124: The Science Behind Trust and High-Performance with Paul Zak

By March 1, 2017Podcasts

 

Paul Zak illuminates how the brain chemical oxytocin relates to how we can develop a higher trust, lower-stress work culture.

You’ll Learn:

  1. How to measure and manage trust in the workplace
  2. The benefits of a high trust workplace
  3. Why hugs should be the new handshake

About Paul

Paul J. Zak, PhD, is founding Director of the Center for Neuroeconomics Studies and Professor of Economics, Psychology, and Management at Claremont Graduate University.  He was part of the team of scientists that first made the connection between oxytocin and trust – his TED talk on the topic has received more than 1.4 million views. Paul is the author of the new book Trust Factor: The Science Of Creating High-Performance Companies. Also the author of The Moral Molecule, he has appeared on ABC World News Tonight, CNN, Fox Business, Dr. Phil, and Good Morning America.  He lives in Claremont, CA.

Items Mentioned in this Show:

Paul Zak Interview Transcript

Pete Mockaitis
Paul, thanks so much for joining us here on the How to be Awesome at Your Job podcast.

Paul Zak
Thank you, Pete.

Pete Mockaitis
Oh, I got such a kick out of your TED Talk and your book. So I want to know, first of all, what’s the scoop behind Sister Mary Maristella and her influence on you and your career? And I may have some follow-ups.

Paul Zak
So those years of Catholic school getting hit in the knuckles with the ruler. No, Sister Mary Maristella was the nun name of my mom.

Pete Mockaitis
Yeah.

Paul Zak
So my mom was a nun before she became my mom. So she, at some point, decided that wasn’t the career for her and dropped out and met my dad. Within three months they were married and they stayed married for 55 years. How about that? Pretty crazy.
So my mom had a very black-and-white view of human behavior. Is there right or wrong. And it seems like, to me, most of the interesting human behavior is in the gray zone. And somehow she leached into my research as a professor and I started really thinking about that kind of good and bad behavior. And I spent a lot of time thinking about this question, “Why are we ever nice with people? Why do we cooperate with people?” And sometimes people that we like or love, we sometimes treat them badly.
So what’s the deal with that, right? So what’s going on in our brains that might tell us, “Hey, Pete. Great guy. I want to hang out with him, could certainly work with him”? And then, I don’t know, “Bob seems really sketchy to me.” So that seems like a pretty useful mechanism if I could find it. And, as you know, it took 10 years and lots of research and tons of blood draws and all kinds of things.

Pete Mockaitis
Wow, yeah, that’s so fascinating. And from that you determined a couple of things associated with a key molecule that makes a world of difference. What’s the story there?

Paul Zak
Right. So we, based on the animal literature, hypothesized that this brain chemical oxytocin might be the signal trust on human beings, or cooperational familiarity, and it was a rich animal literature, but your brain is a very conservative organ because it takes so much energy to run. So oxytocin also works during reproduction as a hormone to help contract the uterus and promote milk flow.
And so from a human perspective, or from a medical perspective, it really just was slotted into this reproductive hormone slot for women, but men’s brains make it too, and we developed a protocol to measure oxytocin in human beings, as I said earlier, with very rapid blood draws. And in doing that we showed that when someone tangibly, intentionally trust you, your brains makes this chemical, and the more of this chemical that’s made the more you reciprocate that trust by being trustworthy. And then we spent about 10 years looking at the promoters, or the inhibitors, of oxytocin release to understand those variations.
I love my wife. I’ve been married for 27 years, and every once in a while I just think about for a half a second about, “Man, I like to throw her off the balcony.” Right? Why? Because I’m stressed out, or she’s stressed out, and you suppress that, of course. So where’s that come from?
So, it turns out, for example, that high levels of stress inhibit this connection-bonding chemical oxytocin. Anyway, so it’s a complicated story. It’s an interesting story but as I was doing this work, about, I don’t know, eight or nine years ago, a company started knocking on my door saying, “Hey, we think trust is important at our workplace, and you are some trust expert. Why don’t you help us build a culture of trust?”
And, Pete, I have to tell you how naïve I was. My first answer was, “Oh, yeah, I’ll come in with needles and tubes. I’ll take blood from your employees or I’ll measure oxytocin,” and their face just turned white, and they’re like, “Oh, no, we can’t do that.”
Subsequently, some very nice companies, a couple I mentioned in my new book Trust Factor, including Zappos and Herman Miller, did let me come in, take blood from their employees, measure productivity, and measure their EEG. We did a lot of work with some very nice companies so that we could develop tools that allow us to identify not only how much trust is within an organization but, importantly, the building blocks that leaders could use to create a culture of trust and manage that culture for high engagement and high performance.

