I have a little riddle for you today, about productivity…

Let’s imagine 3 different people, at work…

— Person #1 does about 40 minutes of work per week.  And spends the rest of the work week goofing off.

— Person #2 does about 4 hours work per week.  The rest of their hours are spent doing things that don’t look like work.

— Person #3 works 40 hours in a 40-hour work week.  They don’t leave any time for goofing — when they’re at work, they work.

Here’s my question to you…

Which is the most productive?

If you go by the standard definition of productivity (which is how most of us judge ourselves), person #3 is the most productive.  They’re given a 40-hour work week, and make the absolute most of it by fitting 40 productive hours in.

And that’s fair enough.  Especially because most of the work world believes time is money, hours are dollars, and so more hours worked equals more output.

But let me add a piece of information.

Person #1, who works 40 minutes per week, was responsible for $40 million in sales during the year.

Person #2, who works 4 hours per week, made $4 million in sales.

And Person #3, who worked 40 “productive” hours per week, made $40,000.

Now tell me which is the most productive?

It kind of shifts the definition of productivity, doesn’t it?

Even if we assume they all generated the same amount of output, the person who can do it in 40 minutes per week is far, far more “productive” than the one who requires 40 hours for the same end result.

Two real-life examples…

My friend and colleague Perry Marshall has become good friends (and business partners) with Richard Koch, author of The 80/20 Principle and over a dozen other great books.

I’ve learned a lot about Richard’s life because Perry often has me review copy for his joint venture projects with Richard.

Richard is known for his books, but to him writing those is not business, it’s play.

Richard’s main business, these days, is as a private investor.  As an investor, Richard works only a few minutes per day.  According to Perry, in the last couple years, Richard’s net worth has increased from $214 million to $373 million.  That’s roughly $75 million per year.  When he’s done with his few minutes of work for the day, he often exercises, then reads, thinks, and writes about ideas that stimulate him.

Richard long ago realized that The 80/20 Principle can apply in many areas.  Not the least of which is work.  He realized that there are a vital few activities that contribute massive output.  While there are a trivial many activities — busy work — that get you almost nowhere.  So Richard pared down his work life to only focus on the vital few tasks that were worth upwards of $1 million per hour.  (Divide $75 million in increased net worth per year by 52 weeks, and you’ll realize if you only work an hour or two per week you’re getting really close.)

This is a great example of how productivity — measured in dollars earned — can increase significantly.  Even while the time spent “working” goes down.

The second example is on a mass scale.  And it has grand implications for current politics.

The US Bureau of Labor Statistics tracks a stat called “Real Output Per Hour of All Persons,” for non-farm businesses.

In other words, this is a per-worker productivity measurement.  How much stuff is created, per worker, per hour.

If you use the year 1947 — when they started publishing this stat — as the benchmark, today’s average American worker produces a little more than 4X per hour what they produced then.

Think about what that means for manufacturing jobs.  Due to technology, the average manufacturing worker is able to output 4X as much today as they were able to 70 years ago.

Efficient processes, robotics, artificial intelligence, and other advances have dramatically increased productivity.  And, it could be argued, the output has increased many measures of our “quality of life.”

But the dark downside to this is that we simply don’t need the manufacturing jobs anymore.

In fact, American manufacturing output has gone up since the 2008 crisis.  But because workers continue to get more and more productive — assisted by technology — the number of manufacturing jobs in America has continued to fall.

What’s the solution?  Without trying to get too political, I can tell you that taxing imports and trying to get companies to keep their manufacturing in the United States will, at best, be a very temporary band-aid.  The same applies to minimum wages.  These have advantages in theory — however they are not a long-term solution.

If technology continues its current ascent (and it most likely will), tech will continue to make the worker obsolete.

The only way to reverse this trend would be to destroy the machines.  But how far back do you go?  When every family had to grow their own food, using manual farming methods, we were at “full employment.”  But was life better?  Would you prefer that, if meant you had “meaningful work?”

In general, higher productivity will increase quality of life across the board — but every big jump in productivity will cause chaos in the sectors where jobs are most negatively impacted.

The biggest challenge a civilization faces in going through this challenge is how to manage the transition in a way that prevents total social upheaval.  But I’m getting off-track…

Let’s get back to the definition of productivity…

There are two big ways you can think about productivity.

— First is the classical, worker-bee definition.  Productivity is time spent working on tasks divided by total time available, regardless of output.  It’s about time worked.

— The second is the more entrepreneurial definition.  Productivity is output divided by time spent working on tasks, regardless of total time available.  It’s about work output.

Under this second definition…

If you’re completely unfocused for the vast majority of the week but you spend just one hour doing a highly-leveraged task that will lead to out-sized results, you may be a highly-productive person.

If you spend hours and hours and hours doing very low-level, menial, minimally-valuable tasks that create equally mediocre results, you’re not productive at all.

(For example, in the last quarter of last year, I spent about 50 tracked hours — and maybe 10 more untracked “thinking” hours — on a project that generated a couple million in revenue for my client.  It also made me about double in royalties what I earned in my first year in a full-time, 40-hours-per-week, 2,000-hours-per-year marketing job.  When was I being more productive?)

Although this second definition is completely contrary to how the ordinary work world thinks, it’s how you must think if you want to create whatever result you most desire in life.  For this, money is a great measurement.  But there are many you can use.  Such as the number of people helped.  The amount of crops grown.  Whatever.  The key is to link the measurable result to the time spent.

Yes, it helps to make sure you’re putting in time spent.  In fact, all else being equal, more time spent on “productive” tasks will lead to better output.  And people who focus on working hard often outperform those who focus on working smart.

But working hard on smart things is really the best way to go.  And being careful to spend as much of your time as possible on your highest-value, highest-leverage activities will generate maximum results in minimum time.

Adopt that mindset, and your breakthroughs will come nonstop.

Yours for bigger breakthroughs,

Roy Furr

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