This is a Sunday episode of Monetization Nation. In today’s episode, we’re going to discuss how to determine our priorities and make good, better, and best choices.
Good, Better, Best
We all know the difference between a good choice and a bad choice. But while it may seem easy to identify and avoid the bad choices, how do we make the best choices? There aren’t just good and bad choices. There are also better choices and best choices.
In 2007, Dallin H. Oaks, a former university president, and state supreme court justice, and a religious leader, gave a sermon titled, “Good, Better, Best.” In his sermon, he explained that as we make choices, we need to carefully reflect on the good, better, or best choice.
“As we consider various choices, we should remember that it is not enough that something is good,” Oaks said. “Other choices are better, and still others are best. Even though a particular choice is more costly, it is far greater value may make it the best choice of all.”
As another way to explain it, with every extra hour or dollar that we have, there are a thousand good choices for how we could use that hour or dollar. Making a good choice is not enough for that limited hour or dollar. We should try to find the best choice.
Oaks encourages us to be careful with how we spend our time. One way to determine how we spend our time is by setting priorities, in our personal and business lives.
I used to work for Azul Airlines with David Neeleman. While I was there, I learned the importance of setting priorities to help us make the best choices.
While I was there David and his company chose to focus on two specific KPIs (key performance indicators): the cost per seat flown and the revenue per seat flown. They felt that if they won these two KPIs they would succeed as an airline as a result. Many of their decisions were based on optimizing those two KPIs.
For example, the front of their company’s headquarters was purple, even though their brand was named Azul, which translates to blue in Portuguese. The color of their building did not affect either of their KPIs and so they kept the front of their building purple while I was there. Changing the color of their building was not one of their top priorities. While it may have been a good choice to spend time repainting their building, it was a better or best choice to invest their limited resources in other places that would optimize their KPIs and better drive their growth.
“We have to forego some good things in order to choose others that are better or best,” Oaks said.
A Cost-Benefit Analysis
In our businesses, we can run a cost-benefit analysis to give us the data to help differentiate good choices from better and best choices. In this process, we analyze the potential reward or benefit from a situation and compare it against the total costs. If the benefits outweigh the costs, it’s a good choice, whereas if the costs outweigh the benefits, it most likely isn’t. Then, if we can look at the difference between the costs and benefits for each of our different options, we can see which of the good choices are actually the best choices where we should invest our limited resources.
Oaks shared a story from his childhood that helped teach him to understand the difference between a good choice and the best choice. When he was younger, he lived on a farm with his family. They rarely went to town which meant their Christmas shopping was done in the Sears and Roebuck catalog.
“I spent hours poring over its pages,” Oaks said. “Something about some displays of merchandise in the catalog fixed itself in my mind. There were three degrees of quality: good, better, and best. For example, some men’s shoes were labeled good ($1.84), some better ($2.98), and some best ($3.45).”
From this experience, Oaks learned that sometimes determining the best choices requires weighing the costs and benefits. While the “best” shoes were more expensive, they were the better option because they were durable and would last longer.
Part of determining good choices from the best choices is by setting our priorities. As entrepreneurs, we have many different things competing for our time. It can be hard not to feel overwhelmed or let the best choices slip away because we are too focused on making a good choice. By setting priorities, we can make sure we spend our time in the best ways possible.
“Most of us have more things expected of us than we can possibly do,” Oaks said. “We face many choices on what we will do with our time and other resources. We should begin by recognizing the reality that just because something is good is not a sufficient reason for doing it. The number of good things we can do far exceeds the time available to accomplish them. Some things are better than good, and these are the things that should command priority attention in our lives.”
John D. Rockefeller, a businessman considered the richest person in modern history, had three habits he considered essential to running a successful business. Based on these three habits, Verne Harnish wrote, Mastering the Rockefeller Habits. Of these three habits, the number one item on the list is: setting priorities for the organization.
Rockefeller created a list of his top five priorities and ranked them in order from most important to least, and made sure to continually communicate these priorities with the rest of his company, always making sure to check off the list items in order.
In the book, Harnish told a story about a consultant who came to Charles Schwab, the CEO of Bethlehem Steel at the time and told him how he could improve his business by using Rockefeller’s top five priority list. Essentially, Schwab had to write down his top five priorities, based on what he believed would have the greatest impact on his business, and then complete them in that order.
The consultant told Schwab to implement his list and pay him whatever he felt the advice was worth. After some time, the consultant received a check from Schwab for $25,000, which could be considered about $600,000 today (Source: Trillium Financial). Schwab’s business clearly found more success when they effectively set priorities. A successful business needs to have clear priorities, understood by everyone on the team if we want to improve.
