of the nuance and it is not
binary, but I still would not consider the Chinese economy a free market.

I appreciate the discussion, but I think we just disagree.

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WalterBright
> That's a very controversial statement without a lot more context.

Here's an overview of the switch to a market economy:

[https://en.wikipedia.org/wiki/Chinese_economic_reform](https://en.wikipedia.org/wiki/Chinese_economic_reform)

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Judgmentality
Let's try something I saw on the front page of HN today about how to disagree
better :)

If the United States is an 8 out of 10 on the free market scale, what would
you consider China?

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WalterBright
It's less free than the US, but it's a lot more free than what it was before
1978. China's prosperity improved in direct correlation with adopting free
market policies.

For another example, look at North vs South Korea. Same country, an arbitrary
line drawn, one prospers the other doesn't. East and West Germany, same thing.
North and South US before the Civil War, same thing.

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Judgmentality
I agree with all of your examples and historically the transition has worked
as you described. I think that after China opened its borders for trade the
transition is so murky you can barely even draw a line like you can for the
others. One obvious difference between China and the others is their widely
agreed upon currency manipulation. There is also the fact that companies are
essentially owned by the state, and you can really only operate with the grace
of the government. I believe censorship is severe enough there to be a factor
as well.

I understand (or at least I think I understand) your point about how by
becoming freer they have prospered more, but I think it is so much more
complicated than that when it comes to China. I realize it's always dangerous
thinking to say something is an exception; but China is an exception. Yes,
China reaped many rewards by opening up trade, but they clamped down on many
things simultaneously - essentially trying to have the benefits of free trade
with the convenience of a draconian state.

This is going in a slightly different direction than I intended. My original
point was about slave labor for specific industries (as opposed to countries),
and I feel my point stands that some industries benefit from it. On the Ivory
Coast of Africa, they have both fair trade and slave labor chocolate - the
slave labor chocolate absolutely dominates the market. My next point was that
China didn't become a super power simply by becoming a free market (and I
contend is still is not a free market, although it is freer than it was 50
years ago), but by hoarding natural resources, manipulating their currency,
exploiting workers (their own and from Africa), disallowing international
competitors internally unless specifically sanctioned by the Chinese
government (so essentially China decides who is allowed to participate), and
other bullying tactics.

While I think China has a much more prosperous future than the Soviet Union
did and they've managed their internal affairs much better (although I do
think shit is going to hit the fan there soon in a very bad way), they became
a superpower first and foremost by strong-arm tactics. Opening the market with
the US and the rest of the world just provided them the money to do so, and we
have bent to their will more times than not.

This has been fun, but we really need to agree to disagree at this point :)

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NotAnEconomist
Setting aside the morality -- which is its own reason to treat people well --
it's damnably effective.

Something I got from a book on negotiating:

It doesn't matter how good of a negotiator you are, if you develop a
reputation for being a jerk, you're going to fail.

Why?

Because for every room you're in being the best negotiator, your reputation is
in ten, negotiating the other way and talking you out of deals you didn't even
know about.

Conversely, if you develop a reputation for being a reliable partner and a
fair dealer, then your reputation will do the hard work for you. People will
talk you into deals without your input, because they _want_ to work with
people like that.

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gao8a
This. Winning is not how can I rip em off. Winning is a feeling of fairness in
all parties and repeat business.

