“He knows the price of everything but the value of nothing” is a term I often heard as a child although I never really understood it until I grew up and made my way the world. It’s been on my mind recently. Let’s take a couple of examples.
Firstly, the potential legislation in the USA to stop online piracy. The debate seems to be about whether all content should be “free” and whether in fact this law would lead to a draconian censorship of free speech. I don’t want to get too deeply in to what is a fascinating power struggle but it strikes me that everyone knows what they are willing to “pay” but aren’t sure what the “value” is to their life. To quote @neilmorrison “If I offered you a free holiday or a free car, you’d expect a catch. Online I offer you free content and you blindly accept.” I offer no conclusion on this other than to ask whether people have truly considered what it costs to have “free” content.
My next example is my bank. I choose to keep my money with them for several reasons, not least of which is the ethical stance they take over investments. It’s true to say that my banking costs slightly more than my friends and the interest rates aren’t quite so good but honestly, it gives me the warm fuzzies to know that what they make from me isn’t being spent on arming dictators and exploiting the developing world. I see that as a fair exchange. I know we can all talk about how bankers have ruined our world but it strikes me that there are a fair few people who lived on credit for things they couldn’t really afford (me included) or bought second houses to rent out. Again, I draw no distinct conclusion but I note that “free” or “cheap” credit did rather blind us to the value of certain investments.
Finally, I’ve recently been talking to David Goddin @changecontinuum following an interesting article on his “People, Performance, Potential” blog about pricing in coaching, a subject obviously dear to my heart. I won’t reprise the discussion here as David covers it much better but it prompted me to tell him a story about an old CEO of mine who was challenged in a “town hall” meeting about the size of his pay packet. He took up the challenge and gave a very interesting answer on his relative worth. The CEO had been hired to deal with a very difficult Public / Private Partnership and was responsible for renegotiating exorbitant contracts. He asked us all to consider when we would feel he had been value for money. Was it when he had saved 10 times his salary during a meeting with a contractor the previous day? Would it be when achieved 50 or 100 times his salary in savings, at no cost to our pay packets and maybe even freeing money for better wages if we could also produce efficiencies. Such a bold answer impressed many of us there and it certainly shifted the debate on dramatically.
Now I’ve been drawing on large examples that many of us can relate to and yet on a micro level we are all facing price vs value decisions daily. The convenience of the supermarket or internet shopping as opposed to traipsing down a high street being the most obvious. However it extends beyond fiscal choices in to such areas as how and where we spend our time. For example the relative worth of friends and family, the necessary compromises of relationships or parenthood, a career in social provision or in private industry. In those areas are you buying on price paid or value extracted? Maybe it’s worth taking a little while to evaluate and balance the books……
On that note, I’m off now to do some pro-bono coaching, I get no money from it, but trust me when I say that it has great value in my life.
As ever, please do get in touch, comment here, @projectlibero on twitter or you can find me at www.projectlibero.com
Great post Jon and I loved the story you told of the CEO – it’s one of those stories I’ll always remember.
It strikes me that price is something that we seek to ensure certainty and to maintain our expectations of fairness & relatedness. None of us would like to find out that the price had changed or that others were getting “better” prices. This is pretty fundamental behaviour for humans. Yet it’s constantly analysed to ensure certainty and to maintain our expectations of fairness & relatedness…
For me, real value can only ever come from what you give (not take). When you give you fulfil needs, you create relationships, you learn & develop, you feel good about it. I think that’s what people truly value. It’s where trust thrives. You don’t need to review – you feel the value.
The beauty is that giving works just as well for pro-bono as it does for paid work!
Hi David, thanks for the comments and of course thanks for your contribution which helped in the first place. I agree that price is something we seek out as a benchmark and it always interests me to see say the price differential for the same things between different countries. It’s often a surprise to me what certain markets will support in pricing terms.
I think this post is a bit like my “stories that speak to us” one where there is a follow up post to be written, more about the value you can get beyond price. I was kind of aiming there but my word count grew as I positioned my ideas. Your paragraph about value “from what you give” is a great starting point for me to write that. Maybe I’ll even get it out this week.
Thanks for a great blog on a subject very close to my heart as well.
This has become very topical in reviews of the spends on talent acquisition vs development. We moan about the lack of talent out there, but we’re not willing to add value and therefore gain better value for money from the people we work with.
Until we develop our people and offer more to new recruits by way of upskilling, supportive management etc – we’re unlikely to see the value we want for the price we pay.
Totally agree with David’s comments here too – we can give a lot more through the work we are already paid to do, as well as exploring pro-bono opportunities for the fuzzies.
And on a personal level – I’m in the middle of the debate on locally farmed meat vs supermarket deals – so this will no doubt add a bit of substance to that too!
Hi Helen, welcome to the blog and thanks for your kind comments.
I think the beauty of this post is that everyone has a slightly different take on what I mean or at least a different example in mind when they ponder the question. I hadn’t considered talent acquisition in my post but for you it’s an obvious link. I enjoyed your view to offer more in terms of upskilling. I remember being in an organisation where someone quoted the story of a CEO saying “But what if we train our staff and they leave?” to which the response came back “But what if we don’t train them and they stay”. So very true.
Good luck with your food debate and I hope I’ve added to your thoughts there.
Hope to see you on the blog again soon.