Choosing priorities is something many people struggle with but it must be done if we want to make the most of our time. Here are five ways we can set priorities in our businesses.
1. Determine Our Main Goals
What is the main goal of our business and what will it take to reach it? If we don’t know what our goals are, how can we determine what needs to be done first? Think back to the example I gave of Azul. They determined their main KPIs and goals and then based their decisions around that. Whatever our goals are, our priorities should align with them, and we shouldn’t have more than five priorities. If we have more, we really aren’t prioritizing anything.
Every successful entrepreneur and business owner knows what their main goals are. For example, with SpaceX, Elon Musk’s main goal is to get humanity to Mars before he dies. He said, “Unless we improve our rate of innovation dramatically, then there is no chance of a base on the moon or a city on Mars. This is my biggest concern.” (Source: Futurism.com)
Musk identified the main issue standing between him and his goal, and made it clear that innovation would be his top priority. Like Musk, we can evaluate what’s standing in the way of our goals and prioritize fixing that. What will help us achieve our main goals? Put that at the top of your list.
2. Look at Our Time Frame
What needs to be done sooner and what will take the most time to complete? This is maybe one of the easiest ways to determine our priorities. What has a due date?
In school, this meant writing the essay due at the beginning of the week before starting on the one due at the end of the week. However, it also meant considering the assignments that would take the most time. We may have had a summary due before a large essay, but started working on the essay first because we knew it would require more of our time.
This same principle applies to our businesses. What deadlines do we have? Do we have a project we need to complete for a client before a certain date? We should move the projects that have the soonest deadlines to the top of our priority list. We should also move the projects that will take the most time to the top of our list.
3. Look at Costs
How much does it cost to start a certain project and do we have the funds for it? For example, if we want to develop a SaaS product, but don’t have the budget for it, our priority may be to increase the sales of our products rather than focusing on the design of a new service. Our budget can be a great blueprint for determining what we need to prioritize. What can you afford?
For example, many entrepreneurs may have a goal to sell a new product or service, but simply don’t have the money to invest in a startup business. So, they have to determine what they need to do to get to their main goal, and then make that their priority.
Bill Drayton, a social entrepreneur, worked part-time for McKinsey for four years while growing his non-profit organization. He made that part-time job his priority because it is what helped him afford his main goal. His organization, Ashoka, is now the largest social entrepreneurship network in the world (Source: CNBC).
4. Look at Our Skills and Do the Easy Stuff
Do we have the skills and abilities to complete a task ourselves? Or do we need to take the time to hire someone else to do it for us? Sometimes it helps to prioritize the easy stuff. It gets it out of the way and opens more of our time to focus on the bigger tasks without feeling overwhelmed by how much we need to get done. If it is a task we can do ourselves, we also don’t need to wait until we have the budget to pay someone to do it for us.
We can look at our to-do list and ask ourselves, “Is there something here I can do within an hour?” If there is, we can prioritize it to shorten our list. It will give us a sense of accomplishment and encourage us to keep going.
5. Do What We Enjoy
What do we enjoy doing? Another thing to consider with our priorities is doing what we enjoy. No one wants to work on a project after a project they don’t enjoy doing. This can put a huge damper on our motivation. Instead, after we’ve prioritized the most important tasks, we can begin to prioritize what we will have fun doing. Why did we start our business in the first place? Do we find joy in being creative and designing products or do we find satisfaction in consulting with our clients? As we work on projects we enjoy, our productivity and efficiency will increase.
Outside of the Office
As we set priorities in our businesses, we need to remember that we have priorities outside of the workplace too. This can include our faith, mental health, or families.
“Some of our most important choices concern family activities,” Oaks said. “Many breadwinners worry that their occupations leave too little time for their families. There is no easy formula for that contest of priorities. However, I have never known of a man who looked back on his working life and said, ‘I just didn’t spend enough time with my job.’”
Starting or running a business consumes a lot of our time, but we have to be careful we don’t let the better and best choices get lost because we are too focused on making the best choices in our business.
Here are some of my key takeaways from this episode:
1. As we consider different choices, we should remember that it is not enough that something is good. We should strive to make as many choices as we can that are better and best.
2. We need to say no to many of the good choices so we can focus on the better and best choices.
3. With so many things competing for our attention in the workplace, it is smart to set priorities.
4. To determine our priorities, we should look at our main goal, costs, timeframes, skills, complexity, and enjoyment.
5. In our businesses, we can run a cost-benefit analysis and compare the results to help differentiate good choices from better choices.
6. We need to also prioritize the better and best priorities outside of the workplace such as our faith, mental health, and families.
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