In his book, 'How to Be Rich', famous millionaire J. Paul Getty tells the story of how he once hired a man named George Miller
to superintend operations at some of the oil operations outside
of Los Angeles, California.
George Miller was an honest, hard-working individual who knew
the oil business.
His salary was commensurate with the responsibilities he was
given. And Miller seemed satisfied with both his job and the pay
However, whenever Getty visited the properties and inspected his
drilling sites and producing rigs, he invariably noted things he felt
were being done in wrong or inefficient ways.
There were too many people on payroll. Not adequate controls
Certain types of work were being done too slowly; others were
performed too rapidly and without proper care.
Some equipment items were being overstocked while there were
shortages on others.
As for George Miller himself, J. Paul Getty felt he was spending
too much time doing administrative work in the LA office, and not
enough time out in the field.
Thus, he wasn't able to exercise the necessary degree of direct
supervision over the operations that were under his responsibility.
All these things served to keep costs high, to slow down production,
and hold down profits.
But J. Paul Getty liked George Miller and felt certain he possessed
all the qualifications of a top-notched superintendent. After some
weeks, Getty had a man-to-man talk with him.
He informed George bluntly that he thought there was considerable
room for improvement in the manner in which he was handling the
'It's funny, but I need only to spend an hour on one of the sites
and I spot several other things we could do better or cheaper,
and increase production and profits,' J. Paul Getty told him. ' Frankly I can't understand why you don't see them too.'
'But you OWN the properties,' the superintendent declared. 'You have a direct personal interest in everything that happens
on or to them. That's enough to sharpen anyone's eyes to the
ways of saving - thereby making - more money.'
J. Paul Getty never thought about it in quite that way before.
He mulled over what George said for a several days, and decided to try an experiment. He had another talk with George.
'Look, George. Suppose I farm the properties out to you.' he
suggested. 'Instead of the paying you a salary, I'll give you a
percent of the profits. The more efficient our operations, the
bigger those profits will be -- and the more money you'll make.'
Miller gave the proposition some thought and then accepted the
The change was immediate - and according to J. Paul Getty - a
little short of miraculous.
No longer merely a salaried employee, the superintendent
became keenly concerned with cutting costs, boosting production
and increasing the profits in which he was now to share.
Miller looked at the operations in a completely different light -
instantly recognizing - and correcting - faults which he had
Where before he'd spent two and sometimes three days each
week in the Los Angeles office, now he made only brief shows
there once or twice a month. He chafed impatiently until he
could return to the drilling sites.
J. Paul Getty checked out the properties again 60 days after
George took over under the new deal. He could find nothing
He noted little if anything he could have done better himself.
In a very short time BOTH Miller and J. Paul Getty were making
far more money than they had before they starting working on
a profit-sharing basis.
The lesson that J. Paul Getty learned is valuable for any cart and kiosk owner. Pay your managers based upon their performance and the performance of the business.
It sharpens their eyes to the ways of saving and making money.
They work harder. They perform better. Often both you AND they make more money.
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