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How to Take Charge of Your HABUT
How to Take Charge of Your HABUT
Have you ever stopped to consider all that you do in a typical work day? I’m not a betting man, but if I was, I’d bet that some of the tasks you are doing are out of habit and could be delegated elsewhere so you could shift from a HABIT to a HABUT.
No, that wasn't a typo. H.A.B.U.T is your Highest And Best Use of Time. It's the stuff you're really good at, the work that generates revenue, gives you energy, moves you toward your goals. This is true productivity at its most fundamental level.
I recall working with Mike, the owner of a successful landscaping company who would spend his mornings making sure all of the equipment was ready to go and working on all of the estimates himself. He had started the business and, like many business owners, had to do most everything in the early days. The problem was once the business grew, Mike was still spending too much of his time on activities that could have been delegated for others to do instead. Like many business owners he was afraid to let go. In time, he finally recognized that by bringing in an estimator he could take that responsibility off his plate.
In economics there is something that we call opportunity cost. Unfortunately, we don’t look at that cost very often. As a result, entrepreneurs, leaders and CEOs are often handling tasks, projects and activities that are taking them away from doing what they do best. You wouldn’t want your top sales rep doing your bookkeeping anymore than you’d want to see an All-Star pitcher playing second base or a great film director handling getting coffee for the crew. In business, you don’t want the C.O.O., making $80,000 doing the activities that a mid level person, making $45,000, could be doing.
Taking a Closer Look at HABUT
At Brand Launcher, we help clients take a closer look at where everyone in the organization is spending their time, starting with those at the top. This brings HABUT into focus. Let’s say the business owner excels at meeting new people and networking and believes he should be spending 50% of his time doing just that. What we do is ask him to track his activities for two weeks. If we see that he’s only spending 30% of his time networking, it means he is spending 20% of his time NOT doing what he does best and what would be more useful to the business. So, he needs to delegate 20% of his activities to others and free himself up to network and grow the company. That’s our first task – find or train one person, or several people, to take on the 20% of his activities.
Here’s Where it Gets Interesting (and a tad more complicated)
In the case of our client, he was doing design work for a woodworking company that was actually $25 per hour higher than what he could be paying to have someone else in the company whose skill set included that level of design. At 700 hours of design work a year (x $25) the company was paying him at a $17,500 higher salary price point than necessary. While that doesn’t sound like all that much for a company, there’s more to this story.
In this particular business there is a 4.8% margin meaning that for every $100 they bring in as revenue, they only keep $4.80. So, when you consider that $17,500 to the bottom line, you now need roughly $21 for every dollar you keep or a 29% increase in sales, (for a $1.27 million company) in order to recoup that $17,500.
Also consider that if a CEO or COO is bringing in $1.5 million a year in business using 30% of their time, that leaves 20% of time on the table or potentially another $1 million dollars.
Making a Change
I was recently speaking at a conference where I did a workshop for leaders of non-profit institutions. During my presentation, I discussed the importance of tracking all that you do and “red lighting” that which you can stop doing and “green lighting” that which you should continue doing.
Following my presentation, I met two people, one of whom liked to be involved in the recruitment of students and the other spent a lot of time doing the organization’s bookkeeping. One told me that he was now going to red light the bookkeeping because it simply wasn’t the best use of his time. The organization would simply do more sales activity to pay for a bookkeeper. The other said she was going to do less recruiting and instead train other people to handle that job. Two solutions, both opening up more time for these leaders to better utilize the Highest And Best Use of Time.
So, what can you do?
+ Carefully track everything that you do as owner, CEO or COO.
+ Get a job description from everyone in the business.
+ Identify which tasks you could red light and seek out who those who could take over such tasks
+ Train someone if necessary
+ If the budget or the potential increase in sales would justify it, hire someone to take on a task
(such as bookkeeping, which could be outsourced)
Though you will probably not end up utilizing the Highest And Best Use of Your Time (HABUT) 100% of the time, you can spend more hours doing what you do best and, as a result, grow your business.
Taking you from where you are to where you want to be,