Saturday, September 15, 2001
Unbundling Your Workload
There are many things that we understand but fail to apply in our own lives. Not only things such as the basic principles of good health, but also relationship and business principles. For example, we are willing to pay a little extra for fresh fish rather than try to save money by buying last week?s somewhat suspect cuts. For another example, we do not generally buy furniture from the grocer. Yet we fail to extend this understanding to our own businesses.
Looking first at the fish story, it should be clear that quality is a value that commands higher prices. Yet how many of us make a conscious business decision on what value-price level we will aim at? It is possible to seek to be the low-price provider. That is one viable market strategy, and if you have a product with vast economies of scale that you can achieve and your competitors cannot, it can be a very successful strategy. After all, even if you just make a penny on each widget you sell, selling a billion widgets nets you $10 million. At the other end of the scale, if you have sufficient brand authority that you can make a million dollars per widget, you only need to sell ten of them to reap the same $10 million. This is another strategy option, and it can also be successful as long as you are able to protect and defend your premium edge.
Of course, writers, editors, and translators are unlikely to be working at either of these extremes. Yet the principle still holds: Assuming that quality and price roughly correlate (which, incidentally, is not always true), you have an opportunity to decide where you want to be on that continuum. Do you want to be a low-quality, low-price provider or a high-quality, high-price provider? Remember that most people end up, willy-nilly, in the middle. Make a decision. You can worry about implementation later.
Let us assume, just for the sake of discussion, that you have set your sights on becoming a high-quality, high-price producer. You know that producing a quality product will take longer, but you hope the higher price will leave you the margin you need to afford that extra time and effort. Once you have decided to go for quality, you wonder how to do that. Rule 1: Build on what you already have. Reaching your goal is going to take long enough without adding complications. If you are tone-deaf, don?t spend your time studying music. Start from where you are. What do you enjoy? What do you already know? That?s what you should do more of. If you find biotechnology fascinating, indulge yourself. If the law intrigues you, give in to its attractions. If you are drawn to some other field, do not fritter time away resisting—go with your instincts. Do what you enjoy, because that is what you will do best. It is what you will imbibe in your off hours, picking up knowledge that can then serve you well during your on hours. Do yourself a favor and specialize.
Whenever I mention specializing, there is always someone who says, “I can’t specialize. I’m interested in too many things.” I never said you could only specialize in one thing. Specialize in what you are interested in. Even if you are intensely interested in many things, surely there are some things that you are less interested, or not interested, in. Music? Sports? Cosmetics? Banking? Ornithology? Patents? Dentistry? Politics? If you cannot decide what to specialize in, start by figuring out what not to specialize in. Narrow the field. Eliminate the obvious eye-glazers. And don’t just eliminate them from the kinds of work you look for. Eliminate them from the kinds of work you will accept. Learn to say no. “I’m sorry, that is not one of the fields I handle, so it would not be fair to you for me to accept this job. I hope you will keep me in mind, however, the next time you have anything in aaa or bbb. Those are my fields. Those are what I do best.” Of course, because you are a specialist, bringing lots of field-specific background knowledge to the task, you charge more, and you use the time that extra money buys to further hone your specialties and to do an even better job for your clients.
Despite this logic, some people say they cannot afford to specialize. Remember, though, that these are people who already specialize. They don’t cut their own hair or cobble their own shoes. They outsource these tasks so they can specialize in the things they enjoy doing and do well, be it writing, editing, or translating. They just do not think they can afford to specialize to any greater extent than they already do. This same things-can’t-be-changed-because-this-is-the-way-the-business-has-always-been mentality also afflicts corporations. Big companies do their own R&D, design their own products, manufacture the products, ship them out, and sell them. They are used to doing everything—they are used to having these multiple capabilities in house—just as you are used to doing a little bit of everything and not specializing. Yet we all know that there are some companies (Xerox comes to mind) that do good research and poor commercialization. There are other companies (e.g., FedEx and Yamato) that are very good at logistics but do not make any physical product. Indeed, John Hagel III and Marc Singer (both of McKinsey and Company) have said that the typical company is really a collection of three companies: a customer relationship business, a product innovation business, and an infrastructure business. Even though the typical company has these three competencies, they are not all core competencies; the company should decide which one is central to its existence, then unbundle the trio and outsource the non-core functions. Rather than doing things because ?they go with the territory,? let someone else do them and free yourself to concentrate on what you do best.
?What you do best? is another way of saying what you do most efficiently, which is another way of pointing out that there are inevitably greater inefficiencies in your non-core capabilities. It is another way of asking why you should waste time and effort on non-core functions. What you do best is what you should specialize in professionally. If you want to do peripheral or even unrelated things in your spare time, fine. But just like the giants, you will do better to unbundle and to focus your energies on the competencies that you see as core.