Olivia: What if the secret to making your business more profitable isn't cutting costs, but doubling down on your most expensive line item: your people? Today, we’re exploring the radical idea that paying more and hiring more can actually make you richer. Jackson: That sounds like a feel-good fantasy, not a business strategy. How does that math possibly work? You’re telling me that the path to higher profits is to intentionally increase your biggest expense? It feels like trying to lose weight by eating more cake. Olivia: It feels that way, but it's the core argument of a really influential book, The Good Jobs Strategy by Zeynep Ton. And Ton isn't just an academic; she's a professor at MIT's Sloan School of Management who was so convinced by her research that she co-founded a nonprofit, the Good Jobs Institute, just to help companies actually implement these ideas. She argues it's the most logical, profitable path. Jackson: Okay, an MIT professor who put her money where her mouth is by starting an institute... that gets my attention. This is a huge claim, though. Where do we even start with an idea that big? Olivia: We start with the human cost of the opposite strategy. Ton paints a picture of two parallel universes in retail, and one of them is a place most of us, unfortunately, know all too well.

Jackson: I have a feeling I’ve shopped, and maybe even worked, in that universe. Olivia: Almost certainly. Ton introduces us to a woman named Janet. She's a hardworking customer service manager at a big-box retail chain. After seven years and multiple promotions, she's making just $11.60 an hour. Jackson: Eleven-sixty an hour... as a manager? That’s rough. Olivia: It gets worse. Her schedule is pure chaos. She works what's known as a "clopening" shift—closing the store at 11 p.m. and then having to be back to open it at 5 a.m. She says, "My life is always in turmoil because you can't sleep. You can't just go to sleep on cue." She has health insurance, but the deductible is $3,500 on an annual income of around $22,000. When she got an infection, the $998 bill was something she had to pay off at $20 a month. A recommended surgery was completely out of the question. Olivia: Exactly. She feels helpless. The store is so understaffed that checkout lines are huge, customers are angry, and other employees can't help her because they're buried under their own tasks. It's a spiral: low investment in people leads to poor operations, which leads to bad customer service and lower sales, which management then uses to justify even more cuts to labor. That's the vicious cycle. Jackson: It's a self-fulfilling prophecy of misery. Okay, that’s the bleak universe. Please tell me the other one is better. Olivia: It’s a completely different world. Ton then introduces us to Patty, who works at QuikTrip, the convenience store chain. Patty also started young, but after seven years, she was earning almost triple Janet's salary. By 2010, she was making over $70,000 a year as a manager. Jackson: Seventy. Thousand. Dollars. At a convenience store? Olivia: Seventy thousand. With affordable healthcare, a stable schedule she could plan her kids' school activities around, and a deep sense of pride in her work. She talks about the bonuses—for customer service, for profit, even for attendance. She says, "You go to work, you do your job, you're excited, and you know everything’s pretty much taken care of. QuikTrip has never let me down." Jackson: Whoa. Okay, that's a night-and-day difference. Same industry, wildly different outcomes. But this is where the skeptic in me kicks in. QuikTrip must be some weird, private, cult-like company to pull this off, right? This is one of the main criticisms the book gets—that these are outlier companies. How can they afford to pay Patty triple what Janet makes? Olivia: That is the million-dollar question, and it’s not about magic or being a "special case." Ton argues it's about a set of deliberate, and often counter-intuitive, operational choices. This is the engine of the 'Virtuous Cycle.' It’s how they pay for the good jobs.