Pete Mockaitis
Oh, yes, that’s perfect. And that’s exactly what I want to dig into now a little bit. So, in your book Trust Factor, you kind of break that down into eight components which spell out the word oxytocin as an acronym. That’s some of the strongest acronym game I’ve ever seen. Nice work. So what are some of those components in terms of the rundown that’s comprising trust in organizations?

Paul Zak
Right. So I certainly can go through those with you, but I want to make a real important point for listeners, which is it’s not just a cute acronym. When we did this research we developed an online tool that companies can use to assess their trust without taking blood from employees. And my view is that culture, or showing that culture is a huge lever for high performance, and it should be measured and managed.
So once you can measure trust with an organization then you need to manage that. And so the management part came from me essentially not being able to tell companies how to increase their trust. And so we did lots of research and drawing research from some other labs as well, and we found these eight factors, as you said, that have the acronym oxytocin.
So that stands for ovation, expectation, yield, transfer, openness, caring, invest and natural. And an important point here is that all these are derived from the neuroscience. So we started by asking both the most simple, but the most profound question about work which is, “Why do people actually show up?” And the trivial answer is, “Well, you get paid,” or, “If you don’t show up…“ Okay, why do you show up and actually try? Right?
So this sort of standard view that we all learn in ECON 101 is that, “Well, work provides this utility and I have to pay you to compensate you for the pain in the butt things you have to do at work.” Except sometimes that’s not true. Sometimes, like for you and me, for example, I love what I do and I work way more than I’m paid because I just dig it and I get a lot of pleasure from it and I got a great team.
So once we asked that, we asked, “Okay, what kind of culture would there be if people showed up who weren’t being paid?” So consider everyone a volunteer. Now let’s build culture from scratch and ask, “What do we know about the neuroscience of social interaction that would tell us about what would make people work their butts off for a group goal?”
And so we found these two key factors, one is trust and its building blocks, and the second is what I call transcendent purpose, why that organization exists at all. And because each of those eight oxytocin factors is directed from neuroscience, the neuroscience tells us specific ways to get the most bang for your buck, if you will.
So if I want to tweak these factors to increase trust, then the neuroscience will guide me on how to get the biggest impact on brains, brain activation and, therefore, on subsequent behavior at work. So maybe I’ll give you a concrete example. I should probably take a breath.
So, the first factor ovation, that’s my word for recognizing high performers. So we know from the neuroscience that individuals who are recognized close in time when a goal is met, who are recognized for meeting a goal, not for trying, who are recognized tangibly, personally, publicly, unexpectedly, all those have a much bigger impact on the brain than when you don’t do those things. And so you’re setting up potentially a tight feedback loop that says, “In our culture we value people who really hit the ball out of the park, and we want to publicly recognize you, Pete, for the amazing work you’ve done. Now, tell us how you did it. Tell us how you ran your team. Tell us what problems you have.”
So ovations both gives us a chance to build on tight feedback loops and also set up aspirations for those who are witnessing that celebration, but it also gives us a chance to debrief and identify best practices. Because, as you know, every project you do there’s going to be some weird crisis that’s going to happen. And by sharing that information about how you overcame that difficulty, now the whole organization learns about that, and then we can avoid that problem in the future.

Pete Mockaitis
Oh, my gosh, so much I’d love to dig into there. So, all right, I’ll prioritize a bit. So these eight components that you laid out there, in your experience working with companies and doing the O factor survey. Did I say that right?

Paul Zak
Correct. O Factor.

Pete Mockaitis
That’s a good test. It’s really fun. Is that OFactor.com/book, right, is where you can take that?

Paul Zak
Right.

Pete Mockaitis
And so I’m intrigued to know sort of, what’s the breakdown in terms of how common we see high levels of trust          versus low or mediocre levels of trust in organizations across the world?

Paul Zak
It’s a wonderful question. And people have taken this survey all around the world. And so we marshalled a bunch of different kinds of evidence in the book for the impact of trust on performance. But your first question is what does trust look like? So everything for companies I’ve gone and worked with that have implemented changes so we can track before and after trust levels and again performance levels multiply measured during a nationally-represented survey in the U.S. of employees.

And so we find there is a big trust deficit in the U.S. There are about, you know, you could look at the top 20% of companies of trust in the U.S., and compare those to the bottom 20%, you see a huge amount of lost value that hasn’t been created because people are not being empowered and held accountable for what they’re doing.
So here are some data from that. So comparing the top and bottom quartiles, we find that people who work in high-trust companies report 74% less chronic stress, they have 106% more energy at work, 50% higher productivity, they take 13% fewer sick days, they say they’re engaged at work 76% more. And even interesting measures outside of work are better when you work in a high-trust organization. So those high-trust organizations are 25%, sorry, 29% more satisfied with their lives outside of work. So they’re happier spouses, parents, citizens and they face 70% less burnout as well.
So something interesting is going on here which we have worked to create really human-centric workplaces where people are empowered to control their work lives to make decisions to execute as they see fit. From a leadership perspective it looks much more like a coaching model than a kind of a micromanagement model. And we know from lots of research in psychology that once you control what you do at work then you are happier and healthier, psychologically and physically happier and healthier.
So, you know, many of the interventions I’ve talked about in the book are very low cost. And, hey, I do a calculation in the book on the return to investment to increasing trust levels and it’s very, very high. It’s, you know, $25 to a dollar spent. So why would you not do this? It’s good for the humans, it’ll improve performance in the organization, and you reduce turnover of employees, you reduce the sick days. I mean, everything really gets better because you’re not being ground down at work.

