Are You Chasing Net Worth or Delivering Net Value?

In today’s world, much is made of the concept of net worth. For many, caught up in the hype of materialism that dominates our society, net worth is the only true measure of one’s success.

However, the problem with net worth is that it is, by definition, a self centric measure. It bears little, if any, relation to the value that one delivers to society or the world at large.

Are you chasing net worth or delivering net value? (continued)

Huge room for improvement

Few would argue with the view that there is huge room for improvement in our world.

The question is, how do we bring this about, when so much about the way we live our lives demands a self centric, narrow focus on building wealth – or at least enough money to pay one’s debts and obligations.

What is the measure of what gets done?

I remember only too well, from my days in project management, the saying “What gets measured gets done.”

This is so true, of course. But this statement alone hides the importance of the decision about what the optimum measure is that should be applied.

If we, as society, deem that the primary measure of individual success should be the difference between one’s financial assets and liabilities, then net worth is “what gets done”. Or, at least, it becomes a prime driver of the actions and behaviours of most people.

A change that would transform our world

There is a change that we could make that I believe would transform the nature of our world for the better, overnight.

That is, quite simply, to replace the concept of net worth, with what I call ‘net value’ as our collectively agreed measure of individual success.

Taking out or giving back?

Net worth is a measure of how much one is worth after deducting what one owes from what one owns. Net value, on the other hand, is a measure of the contribution one adds to the greater good after deducting the shared resources used in that pursuit.

In simple terms, net worth is about what you or I have, whereas net value is about what you or I contribute, or give back.

A focus on net worth encourages taking as much as possible from external resources to benefit oneself. At the other end of the spectrum, a focus on net value incentivises the frugal use of external resources for maximum benefit to society or the world as a whole.

Grappling with the two concepts

It was during the latter stages of my life in big corporate employ that I first consciously came to grapple with the concept of net value versus net worth.

I had many different jobs in my time but the ones I loved most involved team leadership. I loved managing and working with people, helping motivate them to deliver beyond the company’s, and their own, expectations.

Managing up and managing down

To some frustration on my part, I came to notice a pattern whereby those team leaders who focused most of their efforts on ‘managing up’ would get rewarded and promoted faster and more easily than those who focused mostly on ‘managing down’.

If I lost you there for a moment, managing up and managing down are terms I coined to describe the primary focus of people cast in team leadership roles in a typical organisational hierarchy.

As you will appreciate, any team leader has a one-on-one relationship with the boss above but a one-on-many relationship with those in the team below.

Keeping both relationships positive is important for the effective functioning of a leadership role. However, to my mind, it is the one-on-many relationship that has by far the greatest potential to add value to the organisation.

Notwithstanding this, those team leaders driven by aspirations involving net worth as opposed to net value, would pay detailed attention to cultivating the one-on-one relationship, often to the detriment of the people and team reporting in.

The zero sum game

I would like to share another personal realisation about net value. It resulted from losing a substantial sum of money.

For a couple of years I had a part-time share trading account which netted me some small but steady gains. Unfortunately, I got frustrated with the pace of things and signed up for some hi-tech auto trading facility that promised big, quick wins.

I’m sure you know where this is going.

To cut a long story short, I very quickly lost all the money I had built up in that account. Though not an outright personal catastrophe, it was a painful lesson and it made me do some deep introspection.

I soon came to terms with the fact that I needed to learn that lesson. I had always valued fair exchange. Simply put, as you give, so shall you receive.

It dawned on me that in my quest for a quick buck, I had contravened my own value. As I thought more about the whole concept of share trading, I came to realise that such activity offers the world zero value.

Each time someone gains on a trade, someone else realises an equivalent loss. It’s a zero sum game. Share trading is the epitome of a pursuit driven by a focus on net worth as opposed to net value.

How about you?

After sharing my experiences, I’d like to invite you to consider your own career, or work, and whether it is net worth or net value focused?

In general terms, those whose careers are primarily driven by the desire to make money, are likely to be net worth driven.

A high net worth may, or may not be the outcome, but the process of getting there can often be exhausting and unfulfilling and result in a strangely hollow feeling.

On the other hand, those that discover and follow their life’s purpose are contributing to the evolution of our planet and are therefore net value driven.

Being net value driven in no way precludes one from earning and enjoying good money. Ironically, when one’s primary focus is on delivering value for others through one’s work, money is often attracted naturally.

The best is that the process leaves one feeling meaningful, vibrant and fulfilled.

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