How does “Pay it Forward” Work in Business?

The topic of “paying it forward” came from a reader. Here is his comment:

“Pay it Forward – any feedback or insights welcome.”

Short, sweet and to the point, you would think.

Immediately, I thought about the movie I saw years ago, “Pay It Forward”, a compelling story of a child who led by example and taught others about being selfless.

Paying it forward is based on a single premise. If you do a good deed for someone, do it without personal gain. If someone wants to return the favor, you politely suggest that s/he do a good deed for someone else in need and pay it forward instead of backwards.

The interesting aspect of paying it forward is it might be easier to do in our personal life than in business. The traditional way of doing business is, “if you scratch my back, I’ll scratch yours”, otherwise known as a closed system.

The Closed System

In the example below, John has a client or customer who has a problem where Gail’s insight would help shape the project’s direction. In the closed system, if John asks Gail for help, he will know he “owes” a favor back to Gail. The favor could be an expectation that Gail will be brought into the project or she will receive a kick back payment for offering her help.

The focus is centered on the two parties; creating a closed system of benefits. While it may make the relationship between the two parties stronger, it also creates a barrier for others to enter into the relationship.

Now, let’s look at the pay it forward model in business because implementing it becomes more complicated.

The Pay it Forward Model

As a consultant, entrepreneur or business owner, you offer products or services to clients and customers. Sales are required to generate income, otherwise the bills are unpaid. So, the question is if you give your product or service away for free without some type of reciprocation or pay back from the other party, how does that benefit you?

Simply, it may or it may not benefit you immediately. That’s the reality of the pay it forward model – you lose control. But paying it forward may work to your advantage long term too!

In this situation, John asks Gail for help and there is no expectation from Gail to receive anything in return. It is more important to Gail that John is able to help his customer and in turn his customer will go on to help other clients or customers.

The goodwill Gail creates hopefully spreads through the channels. When someone asks, “How did you figured out that answer?” Gail’s name may be mentioned. The power of paying it forward is that Gail’s expertise may reach to more than 27 people and one of them may ultimately pay it forward to her in some way to benefit her business.

Does Pay it Forward Work all the Time?

From my realist point of view –pay it forward doesn’t work all the time, especially in business and I’ll cover that in my next article.