Pete Mockaitis
Oh, that’s so fantastic. So, now, I’d like to maybe zoom in to the vantage point of an individual professional. So, let’s say, you are a manager, or even an individual contributor, I’d love to hear so what are some of the top behaviors, practices that one ought to start doing right away to boost the oxytocin flowing and the trust, and get a taste of some of these fantastic results you laid out there?

Paul Zak
Yeah, thank you. I mean, that’s the key question, right, is, “Where do I want to go first?” So, what we recommend organizations do is do a survey, there are surveys, use our survey, whatever you like, and identify of these eight factors which is the lowest. So, like, everything in economics, or biology for that matter, the more you increase something the less impact you have. So there’s some sort of a concave effect.
So if your, let’s say, score on transfer, which is our notion for self-management, is at the 98% percentile, there’s no reason to get excited about pushing that to a 100. You’re not going to get much bang for the buck. So we start with the lowest factor. And across our nationally-represented sample that is invest which is our word for facilitating both professional and personal development of employees.
And so if I wanted to improve invest then I can sit and talk about growth potentials. So we know, again, psychologically, that’s very important. So we drew up something we call the whole person review which gives people, once a year, a chance to look forward instead of looking backwards. So if you’re following this systems create a high-trust culture, I, as your supervisor/coach, I’m giving you feedback all the time on performance. I’m celebrating the wins. If things go badly I’m working with you to solve that problem. I’m a facilitator of your success, if you will.
So I don’t need to spend the time on the annual review looking backwards because I’ve given you feedback literally every day. I love the daily huddle. I don’t know about you, but the daily huddle is great. Do a five-minute huddle, do a weekly one-on-one meeting, “Are we meeting milestones?” So, again, great accountability but that employee is executing as he or she sees fit. So invest is generally the lowest across the companies, that’s international sample.
So what do I do for that? Well, one is to look forward to ask, “Hey, Pete, you’ve worked here for three years, what job would you like me to help you get next?” So that’s a really provocative question, right? “So I want to know maybe that job is here. Maybe that job is not here.” So a lot of the really smart companies, that have employees who are highly productive, like Google, like Microsoft, they promote having their employees go elsewhere.
So if I worked for Google for five years and I go to, I don’t know, Oracle for three years, I learn a whole bunch of stuff that Oracle pays for, and then I come back to Google, the companies boomerang employees. So I boomerang back, and now I’m even more productive than I was because I had those training from Oracle. So Google does a really good job at maintaining a database of former Googlers, and then when they have openings, just emailing them and say, “Hey, we got this great job. It might be good for you. Think about coming back.”
So same kind of thing. So I want to talk about that with the people who work with me which is, “Where do you want to be in the next couple of years? Right? What would you really like to be doing? And maybe you’re like really happy where you are. Awesome, let’s make sure you’re really successful at that job.” But they say, “Look, I really like to do this other thing, and this company doesn’t have that. It’s not really available to me.” I say, “Great. Well, we’re going to give you some work training so that you can transition into something that you would actually love to do.”
Because if I don’t do that, Pete, yeah, I’m holding on to this employee longer but that person is frustrated. They’re not going to perform the highest levels because they’re just bored. So part of this is mentioning that.
The second is personal perspective. So maybe really smart companies that we profiled in the book – Google, SAS Institute, Herman Miller – they facilitate personal development as well from health and wellness to healthy foods, to subsidizing adoptions, elder care. So really want to make sure that your family life is tight, that you’re happy outside of work, because, as you know, you’ve had employees, if you’re not happy outside of work, you’re not going to be happy or productive inside of work.

Pete Mockaitis
Right.

Paul Zak
So I think the punch line is really thinking about what in those eight components you’re weakest in and then focusing on those. So that’s a long answer so let me be more simple. Summarizing all this, you need to see people you work with as full and complete human beings, which means they’re imperfect, they have emotions, they have a personal life, and seeing them fully for who they are. And when you do that you both give them the real gift of recognition as the complex creatures that we are, but also empower them to show who they really are, to be their authentic selves at work, and to recognize that none of us is perfect, and none of us can do this alone. We’ve got to come together as a team.
And when we have team goals, particularly stretch goals, it motivates the brain to create oxytocin and a host of other neurochemicals I talk about in the book that get rid of all the crap sometimes we have at work and the stresses, and we focus on this joint project that we’ve got to do, this key endeavor. And when we finish that then we get to celebrate and then we build this bonds. And then the next project is easier, and the next project is even easier.

