Element 4.2: Increase Your Value to Others

“When we see persons of worth, we should think of equaling them; when we see persons of a contrary character, we should turn inwards and examine ourselves.”

In a market economy, financial success reflects one’s ability to provide others with value. This is true for both employees and businesses. If you want to achieve high earnings, you had better figure out how to provide others with services they value highly.

As previously stressed, improved knowledge, higher skill level, and experience generally increase productivity and enhance one’s ability to provide valuable services to others. As a result, investments in human capital—education, training, and other forms of skill acquisition—can improve both productivity and earnings. But other personal attributes also influence productivity. Two of the most important are personal attitudes and entrepreneurial thinking. The importance of these two attributes as a source of productivity is closely related to what psychologists call emotional intelligence (EQ). Many psychologists now believe that EQ is more important than IQ as a determinant of personal success.⁽¹²²⁾ Even economists often overlook these two vitally important sources of personal productivity. Let’s consider each of them.

How do one’s personal attitudes impact productivity and success? Consider the following simple thought experiment: suppose an employer is evaluating two potential employees. The first has the following set of attributes: honesty, dependability, persistence, reliability, trustworthiness, respect for others, desire to learn and improve, and ability to work with others. The second has a different set: disrespect for others, unreliability, quarrelsomeness, contempt for education, vulgarity of speech, blaming others for problems, and dishonesty. If you were the employer, who would you hire? Predictably, most would hire the first candidate because those attributes are success-enhancing. Other things being equal, employees with these positive attitudes are usually more productive and function well with coworkers. In contrast, the second set of attributes are failure oriented. They will undermine productivity and the ability of the employee to work with others.

If you want to be successful, you need to cultivate, develop, and strengthen the first set of attributes so they become habits—the core values of your life. Equally important, cast the second failure-oriented set out of your life. Do not let anyone, including friends, convince you that any of the failure attributes are “cool.” They are paths to trouble, and you do not want to go down those routes.

The good news is that you can choose success attitudes rather than the failure ones. Moreover, you can do so regardless of your family background, current income, educational level, or choice of career. Your attitudes will exert a huge impact on your future financial success. Positive attitudes will help you overcome other disadvantages, such as a poor education or a financially restricted childhood.

What are these attitudes? They are well summarized in a class book 7 Habits of Highly Effective People as:

1. Be Proactive (take responsibility for your own choices)
2. Begin with The End in Mind (have a clear vision of your desired destination)
3. Put First Things First (Prioritize your actions)
4. Think Win-Win (as we have emphasized throughout – seek mutually beneficial outcomes)
5. Understand and Be Understood (engage in active listening and empathetic communication)
6. Synergize (value differences and diverse perspectives)
7. Sharpen the Saw (an analogy to a dull saw—it means to invest in life-long self-care, continuous learning and personal development).

Of course, if you choose failure attitudes, you can blame others—your family, your ethnicity, your neighborhood, the schools you attended, or society in general. These factors may influence your choices, but they do not determine them. Your attitude characteristics are under your control. If you grew up in a troubled environment, it may be more difficult to attain and maintain these attitudes. But a person who overcomes a negative environment is admired and respected by almost all. A troubled background can even help launch your success if you choose to develop positive attitudes.

Some of you may be thinking, “My attitudes are my own business. No one is going to tell me what to do or change my behavior!” Suppose a business owner, let’s call him Alexei, has this perspective. Alexei ignores the wishes of consumers and instead provides what he thinks consumers should value, nor does he treat his employees with respect. Alexei is free to make these choices. If he does so, however, he will pay a price in the form of lost sales and probable business failure.

Similarly, potential employees are free to “do their own thing.” They can ignore how their attitudes and behavior affect productivity and employability. But, like the business that ignores the desires of consumers, employees who ignore how their attitudes and behavior influence their productivity will pay a price in the form of poor opportunities, low earnings, and spells of unemployment. None of us is an island unto ourselves. If we want others to provide us with income, we need to cooperate and make our services valuable to them.

