How To Understand The Value You Provide And Under What Terms

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Sunday, 8.23pm

Sheffield, U.K.

Try not to become a man of success, but rather try to become a man of value. – Albert Einstein

As I continue with the Getting Started book project there are a few things that will be different if you’ve been reading these posts for a while.

I’m going to use the images to experiment with graphical organiser templates – the kinds of things you can fill in as you explore an idea, so you might see more images like the one in this post – a framework with some initial ideas as an example.

Each post will also have a more clearly defined goal – something that you can achieve along with a strategy – a play out of a playbook or a beat or a scene that shows you how to do it.

Not all at once, of course, not perfectly – because this is an iterative process as I work through a rough draft.

In this post we’ll look at what you can do with those resources – and where you should focus your time and attention.

The goal is to get a clear understanding of how you personally create value.

The definition of value depends on who is doing the defining

As is so often the case, Warren Buffett has a quote that’s worth starting from to understand the idea of value.

Price is what you pay; value is what you get.

In the last post we looked at understanding the resources you have – the ones that you will have under all circumstances.

The core resources are made up of the training you’ve received, the skills you’ve developed and the tools you control.

Just having these resources does not, however, mean that you’ve created value.

You actually need to create some thing in the first place – a thing from which value emerges.

Let’s say you make a clay pot during your first ever pottery class.

Does it have value?

To an experienced and discerning collector of ceramics your first attempt at creating a pot probably has no value whatsoever – she simply wouldn’t bother to name a price.

But if you’re three and it’s for your mother – then that pot is priceless – its value is infinite.

The cup on my desk that has the footprints and handprints of my once-three year old is not for sale.

Unfortunately, once you grow up, you rarely find people who believe in you quite as much as your mum does.

So you have to start thinking about how other people define value, and it’s probably not in the way you first think.

For example, let’s take three basic resources that most people will have to one extent or another.

Can you read, write and do maths?

Is that valuable?

If a customer is looking for a researcher, a copywriter or a programmer, then it’s likely that you have something that they will value – your ability to digest and understand complex information, your skills at crafting clear and compelling copy and your ability to think logically and create computer programs that work.

This is worth understanding clearly.

Just because you can read something doesn’t mean that you have value.

What matters is whether you can read what someone else needs you to read, understand that material, and produce a research report that is useful to them.

Value emerges from how well you do that task in the eyes of the person who needs you to do it.

What people assume is that value is something they have, something that’s in them that they give you.

The crucial thing to understand is that you have to produce something – you have to bring a thing into existence that you give to the other person – and then value is created only when they think it is.

What you have to get clear in your own mind is what is that thing – what is it that you’re going to produce.

Do you have the resources you need to create value?

To produce anything you need resources like the core ones discussed earlier in this section.

In the same way you want to create value for someone else – these things are of value to you – someone else gave them to you.

Going back to my simple example, you learned to read, write and do maths at school – you were given these skills that are now of value to you.

You may have more items on your list – your art skills, for example or your ability at multiple programming languages.

All these are things you value and they are the resources you can use to create value.

What you have to be clear about is whether you can do these things well – well enough to compete with other people out there.

You don’t need to be the best at what you do – but you do need to be good.

If you aren’t good yet then you’ve got to spend some time getting good before you’re going to be in a position where you can create value.

But that’s something that’s entirely within your control and it comes down to focus and practice.

In my own consulting experience the three skills I’ve put down – reading, writing and maths – have been absolutely fundamental to the work I’ve done for the last twenty years.

And it’s surprising how few people you can hire that can demonstrate a mastery of these three basic skills.

Your field may be different, so you should list at least three things that you have that you value.

Now, let’s see what you can do with them.

Which value creating activities are worth doing?

Some people are lucky – they’re naturally good at lots of things.

You’re rewarded for this at school – being good gets you lots of stickers and good marks and positive report cards.

It’s easy to conclude from the experience of youth that being good at everything matters – and being better at everything than everyone else is the way you get ahead.

But that isn’t the case – what matters is what’s worth doing for you.

Most of us aren’t going to be included in that list of people who are better than everyone else.

We’re going to be rubbish at a lot of things – but there will be some things that we’ve shown we’re good at doing.

I don’t know what that is for you – it probably depends on what you saw grown-ups doing when you were young, the kind of resources you had growing up, the kind of people you hung around.

But there will be something – a thing you’ve got in your head, a skill you’ve got in your hands, resources that you control – that you know you can do, that you’re good at.

If you don’t know this yet – that’s ok, it just means you have to spend some more time learning what those things are by trying out different activities and experimenting to see what you like doing.

It’s the thing you’ve always done – you can’t remember a time when you didn’t do this thing.

If that thing is on your list – it’s time to look at it in some more detail.

There’s a good chance it’s the key to setting yourself apart – because you’ve become better at doing this over time.

There’s really just one thing you need to ask yourself when it comes to deciding how you create value.

How easily can someone else do this thing you do?

This is the crucial question that can often make the difference between your project succeeding or failing.

If you showed a prospect this thing you’ve made will they say, “Well, anyone can do that.”

Or will they say, “Wow, I could never do that.”

Anyone can buy goods from a wholesaler and sell them at a market stall.

Fewer people can design their own art and sell them at a market stall.

Would you be more likely to buy trinkets at a stall or buy artwork straight from the artist in front of you?

Obviously, it depends on you – your definition of value.

All else being equal, however, people are more likely to value what they cannot get from anyone else.

Which is why you need to be clear on who is setting the terms for value creation in your negotiation with a prospect.

Are you setting the terms for the value exchange?

If someone knows what they want done and give you a scope of work then you’re being hired as an employee or as a contractor.

You’re going to do what is needed of you – and the value you bring is in the form of your labour.

You’re exchanging time for money – and that is a perfectly respectable form of value exchange.

If you want to start your own business, however, you have to start setting the terms for the value exchange.

This means that you “propose” the scope of work – you set out what you will do and what the other person will get from you.

You can’t control how they think or react, but if you put something in front of them that you believe is useful to them, and they agree – then you will have created value.

Now it’s about agreeing on a price for the exchange.

Something we’ll address later in this book.

Is this what you really want to do?

By now you should have whittled down your resources to the most valuable – the ones that you can do well and are the hardest for others to do.

But it’s also important that the things you can create with these resources at the things you actually want to spend the rest of your life creating.

Or at least, a very significant portion of your life.

It’s much easier to stay the course if you’re doing something you like doing.

Perhaps you’ve found a niche where you can create value but it’s a tiring, miserable existence.

Maybe you think that’s worth it because when you’ve made your millions you can sit back and do nothing.

That’s up to you.

For the rest of us, life is going to be much more enjoyable if you design it to fit you rather than forcing yourself to fit into someone else’s life.

And you’ll get to the right design when what you value helps you create things that other people value enough to pay you.

This value thing is important and so tomorrow I’m going to look at it again through the lens of the “circle of competence” idea.

Or not – it might be something else, we’ll see.

Cheers,

Karthik Suresh

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