Pete Mockaitis
Oh, that’s so exciting to think about and see that unfolding. And so I’d love to hear, so if invest is a component that many organizations are falling short on and need to do more of, is there anything else that leaps to mind in terms of organizations are kind of doing a lot of this and they would be well-advised to cut it out?

Paul Zak
Yeah, that’s a great question. I mean, I think the number one thing that comes to mind is fear-based management. And you may know the history better than me, but it seems like it’s a hold-over from the 18th century, I don’t know, pin factory, Adam Smith kind of labor thing. But, nowadays, if I want top performers I better create a culture where these people can thrive and flourish and grow or they’re going to go somewhere else where there’s definitely a work or challenge.
So I think this fear-based management we know from a neuroscience perspective inhibits oxytocin release and diminishes performance. People end having, what psychologists call, learned help assist. So if I ever come into your office, and every time I do, or most of the times I do, you scream and yell at me and threaten me, I just give up, right? And I’ve worked for guys like that, and I’m just like, “Man, I’m watching the clock. Like 5 o’clock I’m out of here, and 5:05 p.m. I’m on LinkedIn looking for a new job.” Right?
So fear is a great short-term motivator, you know, if you’ve ever, I don’t know, went skydiving or done some whitewater rafting. A bit of fear is not bad. And so I talk about how stress is not a bad thing at work, and even making you happy at work is not what the neuroscience says I should do. I should challenge you. I should give you the opportunity to do something extraordinary, give you tools to be successful, then recognize if you can meet that goal.
So I don’t want a low-stress workplace, I don’t want everyone singing Kumbaya and not getting any work done. But I do want high performers who are in a culture that recognizes that peak performance is the goal. And most of the time that goal probably will be missed but when it’s hit is extraordinary and it’s got to be recognized. So if I’m going to fear you into it then you’re just going to give up. So it’s really getting rid of that.
Even the language I talk about in the book. So I don’t like the word employee. I prefer colleague. We’re all working together. I don’t like offices. When my lab was built the contractor said, “Which corner do you want your office in?” And I said, “I don’t want an office. I want to be moving. I’m a coach. I’m a leader. I’ve got to be working with people. I’m always on the move.”
And we talked about a number of projects we’ve done. For example, one at the office designer Herman Miller which we actually measured productivity in open versus closed workspaces. And, in fact, in an open workplace that’s noisier, that’s got people moving around, people are more relaxed, they’re more productive, they’re more innovative in tasks we gave them to do so we can actually quantify all this. And so office design matters and how treat each other matters.
So I think getting everyone on the same team and seeing the human set point of view instead of a piece of human capital, which sounds like a machine, I don’t even know what human capital is, skills. You’re a human and you’re complicated and you’re wonderful, and you can innovate if I give you some runway. And so part of trust factor is really giving people runway. Well, from a leadership perspective, making sure you’re checking in, you’re giving clear milestones, people are hitting their goals, and also not punishing people for making mistakes. If it’s an honest mistake and you try to innovate on something, and if there’s no mistakes, no innovation.
So one of the book’s, sorry, one of the companies I profiled in the book is a software company called Valve that makes a bunch of online multiplayer games, Left 4 Dead, others. And fascinating company, so they self-organize, you’re hired, you get a desk with wheels and you are instructed to find a group to work with on a project that, to you, looks “interesting.” Wow, now that’s, we’re hiring, inspiring people.
“You guys are going to find a way to create value. If you can’t find a way to create value then it’s probably not the place for you. But if you do, you know, do something that you really dig, that you can wake up and be excited about doing. And then when we’re done with the project we’ll do a 360. We’ll figure out how much people contributed. We’ll give people feedback. And as long as we have clear milestones as we’re going through the project we know where we’re going, we know if we’re hitting those goals.”

And Valve said, it says in their handbook, “If you screw up we don’t care. And if you screw up and it cost us money, we don’t care. And if we screw up, if you screw up, and it’s publicly known and it delays the launch of a product, we don’t care because we want people to innovate at the highest levels. And so the only way we can do that is not to punish you for making the mistake, an honest mistake.”

Pete Mockaitis
Oh, that is powerful. Oh, thank you. And so now I want to follow up a little bit on what you said with regard to the stress piece. What’s sort of the best thinking with regard to navigating the benefits of having sort of a positive stretch, stressful sort of moment or challenge versus sort of like the chronic workplace stress that just sort of tears down and debilitates?