The bottom line is straightforward. Success-oriented attitudes are highly important determinants of financial success. You cannot buy these attitudes. Neither can someone provide them to you. You must choose them and integrate them into your life. Furthermore, if you do so, it is a near certainty that you will have a substantial degree of economic success. The opposite is also true. If your life is largely a reflection of the failure set of attitudes, it is a virtual certainty that your future will be characterized by financial troubles and personal bitterness.

Another personal attribute that can enhance your productivity is entrepreneurial thinking. While entrepreneurship is often associated with business decision-making, in a very real sense we are all entrepreneurs. We are constantly making decisions about the development and use of knowledge, skills, and other resources under our control. Our financial success will reflect the outcome of these choices.

If you want to be financially successful, think entrepreneurially. Put another way, focus on how to develop and use your talents and mobilize available resources to provide others with things that they value highly, of course always keeping in mind your own values and ethics. We are not suggesting that you make your fortune by providing harmful drugs no matter how high the demand!

Once you begin to think entrepreneurially—to think about how you can increase the value of your services to others—do not underestimate your ability to achieve success. Entrepreneurial talent is often found in unexpected places. Who would have thought that a middle-aged, milkshake-machine salesman, Ray Kroc, would revolutionize the franchising business and expand a single McDonald’s restaurant in San Bernardino, California, into the world’s largest fast-food chain? That the athletic shoe brand Adidas, started by Adi Dassler in his mother’s kitchen in 1924 would grow to $22 billion in sales?⁽¹²³⁾ How could anyone have anticipated that Jeff Bezos, starting an online bookstore in his garage in 1994, would expand Amazon into the world’s largest retailer? Did anyone in the 1950s expect Ingvar Kamprad, founder of IKEA, to take his first small showroom in the town of Älmhult in Sweden and make it the largest furniture retailer in the world?⁽¹²⁴⁾ These are high-profile cases, but the same pattern occurs over and over. Successful self-employed professional and business leaders or founders of world-beating firms often come from diverse backgrounds that appear to be largely unrelated to the areas of their achievement.

Self-employed entrepreneurs are disproportionately represented among the wealthy. While the self-employed constitute a big part of the labor force, they account for a much larger share of millionaires. On average, self-employed people are four times wealthier than wage and salaried workers.⁽¹²⁵⁾ Four major factors contribute to the financial success of self-employed entrepreneurs. First, they are good at identifying and acting on attractive opportunities that have been overlooked by others. Second, they are willing to take risks. Greater risks and higher returns go together. To a degree, the higher incomes of self-employed entrepreneurs are merely compensation for the uncertainties accompanying their business activities. Third, they have high investment rates. Self-employed business owners often channel large shares of their incomes into growing and expanding their businesses. Fourth, they generally love what they do and therefore work long hours.⁽¹²⁶⁾

It is also the case that employees can gain by “thinking like entrepreneurs.” Just as the income of business entrepreneurs depends on their ability to satisfy customers, the earnings of employees depend on their ability to make themselves valuable to employers, both current and prospective. If employees want to achieve promotions and high earnings, they need to develop skills, knowledge, attitudes, and work habits that are highly valued by others.

Development and use of your talents in ways that provide large benefits to others are keys to financial success. They are also central to what Arthur Brooks calls “earned success,” the central element of happiness and life satisfaction.⁽¹²⁷⁾ No one can give you earned success; you must achieve it. Earned success is present when your education, work, and lifestyle choices reflect the purpose of your life. Throughout our careers, we have asked our students what they want to do with their lives. In one form or another, the response is nearly always the same: I want to do things that will make the world a better place to live. Of course, individuals will differ regarding how they plan to do so. But, regardless of their plans, a positive set of attitudes and an entrepreneurial thought process will enhance their ability to live a meaningful and rewarding life.