In designing self-managed organisations understanding the Principle of Exchange is a critical component to ensure success.
When the Principle of Exchange is working well, all parties feel valued. No one feels that they are giving more, working harder, spending more time, not being appreciated. The relationships are void of any form of resentment.
To understand the Principle of Exchange, we must first be mindful of dynamic equilibrium.
Equilibrium occurs when all acting influences are cancelled by others, resulting in a stable, balanced system. Equilibrium is not inactivity, but rather dynamic balance.
Nature exhibits a dynamic drive towards equilibrium. For example, if you enter a warm room in winter, allowing some of the outside cold air in as you enter, that cold air will quickly equalise to a mean temperature, rather than stay as a pocket of cold air.
Similarly, we as humans seek a dynamic equilibrium in our work and life, through the exchange of value.
Value however, is a very individual thing.
Our traditional currency for value is money. I buy a loaf of bread, and I will pay anywhere from a few dollars to $6 plus. If I am starving, and there is only one loaf to be had, I could pay more for it and still consider that I have been receiving fair value for my money/exchange. The Principle of Exchange applies.
There are many other forms of currency. I may have lots of time. Time therefore has less value to me. You, on the other hand, are really busy, and have little available time. Time becomes of high value to you, for which you will willingly pay a premium.
Or.. I may get vital needs met by taking care of someone or people. The caretaker role could allow me to feel loved, needed or important. Therefore I spend time willingly as a caretaker, receiving my value exchange in the process.
You may be a creative, and love to work with people on new ideas. Time spent in this domain, which is not part of your paid work, could really nourish your soul, and therefore give you such value that you are happy to do this for free or a small fee.
However, if the value equilibrium if broken, if the forces of give and take are not balanced within a boundary of arbitrary measured time, then a situation occurs where there is an experience on one or both sides of the values exchange where there is more give, less take, or more take, less give.
This situation is unsustainable in the long term, both at the micro level, which occurs between two or more people, and at the macro level, which we are facing in our crisis of climate change. (This is a more complex discussion on the principle of values exchange, beyond the scope of this article. In simple terms, we have been, as a human race, taking far more value than we have been giving back, in respect to the earth/gaia/the environment.)
For the purpose of this article, we shall look at this through the lens of two people. If one person becomes aware that their value exchange is no longer in place, they will experience resentment. Initially, this is a mild form of resentment, however, as the situation continues, the resentment will build and has the potential to become explosive/destructive. The Principle of Exchange is broken.
Simple case example, I give of my time in a work situation, for which I am paid an agreed salary. My manager keeps asking me to do more and more tasks, take on more and more responsibility, with out any increase in salary. For some people, this situation would be acceptable. They may be getting their needs met – needs to feel important, to make a contribution, to be a vital team player. However, another person who has a high need for family and home life will fairly quickly experience a loss of equilibrium, and will start to feel resentment on an escalating scale.
As leaders and managers, it is crucial that we understand this Principle of Exchange and be constantly monitoring its status. Any signs of resentment towards the company, or towards the manager is a likely red flag that the Principle of Exchange needs to be brought back into equilibrium. This would require a “Speak the Truth” conversation.
As business owners and people in relationship to other people it is very important that we understand the Principle of Exchange, and apply it, regularly monitoring the values equilibrium of the people around you. Is resentment present? If so, the values equilibrium may be out of whack.
In all of our relationships at 2:23AM and Big Blue Sky we work with conscious intent to ensure that the values equilibrium is maintained and the Principle of Exchange is healthy. We do this by introducing the conversation in very clear terms at the front end of the relationship, ensuring that each party is clear on their role, what is expected of them, and what will be their values exchange.
We do this in 6 domains, as part of what we call Integral Accounting (*link below). We also request that if the other parties ever feel like the values exchange is moving out of equilibrium, they speak up. This doesn’t mean we take our eye off the ball and step over any sign of resentment. We will revisit the values exchange conversation regularly to be sure all parties are within dynamic equilibrium. This is a critical key. Many people will have this conversation at the beginning of a relationship, and then fail to revisit it regularly enough.
Often people are happy to be overly generous at the start of a relationship, but if they do not get some form of exchange, such as respect, acknowledgement, payment, or genuine appreciation, at some point they will begin to feel resentment.
Unfortunately our society has slipped into ever increasing levels of entitlement. The ~I deserve~ society. Or, ~I am owed~. Or, pure and simple, ~give me!~. This approach is really a “dis-ease” state, breaking the natural law of dynamic equilibrium, where the equation is strongly pitched to the take side, with almost complete neglect of the give side.
To break this cycle, which is pandemic an Integral Leader would:
Step 1. Clean up your own act and get back into values equilibrium-ask yourself;
What am I giving?
What value am I adding? (Whether it be as a tax payer, a volunteer, a conscious recycler, an activist, a philanthropist etc.)
What do I think I deserve, and why? Is it my entitlement speaking, or my true value? (Your true value is an internal recognition that is without ego. You will know if it is ego if there is any form of demanding energy, or righteousness, or arrogance. True value is humility and acceptance. It does not need to make noise or tell anyone…)
Step 2. Coach, teach and train others around you to be clear around their own Principle of Exchange.
Are you able to meet their expectations or not…you may need to negotiate?
How would they know they had experienced a win for them? What would they have, or be, or know?
What would a win win win look like? This is where they win, I win and the organisation or third part wins.
The Principle of Exchange is critical to any successful relationship.
Common examples where this principle is not working…
“Why don’t you ever help me around the house?”
“I seem to do everything around here!”
“I do all the work and he gets all the accolades!”
“I seem to attract relationships where I get to work hard, make all the money and my partner hangs out having a good time, living off my work!”
Bring the Principle of Exchange into your conscious communication as a daily habit and life is sweeter.