Paul Zak
Right. So that chronic stress that inhibits our ability to look forward to be innovative and actually to collaborate effectively, chronic stress has a number of interesting neurochemical changes but it narrows our focus to the here and now. It narrows our vision to just the thing in front of us. So that’s not what I want from innovative employees. I want people who are thinking about the big picture, thinking about how to wow this client. Again, coming from the neuroscience, it tells us not only does it sort of feel weird if I’m chronic-stressing people. It’s not going to be effective.
And how to reduce that? So reduce uncertainty about that. Tell people why they’re doing another project. But that challenge stress is also important. So, as I said earlier, the brain is actually a very lazy organ because it takes so much energy to run. So when I have a stretch goal, and my team is empowered to reach that goal, they have the resources to do it, the training to do it, and they’re trusted to execute as they see fit, that is I’m giving them enough runway, then we see high performance, really much higher innovation in things we’ve done and greater enjoyment.
So, for listeners, if you want to do the simplest thing ever to assess your culture, the neuroscience shows and the data strongly support that people who work in high-trust high-purpose cultures, purpose again is this notion of why we even exists as an organization, they enjoy being at work. So you can reverse-engineer this process. If you just want to see how we approach this working, ask employees this question, which is, “On an average day how much do you enjoy your job? One to seven.” And that is what we call in mathematics sufficient statistics. So it’s one number that gives you a pretty good lay of the land for the entire company.
And if you do that you might find that the department in Kansas City is nailing it and they love what they’re doing. And, let me tell you, productivity number would be higher, turnover would be lower, and we find that the business unit in San Diego, people do not take their jobs. And so copy, copy the high-performing areas, find out what those leaders are doing there, find out, “Are they hiring differently? Are they training differently? Are they providing, I don’t know, snacks in the afternoon?” Just copy. That’s the first thing you do. Don’t even change anything from outside the company until you find out who are the exemplaries within the company that you can learn from.

Pete Mockaitis
Oh, right on. Well, so now I want to hit just a couple more points before we hear about your favorite things. And that is in your TED Talk you prescribed eight hugs a day to get the oxytocin going and flowing. And I imagine that might be a subcomponent of the C caring in the oxytocin world for workplace. So can you give us a sense for just how much bigger of a hit or a dose of oxytocin is a hug as compared to a handshake? And why is eight the number you settled on?

Paul Zak
Yes, so as you’ve learned in our conversation, I’m an evil, evil person. And I sometimes feel like I’m a Martian and I’m trying to figure out what these humans are doing around me. And so I run experiments, I have a 25-person lab, so I have a great luxury, and thank you taxpayers who put a lot on this work, this luxury of trying experiments to figure out how to connect better to people around me.
And we showed experimentally that touch releases oxytocin. And as a sort of self-experiment, because I am a Martian, I decided to experiment on myself and to see what happens if I started hugging people. And I found, immediately, that they connected better to me, they opened up better, our interaction was much more effective, we got to why we’re meeting in the first place. And, as you know, I did this in my TED Talk, and then I really got stuck in there, so now I really have to hug everybody when I meet them.
Eight is the number because oxytocin is active in the brain for about half an hour, and I figure when you’re home you’re getting hugs from your spouse or your kids or you’re petting your dog, all those things release oxytocin. But when you’re out of the house straight hours, you know, once a day is pretty good. It means you’re giving someone around the gift of oxytocin release and they’re likely going to reciprocate, and that means you’re going to be calmer. Oxytocin reduces our stress responses so you can be calmer, you’re going to be happier, and it begins this virtuous cycle where, “I’m really caring about you in the really simple way.” But to hug someone you have to actually like them. You don’t hug someone you don’t like.

Pete Mockaitis
Right.

Paul Zak
And also you play sports, I’m sure. I did. Like, who do you touch the most? Right? You touch people on your team that you care about. And there’s a reason that teammates are touching each other in a huddle, or touching each other before the game starts. We learn a lot about the people around us through touch, and I think we should embrace that.
Again, at work it’s got to be appropriate touch. So what I do is I just pre-announce, “Oh, I hug everybody.” And let me tell you, about 99% of the people in the last eight years of doing this, say, “Fabulous. Perfect.” And 1% say, “You know what? I’m not comfortable with that.” And I’m like, “All right. That’s fine. I can shake hands. No problem with that.” But my preference is to hug people, and it’s just to move that connection up a couple of steps.
So the amount of oxytocin release depends on your relationship with that person, it depends on their own physiologic state. But I think the key issue is you can’t make your own brain release oxytocin, you can just give that gift to somebody else. And if we start thinking about people at work that way, “How can I make Pete more effective today? How can I show Pete that I really care about him? I care about his success as a human being, not just as a worker be.” Once I think of that about work as a service that I’m providing to my customers and to my colleagues, I think, then, we’re in this high-trust, high-caring, high-engagement kind of world that we found in our analyses creates high-performance companies.

