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Calculating Your Time Opportunity Value

The critical step now is to calculate the Opportunity Value of your time. Now that you have identified your Platinum Activities, you are well positioned to identify the value of your time when you are engaged in these activities and delivering the results that they will produce. What is that number for you?

I have seen business owners put the value of their time as low as $150 an hour, basing it either on cost plus or on what they think they can bill their clients. That may well be an accurate number if you break it down according to how they currently spend their time, but it is an average of some very different numbers.

Let's suppose that 15% of an executive's time is spent on Platinum Activities at an hourly rate of $500 and that the rest of their time is spent on more mundane activities that have a value of only $100 per hour. The average value of their time is $160 per hour, but the averaging makes this number irrelevant. It is like having one foot in boiling water and one foot in freezing water and saying that, on average, you are the right temperature.

The Opportunity Value when you are working on Platinum Activities is much higher than at any other time. Remember that none of us work at our most effective level all the time, and when calculating your number it is important to keep in mind that we are only talking about the value of your time when you are at your most productive.

Depending on your Platinum Activities, your value can be $500 an hour or more. To calculate your Time Opportunity Value, look at your Platinum Activities and identify what these are worth to the business when completed. Then think about how many hours it takes to create that result and then you can calculate your Opportunity Time Value.

For example, suppose one of your Platinum Activities is bringing in new clients. If the lifetime profit value of a client is $10,000 and it takes you ten hours to bring them from prospect to client, then the mathematical value of that time is $1000. Maybe you can't take credit for the whole $10,000 of profit the company will make from the client, but you should use this as a point from which to calculate your Opportunity Cost Value.

I had a lawyer go through this exercise. He is the Managing Partner and rainmaker for a small law firm and bills clients at around $400 an hour. When he looked at his Platinum Activities rainmaking and developing work for the firm was high on the list, and he calculated his Time Opportunity Value at $1,200 an hour.

So what is your hourly Time Opportunity Value?


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Time Management Tips

  • When somebody interrupts you when you are busy, don't let them interrupt your train of thought. Ask them to come back and see you at a specific time – you may be surprised that they actually figure out the answer and don't come back to ask you.

  • Everybody has about three hours during the day when they are at their best. Figure out what your "Prime Time" is and then plan your day around it. Make sure that you dedicate that time to focus without interruptions on the activities that are of most value to you.

  • It is all too easy to waste time on phone calls. Keep an egg timer next to the phone to keep track of exactly how long you are talking. It will keep the time you are spending in the forefront of your mind and will help you handle the call more efficiently.

  • Never go to the bank to deposit checks, it is a Time Bandit way below your pay grade, and claiming it is therapeutic and gets you out of the office is deluding yourself. Send somebody else!  Better still, get a check scanning machine...and make sure the bank pays!

  • Organize your office so the door isn't in your immediate line of vision. The big payoff is that people can't appear at your door, hover, catch your eye and distract you. If you make it harder to interrupt you, people may figure out answers themselves rather than asking you.

  • When you have to give out an e-mail address to somebody who's going to send you things you don't want in your inbox, give them a special "junk" e-mail address. Then set up a rule so that everything to that address goes to a folder you review on your timetable.

  • When somebody interrupts you to ask you a question always reply with a question back. Ask them how they would deal with it, and make them think proactively rather than just relying on you. A good technique is to ask: "If I wasn't available today, what would you do?"

  • If your key customers expect you to answer the phone at all times, get an Internet phone line and give them a "VIP" phone number to call. Set it up with a unique ring on your system and you'll know that calls on that line are from your most important customers.

  • Most people have a “To Do” list to record the tasks they need to "Get Done", but it doesn't help identify what you shouldn't do yourself. For that you need a “To Don’t” list. Identify the culprits, put them on the list and defend your time by assigning them elsewhere. 

  • E-mails have overtaken the phone now as the most dangerously effective of all Time Bandits. Turn off your e mail alert and check your e-mail only four times a it on your schedule not the schedule of the people who are interrupting your more productive work.

  • E-mails have overtaken the phone as the most dangerously effective of all time wasters. The worst thing is the e mail alert that pops up on your computer screen. Don't let other people interrupt you in this way and take back control of your time by turning the alert off

  • When somebody interrupts you while sitting at your desk, stand up. It changes the pace of the interaction and sends a message to the interrupter that they have invaded your time. The more you can send this message, the more effective you will become at protecting your time.

  • When somebody comes to you with an issue they should figure out themselves, don't allow yourself to relieve them of the burden and take it on yourself. Instead of saying "leave it with me" when this happens, say "never delegate upwards" and ask them for their solution.

  • Entrepreneurs wear so many of the hats in their business that many of the tasks they carry out are at a level way below the real value of their time. Are you working below your pay grade by not handing off menial tasks that should be done by others?

  • When you are hiring new employees, ask candidates about their time management abilities. The best employees are those that can prioritize their work and handle interruptions, so be sure to ask relevant questions to probe in those areas so that you hire somebody who has those skills.

  • Email has become a huge time-waster and taking control of your Inbox is becoming more critical than ever. The ideal state is only to have things in your Inbox that are important, urgent or time sensitive, and to put everything else automatically into folders using Rules governing what happens when they come in. I’ve been using Outlook Rules for a number of years to sort specific topics, but I recently came across a new rule that makes a dramatic difference.

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Most people have a “To Do” list to record the tasks they need to "Get Done", but it doesn't help identify what you shouldn't do yourself. For that you need a “To Don’t” list. Identify the culprits, put them on the list and defend your time by assigning them elsewhere.