Laws of teamwork

Reflections on Teamwork: Insights from ‘Law of the Price Tag’ – Inspired by John Maxwell’s Book

The team fails to reach its potential when it doesn’t pay the price.

In the 19th century, Aaron Montgomery Ward founded Montgomery Ward at just 28 years old. Ward was a seller of agricultural products and during his journey, he realized he could make money by bringing goods bought directly from producers at wholesale prices, and delivering them via mail to rural consumers.

In 1871, Ward saved up enough money to start the business, but a devastating fire in the city of Chicago destroyed all his stock.

Ward lost everything he had, but that didn’t stop him. He convinced two colleagues to join him as partners, and in 1872, he managed to start his business.

With only a year of partnership and despite moderate success, his two colleagues asked to leave the partnership.

Satisfaction guaranteed or your money back.

Once again, this didn’t deter him from continuing. He invited his friend George Thorne to share the partnership.

In 1875, Ward and Thorne had an innovative idea, and after including a new “credo” in their product catalogs – “Satisfaction guaranteed or your money back”, the business took off.

However, Ward’s perseverance and willingness to pay the price twice to start his own business yielded results in less than a decade later. The company’s catalog became known as “The Wish Book”.

By the end of the 1910s, after Ward’s retirement, the new board stopped paying the price. Furthermore, by 1886, another company based in Chicago emerged – Sears Roebuck and Co.

Population migration

In the 1920 census, for the first time in the United States, it showed that the majority of the population was living in large urban centers. Buying habits were changing.

Still in 1919, Robert E. Wood was hired to lead Montgomery Ward. He had a desire to open stores in cities, where people could buy the product in person. However, the owners were not willing to pay the price of change.

Aware that his project would be the future of business, Wood left Montgomery Ward and went to Sears where he managed to implement his project.

By 1929, Sears had over 300 stores. In 1954, Wood was promoted to president of the company, and shortly thereafter, Sears became the most successful department store company in the country.

Bankruptcy

And Montgomery Ward?

It never managed to recover because it didn’t pay the price at the right time. It opened stores but by then Sears had become too big.

Whenever the market changed, the company leaders didn’t pay the necessary price to regain the market.

In 2000, Montgomery Ward and Company announced it was filing for bankruptcy and would close its doors forever.

This is what can happen when people disregard the Law of the Price Tag.

Currently, Sears is the fifth-largest American department store chain by sales, behind only Walmart, Target, Best Buy, and The Home Depot. In 2018, it missed a payment and soon after declared bankruptcy. However, it is still operational. Link to Sears website