Terrence Brown Creates Value

Management

High leverage tasks vs. Low leverage tasks

High leverage tasks vs. Low leverage tasks. Shortly after CEO Jeffery Immelt took over the reins at General Electric he estimated that on their best day, GE salespeople spent only 30% of their time in front of the customer. He wants to work that up to 70-80% of their time. My question is what are the salespeople doing if they are not in front of customers? You can travel just about anywhere during the evening hours and on weekends. So what are they doing the rest of the time? Given that GE is one of the most value-producing businesses in history, how much time are the salespeople in other organization spending in front of customers? Directly interacting with the customer is one of the best ways to create value (by selling) and create opportunities (by learning customer needs). The more people doing it and the more often they do it, the more successful the firm will be.

Think about your day. How much time do you spend on productive work versus time consuming, time wasting and ultimately value destroying activities? How many necessary emails did you read? How many useful meetings did you go to this week? How much paperwork is on your desk? One way to put time on your side is to differentiate between high leverage and low leverage tasks. High leverage tasks are the core responsibilities of a given job. They tend to be the ones that are prominently listed in your job description. These also tend to be the activities that are more directly related to value creation. On the other hand, low leverage tasks are the ones that organization members spend the most time with, waste the most time with, and with which they have the most aggravation. These time wasting activities vary based on what your specific job is. For example for a secretary, clearing the meeting room of coffee cups, half eaten donuts and spilled tea, is a low leverage task for him or her, especially if the company has cleaning staff.

Getting his workforce to focus on high leverage activities is a major rallying point for Fred Smith, Founder, Federal Express (FedEx). He recognizes the tremendous power in this concept. How productive and how much value would be created for your firm, if everyone just did high leverage activities? For example, let’s assume that you spent two hours of your eight hours today doing high leverage activities. If you were able to increase it to the full eight hours, how much would you get done? Would you be 4 times more productive? I would venture to say that you would be more like 10 times more productive because you would be working in contiguous blocks, instead of 5 minute snippets. Furthermore, there is a momentum effect to work as well. Once you begin to work, focus, concentrate, you develop momentum. Now imagine what would happen if everyone in your company increased their productivity by 4 times or 10 times. It is almost too scary to think about. But why shouldn’t that be your company?

While the situation where each person is spending all of their time doing high leverage tasks may seem unlikely and perhaps unachievable, that should be your organization’s objective. There are several ways in which the organization can increase the percentage of time spent on high leverage jobs. The three most important are: delegate, redesign and outsource.

The first way to increase the high leverage content of a job is by delegating. While this may seem obvious, its practice is less so. Managers, especially in more traditional organizations, should be very familiar with delegation. The manager should simply delegate as much as possible of his or her low leverage activities to someone else. This does not mean the tasks should be delegated to just anyone. In fact, that would be counterproductive. The idea is to delegate your low leverage tasks to someone for which the task would be at best in their high leverage zone or at least very near. For example, if a company has a travel department, a manager or his secretary should not spend time handling the details of his trip to London. The travel staff should.

The second way is to redesign the job. It is possible that the way the job is currently formulated, includes too many low leverage or potentially low leverage activities. Here the answer may be to just extract many of the low leverage activities out of that job. In doing this you have a few options. One would be just to divide and reassign some of these activities to others. However an alternative choice may be even better. The low leverage activities removed, could be consolidated and packaged into a new job or function. In doing this they now become high leverage activities for those new persons. This way the tasks get the full attention of a dedicated person. Also the person could develop expertise and specialization that would allow the tasks to be accomplished in a productive manner.

Finally, some low leverage tasks can be outsourced. The growth of outsourcing is directly related to the desire of businesses to refocus their efforts on the tasks they believe are central to their mission or strategy. In this vein, low leverage tasks can often be bundled and outsourced. The first main advantage to this is that the success organization’s employees can be relieved of some low leverage activities thereby increasing their high leverage work intensity. Secondly, the newly outsourced activities will be handled by a firm whose expertise and focus (i.e., high leverage) are specifically those tasks. As a result productivity is enhanced and value is created.

So you want to start dramatically increasing the productivity of your day or that of your organization, start reducing the amount of time spent on low leverage activities and really start creating value.

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3 thoughts on “High leverage tasks vs. Low leverage tasks

  1. victor

    But, low leverage tasks can facilitate time to incubate ideas and give an opportunity to reflect over my current high leverage work and relax for a moment. Being constantly on the edge and feeling pressure to be productive and doing \meaningful\ high leverage work will probably have an impeding effect on creativity and the efficiency. My experience as a student is that if I give myself time to reflect and vary high leverage work (solving statistical analysis problems) with low leverage work (doing the dishes) is optimal for my performance and I believe there is research that agrees with my observations. So like you mention, 8 hrs high leverage work is probably not achievable. There is a reason Google gives employees 20% of their time to work on their own projects (although this is probably considered high leverage work I believe what stimulates creativity and a positive work environment is when employees do high leverage work because they enjoy it rather than because it is a managerial goal). But my interpretation here might be a bit off focus, and I surely agree that delegation, redesign and outsourcing could be applied to many firms to improve the value creation and efficiency of certain tasks; especially in the public sector here in Sweden where MD’s spend plenty of expensive tax funded hours on administrative tasks…

  2. Terrence Post author

    Thanks for the careful read and thorough response. I have written another piece that perhaps I will post. It is aimed directly at one of your points. Just as it is very tough and not advisable to run a computer’s CPU at 100% for extended periods of time, it is not advisable to run people at 100% either. This is especially the case, if the employee is expected to be creative.

  3. Terrence Post author

    Thanks for the thorough read and in-depth comment. I have written something that I should post that is directly targeted to you comment. Just a computer’s CPU should not be run for extended periods at 100%, neither should employees run at 100% for extended periods either. This is especially relevant, if any sort of creative output is expected.

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