Give value first.

Scott Ginsberg of “HELLO…my name is Scott” has a free eBook available titled, “66 Priceless Pieces of Business Advice I Couldn’t Live Without.” One of his pieces of advice is, “Give value first.”

I think this is one of the most overlooked, but vital pieces of advice out there. How often have you heard someone complain they’re not paid enough or they didn’t receive a large enough raise?

I don’t know about you, but I hear things like this from people all the time.

Every time I hear someone say they’re not paid enough money for a job I want to ask them what value they’re providing. I’ve found there is usually a correlation between the value someone provides and their compensation; and most people are completely oblivious to this correlation.

On which side of the chart do you fall? The relationship of value-to-income is not a straight 1-to-1 ratio like most people think. There are a few reasons for this:

• value can be a vaguely defined quantity in a relationship
• most people want to see proof of value before they’ll determine (and pay) a price
• intangible factors can affect the worth of your value

Usually the relationship - when plotted on a graph - is a logarithmic curve. When you’re first starting to offer value, you have a lower income (or return on your value).

Once you’ve proven yourself, your product, your service - whatever you need to prove - your income rises. As you provide more and more value, the amount of income relative to your value will increase logarithmically.

This means you will eventually get to a point where your income and value are maximized. Whether we work for someone else or are self-employed, this point of maximum value and maximum income is where we all want to get in our professional lives.

But the “gotcha” of a logarithmic relationship is that when you’re first starting out you have to put more effort and energy into one axis of the relationship to generate output on the other. You have to initially provide more value from which you receive less income.

If your first effort is to maximize your income, you had better have the perfect value proposition. It’s not impossible to do, but it’s extremely difficult.

If you change your perspective just a little and focus not on your result (the income), but on your effort (the value) something special starts to happen; you will notice that the relationships around you are built better, on my solid foundations. You will notice that you care more about providing a better quality product for your customer. You will become input-focused rather than output-focused.

You will be building value first and trusting that income will follow. If you take this approach to life and your business relationships (and even personal relationships) you’ll always come out ahead because income will eventually greatly reward value.

Remember the saying; “if you build a better mousetrap the world will beat a path to your door.” The path doesn’t get beaten to your door because you’ve cornered the market on mouse catching, but rather because you’ve provided great value to people in the form of a better trap.

If you’re like most people, at this point you might be asking yourself, “If I provide all this value up front aren’t I taking a risk on the payback?”

Yes you are. But all of life involves some risk. The proposition is this; prove yourself first and be rewarded. It’s very possible you’ll run into someone who wants to take advantage of you. When this happens you have to learn to quickly trust your gut when starting to deal with someone in a new relationship.

And remember, value is a two-way street; if you’re giving but never getting, you’re free to change the relationship!

When you commit yourself to providing value first, you’ll be more likely to create “win-win” solutions in your relationships. Keep this advice close to your heart, put it in practice everyday and you’ll soon see returns on your value that you never predicted!

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January 27th, 2006

Entry Filed under: Purpose, Wealth, Career, Beliefs