We exchange value every day without thinking about it.
The key to unlocking the power of the value exchange is understanding the value of your time and engaging with intention.
For many, value is elusive and they use it as an excuse to avoid exploring if they are giving or receiving value. At the core, value is the opportunity to serve and help others. Basic value helps people and organizations survive and thrive.
We prioritize based on value.
If everything is valuable, then nothing is. If everything is a priority, then nothing is.
Value is our imperative. Think about how we exchange it.
Price versus value
Whether we realize it, each transaction exchanges value. Basic transactions involve exchanging a currency for a good or service. The buyer valued the good or service more than the currency, and the seller valued the currency more than the good or service.
They exchanged value.
You have one job: maximize the value you get
What makes this powerful is the built-in expectation that you offer a good or service that was a low cost for you to create in exchange for a value over the cost.
Here’s where this gets exciting: In an ideal situation, all parties to the value exchange feel that the cost of the price that they put into it is lower than the value they get in exchange.
That’s the power of understanding what is valuable to you and what others consider valuable. You can seek the choices that allow everyone to maximize value for lower cost.
You pay with more than money (time is money)
We engage in endless transactions that require us to invest our time. Worse, we rarely consider or realize the value (or lack of value) we get.
This works both ways, too:
- When you give someone your time, what value are you getting in return?
- If you’re asking someone for their time to read an article, listen to a podcast, or come to a meeting, what value are you offering them?
What is the value of your time?
Here is the simplest way to calculate how much an hour of your time is worth:
- Note your salary. For example, let’s say you make $100,000 a year (because it makes math easy).
- Remove the last three digits of your salary (or gross annual income). In this example, that is $100.
- Divide by 2. In this case, that works out to $50 for an hour of your time (every day).
I’ll look for a video clip where I explained learning about this (the hard way). It involved a dynamic speaker pointing out I was an idiot (I was) and working me through the value of my time versus the cost of cutting the grass, a chore for which I enjoy little value.
The simple point is your time has value. While the value of your time is not a measure of your worth, it does signal growth (or not).
Knowing the value of an hour of your time allows you to enter better value exchanges.
Command your time to increase value
We’re each granted 24 hours a day, yet many people consistently “run out of time.” So I propose we command our time and manage our energy.
Look for the 3x, 5x, or 10x return on your time. If you invest two hours worth $100, are you getting $300-$3000 in value?
Make better decisions
Once you understand the value of your time (and the collective time of your team) and realize the importance of considering the value exchange, you make better decisions.
Over time, you learn to assess whether the juice (the cost of your time and energy) is worth the squeeze (the value you get).
Consider how this works in your organization
You need to solve a problem with a potential of delivering $10M or more of value. In order to solve the problem, you need a $300k tool. How much time and energy does it make sense to invest in preparing the business case?
Is it enough to spend $100 to get the $300k tool to solve the $10M problem, or does it make sense to invest more, perhaps a lot more?
Sure, I’ve oversimplified it, but that’s the crux.
How much are you willing to invest to clarify and guide the decision to get the right solution and unlock more value in the exchange? Is winging the presentation at the last minute a better strategy?
The value exchange only works when you use it
Everything we do exchanges value.
The value exchange is a powerful leadership and development tool.
Hey, I just spent an hour of my time listening to that webinar. What value did I get and was it useful?
I find it useful to reflect on the value I get from the time I spent and carry that forward into future decisions on where to invest my time and energy.
Take a moment to scratch out the value of an hour of your time. Then pick something in your day and see if the value gained exceeded the price you paid.
What did you learn in the process?