Pete Mockaitis
Oh, very good. So, let me follow-up on your exact verbiage, if I may. So you just meet someone, they extend their hand to shake, they say, “Hey, Paul, good to meet you.” And you say, what?

Paul Zak
I say, “I hug everybody.”

Pete Mockaitis
Three words.

Paul Zak
And I open up my arms. Yeah, and it’s an amazing thing. And let me tell you who gets touched the least, and that is generally younger males. So if you’re in the workforce and you stop playing sports, you’re not in school anymore, and maybe you’re single, I remember being in a meeting in a very large agency in the U.K., I won’t mention the name, and this guy came in late. He’s about 24 years old. And we started the meeting, “I hug everybody.” He walks in, I give this guy a hug, and his face lit up.

Pete Mockaitis
Wow.

Paul Zak
Because he’s British, and he’s 24, and he’s a single guy, he’s working in London. And we need that connection. And boom, now, all of a sudden, now I’m connecting to that guy. He knows I care about him, we’re on the same team, we’re here in the room together for a reason, “Let’s work together as a team. Let’s work together as a rugby team, or a football team, or whatever he used to be on.” And it’s an amazing thing. So, for you and for listeners, just try it a couple of times and see what happens, and you’ll find it really works.
Now, I should say, no creepy hugs, no grabbing people, and also I’m in my 50s so I’m old enough that I’m not a threat to anybody. So I’m just a big stupid grizzly bear, I’m a guy, and so don’t creep people out. I mean, that’s just the worst. And obviously touch at work has got to be appropriate.
Having said that, one of our long-time clients who actually allowed us to use their data in our book which is the online shoe-seller Zappos. You walk in Zappos, you feel the caring, you feel the energy. And let me tell you, all those employees are hugging each other all the time. They know each other. It’s now 1200 employees, they know each other. They care about each other. They have nooks where they can take their computer and work with wireless and get a snack. They have a ping pong table. They have a coffee bar. And there’s a free tour, by the way, at Zappos.
If you’re ever in Las Vegas, for listeners, sign up for the Zappos tour online. Oh, I think it’s 10 bucks now, but, anyway, it’s mostly free. And just check it out and see what it’s like to work in this really high-trust workplace where people love what they do, and they love the people they do it with, and they trust the people they do it with.

Pete Mockaitis
That feels so good and happy. And so it’s just reassuring to hear you say that there is not really much risk or downside by saying, “I hug everybody,” most of the time when a hand is extended to you.

Paul Zak
Yeah, try to be a human, right? Humans connect to each other, so. I don’t know why we got sold this in business school, they sold this bill of goods that says, “When you’re at work you’re an automaton, and you don’t get to be a human.” I’m sorry. I don’t know who automatons are, but I really just work with humans. And if you’re a human you need to connect. And that’s what the oxytocin work shows, is that deep in our evolutionary history, deep in the old parts of our brain we have this system that makes us want to, need to connect to people around us. And who better to connect to than the people you’re going to spend eight or ten hours a day, hopefully, working on cool things together with. Like, that’s just asking for a connection. So that’s basically what the book is about.

Pete Mockaitis
Oh, that’s so good. That’s so good. So, you know, I hate to end on a downer note, but I do want to touch base. You introduced a technical term in your TED Talk for those who don’t seem to have much of an oxytocin response when it comes to the trustworthiness test, and that was bastards, which is fun. So, tell us, if you’re working with folks in that category, any pro tips best practices for managing the situation?

Paul Zak
Yes, and I think this also makes, for people who manage others, their life a little easier. So about 5% of the population we find, regularly, will not release oxytocin when they get a positive social interaction. And so we’ve been able to profile these individuals. Half those people are having a really bad day, so their stress hormones are really high. And you and I have been in that situation, right? Where you’re just cranky to somebody and the next day you’ve got to go into your wife or your colleague or your secretary, someone you go, “Man, I was a jerk yesterday. I was having a bad day, and I realized now that I was really cranky to you and I’m really sorry.” Now, that’s fine. We understand that, and that’s okay.
The other about two and a half percent are psychopaths. And so we’ve actually done some studies in prisons who are criminal psychopaths, and indeed they don’t release oxytocin, they see others as a means to an end. So it means whoever you hire, 2% or 3% of those people are just going to be bad and you can’t remediate them, they’re just not going to work out, bad on you that you didn’t find them, and you need to cut them loose right away.
So 2% or 3% is not bad, right? It means you can’t expect from yourself perfection either. So I think part of this also is allowing leaders to accept their own imperfections. You’re leading a group of people, you’ve got 500 or five people working for you. Yeah, 2% of those, 3% of those they’re just going to be bad fits, bad hires. And I talk a little bit in the book about firing well. So how do you fire someone?
And in my view, I love when I fire someone, or let them go, and they want to take me to lunch, because they know, it’s coming. We’ve tried and it’s been a bad fit. Now, the bastards won’t take you to lunch. They just want to grab as many office supplies and get out the door. So those are easy fires. But, it’s okay, 2% or 3% of the people you hire, they’re just bad people. I’m sorry, they’re just not going to have the ability to cooperate neurologically. And I could tell more about why that’s the case – genes, environment, blah, blah, blah. But cut them loose.

