It is not simply amount of production alone but, additionally, the quality you must deliver to ensure exchange. L. Ron Hubbard discovered four conditions of exchange.
1. First consider a group which takes in money but does not deliver anything in exchange. This is called rip-off. It is the “exchange” condition of robbers, tax men, governments and other criminal elements.
The first of these conditions is really a criminal condition. Rip-off is an attempt to get something and give nothing. And it’s the road to ruin.
2. Second is the condition of partial exchange. The group takes in orders or money for goods and then delivers part of it or a corrupted version of what was ordered. This is called short-changing or “running into debt” in that more and more is owed, in service or goods, by the group.1
A customer orders five blue pencils to arrive on Wednesday and, two weeks later, receives three orange pencils with a note: “The other two will be coming but they will be green. I hope you don’t mind.” This incomplete exchange causes a backlog and eventual insolvency. And if the pending insolvency is not handled, it can move back down to condition number one: rip-off or fraud.
3. The third condition is the exchange known, legally and in business practice, as “fair exchange.” One takes in orders and money and delivers exactly what has been ordered. Most successful businesses and activities work on the basis of “fair exchange.”2
A customer orders three blue pencils to arrive on Wednesday and he gets three blue pencils on Wednesday. This is legal and fair exchange. It’s also what is accepted as “normal.” The generally accepted belief is that “if you just give people what they want, then everything will be fine.” But, in fact, giving people only what they want does not necessarily bring about expansion. At best, it just keeps your head above water. It does not guarantee survival. The real answer to guarantee success in any endeavor is delivering in abundance. “Normal” exchange does not always bring about success.
4. The fourth condition of exchange is not common but could be called exchange in abundance. Here one does not give two for one or free service but gives something more valuable than money was received for. Example: The group has diamonds for sale; an average diamond is ordered; the group delivers a blue-white diamond above average. Also it delivers it promptly and with courtesy.3
Thus we can see that the fourth condition is the only real guarantee of success.
The fourth condition is the preferred one. It is the one I try to operate on and have attempted to for ages.
The Four Conditions of Exchange
Produce in abundance and try to give better than expected quality. Deliver and get paid for it, for sure, but deliver better than was ordered and more. Always try to write a better story than was expected; always try to deliver a better job than was ordered. Always try to produce—and deliver—a better result than what was hoped for.
This fourth principle above is almost unknown in business or the arts.
Yet it is the key to howling success and expansion.4
Condition four is the only one that guarantees survival in abundance and that is achieved by delivering more than is expected. That doesn’t mean if somebody ordered ten pencils you send them twenty. That’s a good way to go out of business. It does mean that if they ordered ten pencils to be delivered on Wednesday, you send them ten pencils, perhaps on Tuesday, with a few erasers and a little note that says, “Thank you very much for the order.”
It is the pluses that guarantee greater survival. And the pluses don’t have to cost more time or money. It’s a question of care, not cash.
Additionally, how quickly success comes about does not and must not rest on the shoulders of the company executives alone.
Where a group is concerned, there is another factor which determines which of the four above is in practice. It is group internal pressure. Where this only comes from executives, it may not get activated. Where it comes from individual group members in the group itself, it becomes assured. The internal demand of one staff member to another is what really determines the condition of the group and establishes which of the four conditions above come into play.
Thus the organization collectively, in electing which of the four principles above it is following, establishes its own level of income and longevity and determines its own state of contraction or expansion.
While this is a must in an executive—to establish the principle being followed—the real manifestation only occurs from pressure by individual staff members or others within the group.5
We can easily see that executive leadership is vital but individual responsibility is also a key factor. It is the group that sets the standard and which of the four conditions is applied or implemented.
It is up to the individual staff member in a group what the group income is and what their own staff pay is. The organization cannot earn more and the individual staff member cannot be paid more than will be established by which principle above they elect to follow.6
If you look at every successful business, giving people more than they expect—especially in the area of service—is, in fact, normal. That’s the way that it should be. That’s the concept that you want to bring into your business or indeed into your life.
You must continuously do those little extras that helped to build up your business.
Professional Speaker, Writer, Business Consultant
Author of The Natural Laws of Management: The Admin Scale
1,2,3,4,5,6 Hubbard, “Exchange, Org Income and Staff Pay.” Policy Letter of 10 September 1982, Organization Executive Course.
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