The $100 Million Productivity Tip

Stack of dollar bills

Photo by Andrew Magill

When Charles Schwab became President of Bethlehem Steel in 1903, he made an unusual offer to his consultant, Ivy Lee:

Show my staff and me a way to get more done in less time and I’ll pay you any fee within reason.

Without batting an eyelid, Lee offered to give Schwab a tip in a few minutes that would boost his productivity by at least fifty percent.

Here’s the gist of what he said in the twenty minutes before Schwab left to catch a train:

1. Take a card and write down the six most important things you have to do tomorrow. Number them in order of importance.

2. First thing tomorrow, start working on item one until you finish it.

3. Next, do the same with item two, item three and so on, until it’s time to stop for the day.

4. Don’t worry if you only finish one or two items on the list. If you can’t finish them with this system, you’d never have finished them with any other system. This way, you will at least have finished your most important tasks.

Lee invited Schwab to try the system for as long as he liked and pay what he thought it was worth.

Two weeks later, Schwab sent Lee a cheque for $25,000.

At the time, some people said it was foolish of Schwab to pay so much for a simple idea, and so little consulting time.

But Schwab later credited Lee’s advice with helping him transform Bethlehem Steel, from a virtual unknown into the largest independent steel producer in the world, in less than five years.

In the process, Schwab earned a personal fortune of $100 million.

(Source: The Millionaire in You by Michael LeBoeuf.)

What do you make of that?

Do you think Schwab paid over the odds for a simple tip?

How do you measure the value of advice?

What difference would it make to your work if you started using Lee’s $100 Million Productivity Tip?

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  1. Hi Mark,

    That’s a fun, great story! Glad it worked so well for them both.

    One of the things I run into as a creative type is that the idea of productivity can be very skewed–sometimes it’s very productive for me to walk the dog or take a shower, or something very boring, because I’ll get a ton of ideas or have a breakthrough. Of course, walking the dog shouldn’t be first on my list of daily goals, so it has to be balanced with sitting down and doing the work (for me, fiction writing).

    So, to me it’s a strange alchemy. I do have fiction writing atop my list every day, but then I have to allow room for ideas to compost and ferment in other ways, too. It reminds me of that saying by Seneca: “Luck is when preparation meets opportunity.” But rather than luck, it’s about creative productivity. You’ve got to bear down and do the work while also giving your mind opportunities to be free.

    Thanks, as always, Mark!

  2. I have to agree with Baker. There are some things in my life that must happen in a particular time slot or things like walking the dog early that cannot wait until the most important project gets done.

    There are also some projects that work best with a break in the middle instead of a straight through six hours or something.

    I prefer to clear out accumulated email from overnight before I start my day. This means by 6AM I don’t have to think about email until I am ready for a break from other things. (I am not one of those people who gets 200 emails daily but I do get email from overseas).

    In terms of the value of advice, it is not the advice that has value but the advice given to a particular person. I wouldn’t pay someone to tell me to list my priorities in order, but there are others for whom this advice has obviously been highly valuable.

    What is nice in your story was that a price wasn’t set by the seller but by the buyer according to value. In economics there is a term “price discriminiation.” A business earns the most if it can charge different amounts for the same item to different customers depending on the value they place on it. The buyer for whom it is of greatest value, on the other hand, is better off if the price that is charged is uniform rather than adjusted by value to the consumer.

    If a piece of information is worth $25,000 to someone, the person offering the advice can charge up to that much as long as the customer is not aware of being able to buy the same advice easily for $10. Obviously the consumer is better off paying $10 for advice worth $25,000 to him than paying $25,000.

    Which leads to the third part of the value of advice. There is advice, there is the person receiving it, but there is also the credibility the advice has in the mind of the customer depending on who is selling. Schwab might not even have tried the advice if he had heard it in the elevator from his doorman.

    • What I’m getting from you and Baker is that a straightforward list of priorities doesn’t take account of the rhythms of the working day and the creative process.

      Re the value question, yes pricing is a multi-faceted question, involving value, context (competition) and credibility.

      I’m also wondering whether another reason Schwab paid that price was to hold himself accountable for sticking to the system…

    • Billy Newsome says:

      So, in reference to what you’re suggesting Fritzie, is that ‘one man’s trash is another man’s treasure; and I can agree with that!

      • True about trash and treasure, but I was thinking of differences in value that may be less dramatic than that!

  3. Great post. Thanks for sharing. I really like the “A Creative Person Needs Three Things to Be Happy” section. Validates a lot of feelings on the creative process. People don’t understand it’s better to let creatives out of the office and roam free! We’ll produce better ideas and you’ll get a better return on your investment.

  4. It’s interesting that the quality of the idea is what what valued – not the time it took to present it, or the length of explanation.

    Many have said (on the sly) that Malcolm Gladwell’s book ‘The Tipping Point’ could have been at least half the size, but he must have expanded on his idea/observation in order to make it into what we value as ‘a book’.

    This concept of being paid for the idea, rather than the tangible product, is the ultimate challenge for creatives in getting paid what they are worth.

    • Well I guess the internet is freeing many of us from having to package our ideas into book form. ;-)

      Re ideas and value, I think a critical skill is understanding the value of an idea in a particular context, and making creative decisions about how to exploit one’s intellectual property.

      In this case, Lee understood the value of the right idea, at the right time, to the right person. I don’t know the background, but I’m guessing it took a lot of effort and ingenuity to put himself in a position where he could make an offer to such a powerful man.

      Alternatively (or in addition) he could have elaborated his system into a book or offered courses in teaching it, charging much less to many more people.

  5. Hi Mark:

    The value of the advice is superb.

    Most people don’t get to do what they want to do and they get frustrated because of it. By listing them down and attacking them one after the other, you will get something done and be happy even if the happiness is not absolute because you have not done all the other things you want to do.

    Great advice. The key is to just start doing something that is inline with your goal.

    You will never have the perfect time.

    Cheers,

    Sam Lab.

  6. Rhythms of a day are important, but when it’s time to get down to work, I think having a clean sheet of paper with a few tasks is unbeatable to help bring focus. When I find myself in a crazy ping-fest (from email to phone to co-worker interruption to a pile of papers), the best thing for me to do is shove all aside, turn off my computer monitors and make a short list, set a timer (a little 25 minute pomodoro thing), and get to work on the first item.

    I should probably go do that now!

  7. Speaking of freedom in time and how to manage it: I realized I need a rhythm or list (short or long), but most of the time it gives me the pressure of not having it done properly or I am behind or ahead and…, eventually it hurts my creativity . So, I change the rhythm whenever I feel it. If I feel taking my dog out now falls in the middle of my creative painting hours, I do it. If this week instead of waking up early in morning to finish work I feel more night person, I do that.
    At the beginning I was so strict on myself and thought I want to cover my laziness, but it was not.
    I can be more productive, happier when I let the rhythm of my day syncs with my desire. I feel “creative me” is charge rather than a “not changeable list”.

    Great post Mark and wonderful comments from folks.

    • I am like Sayeh in not forcing myself to maintain a rigid schedule. I couldn’t, as I have quite different obligations different days. But I do always feed and walk the dog at the same time each day.

    • Sounds great Sayeh. As you say, the key to making this approach work is being self-aware enough to know when ‘creative me’ is in charge (as opposed to laziness, Resistance etc).

      Personally I like a fairly regular schedule, but I can see the benefits of allowing room for spontaneity. :-)