Understanding Opportunity Cost

Do you know what your team’s time is worth? Lack of focus consumes time. That’s the one resource you can never get back. When you look at activities in terms of their time cost, it becomes easier to say no to distractions.

Don’t just ask, “What task am I going to do next?” Instead, ask, “What task am I not going to do so I can work on the new request?” When requests come in to your team, assess what other work isn’t going to get done by the team if you take on the new request. If you can explain the tradeoff to the person who’s asking you to do the work, they’re probably going to be more open to you saying no and deprioritizing that new task if it’s not as important as other work you should be working on.

I work with one attorney at a large corporation who has a team of lawyers. People come to his team all the time and ask for legal work to be done even if his team shouldn’t be doing that work. He always says yes even though it’s not necessarily something an attorney has to look at. He was complaining one day about how much work was on his team’s plate. I asked him, “Hey, would you pay an outside attorney 400 dollars an hour to work on that new project that just came in?” His eyes got big and he said, “Absolutely not.” That’s when the lightbulb went off for him. He realized by taking on that project, it meant his team wasn’t working on higher priority work. He was sending that high-priority work to outside counsel and paying 400 dollars an hour. The thing is, taking on the low-value work was essentially costing him that 400 dollars. That’s when he started saying no to those distractions so his team could focus on the most important work.

When you understand these tradeoffs in terms of time cost, it’s easier to say no to low-priority or low-value work. This is going to make the work your team does the highest priority work that’s on their plate.