Pete Mockaitis
All right. Thank you. Well, Paul, tell me, is there anything else you really want to make sure that we cover off before shifting gears and hearing about your favorite things?

Paul Zak
Yeah, I think it’s not really so hard. I mean, I think the neuroscience gives you ways to get the biggest impact on brain and behavior. But a lot of those stuff is stuff you learn in first grade or your parents told you. So I end this book with a quote from a long-time Herman Miller CEO, Max De Pree, and he said, “The first responsibility of a leader is to define reality, and the last to say thank you. And in between the two, the leader must be a servant.” So how about that as a marching order? Say please and thank you, tell people where they’re going, and just help them get there. That’s actually not that hard. Don’t be a jerk. Let’s just kick in, do the hard work and get it done.

Pete Mockaitis
Oh, that’s great. Thank you. Well, so now, let’s hear, do you have a favorite quote? Or maybe it’s just the one you shared. But something that you turn to for inspiration again and again.

Paul Zak
You know, I was on the faculty on Claremont Graduate University for 10 years with Peter Drucke before he died, and there’s a lot of Peter Drucker in the book. So people who know Drucker’s work will see, you know, a lot of the neuroscience behind many things Drucker said. And including, actually in every chapter, I have what’s called the Monday morning list.
So Peter famously said, “Don’t tell me what a great meeting you had. Tell me what you’re doing differently on Monday morning.” So I did the same thing in the book. “Read a chapter. Do these five things. Do it on Monday. Don’t wait. Do them now. Let’s get this job done. Let’s make this place better.”
Anyway, I really liked this idea, I don’t know who said this, the quote, but Peter said, you know, one of his gifts also was being able to not know a lot but ask good questions. So I think when we not only listen to others but we give them the respect of paying them our full attention. So I try to do something I call listening with the eyes. So if you’re talking to me, Pete, actually I’m looking at your picture right now on the screen, I want to make eye contact with you. I don’t want to look at my phone. I don’t want to be distracted. I want to give you my full attention.
So, imagine how amazing it feels to have someone be fully present when you’re talking to them and listen, let them finish what they’re saying before you jump in and say something. So give people that respect, that honor of giving them complete attention. And it’s amazing, again, how much that’s going to change your interaction with people around you. It’s sometimes hard to do. We’re all so busy. We have so much to do, but if you can, for just, 30 seconds, fully attend to someone in front of you, they will respond with oxytocin release and they will, you know, go to the map for you. And I think that’s what we want at work. We want people who have our backs, who do really care about us, who care about the mission of the organization.
And once in a while, we’ll wake up at three in the morning working on some problem for work and email, you don’t go, “Hey, Pete, this thing that we were struggling with for a month, I just figured it out in the middle of the night. And that’s how passionate I am.” So those people are there, and if you put them in a culture where they can really grow and be recognized they will perform at high levels.

Pete Mockaitis
Oh, thank you. And how about amidst all the research, if you could pick one or two favorite studies or experiments or pieces of research?

Paul Zak
Oh, gosh. You know, that’s a good question. I mean, there’s probably a hundred studies in the book I talked about. I have to suppress the name of this company, but we worked in 2008, in the big recession, we worked with a financial services company that was doing a bailout. I mean, he was being bailed out by the U.S. government. And it was a madhouse, and it was possible this company was just going to be shut down.
And to work with an amazing turnaround CEO, who really kind of thumbed his nose to the government, and said, “This is a very good company. It’s always been a very good company. It was a bad company for two years, and got nailed.” But he put employees first, and the employees rallied around this CEO as their turnaround guy, and this company now has paid back the government, well ahead of schedule, and is again very profitable. But he said, “It’s all about the employees.” And Drucker said that, too, actually. He said, radically, in the 60’s, he said, “An organization’s first responsibility is to employees. Not the customers. To employees.”
And the work I’ve done since, yes, that’s correct. So if I don’t make you, people, who are doing all the hard work in the frontlines, if I don’t empower you, if I don’t trust you, if I don’t give you the tools to be successful, why are you ever going to make a customer happy if you’re not engaged and love what you do. So, anyway, this CEO did that wonderfully and it really works. So, again, it’s a human-centric organization.

Pete Mockaitis
Oh, right on. And how about a favorite book?

