The Things That Are Worth More Than They Cost

Last week, over dinner in Mexico City, I got into a conversation with an executive I admire. Let’s call him Ned. We were at a long table in one of those restaurants where the noise level forces you to lean in, which has the side effect of making every conversation feel more intimate than it might otherwise be. Ned was telling me about an assignment earlier in his career, one that shaped how he thinks about leadership to this day.

When Ned was still relatively young, his company sent him to Japan for three years to turn around a struggling business unit. The assignment was daunting for reasons beyond the business itself. As a foreigner (and a young-looking one) he was navigating a new culture as an outsider and he had to earn credibility before he could change anything.

So Ned did what most leaders in turnaround situations do first: he reviewed where the money was going. He went through the budget line by line, looking for inefficiencies. And one item stood out.

The company had a dedicated recovery team. Their job was to handle a very specific and very rare problem: defective products that reached the customer. If you’re a contact lens wearer, you can picture it: you open a package and find no lens inside, or two lenses stuck together, or a lens that’s simply unusable. It doesn’t happen often, but it happens.

Here is what the recovery team did when it happened: they showed up at your door. Not a phone call. Not a replacement shipped in the mail. A person, at your home, carrying a fresh pair of contacts and a box of cookies.

Yes. Cookies.

To Ned’s analytical eye, this was an obvious cut. The defect rate was tiny. The cost of maintaining a team to make house calls for a rare occurrence seemed wildly disproportionate. He could replace the whole operation with a simple mailing program at a fraction of the cost.

But when he proposed the change, the response from the Japanese team was immediate and firm: absolutely not. The people in the business believed deeply in the value of this service. They weren’t being sentimental. They were being strategic. They understood something about the relationship between failure, recovery, and loyalty that Ned, at that point in his career, had not yet fully grasped.

He never made the cut.

The paradox of service recovery

What Ned’s Japanese colleagues understood intuitively, behavioral science has documented extensively: a well-handled failure can create more loyalty than a flawless experience.

This is known as the service recovery paradox. The basic finding, replicated across industries and cultures, is that customers who experience a problem that is then resolved exceptionally well often end up more satisfied and more loyal than customers who never experienced a problem at all.

It seems counterintuitive. Wouldn’t the best outcome always be getting it right the first time? In a purely rational world, yes. But we don’t live in a purely rational world. We live in a world where what people remember is not the defect: it’s what happened next. The moment of failure creates a window of vulnerability. The customer feels let down, frustrated, maybe even angry. And in that window, whatever the company does next is amplified. A dismissive response confirms the customer’s worst suspicions: they don’t care about me. But an extraordinary response (a person at your door, with the problem solved and a box of cookies in hand) does something powerful. It says: we see you. This matters to us. You matter to us.

That signal of care, arriving precisely at the moment when the customer expects indifference, creates an emotional bond that a smooth transaction never could. The failure becomes the foundation of trust.

Why leaders keep trying to cut the cookies

I’ve been thinking about Ned’s story because I see a version of it in many organizations I work with. Not about contact lenses, but about the broader pattern: the tension between efficiency and what I’d call relational investment: the things a company does that don’t show up cleanly on a spreadsheet but that hold important things together.

It’s the manager who spends twenty minutes after a meeting checking in with a team member who seemed off. It’s the company that sends a handwritten note when an employee’s parent passes away. It’s the onboarding buddy who takes the new hire to lunch every week for the first month, even though there’s no formal program requiring it. It’s the leader who flies across the country for a thirty-minute conversation that could have been a Zoom call, because some things need to happen in person.

None of these things are efficient. None of them would survive a rigorous cost-benefit analysis. And that’s precisely why they’re so easy to cut when budgets tighten or when a new leader arrives with a mandate to streamline.

The problem is that their value is invisible until they’re gone. You don’t notice the trust that’s being built by these small acts of relational investment. You notice the trust that’s missing after you’ve eliminated them. And by then, it’s much more expensive to rebuild than it would have been to maintain.

What the cookies were really about

Let me go back to the recovery team in Japan for a moment, because I think there’s a deeper lesson in the cookies.

The cookies were not an apology. They were not compensation. A person showing up at your door with a replacement product is already extraordinary. The cookies were the signal that this visit was not a transaction: it was a relationship. They were saying: we didn’t come here just to fix a problem. We came here to see you.

That distinction, between fixing a problem and showing up for a person, is the difference between adequate service and genuine care. And I believe it’s the same distinction that separates competent leadership from the kind of leadership that inspires loyalty.

Thanks to Ned’s story, in my work with leadership teams I will now ask: “What are your cookies? What are the small, seemingly inefficient gestures that tell the people around you (your team, your clients, your partners) that this is not just a transaction? That they are not just a line item?”

I expect many leaders will be able to name them. The harder question is whether they’ve protected them.

Three things worth considering

If Ned’s story resonates, here are three things I’d suggest thinking about.

First, audit for relational investment, not just cost. The next time you’re reviewing a budget or a process, ask: is there anything here that looks expensive but that might be doing invisible work? Talk to the people closest to the customer or the team before you cut it. The Japanese team knew something Ned didn’t because they were close enough to the customer to feel it.

Second, design your own version of the cookies. Every organization has moments of failure: a delayed delivery, a missed expectation, a transition that doesn’t go smoothly. What happens in those moments? If the answer is “we follow the standard process,” you’re missing an opportunity. The moment of failure is the moment of greatest emotional leverage. Use it to show up in a way that people will remember.

Third, remember that trust is built in the small things. We tend to think of trust as something that’s established through big gestures: a bold strategy, a major investment, a dramatic turnaround. But in my experience, trust is built much more often in the moments that nobody is tracking. The check-in after a hard day. The handwritten note. The twenty minutes that “weren’t worth it” on paper but that changed everything for the person who received them.

Ned eventually came to see the recovery team differently. What he initially read as an inefficiency, he came to understand as one of the strategically valuable things the company did. Not because it was cost-effective… it wasn’t. But because it built something that no amount of marketing or product optimization could replicate: the feeling that this company would show up for you when it mattered.

That’s not money-worthy in the traditional sense. But it’s worth more than we might think.