Why 75% of your generosity provides no value—and how to change that.

Put us out of business because you are so damn generous with what you give the people who walk in this door . . . . I challenge you to put us out of business with how generous you are. Go do it. Give away free stuff.

No CEO would ever say that, right?

Certainly not a CEO in the building industry. 
Generosity will run you out of a bonus, if not out of business.

Other than carpenter’s pencils and your logo’d hats that stand way too tall on a human head—you don’t give away free stuff in construction. 

 

Except you do. 
Every day.

 

Material, for example.

It was delivered, but then it disappeared. 
Please send free material.  

It was delivered. It’s installed. It looks great. It’s the wrong color. 
Please send free material.  

It was delivered. But the painters walked all over it with muddy boots.
Please send free material.  


Yessir, you are generous to a fault.
Literally. 


75% of the time, your generosity provides no real value—and that’s your fault. When it comes to giving away free stuff, the difference between generosity and complicity boils down to 2 things: acknowledgment and value.

 

Acknowledgement: Do I acknowledge you provided me with free stuff? 
Value: Do I value the free stuff you provided me?

Your team assumes your frequent generosity is resonating with Purchasing Managers (acknowledgement) and confuses the essence of value (it’s what I perceive it to be, not you).

 

Here’s the truth: word of your generosity is not getting around. When construction managers drop the ball, they have a vested interest in keeping news of the fumble local. And if Purchasing Managers don’t know about it, they can’t acknowledge it. 

And there’s worse news: some Purchasing Managers may hear it. 
The may acknowledge it. 
And they may not value it. 

They expect it.  
Value is what they perceive it to be, not you.


But there is hope. 

In my book, Behind Your Back, Rule 4.6 is Embrace the Z.D.I. 

Z.D.I. stands for the Zero Dollar Invoice.
     
To properly execute a Z.D.I., just send a standard invoice with agreed-upon pricing, but with a full discount at the bottom. For example, a four-hour, round-trip box truck with two employees to pick up extra materials: 

  • Man hours = 8 x $35/hour = $280 
  • Fuel charge = $120 
  • Restocking fee = $100 
  • Total Charge = $500 
  • Hartmann Homes Discount = $500 
  • Net balance = $0

 

PS: You’re welcome. 


Z.D.I.s help in three critical ways: 

ONE 
The Z.D.I. ensures acknowledgment of your generosity with the Purchasing Manager. 

TWO
The Z.D.I. allows you to evaluate the Purchasing Manager’s perception of the value.

THREE 
You are creating a paper trail for future evaluation within your own company. If your Hartmann Homes Z.D.I.s add up to $150K at the end of the year, you may want to reconsider your interest in their business.


As a Purchasing Manager, I implored my vendors to submit Z.D.I.’s monthly. Few did. Good Purchasing Managers want to know about challenges— and your subsequent generosity—because those additional costs are ultimately factored into contracts.

 

So did a CEO really say that quote at the top?
Yes. 

 

Randy Garutti, CEO of the recently IPO’d Shake Shack, challenged his team to take their fast-casual, burger dining hospitality to a new level.

When a four-year-old is crying from hunger pangs after an hour wait for burger & fries, a free cup of ice cream (cost of cup + spoon + napkin + ice cream + labor = $0.88) will be acknowledged and valued immediately. That’s a certainty.

 

As for your free box truck with 2 employees picking up 84 lineal feet of primed poplar shoe molding? That’s uncertain.

 

Take the uncertainty out of your generosity.

 

Just send a Z.D.I.—a Zero Dollar Invoice—when you perform activities you feel you should be paid for . . . but want to be generous.