Businesses are often money-making enterprises. This generally encourages a short-term orientation in our decision making.
Strategy, however, is the relationship between decisions you make now and possibilities those decision bring within reach later. There is a real–but often unclear–relationship between the decisions about now and the future possibilities those now-focused decisions unlock.
In other words, if you are only focused on the short term, your decisions may not be very strategic. They may not unlock the most desirable future possibilities for your business.
I would like to explore this tension a bit, with a focus on the non-monetary value that some work can have for you.
If your current situation is such that you truly cannot afford to think about anything other than the short term, this paper is not for you. And you have my sympathy. I sp\0x10ent years in that very same situation.
But if you are starting to think about how you might build some short-term success you’re current realizing into something more valuable over the long term, this paper is definitely for you.
If you decide to do something because doing that thing might create value in the future or give you better options in the future, you have done two things.
First, you have taken a risk. Your decision might not work out the way you thought! That future value might not materialize. Those future better options might not become available to you. Or they might! That’s the nature of risk-taking. You are less than 100% certain about the cost and benefit of doing a thing. You can’t guarantee a particular outcome. This comes with the territory of risk-taking. But smart risk-taking can be a very profitable activity, as many wealthy \0x10people will tell you.
Second, you have made a strategic decision. You have made a specific choice to do something now because of the future benefit of that decision.
When I’m working with coaching clients, I often ask them: “What is the strategic value of this opportunity?”
When I ask this question, I’m asking them to focus on what this opportunity might lead to, or what future value they might create by saying “yes” to this opportunity.
If the opportunity is client work that is likely to be very profitable and might lead to very desirable future opportunities or significant future value (beyond just the revenue from the engagement), then it’s an easy decision. This is a “have your cake and eat it too” opportunity. These are wonderful, but earlier in our careers, few of us get these kinds of opportunities.
Instead, when you’re earlier in your career or trying to transition from implementation to advice work, you’re more often getting opportunities that are comprised in some way. They might meet short-term revenue needs but not offer any strategic value. Or they might offer strategic value but generate only very modest immediate revenue.
I think you should at least consider taking that immediate revenue-strategic value tradeoff when it shows up. And if these kinds of lower revenue-higher strategic value opportunities don’t show up for you, I think you should actively cultivate them in order to move your career more assertively towards cultivating exceptionally valuable expertise.
There’s an implicit point of view I’ll make explicit here: It might be just my personal experience, or it might be generally true, but if you’re just starting to move out of a generalist market position, I believe that it’s easier to get access to opportunities that are primarily strategically valuable than it is opportunities that are both lucrative and strategically valuable. Said differently, if you can delay financial gratification a bit–maybe 2 or 3 years–I think you can spend that time optimizing for the future value of your expertise at the expense of short-term revenue. I think this is an awesomely desirable tradeoff if you can afford to make it. Graduate degree students do it all the time. I hope you can, too.
So let’s talk about how to evaluate the strategic value of opportunities.
Evaluating Strategic Value
I’m going to focus on the strategic value of client-facing opportunities. In doing this, I’m ignoring the strategic value of things like writing a book, doing research, and that kind of thing. That stuff has strategic value too, but I’m specifically focusing on the strategic value of paid client work.
The most fundamental future benefit of strategically valuable work is the credibility it can create. The project goes well and you walk away with a logo for your website, a case study, a happy client, referrals from that client, greater expertise, and greater confidence in future sales conversations. Maybe not all those things, but the chance to acquire all those things.
Those things have utility in your business development. They can unlock opportunities in the form of access to better, more desirable, or more profitable work. They can contribute to an ability to speak more authoritatively on your expertise using real-life examples.
Access is my shorthand for your ability to gain access to buyers in a market. Access is not a binary thing that you do or don’t have. It’s more like a network that’s built over time and measured in terms of reach, density, and strength of connection.
Strategically valuable work can pay you back in the form of greater access. This naturally raises the question: access to what or who?
It could be access to a certain type of decision-maker or buyer. Maybe you’ve never worked much with large publicly-held companies, and you don’t really understand how their buying process works. A strategically valuable project could help you learn how to find and engage with decision-makers in that kind of environment.
It could be access to a market. Your first project in a desirable market you’ve never worked in before could help you learn the landscape of that market. Who are the players. What are the watering holes? Which conferences are the must-attend events?
Again, access is not a binary all or nothing thing. It’s the result of building multiple connections, or a network of connections. So one single strategically valuable project is unlikely to transform your access to a market or type of buyer from zero-to-amazing overnight.