Paul Zak
You know, I could tell you, my favorite book in the business realm is about 10 years old called The Experience Economy. If you haven’t read that book, it will blow your minds about how to create experiences at work for customers, and for that matter for employees, that are extraordinary, are valuable, have high margins associated with them. So people will pay for extraordinary experiences.
And, actually, one of the books I profiled, one of the companies I profiled in the book is Trader Joe’s. And Doug Rauch, the CEO, took Trader Joe’s national, told me that when they started moving outside of California he had this realization that they are not a grocery store. So grocery stores are large, they sell lots of items with a very low margin, so high volume low margin.
Trader Joe’s, as you know, is small, higher margin, but what differentiates them is the service. And he said, “We are an organization that provides an extraordinary experience for our customers. We happen to do that by selling them food, but the first thing we do is create an experience, a positive experience.” And so, anyway, the book spends some time how they do that at Trader Joe’s. So, yeah, it’s a crazy good book – The Experience Economy.

Pete Mockaitis
Oh, thank you. And how about a favorite tool, whether that’s a product or service or app, something that you use frequently and helps you be more awesome at your job?

Paul Zak
Yeah, and as you mentioned, we have a whole bunch of tools online at OFactor.com, and so in measuring and managing culture you can do a lot there. I also love Slack because email now is just getting clogged up, and I love the organization that Slack gives you. And, as you know, for the basic use it’s free, and it’s just an amazing product.

Pete Mockaitis
Oh, thank you. And how about a favorite habit, a personal practice of yours that helps you be more effective?

Paul Zak
I don’t do email every day, and I don’t do it in the morning. I try to find, I get up early and I do the most important things first thing in the morning, and for me that’s writing, that’s thinking, that’s planning. And if you get suck into the email hole, even though it seems like you’re getting productive stuff done, all the times you just do a lot of busy work. So, yeah, I take the first three hours.
Oftentimes I’ll work in the morning at home before I go to the office, and my trick is I don’t get dressed, which sounds gross. But, I mean, I just wear my pajamas or robe or something, and I’ll sit at my desk with a cup of coffee, and I can bang out from 6:00 to 9:00 at amazing amount of work with a couple of cups of coffee, and then take a shower and get to work. And you feel like, “Okay, I did two things that work pretty cool today in the first three hours, and now I can go do the other administrative stuff I have to do.”

Pete Mockaitis
All right. And how about a particular nugget or articulation of your message that really seems to connect, or resonate with folks, they get a nod in their heads, taking notes, retweeting, Kindle book highlighting? What’s a Paul original that really seems to hit the mark?

Paul Zak
Oh, how nice of you to ask. You know, I have a real simple rule, which is for every interaction I have with somebody I want to have just let me more love in the world, and you can interpret that word love any way you want. But I want to make that a positive experience for you. So I call this my love plus program. So any interaction with you I want to make sure that you are happier coming out of that than when you came into that. And if I think of that that way then I’m in service to the people around me. And I like that word. I like to end conversations with service.
And so I’ll try that with you, Pete. So, Pete, I wanted to be of service to you. So you are extraordinarily kind to let me be on your program. I’m excited to be here and I hope that in the future you’ll reach out and let me do something for you. It’ll be my great honor to do that.

Pete Mockaitis
Oh, well, thank you. I feel like I’m being served right now because this is just so fantastically interesting to me and the audience. So, yeah, well, I’m feeling it. It’s working.

Paul Zak
Good.

Pete Mockaitis
And what would you say is the best place for folks to learn more or get in touch with you if they want to see what this is all about?

Paul Zak
Two places. You can learn more about me personally at PaulJZak.com, P-A-U-L-J-Z-A-K.com. And the book and the tools and also online free stuff can be found at OFactor.com, O-F-A-C-T-O-R.com, and you can email me there. I love to engage with people. You know, once you’ve done all this, and use the work, now I just want people to use that, read the book, ask me questions. So, please, for listeners, reach out and if you’ve got crazy questions, send them along. You know, Paul Zak could be wrong. So if you see something you think I missed, love to hear about it. Or some way I can help you in your company, yeah, definitely reach out.

Pete Mockaitis
Oh, thank you. And do you have a final call-to-action or parting words for those seeking to be more awesome at their jobs?

Paul Zak
Yeah. How about this, which is really simple? Go out, today or tomorrow, and tell two people you work with, why you appreciate them. You have to be specific, it’s got to be personal. It can’t be just like, “Ah, you’re so awesome. You worked here 10 years.” Go, “You know what, Betty, every day you answer the phones and you’re always happy to everybody who calls, and it just makes our workplace more pleasant and makes our customers happier.” Gosh, people would love to hear that. So, two people, tell them why they’re so important to you, why they’re wonderful.

Pete Mockaitis
Perfect. Thank you. Paul, this has been such a treat. Please keep it going. Keep spreading the love and all the good things you do.

Paul Zak
Thank you so much, Pete. What a pleasure and hope to see you again soon.

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The Gold Nugget

The Gold Nugget

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