Friday, 8 May 2009

How much are you worth?

Here's a provocative question. Would the salary you receive look like good value for money for the organisation and it's stakeholders if analysed in the cold light of day?

How do you add value? How much value are we talking about?

There's been much debate about 'fat cats' and mega salaries in recent years. Tabloid headlines might make you think that all senior managers were paid millions. Fat cat? Fat chance more like for many. Even so, however much a senior manager is paid, whether its 50k or 5 million, it should still represent a good deal for the stakeholders. It's usually quite easy to see and measure the value of a member of staff at the 'sharp end' - especially if you're in a sector that recognises the difference between direct and indirect labour. But a senior manager is often paid as much as several members of staff - indeed, a PLC CEO might be paid as much as several hundred members of staff - and are almost inevitably 'indirect' labour. Or as one irate employee said to me many years ago while challenging something I wanted to change; "I'm profit, you're overhead"... and they were dead right.

So what makes you worth your salt? If you look at highly paid people in other walks of life - sports stars, film stars, authors and the like - you might think it is to do with supply and demand. Frank Lampard is worth his 5m a year or whatever, so the story goes, because players with his level of skill are in incredibly short supply and there's a lot of demand from clubs across the world who would offer him any amount of money to sign for them. But what about Meg Ryan or Colin Farrell? I haven't heard that the world is running short of talented actors and actresses - a visit to any of the restaurants in LA will show you thousands who would tell you they were every bit as qualified and capable (and considerably cheaper). So how come they get $10m a movie? Can't be supply & demand here.

Clearly, a film studio pays these stars at this level because they believe it is an investment that will show a direct return on their bottom line. Perhaps this is a clue to our senior manager salary conundrum? Staff are paid for the work they do - senior managers for their impact on business results. That would make sense, wouldn't it?

Which brings the killer question.

What do you do with your time? How does it directly impact on business results?

All the time I see senior managers filling their diary with things to do. Meetings, tasks, reports, outside engagements and then squeezing in a few more meetings. Long hours and busy, busy, busy, busy.

Be honest with yourself.

How much difference have you made to the results of the organisation today?

How much would it have mattered if you hadn't been at work today? Would the stakeholders have noticed a big difference?

Your job is to lead. In any organisation, only a few things make the big difference. Those things that take you straight towards your vision and inspire, motivate and enable your people to do their best work.

Shouldn't you be doing those things for at least 75% of your day?

Check your diary for next week and see which things add the real value. If it's less than 75% of the time.....

Change it.

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