Even so, multiple carefully chosen strategically valuable projects can pay significant dividends in terms of both credibility and access.
As a generalist, I was constantly learning on the job. At first, this was exciting, and towards the end it was very problematic.
One of the core promises of an expert’s value proposition is that they won’t be learning on the job, or if they are it’ll be clearly disclosed and handled as a R&D or a proof of concept where the risk of the unknown is acknowledged by both sides.
But as a generalist becoming a self-made expert, you will still be learning on the job. And as a result, you will probably discount your fees to account for the risk inherent in this on-the-job learning.
This situation should be temporary. The narrow focus you’ve willingly embraced lets you “stack” closely-related on-the-job learning quickly, which helps you move out of the learning-on-the-job mode into genuine expert mode within a year or three.
It’s not that you’ll stop learning, but you’ll stop having to discount your fees because of the risk of on-the-job learning. You’ll stack experience and find other ways to learn using the downtime offered by the greater profitability that comes with higher fees and less labor-intensive work.
Another form the strategic value of certain opportunities can take is on the job learning. Some examples I’ve seen in my clients:
- A coaching client was a very good PHP developer. He’d tired of doing dev work and wanted to use what he’d learned about process, workflow, and quality to help other dev teams level up. He proposed doing this for a previous client. They balked at the price, he circled back later with some scope changes and a modestly lower price and a realization that the experience would give him credibility and on-the-job learning that he could use later down the line to justify higher prices.
- Another coaching client helps companies gain competitive advantage from open source practices. He has experience and access to the tech world, but wants to apply his expertise to the Fortune 500 world. This will involve on-the-job learning. Not so much in his area of expertise, but in how to apply that expertise in a different business environment (tech vs. F500). He will manage the risk of this on-the-job learning with initial fee discounts, carefully managed scope, or a combination of the two. While he may leave money on the table now, with future clients he will be in a stronger position to charge super-premium fees.
Proving a concept
Related to on-the-job learning, you may have opportunities to prove a concept, and this can have strategic value to your business. With on-the-job learning, you are often applying existing expertise in an environment that’s new to you. When proving a concept, you are experimenting with an un-tested concept with a client. Obviously, you do this with their full knowledge and permission, and they choose to accept the risk because of the potential upside.
Somebody had to be the human that got the first artificial heart tried out on them. Barney Clark was that somebody in 1982. I presume he knew the risk, and judged it better than the alternative.
Proving a concept is innovation. It’s pretty well established that the cost and risk of innovation will often not turn into immediate payback. For this reason, you may have opportunities to prove a concept with a client, and you may accept a reduced fee in exchange for the risk and delayed reward this implies for your client.
Going upmarket may mean working with a new segment of your existing market, or it may mean seeking a new but more desirable market for your services. Either way, your lack of credibility in the new, more desirable market may mean that you say yes to work under terms you would normally reject. This can be strategically valuable because you can gain credibility and access you might otherwise not.
Finally, we have the concept of “sawdust”, which I reluctantly attribute first hearing about to Gary Vaynerchuk. The idea is that your paid work may produce “by-products” that are useful in your marketing. These by-products can be thought of as the sawdust in a woodshop. A factory can convert sawdust into secondary products like medium density fiberboard.
You might take on work that is not all that attractive or lucrative on its face but offers you strategically valuable sawdust you can use in your marketing or elsewhere in your business.
I’ll conclude by saying that trading short-term profitability for longer-term value creation is always a nuanced judgement call. It’s never easy to sacrifice relatively certain revenue for relatively uncertain future value. Yet, I see this tradeoff as a critical part of the self-made expert’s path. If you’re optimizing for the future value of your future expertise, I think you–like me–will choose to make these kinds of tradeoffs.
You won’t have to make them forever because you’re making them in service of an asset–your future expertise–that will, as it grows, make it increasingly unnecessary to sacrifice revenue. It’s fundamentally no different than someone investing in schooling or training, with the exception that you’re doing it this way because no curriculum exists for the expertise you’re trying to create.
So… you build the curriculum yourself out of strategically valuable opportunities, and you fund your own education by trading short-term revenue for long-term expertise.
If you have any questions about applying this guidance to your business, please feel free to contact me at firstname.lastname@example.org.
If you’d like my direct help identifying and capitalizing on strategically valuable opportunities, my services may be a fit: https://philipmorganconsulting.com/services/