Focus on core, outsource the rest

Invest your money (or energy) where it will do the most good.

At the organizational level, do what your group does best and outsource anything left over. Concentrate on your secret sauce, not on routine and administrative stuff.

Any behavior that can raise your stock price is core — everything else is context. Context is “hygeine.” Do you bathe? Good. If you didn’t you’d lose your job. But don’t expect to receive a promotion for bathing no matter how squeaky clean you are. Differentiating on context is the single biggest waste of resources in Fortune 500 operations. Without very careful management, context always gets in the way of core because it absorbs time, talent and management attention.

Shareholder value (AKA market cap) is a function of competitive advantage, and organizations achieve it by focusing on core. Everything else is context, and context is a needless distraction. You don’t profit by maintaining trucks, cutting paychecks, or taking out the garbage. Hand those things off to organizations for whom those¬†activities¬†are core, e.g. Ryder Truck, ADP, or Waste Management.

This applies to how you invest your personal time, too. To the extent that you can pass off busy-work, you gain more time to be productive. For example, consider someone who makes $150/hour doing her own taxes to “save” paying a tax preparer $500. Since the tax work requires getting back up to speed, assembling the right collection of forms, and not inconsiderable arithmetic, preparing the taxes takes ten hours. Time is a limited resource. She is trading the $1,500 she might have made to “save” $500.

If you’re a working professional, it’s probably not sound to wash your own laundry, move your yard, or paint the front fence.