Reducing opportunity costs through understanding value and time

I had an interesting conversation with a friend the other day where the topic was prioritization at work. We came to the conclusion that most people in an organization will feel very busy while the actual value output each person creates for the org is not correlated to that perception.

Putting aside the issue of individual differences—someone might be more easily frenzied than someone else—I think much of this discrepancy can be explained by a misunderstanding in where the value exists in a given task. This article explores what I call “task value modeling,” a mental model for understanding where value exists in tasks as a function of time.

The big idea here is we tend to assume an ASAP requirement for tasks that may not benefit from a quicker resolution, this creates a higher perception of our workload without creating greater value. If we understand when and how value is created we can relieve ourselves of unnecessary rush and work by better prioritizing and scheduling our tasks without loss of value.

Task Value Modeling

Task value modeling attempts to conceptualize when value is generated by a given task. This article includes the assumption that the given task has value to begin with! That’s a risky assumption but one that is beyond the scope of this article.

The hope is that by examining the time-based assumptions inherent in the expected value of our tasks, we enable better judgment of opportunity cost. In other words, you may think two tasks are in conflict because you assume they must be completed in the same time period, forcing an opportunity cost judgment as one task must be given up or prioritized over another. If we understand the task value model for these tasks, we can better configure our tasks across time to reduce opportunity-cost conflicts.

Models and examples

Here I’ve identified 5 models to help explain the idea. Keep in mind this list may not be exhaustive!

1. Deadline value

• Tasks in this category have constant value until a deadline, after which their value drops to zero.
• Examples of this may be an emailed question about the meeting place for an event. The value is realized as long as a reply is given sometime before the event, but after the event the value drops to zero as the information is no longer relevant.

2. Deadline-declining value

• Similar to the deadline value model, value is constant until a point but rather than dropping to zero, the value line slopes downwards at a task-specific slope.
• Examples of this model are many projects with deadlines. If the project is delivered before the deadline the full value is realized, however the value does not drop to zero if the project is late but declines over time past the deadline.
• The exact slope of this decline depends on many factors, and smart prioritizers may be able to decrease the angle of the slope through careful communication with stakeholders.

3. Declining value

• Unlike the previous models, tasks in this category begin with value at the highest point at t=0 and decline over time, getting infinitely close to zero.
• Example of this may be developing a best-practice playbook. There’s always value in creating a playbook, but its value will always be higher yesterday than today, so its value is always in decline. Conceptually, the value will never be zero, as there’s always some value in persuing this task. But in reality, on a long enough time-scale everything goes to zero (e.g the heat death of the universe).

4. ASAP value

• Like declining value, its value is highest at t=0, and declines over time, however, this task also carries a deadline after which the value drops precipitously to zero.
• It combines elements of declining value and deadline value.
• An example would be, an urgent question of where the meeting is taking place minutes before it’s set to begin. The earlier you answer the better (as the person can show up on time, or less late), but after the meeting has ended the value is 0.

5. Constant value

• Tasks with constant value regardless of time.
• I am skeptical that tasks like this exist, while theoretically possible, most tasks have some interaction with time even if conceptualized on a massive time scale (i.e value is zero by the time you retire from work).
• Often what appears to be constant-value tasks have no value at all, and should just be disregarded outright.

Manager’s solution

This is a pretty heady article, but I feel the solution is really simple. We should focus on clear alignment on timeline expectations whenever tasks are given.

For managers, any time you delegate a task, be clear about your timeline expectations. In many cases, wasted work and time is the result of false assumptions. We should work to stamp out assumptions wherever possible.

For individual contributors, if you’re feeling frustrated by the wasted work you see in your day to day, look critically at your tasks and their task-value. If you’re unsure when the value of a task is created, simply ask.