In a recent study, 84% of successful executives said that their ability to communicate effectively with others was the key reason for their success.
Almost all successful men and women today in the world of work, business, politics and other fields are in their positions because of their ability to communicate well with other people. Effective communicating is a key time management skill.
Here is a rule: Never assume that the other person understands what you have discussed until he or she has fed it back to you in his or her own words.
Never assume that you understand until you have repeated it back or explained it in your own words and had the other person agree.
It is a truism that we only understand something to the degree to which we can explain it to another person. The very act of articulating an assignment or decision in words clarifies it for both the speaker and the person listening.
In interacting with others, seek first to understand, then to be understood.
Most people get this rule backwards. They are so busy trying to get other 273
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people to understand them that they don’t take the time to understand the other person first.
Seek first to understand. Listen closely to the other person to be sure that you fully understand what he is both saying and meaning. Only then should you try to get the other person to understand you.
The key to effective communication in working with others is developing absolute clarity about what needs to be done, and why, and when, and to what standard. Clarity requires time, attention and patience.
The Law of Comparative Advantage
In 1805, the British economist David Ricardo announced what has become one of the most important principles of economics, “The Law of Comparative Advantage.” This law initially referred to trade between countries. It demonstrated mathematically that countries should specialize in producing those products that they made better than any other country.
Ricardo showed that, even if country A produced two products at a higher level of quality than country B, it was still better for country A to concentrate exclusively on producing the product that they made best, and let country B exclusively produce the other.
The total value created by both countries for their citizens would be greater in proportion to the resources consumed in production than if each country tried to produce both products.
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Applying Comparative Advantage to Your Work
In business and commerce, this is an extremely important principle. It is the base of modern wage differentials. In your work life, the Law of Comparative Advantage says that you should assign, delegate, outsource or have someone else do any job that can be done at a wage less than you earn, or less than the wage you desire to earn.
In its simplest terms, if your goal is to earn $50,000 per year, and you work 2000 hours per year, your hourly rate is approximately $25 per hour. This means that you should hire someone else to do any task that can be done at an hourly rate less than $25, even if you can do the task better than he can.
This enables you to spend more time doing more work that pays $25 per hour or more.
If you want to earn $100,000 per annum, your hourly rate is $50 per hour, each hour. But you cannot earn $50 per hour during the workday if you are getting your car washed, picking up your groceries, or dropping off your dry cleaning. You cannot earn $25 or $50 per hour if you are chitchatting with your coworkers, making coffee, reading the paper or surfing the Internet.
This kind of work or activity does not pay you $25 to $50 per hour. The basic rule is this: If you want to earn $100,000 per year, you have to do $50
per hour work for eight hours every single working day.
The Key Personal Productivity Principle
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This is a key personal productivity principle. If you do not focus single-mindedly on working at or above your desired hourly rate, you will not earn this amount of money in the long run.
This rule applies to hiring a bookkeeper, typing, shopping, house cleaning, washing your or any other task. The key to effective delegation, whether you are a boss or an employee, is to continually be seeking ways to outsource and delegate those things that pay a lower hourly rate than you earn. This is the only way that you will have enough time to concentrate on doing the kind of work that will pay you the kind of money that you truly desire.
Every year, hundreds of thousands of people are laid off from different jobs in different industries. In almost every case, this is because their hourly contribution to their companies has dropped below the amount of money they are receiving in wages or salary. This may have been caused by external circumstances, by changes in the market that render the products and services they produce less desirable.
You Can Only Be Paid What You Contribute
In too many cases, their value has dropped is because they have not continually upgraded their skills on the one hand, and they are wasting too much time on the other. They are engaging in activities or performing tasks of low value or no value, tasks that no one can pay them $25 or $50 an hour to do. As a result, they are laid off or fired, and must make the rounds for several months before finding new jobs that pay even lower amounts than they were earning before.
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The focus on your hourly rate, and continually increasing the value of your work on an hourly basis, is the key to your future. As Pat Riley, the basketball coach said, “If you’re not getting better, you’re getting worse.” If you are not continually learning and upgrading your skills, you are actually sliding backwards, and your time is becoming less and less valuable to your employer. Don’t let this happen to you.
Delegation Is the Key to Leverage
To achieve everything you are capable of achieving, and to be able to concentrate on those few tasks that can make the greatest contribution to your life and work, you must become excellent at delegation. Whether you are a boss or an employee, you must be continually seeking ways to outsource, delegate and get other people to do things that pay you a lower hourly rate than you desire to earn.
There are several ways that you can become more effective at delegating and outsourcing, or hiring other people to do parts of your work so that you can do the parts of your job that pay the most.
1. Instead of You?
Ask the question, “Who can do this job instead of you?” Remember, you have to delegate everything possible in order to have enough time to do those few things that are most important.
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2. Better than You?
You should ask, “Who can do this job better than me?” One of the characteristics of effective managers and successful leaders is that they have the ability to find people who are superior to them in specific tasks. You should continually be looking for people who can do certain parts of your work better than you.
3. At a Lower Cost?
Evaluate the job and ask, “Who can do this job at a lower cost than me?”
Many companies and individuals are finding that they can outsource major parts of their operations to companies who specialize in that area.
Companies that specialize in a particular function can usually do the job cheaper and faster than a company that does that work as part of its other activities.
4. Can It Be Eliminated?
Ask yourself and others, “Can this activity be eliminated altogether?” What would happen if the job were not done at all? Many of the routinized tasks and activities in a company or business could be quite easily eliminated with no loss of productivity and great increases of ineffectiveness.
Once upon a time, in a Fortune 500 company, a new Vice President of Finance took over the accounting and bookkeeping for the national organization. One of his departments consisted of 12 highly paid accountants 278
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and analysts who spent their time assembling the monthly reports from all the operating divisions into a single binder, which was then distributed to all the division heads. This department and its activities were costing the company almost a million dollars a year.
The new Vice President was curious. He went down the hall to one of the division heads and asked him if he had been receiving the monthly reports from his accounting department. The division head assured him that he had been getting the reports each month. The Vice President asked, “What do you do with them?”