Unfortunately, everything in the workplace comes with an opportunity cost, which is loosely defined as a loss of something that could have been gained had your time been spent there, when instead you spent your time doing something else.
The opportunity cost of “good use of time” activities is the inability to focus on the “best use of time” pursuits.
Here are a few examples:
- The opportunity cost of a principal working on a project (often the urgent) is not being able to develop new business (certainly highly important)
- The opportunity cost of a marketer working on a proposal (again, the urgent) is not being able to market to company to a broader audience (once again, highly important)
- The opportunity cost of a manager spending their day dealing with personnel issues (urgent) is not being able to develop their team or oversee their work (important)
Of course not. So we’re always juggling our responsibilities with our available time, robbing Peter to pay Paul because there simply aren’t enough hours in the day!
But how many of us are truly in charge of how we spend our hours? Supervisors dictate priorities. Clients dictate priorities. Coworkers dictate priorities. Prospects dictate priorities. As a friend of mine used to often quip: “Nothing is impossible … for those that don’t have to do it!” In other words, people who don’t respect your time like to make major demands on your time and expect you to perform to their expectation.
This malaise infects firms of all sizes, as well. In small and mid-sized firms, too many employees suffer from “multi-hat syndrome,” which allows them to do a half-assed job on just about everything they do! How’s that a recipe for a successful firm, much less a successful career? They are pulled in too many directions, becoming the proverbial jack of all trades, master of none!
Likewise, in large firms the challenges are the same, or even amplified. In fact, if you look at most large firms by divisions or offices, you find that large firms are really just a bunch of small firms all using the same logo! Like the A/E/C megafirm down the road that has six employees in their local office. Do they really benefit from economies of scale – or do they suffer from multi-hat syndrome, too?
We need to get beyond the fantasy of, “If we hire more people, these problems will go away.” Sorry, but if we hire more people, the problems will just be different – or amplified!
So how do we get our time back?
Music legend Aretha Franklin said it best: “R-E-S-P-E-C-T, find out what it means to me.”
In a work environment where everyone respects one-another, you respect one-another’s time. It sounds simple, but is it realistic?
How do you show a value for your time?
My colleague Tom Traina, MBA, CSM has a simple philosophy: “Always charge for your time, no matter what you’re doing.”
Whether you actually submit an invoice is another story, Tom says, but you should always equate your time to cost. And the price for your time should be directly off the company rate schedule. If your firm bills you at $150 an hour, and a coworker comes to you and asks you to work on a specific task, let them know how much it will cost them. “This task will take me 10 hours, so the fee is $1500.”
The idea here is to help them understand that nothing comes for free, your time is valuable, and it is going to cost the company a lot of money for you to do what they are asking. And if they are asking for you to spend your time doing something of high value to the firm, then it is time well spent. But if it is merely a good use of your time – or even a waste of your time! – they need to understand that, too.
This is easy to do for those who actually know their hourly rates. But what about those staff members that aren’t normally involved with projects? There’s a pervasive attitude in A/E/C firms that the time for those staff members in the “overhead” categories is less valuable than the time for those that are billing hours to projects. It’s absolutely absurd, but nonetheless prominent. Talk to business development, marketing, human resources, accounting, and information technology professionals, and they will lament that their colleagues don’t respect their time.
“Just drop what you’re doing and work on this, because my stuff is more important than whatever you are doing.”
This attitude regularly chases scores of talented professionals from our industry!
If you want to see it in action, just look at a marketer’s time spent on low-probability opportunities. A firm without a robust go/no-go decision-making process for project pursuits will chase everything under the sun, and win few-to-none. The marketing team will literally waste hundreds of hours working on proposals for projects that they have no chance of winning. (More like thousands of hours!)
If you don’t have a billing rate, it is pretty easy to calculate. It is not your direct salary, but rather a multiple of it. A lot of firms have payroll multipliers of 3.0 to 3.5, which covers salary, benefits, overhead expenses (like rent, utilities, equipment, etc.), and profit. So take your salary and multiply it by 3.5. If you make $40 an hour (if you are hourly, you already know your pay-per-hour; if you are salaried and don’t know it, just take your annual salary and divide by 2080 hours), 3.5 times your hourly rate equates to $140/hour, which puts you in the ballpark of the true cost of your time to the company. Thus, a 40-hour effort to do something costs your firm $5,600.
When co-workers are asking you to spend your time on low-value activities – or good, but not best uses of your time – help them understand the true cost.
Another way to look at things is by utilization rate, a number critically important to A/E/C financial professionals. Average firm utilization rates – time that can be billed to clients – are in the 50-60% range, although for individual technical professionals the utilization targets are often above 75%. Simply stated, a 75% utilization rate means that if someone works 40 hours in a given week, 30 of those hours will be charged to a project (and hopefully billed to a client). But that doesn’t mean that they have 25% of their time “free” to do whatever. In fact, some weeks they may be able to charge 50 hours to a project.
Most overhead positions within A/E/C firms are 0% chargeable but have a 100%+ utilization, which is another way of saying that these professionals are overworked!
So when your time is requested to work on lower-value activities, sit down and talk with the person who is asking for your time. Explain to them the estimated cost to do what they are asking. Demonstrate to them everything else in your to-do pipeline, and the opportunity cost of not doing those tasks.
Remember, however, that it goes both ways. Because I operate in the sales and marketing space, I often see marketing professionals needing input from the technical professionals – project descriptions, resume updates, scopes of work, presentation input, etc. But just as the marketers don’t appreciate being told to drop what they are doing to work on something, neither do the technical professionals. They, too, are working on tight deadlines. Their project managers or principals or clients may be breathing down their necks! Maybe the project due date has changed, or there was a major error that caused last-minute redesign, or they are trying to balance heavy workload with proposals that need written. Or they have standards to update or staff to manage.
“R-E-S-P-E-C-T, find out what it means to me.”
Show them respect, have empathy for what they are dealing with, and they will often reciprocate.
Everyone’s time is valuable, and no one’s time is more valuable than anyone else’s. We all have a job to do. However, for us to succeed at that job, it is imperative that we focus on the important – not just the urgent. And it is critical that we focus on the highest-value activities for our limited time.
Firms that focus on the good and urgent, but not the best and important, rarely achieve their financial goals – and often lose their highest performers in the process.
Don’t let this happen to your firm!
Eisenhower, Covey, & Your Time
Dwight D. Eisenhower, five-star general and 34th president of the United States, had a simple approach for time management. Known as the Eisenhower Box, it was popularized by Dr. Stephen Covey in his books 7 Habits of Highly Effective People and First Things First. Eisenhower stated, “I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent.”
Covey took that concept and created a simple matrix, which is summarized below:
Covey notes that highly effective people spend the majority of their time in Quadrant 2, which he refers to as the “Quadrant of Quality.” So what happens when you don’t spend enough time here but instead spend most of your time in Quadrant 1? According to Covey, it creates stress and burnout – and ultimately deeper crises. However, time spent in Quadrant 2 actually shrinks the need to spend time in Quadrant 1.
Do your coworkers truly value your time? Does your company value your time?
Questions? Comments? Reach Scott at email@example.com or connect with him at https://www.linkedin.com/in/scottdbutcher/.