Jackson: Alright, I'm ready. Unveil the secret engine. What are these operational choices? Olivia: Ton outlines four, but let's talk about the most shocking one first: Offer Less. Think about a typical supermarket. It carries around 40,000 different products. It's overwhelming. Now think about a model retailer like Costco or Trader Joe's. They each carry only about 4,000 products. Jackson: Hold on. That's the opposite of the 'endless aisle' philosophy that Amazon and others have perfected. Isn't the whole point to give customers more choice? I feel like I've heard of studies, like the jam study, that say less is more, but isn't that just a quirky academic thing? Olivia: It's not! The jam study is famous for a reason. Researchers set up a tasting booth. When they offered 24 types of jam, more people stopped to look, but only 3% actually bought a jar. When they offered only 6 types, 30% of people bought one. More choice often leads to decision paralysis. But for a business, 'offering more' creates a nightmare of hidden costs. Jackson: What kind of hidden costs? Olivia: More stockouts, because it's harder to forecast demand for 364 types of toothpaste than for 10. More waste, especially with fresh food. More complexity in the supply chain. More time for employees to stock shelves. By offering a highly curated selection, Trader Joe's can become experts on their products. Their inventory turns over incredibly fast. And their employees can actually recommend the perfect cheese because they know all 4,000 items, not just point you to aisle 58. Jackson: Okay, that makes a lot of sense. You're substituting a curated selection and knowledgeable people for a mountain of inventory. That's brilliant. What's another one of these 'choices'? Olivia: The second is a beautiful paradox: Standardize and Empower. Olivia will use the QuikTrip example. They standardize everything—how to clean the bathrooms, how to stock the drinks, how to make the coffee. It's military precision. Jackson: That sounds like the opposite of a good job. That sounds like being a robot. It's the Frederick Taylor, scientific management stuff all over again. Olivia: Ah, but here's the twist. They standardize the routine tasks to free up employees' mental energy to be empowered where it matters most: with the customer. And here's the key difference from Taylorism: they involve employees in creating the standards. It's not a top-down mandate from corporate. Store managers and employees get together to figure out the single best way to do a task, and they explain the 'why' behind it. It becomes 'our' way of being excellent, not 'their' rules. Jackson: So it’s standardization with dignity. You’re not just a cog; you’re a co-creator of the machine. That changes everything. You get the efficiency of a system, but the pride of ownership. Olivia: Precisely. It allows them to be incredibly efficient, which saves money, while also making employees feel respected and smart. It’s a perfect example of how these operational choices aren't just about cutting costs; they're about creating a smarter, more effective system.

Olivia: And you can see how these pieces all connect. The operational choices, like offering less and standardizing, reduce waste and complexity. That creates savings and productivity gains, which then funds the investment in people—the higher wages, the better training, and the 'slack' time so they're not constantly rushed. Jackson: And those well-paid, well-trained people are the ones who make the operational choices work. The Trader Joe's employee who can recommend the perfect cheese, or the QuikTrip manager who feels ownership over the standards. It's a self-fueling system. It's not just 'being nice,' it's a brilliant business machine. Olivia: Exactly. And this is where the book's biggest impact lies. It reframes the entire debate. The 'bad jobs strategy' isn't an unfortunate necessity; it's a lazy choice. It's a system that creates massive hidden costs—high turnover, lost sales from what Ton calls 'phantom stockouts,' terrible customer service, and the societal cost of workers needing public assistance. The book's data on this is staggering. Jackson: So the real takeaway is that a 'good job' isn't a perk. It's the central gear in a high-performance engine. And if you neglect that gear, the whole machine grinds to a halt, even if you don't see it right away. The story of Borders bookstore failing is a perfect, tragic example of that. Their system said a book was in stock, but their disengaged, high-turnover staff couldn't find it 18% of the time. That operational failure, born from a bad jobs strategy, made it impossible for them to compete with Amazon. Olivia: Perfectly put. It's a long-term investment in resilience and excellence. And that brings us to a powerful quote from the book that really sticks with me: "If the good jobs strategy is possible in low-cost retail, then it is possible pretty much anywhere." Jackson: That's a challenge to every leader out there. It leaves you with a question: are you building a business on a vicious cycle or a virtuous one? We'd love to hear what you think. Join the conversation on our social channels and let us know if you've seen these cycles in your own workplace. Olivia: This is Aibrary, signing off.