Know what you know, what you don’t know, and what you need to know

Let me start with the common clichés we have all heard many times without much thought:

“Jack of all trades, master of none,” “I wear many hats,” etc..

Let’s be honest - unless we find ourselves working for a 1,000+ person firm where every position has a clear and concise description, the likelihood that our roles involve more than we bargained for is extremely high.

As overused as the sayings above are, they exist for a reason. More often than not, they are entirely true. So what impact does this have on our ability to perform roles efficiently?

First, let me provide a baseline for where my next points stem from. If you are like me, many of the topics you studied in college didn’t seem to apply to the “real world,” but you did your homework, studied, and filed this “stuff” somewhere. As individuals' responsibilities increase, businesses grow, and new situations/opportunites present themselves, some of this “stuff” seems transferable and more useful now than it did at the time. This “stuff” you access that you thought you forgot. What “stuff” am I talking about personally? For this particular post, I am talking about a point a professor of mine at Temple’s Fox School of Business beat into my brain.

The Course: International Economic Trade Theory

The Topic: Comparative Advantage of Specialization

The Theory (sorry, but I am sourcing Wiki): “The theory of comparative advantage is an economic theory about the work gains from trade for individuals, firms, or nations that arise from differences in their factor endowments or technological progress. In an economic model, an agent has a comparative advantage over another in producing a particular good if he can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade.“ Full article here:

How does this translate today in my role as VP of Operations for a digital media firm? Glad you asked…

In summary, the theory states that person A (we’ll call him Bob) is really good at drawing circles and person B (we’ll call her Sue) is really good at drawing boxes; but both Bob and Sue have a job that requires them to draw a circle inside a box to complete a “project". In the theory of applying comparative advantage, Bob would only draw circles and Sue would only draw boxes and their specialization will increase output potential. In economics, theory goes on to explain the mutual benefits to GDP by trading boxes for circles and circles for boxes (assuming both Bob and Sue need both).

Here is how it works: (Sorry in advance if this is too dumbed down, but it makes the point.)

Without “Comparative Advantage”:

Bob can draw 10 circles per hour, but only 5 boxes. Total output for 2 hours work is 5 completed completed projects (boxes that contain circles).

Sue can only draw 5 circles in an hour, but can draw 10 boxes. Total output is also 5 completed completed projects (boxes that contain circles).

Total output for both Bob and Sue for two hours work is 10 completed projects when working independently.

With “Comparative Advantage”:

Bob draws all circles for two hours (which at his rate of production of 10 circles/hour is 20 circles).

Sue draws nothing but boxes (which at her rate of production of 10 boxes/hour is 20 boxes).

Total output for both Bob and Sue for two hours work is now 20 completed projects (boxes that contain circles) when working together.

In an ideal world, this is how an agency would operate. Every person would have a defined role they did extremely well, improved at over time and output potential is maximized. We, however, don’t live in an ideal world. In this scenario, if Bob doesn’t show up to work, and Sue can’t draw circles, total output drops to zero.

Applying these concepts in a “real-life” situations involves careful overlap with the fundamental principles of comparative advantage in place. This way output potential is maximized while keeping contingency plans in place while teams are not large enough to support 100% specialization.

In short - know what you know, know what you do well, and understand that hiring the right person to split responsibilities of a particular “many hats” role has the potential to do much more than simply double output. Hiring the right people, restructuring your organizational design, and strategically defining roles/responsibilities can help any company transitioning through growth and exponentially increase output potential while simultaneously reducing operational costs.

Higher output and lower costs result in greater profitability, and that is where my role has the greatest benefit to AYC Media and its employees. Adaptation and willingness to change (knowing what you need to know) is equally important as outdated company structures have the potential to choke growth (even when you are increasing your # of employees).

There are many more principles learned in topics ranging from physics and calc to economics and finance that have been extremely useful when tasked with architecting growth strategies. Admittedly, I often find myself (on an alarmingly increased level) searching reputable sources online and digging through old text books (yes, I kept every last one of them) for knowledge I may have underestimated the importance of when they were first introduced. Full circle? Maybe - but right now, I can’t get enough and humbly accept that there is plenty I don’t know and more I need to know.

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