No this isn’t one of those feel good posts which is about to say how the world would be better off if we were less focused on making money (it would be, but that is a separate story).
You see business really isn’t about making money. It never has been and it never will be. It just looks like business is about making money.
Here is the thing. Nobody actually makes money. It is a screwed up way of looking at the world. You never, ever make money – and your business never ever makes money. If your business does make money, you will likely be put in jail for forgery. It is illegal. The only people who make money, work in the central bank.
Now, I know this seems obvious, and it may seem like I am playing with words, but I want you to understand that we do not talk in these terms by accident. Most of us in business actually think in terms of trying to make money. That is not what happens though and thinking this way is an incredible waste of energy.
How much money do I make?
How much money does our business make?
How can we make more money than our competitors?
Can you imagine how many people in the business world today will be sitting down to try and work out ways to make more money? All that effort put into trying to do something which is actually impossible.
This is one of the reasons people get so frustrated when it comes to wealth and business. ‘Making money’ is a screwed up way of thinking.
You do not make money.
When you go to work and your boss pays you at the end of the month, you do not make money.
When you pull gold out of the ground at a cost of $800 an ounce and sell it for $1200 per ounce, you do not make money.
When your business does really, really well and you end up with $100 million more at the end of this year than you did at the end of last year, you did not make money.
At any moment, there is a fixed amount of money in the world. You can increase your share of it, but that is very different from making it. (I am not saying the amount of money in the world never changes — it can fluctuate according to government policy. However, at any precise moment, the amount of money in the world is fixed. You can’t make any more of it.)
When you acquire money, you did not make it. Something else happened.
You created value.
Your capacity to create value is what has you increase your share of the money pool. Business is not a ‘money making’ game. Business is a value creating game.
Your relationship to the distinctions of value creation are probably the greatest factor in how successful you and your company is, and ultimately how much money you acquire. Every one of your business stakeholders only trades with you because it is a value creating transaction for them. Whether it be your shareholders, your staff, suppliers, customers or potential customers.
No matter what your role in the organisation, your number one priority should be to map out the value you create with all your stakeholders. If you are not clear on the value created in these relationships, how are you ever going to really capitalize and leverage them?
Becoming a master of value creation is at the heart of being a great business person.
Unless you become a master of value creation… how will you ever get more money?
Here is the thing. Nobody actually makes money. It is a screwed up way of looking at the world. You never, ever make money – and your business never ever makes money. If your business does make money, you will likely be put in jail for forgery. It is illegal. The only people who make money, work in the central bank.
Now, I know this seems obvious, and it may seem like I am playing with words, but I want you to understand that we do not talk in these terms by accident. Most of us in business actually think in terms of trying to make money. That is not what happens though and thinking this way is an incredible waste of energy.
How much money do I make?
How much money does our business make?
How can we make more money than our competitors?
Can you imagine how many people in the business world today will be sitting down to try and work out ways to make more money? All that effort put into trying to do something which is actually impossible.
This is one of the reasons people get so frustrated when it comes to wealth and business. ‘Making money’ is a screwed up way of thinking.
You do not make money.
When you go to work and your boss pays you at the end of the month, you do not make money.
When you pull gold out of the ground at a cost of $800 an ounce and sell it for $1200 per ounce, you do not make money.
When your business does really, really well and you end up with $100 million more at the end of this year than you did at the end of last year, you did not make money.
At any moment, there is a fixed amount of money in the world. You can increase your share of it, but that is very different from making it. (I am not saying the amount of money in the world never changes — it can fluctuate according to government policy. However, at any precise moment, the amount of money in the world is fixed. You can’t make any more of it.)
When you acquire money, you did not make it. Something else happened.
You created value.
Your capacity to create value is what has you increase your share of the money pool. Business is not a ‘money making’ game. Business is a value creating game.
Your relationship to the distinctions of value creation are probably the greatest factor in how successful you and your company is, and ultimately how much money you acquire. Every one of your business stakeholders only trades with you because it is a value creating transaction for them. Whether it be your shareholders, your staff, suppliers, customers or potential customers.
No matter what your role in the organisation, your number one priority should be to map out the value you create with all your stakeholders. If you are not clear on the value created in these relationships, how are you ever going to really capitalize and leverage them?
Becoming a master of value creation is at the heart of being a great business person.
Unless you become a master of value creation… how will you ever get more money?