This post is not about how to convince your boss for a raise, or how to interview for that higher paying position. This post is to help you analyze and optimize how you spend each hour of your day. Time is a precious non-renewing resource. Furthermore, each second can be monetized into a unit of pleasure, compensation, self-improvement, relaxation, sleep, healing, etc… There are no wasted moments.
My goal with this post is to help you analyze how you spend your time so that you can maximize the amount of money you make per hour spent working. Admittedly, everything we do each day adds value in some way, even those mundane activities. (You might learn that you never want to do it again…) However, this guide is aimed to help you optimize each time unit, and to help you find ways to group together high-value activities, activities that have a low ratio of time spent to unit of compensation, pleasure, etc.. (i.e. more money and more fun in less time!)
Ok, let’s get started.
Step 1: Calculate your earning potential
This is an important first step, as it will set up the groundwork for your analysis. This calculation will help you identify where your time is best spent.
First, start by writing down all of the tasks and their associated completion times, which you complete in a day. Next, expand that list to include the entire week’s tasks. If you feel there are outliers, expand out to a month. A month’s time should capture all of the significant and recurring tasks you complete. Since this guide is focused on maximizing units of compensation, it is important to associate compensation with each of those tasks. If you are employed, earning a wage, this is done simply by dividing your hours worked by your earnings to calculate the amount of earnings per hour. If you are self-employed, you will have to associate each task independently with revenue. You may not be able to be exact, but use your best judgment to estimate how much revenue or business value each task carries.
By this point, you should have a good feel for what tasks minimize the ratio of time-to-earnings. If you are like me, chances are it will be surprising to realize how much time is spent on low value activities. Wondering what a low value activity is? Well, continue to step 2…
Questions to ask yourself after step 1:
What percentage of your day is spent on high-value tasks? How many total working hours does that add up to?
What is your current earning potential if you only completed high-value tasks?
Can you add more high-value tasks?
What do those high-value tasks have in common? Does this help you uncover your true skill sets, passions?
Step 2: Evaluating your low-value activities – eliminate, delegate, outsource
Take another look at your list, and highlight all of the low value activities. Low value activities can be defined by either having a substantially high time-to-compensation ratio when compared to your highest value tasks, or are clearly time wasters or outside of your current skill set. If your tasks have a broad range of values, look at the normal distribution bell curve. Optimize around the average time-to-compensation ratio.
Now it’s time for the fun part. Run through your highlighted list of low-value activities line by line and assign one of three actions: eliminate, delegate, or outsource. Don’t be afraid to get aggressive with this list. It may be hard, but rely on your analysis completed in step 1.
Here is a basic guideline for when to use each action:
Eliminate: Eliminate all tasks that add little to no value, are clearly outside of your skill set, or activities you hate. (Time spent doing things you hate carries little value)
Delegate/Outsource: Delegate all low-value tasks that are clearly defined, yet still play a role in your business or for the business you work for. Potential candidates for those tasks are people who would have a high time-to-compensation ratio for that task.
- Another person can complete that task much faster than you.
- Another person can complete that task at a lower cost or wage relative to you.
- Successfully outsourcing tasks requires that you clearly understand the value that task carries, and its associated deliverable. This also ensures that the time-to-value ratio for the delegate is maximized.
[Step two carries a hidden value for business owners and managers. By closely defining and delegating tasks to other employees or contractors, you optimize your staff by matching the skill sets of each employee to their associated high-value tasks. Labor is one of the biggest variable costs. Therefore, the importance of its optimization cannot be understated. ]
If you decide to outsource any of these tasks to contractors, ensure that deadlines and deliverables are clearly set so that you do not have to spend much time managing each task. Delegate and forget about it. Do not waste time checking up for unnecessary progress reports. Use a task management tool to set timelines, to-dos, and to keep messages out of your e-mail inbox.
Step 3: Finding more high-value tasks, maximizing your hourly wage
Great work so far! You have delegated or eliminated all of your low-value activities and you are spending your time on only the activities that make you the most money per unit of time. Now what? Look at your list of high-activity tasks and look for similarities and correlations between them. It should give you a picture of the types of things that you are good at, or the activities that make you a lot of money.
Take each of these activities and create a venn diagram. Use this diagram to find associations between the tasks, and to think of ways to expand each task. Estimate time and compensation figures for each of the new tasks you add. Continue this process until you are satisfied with either the total time spent working or the amount of projected earnings. Be conservative on time-to-compensation figures and add more tasks than you think you can handle.
Step 4: Continue to optimize
Repeat these steps continually as you work to transform your work day and maximize your hourly wage. It may take several iterations until you are able to truly eliminate all low-value tasks. Remember to hold yourself to strict guidelines. Plan each day’s tasks the night before, and stay focused on only those tasks listed until they are completed. And, when you’re done, stop working and go have fun! The best job is the job you spend the least time doing.
Employees: Bonus tips to help you convince your boss of the value of your new schedule and tasks.
- A results oriented work environment focuses on tasks. A focused job description equals a more productive work-force and a happier work-force.
- Why should we stick to a standard 8-5 schedule? Don’t constrain productivity within an arbitrary set of hours. Who says you can’t be more productive at midnight than you can be at 8 am, or vice versa. Who even came up with the idea of an 8-5 work schedule?
Some other big companies are doing it with success:
- Bestbuy (http://www.businessweek.com/magazine/content/06_50/b4013001.htm)
- Semco (http://en.wikipedia.org/wiki/Semco)
Done working yet?
Hilarious (and on topic)
Visit our business productivity page to read our commentary on productivity.