Every person in every business performs a mixture of tasks; Some tasks are low-value, while others are high-value. I often ask a business owner “How much is an hour of your time worth to the company when you are doing the most valuable work?”.
As we grow and develop a business and our own capabilities we tend to hold on to a bunch of things that we’ve always done, because we’ve always done them! Maybe no one else knows how to do them, or maybe we enjoy those tasks. The reality is that we should no longer be doing those things. It’s time to stop!
The easiest way I’ve found to illustrate this to someone is to draw a simple graph with £ per hour on the vertical axis and time on the horizontal axis. Then I ask for some examples of tasks, how long they take, and how much that work is really worth per hour? For example, bookkeeping: it takes a few hours each month, but the ‘going rate’ to have someone else do that is perhaps £25 per hour. So we draw a red cross on the graph – low down and to the right (not worth much and takes a few hours).
Let’s look at a few more examples – they like to open the mail, they like to answer the phone when it rings, they ‘have to’ wash-up at the end of the day because no one else will! You get the idea, lots of red crosses – low-value work.
We draw some blue crosses for things like staff appraisals, meeting key customers, and all those other things that are valuable enough that they seem more valuable. These are tasks that seem like a better use of a manager’s time. But it’s still not where they should focus.
I ask “Who’s your largest customer and, if you work it out, how many hours of work did it take to get them and how much will they be worth over the whole time they buy from you?”. The answer is usually quite interesting – imagine the answer is that it was a long process over three months but the actual number of hours invested was 10 hours and the customer will probably spend £100,000 over the next five years. That means those 10 hours invested were worth £10,000 per hour. And the reason they don’t spend more time doing £10,000 per hour work…? It’s because they’re busy doing their own bookkeeping to ‘save’ £25 per hour it would cost to outsource it or employ someone.
When managers spend their time most effectively, can be worth a huge amount of money per hour. Actually, almost anyone at any position in a business can usually be worth a lot more, provided they gain awareness of the true value of what they do and what they could do. Every hour that you choose to use your time in a certain way, you choose how much value you generate, so choose wisely!
Often it’s necessary to first free the time to be more selective, but that’s a whole other story about Outsourcing, Delegation, or applying The 3D rule which you can read about elsewhere on our blogs.
Your Business Coach can help you to analyse your time usage, identify the most valuable work, help you to divest the least valuable work, and help you earn more while working less!