What is your currency?

Jay Deragon, on his blog "A Relationship Economy", has been exploring the idea of relationships and knowledge as "currency".

Social media is redefining the idea of currency, because of the value we create through our relationships and the sharing of knowledge.

He posts an interesting video discussion with David Bullock (http://www.davidbullock.net)

Posts:

How do you define currency?
http://www.relationship-economy.com/?p=3943

Do Relationships create currency?
http://www.relationship-economy.com/?p=3924

Is Knowledge Currency?
http://www.relationship-economy.com/?p=3941

Hmmm... food for thought here!

The nature of profit

I'm worried that in all of this discussion about the "Big Bailout", the concept and the merits of "profit" get lost.

The problem right now, as I see it, is that we have forgotten what profit means... Profit is not extortion, it is not injust, it is not unfair, it is not evil.

Profit, as I define it, is the value that I add to an exchange, a value that expresses the positive impact that this exchange represents for the client.

In calculus, a branch of mathematics that is the language of physics, each number has a "real" and "imaginary" term. The real term is what we can touch and count, and the imaginary term represents potential. As numbers are manipulated and combined through the equations of physics, the imaginary terms join to become real, and sometime real terms become imaginary. Electricity, magnetism, gravity, quantum mechanics, all these are physical phenomena that can be represented through the calculus of real and imaginary numbers. (for a deeper explanation, see here)

I believe that business is a similar transformational process. As I input or invest the real resources of time, money and effort into my business, I also invest the imaginary, intangible resources of passion, mission, intention, values and trust.

Profit, the value that I add to the exchange, is also represented by "real", tangible, and "imaginary"-intangible terms. The real terms are representable in accounting language: return on investment, increased cash flow, savings and so on. But these real results have to also be balanced through the intangible benefits: how has this transaction helped my client fulfill their potential just a little bit better? To improve the quality of their life? To advance community, nation, humanity, the environment, the planet?

Any business transaction has to generate a value added that is win-win, in the short term as in the long, in the tangible as in the intangible, in the local as in the planet, to you as to me.

When I sacrifice the intangible profit of doing good over the long term just to temporarily increase my tangible dollar results in the short term, the core reason for being of the business starts to rot, and you get the empty shells of the major institutions and corporations that you see today.

Business is about creating a bridge of trust between two people in order to exchange resources of value in order to mutually improve each other's lives. Business is personal, it is is a sacred responsibility. Focus on creating tangible and intangible value that expresses who you truly are, and you will build something that will make a lasting impact on the world.

Instead of filling a need, fulfill a desire

It's in all the Business 101 texts: to be successful in business, all you need to do is to find an urgent need and satisfy it.

That may seem logical, however the story continues from there. Because if all I'm doing is satisfying a "need", then what happens is that I'm engaged in a race to the bottom, a direction that leads to disaster.

Say you're very hungry and you're offered the choice of a Big Mac right away, or a freshly prepared, balanced and nutritious meal two hours from now, what do you think you'll choose? Many (most?) people choose the Big Mac, but why?

It goes back to the basic Maslow's hierarchy of needs: when physiological needs like food, shelter, sex are lacking, this creates stress. And people want to relieve that stress quickly, cheaply, with the least effort and investment.

So if I aim my product or service at meeting a need, then all I am doing is relieving stress, and I have to compete with other ways of relieving the stress that are cheap and quick. No wonder MickyD's business is booming, it's not about the taste or the quality, it's about that quick hit.

If I focus on the values at the top of Maslow's need pyramid, around self-actualization, then I attract people who are motivated to seek more. A person seeking self-actualization appreciates the experience of the home-cooked, balanced, nutritious meal: they want a fuller experience of taste, they recognize the long-term benefit of nutrition, they appreciate the time and care that goes into preparing the food.

By directing my offer to fulfiling desires, it may take longer to build my business, but it will be stronger and last longer, because then I can build in other values like loyalty, trust, even love...

Focus on filling needs, and you become a commodity, where you are judged on price alone, with the winner being the lowest cost option. If you choose this direction, take your money and run, because it is very difficult to create a lasting business because you will always be fighting against slim margins to eke out a profit.

Shift to fulfilling desires, and you attract those who want more and who are willing to commit (invest) more time, energy, patience and money in what you offer. You will have fewer clients, but they pay better and are much more fun to be with.

So if you're tired of being a slave to your customers, it is time to turn conventional biz wisdom on its head. Focus on igniting and fulfilling a compelling desire, and you will work less, make more and have much more fun with people who value who you are and what you offer.