Business 101: Use a "Favor Bank" when Nothing Else Works

"Who is John Galt?"

- From Atlas Shrugged by Ayn Rand

Back when I was a newly arrived businessman, fresh out of college, I used to emulate (and perhaps idolize) Ayn Rand's premise that you would be able to get ahead in the world based on the notion that you should rightly profit through the merit of your own good work, by the sweat of your salty brow.

All and good. But don't forget the kind of world we live in.

When the going gets rough, the rough get going - by picking up the phone to call in a few favors.

"THE FAVOR BANK"

Given the passage of years of in conventional business transactions, I've been witness to an age-old business practice - where favor is a bartered commodity.

In its worst form, it rears its ugly head in the shady world of old-boy politics and back-slapping of the kind we see in corrupt government organizations. In its best of forms, we see it as the brokering of favors between two good friends meeting each over lunch, with one paying for both meals in exchange for some help in-kind.

No matter how bright or dark the package is, this indefinable exchange of non-currency commodities is what I affectionately call "the favor bank".

WHAT IS THE FAVOR BANK?

Through the culling and currying of favors between two parties, folks may enjoy a form of friendly bartering that can actually make a difference between getting something done and having it otherwise stand idle.

By doing a favor for someone, the idea is you have "made a deposit" in an unseen bank, with a similarly unseen implication that the other person now "owes you" a favor in return, perhaps at some undisclosed time.

FOR EXAMPLE

So, what does this banking of favors actually mean? I'll use one of my recent transactions as an example.

As a relative newcomer at my place of work I recently made the acquaintance of a business colleague who's been with the company for decades. He is well-placed, is a walking encyclopedia for his field of expertise, and is obviously a great resource into which I could tap for information critical to my job well.

The problem is: this guy is busy. And he has loads of friends and resources at his disposal without having to deal with a small fry guy like me. How to overcome this dilemma?

In my case, I offered something that works perhaps at least 80% of the time: free lunch.

Despite the fact that mom and dad raised me saying almost every day, "There's no such thing as a free lunch", my offer of tasty cuisine at a choice restaurant seemed to do the trick. When we met up, I was able to bend this guy's ear for a solid hour and get some much-needed information. After I picked up the tab, this guy was conscionable enough to feel as if he still owed me something, despite the fact that the information he had given me was really helpful.

While it's nice to know that someone is there to help you out at any time, the idea is not to make your partner feel manipulated somehow. Rather, the intent is to open friendly lines of communication and incite a willingness in the other person to provide valuable help, sometimes (perhaps preferably) on short notice.

The working commodity is favor, and these favors figuratively add up when deposited into an unseen bank account.

MAKE FREQUENT DESPOSITS

Just as it is with banks of a conventional sort, one should make regular deposits into the account to keep it active.

While there are some good-hearted souls who likewise have good memories, it's sometimes not safe to assume that a favor lent five years ago would readily be given in return after five years of complete silence. It pays to keep in touch with one's acquaintances, and given their potential value to you on an ongoing basis, it might be a good idea to meet up with them regularly - and perhaps even do them a favor so that you will be "in their favor".

BEST ENJOYED IN SMALLER DEPOSITS

Of the simplest kinds of favor banks we see in everyday life are those we see among good friends.

My friend Jeff recently curried a favor from me, offering me perhaps one of the most universal forms of currency available: food. Jeff is moving into his new house now. He has loads of furniture. Big, dark, heavy furniture. The kind of furniture that hernias show up for.

Knowing of my undying love for really good Chinese food, Jeff offered to take me for some dim-sum once his furniture had been safely transported to his new digs. I jokingly offered to take care of the dim sum first, and offered to leave the trivial needs of his furniture for some later undetermined time.

All laughing inside, Jeff got what he needed. I did, too.

OTHER CULTURES USE IT ALSO

Not surprisingly, what works for folks on this side of the world also works well for people around the bend. Some cultures even make an extremely big deal about the favors they swap with each other.

To read about more about this, read my article about "good relations" in the Chinese Favor Bank.

Deposit frequently. Withdraw when needed!

- John

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