3 practices of successful companies that you can apply on a personal level

There are many aspects in which people and companies behave in the same way. At the end, the hearth of companies is the people who work there, and we share the same end goal: create value. The main objective of companies is to create value for the shareholders. For us, it’s the same principle: do things that create value, things that make us feel satisfied, happy, useful.

And if companies and people have the same kind of objectives, ¿What would happen if people start using some of the practices that companies use to reach their objectives? Could we be able to replicate some of those practices and adapt them to a personal level?

Here are some options:

1.Successful companies apply segmentation processes to their clients, and they understand that not all of them create real value. A successful company, contrary to what one might think, is not interested in addressing all type of customers. A successful company knows how to prioritize, how to segment and how to efficiently allocate and use its resources. That’s why a good company only focuses on getting and retaining high-value clients. This way, the company optimizes the Cost/Benefit ratio of getting and retaining these clients. It doesn’t make sense to invest 1 dollar trying to “seduce” a client that is only going to consume 70 cents. This will be a bad type of customer. Segmentation processes help companies to identify clients with high potential of value generation. That’s how companies make their operation more efficient.

How to bring this to a personal level?

 We rarely think about which activities, objects or routines of our day-to-day life are unnecessary, and we are rarely able to identify how much these unnecessary activities, objects or routines are affecting our productivity and how much time are stealing from us.

How to fix this? Doing a segmentation on a personal level. The key is to learn to identify the Cost/Benefit ratio of all those activities and routines. If we do this, we will be able to segment them into two categories: Those that have attractive Cost/Benefit ratios, and those that have mediocre or negative Cost/Benefit ratios.

Here are some examples of activities that I consider have mediocre or negative Cost/Benefit ratios: 

  • Watch TV (Or watch a lot of TV): Takes a lot of time and brings very few benefits.
  • Taking more than 20 – 30 minutes to bathe and to dress.
  • Read the news first time in the morning: It takes my most precious and creative time of the day.

Here are some examples of activities that I consider have positive Cost/Benefit ratios:

  • One hour of exercise in the morning: It improves my concentration during the day, and predisposes me in a positive way.
  • Playing a musical instrument at least 30 minutes a day: Encourages creativity and frees the mind from the work day routine.

2.Successful companies outsource non-strategic activities. As a way to optimize their cost structure and use their resources in the most efficient possible way, successful companies outsource many of the processes and activities that are not part of their strategic objectives. To do this, they hire companies or experts on providing those services they want to outsource. Typical examples of outsourcing are the technical support services, call centers, cleaning staff, maintenance personnel, etc.

How to bring this to a personal level?

Most of us find very hard to understand and to accept that we are not good at everything and that we don’t have the time and the energy to do everything we would want to do. That’s why we need to learn how to outsource, because this will allow us to have more resources (time and energy) to focus on the things we are really good at, those activities where we can create more value.

Just as companies outsource non-core activities, we can do so too. To understand the true importance of outsourcing some activities, we need to evaluate them in relative terms, not in absolute terms. It’s not always convenient to measure it in only in financial terms. It’s necessary to include the most important variable, which is not money, but time.

If it’s going to take you 5 hours to fix the damaged water heater in your house, and you will spend half of this time to improvise and trying to figure out how to do it, wouldn’t be more efficient (in terms of the free time you will have to do something that creates more value) to outsource this activity and hire an expert?

Don’t think about it only in terms of the money you will spend hiring the expert, think about it in terms of all the high-value activities you could have done in those 5 hours. We always need to think in terms of the opportunity costs of the resources we are going to use.

In my case, I prefer to hire an expert to do that job and use those 5 hours writing. With no doubt, writing will bring me more value than fixing a water heater.

Besides, it would save me from being miserable and mad for having no idea on how to fix that water heater. 

3.Successful companies know how to make divestments on non-strategic assets/Processes. Once companies have identified which assets, processes and activities are not worth it and are not enough attractive in terms of profitability and efficiency, they are able to understand that the ideal thing to do is to sell those assets to someone else, someone who has the capacity to use them more efficiently.

This way, the company frees resources and keep investing in other assets, processes, and people that make a more efficient and profitable operation. The premise is: not everything is efficient for us, not everything works for us. The key is to learn to identify which elements have the greatest probabilities to generate the greatest value for the company.

How to bring this to a personal level?

The first thing you need to do is, finally and once for all, to take the decision to get rid of all those objects on your desk, your office and your home that are no longer serving a purpose. The things that you don’t use anymore, the things you always say you are going to get rid of and you never do.

Getting rid of the unnecessary (objects, processes, routines) has a positive effect on our mind. It frees space to think about more relevant things and eliminates the need to make unnecessary (and time-consuming) decisions related to those things. This gives us detachment and focus. Having fewer options, we will be less distracted, and we will have more chances to focus on the important, value-creating activities.

Sometimes, what we lack is simply an observation and imagination capacity. Maybe now you will be more interested in doing a little research on the practices that successful companies make, and you will find a way to apply that on a personal level.