Opinion: Don’t Rely on the Invisible Hand

A picture of Lippert's Adam Kronk, a columnist for the magazine who discusses leadership management and culture.

When I was teaching business ethics at Notre Dame, among the texts on the syllabus was an essay called I, Pencil by Leonard Read.

Published in 1958, the relatively short piece illustrates in a surprisingly creative way the concept that even something as simple as a wooden pencil is created by a staggering amount of cooperation between literally countless people.

The pencil’s components are sourced from every corner of the earth. The pencil contains cedar grown in Oregon, which is then shipped via rail to be milled in California. Its graphite is mined in Sri Lanka, mixed with clay from Mississippi and strengthened by wax from Mexico. An eraser includes ingredients derive from Indonesia to Italy.

Read points this out for many reasons, including to show how many workers and industries participate in the process. At any step along the way, employees who are involved in making the pencil live and eat in those communities. If a logger drinks a cup of coffee at a diner on his way to work, the people who run the establishment are a part of the process and benefit from the phenomenon as it unfolds.

Quickly, our brains almost short circuit considering how interconnected everything is.

However, the author makes another, perhaps even more flabbergasting, point.

No single person knows how to make an entire pencil.

To craft one of the most basic objects we take for granted daily requires expertise in various areas. The cooperation and interdependence necessary are worth marveling at for a moment.

Among the original motives behind the essay was to illustrate and praise what Adam Smith once labeled as the market’s “invisible hand”—the notion people come together, innovate and create things no one person could have imagined, responding to society’s overarching needs and wants. I always enjoyed watching sophomore business majors—who were planning careers in investment banking, mergers or management—
as their minds were blown by these basic, yet profound, concepts.

So, what does making a pencil have to do with the RV industry, and why talk about a pencil in the publication’s pages?

First, if the above points are true about a pencil, how much more so are they the case for an RV? Working for
a company that makes so many components in such a complicated product, I have the chance every day to marvel at the effort and expertise invested into each disparate part. Indeed, right across the street from one of our axle factories is another factory that makes mattresses. Although these two products have little in common, every team member involved in producing both items works for the same organization. Even within a facility, employees spend their days doing vastly different things, from accounting to safety to shipping to cleaning to training.

When was the last time you stood back and simply acknowledged the beauty of the astounding symphony of people in your company, cooperating to create what you contribute to the industry? Have you paused to think about what makes everything come together?

Here, I would dare to offer Read’s brilliant essay omitted something: the role leadership plays in making everything happen.

A well-documented truth in the human resources world is that a sense of purpose is among the most important ingredients in retention. If employees feel a clear sense of mission and know how their specific job furthers the mission, they will not only stick around longer but work harder, too.

Am I suggesting you give your workforce a lecture on economics or explain how pencils are made? While the idea might be interesting, doing so likely is impractical.

What I am saying is we do not have to—I might even suggest, we should not—rely on the market’s invisible hand to motivate our people.

Yes, demand will end up driving cooperation. Consumers with money to spend will create opportunities to make and sell products. However, relying on the invisible hand for motivation is a decidedly passive manufacturing approach. Certainly, the tactic will not retain talented team members if they can make 50 cents an hour more at a competitor.

What if, in addition to admiring the cooperation our businesses require, we set a bolder vision? What if we showed our workforce “the industry” is not the only thing creating the need for what we do and a means for putting food on the table? What if we articulated, clearly and relentlessly, a higher purpose to the activities bringing our teams together?

At Lippert, we shout this from the rooftop every chance we can. Every employee here knows working at Lippert is about more than making another component. The job is about making lives better through developing meaningful relationships.

Taking an approach such as this does not solve every problem. We are not immune to the challenges a downturn brings. Our leaders are not magically transformed into saints.

However, stating a larger vision, spending significant time together serving our communities through service work, devoting energy to setting and achieving personal goals outside of work, and holding our core values at the center of our focus daily radically transformed our company over the last decade. Although only one measure, employee turnover at Lippert dropped from over 120% to under 30%.

Turnover is the ultimate “vote with your feet” metric—if people choose to stick around, even when times are tough, then something we are doing is working.

We have a long way to go in our cultural journey, make no mistake.
I would say anyone who thinks they have everything figured out most certainly has a blind spot. As we keep chipping away and striving to make lives better, I can assure you: more than an invisible hand is bringing us together.

Every organization, ours included, could benefit from having a renewed focus on a sense of wonder at what we can achieve when we collaborate and a crystal-clear statement of why our work matters.


Adam Kronk is Lippert’s chief culture and leadership development officer. He heads up Lippert’s efforts around culture and leadership development.

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