Productivity and Self-Employment

I think it is interesting that many of the people most focused on productivity work for someone else. Why? Because even if you are well paid, you are always going to make less than the value you create. For one thing, salary ranges are very rarely tied to pure performance. If you work with 10 people who all do the same thing, it wouldn’t be surprising if the top performer is 10 times more productive than the worst. However, it would be very surprising if the top performer were paid 10 times the salary of the lowest.

The other reason that wide variance in performance doesn’t translate into wide variance in pay is because jobs are designed in order to make a position replaceable. That is why you have a job description. It is a blueprint for the person who can fill that job. There is a foundational mindset that you can swap out individuals like you can swap out spark plugs. In actual practice–particularly with high performers–that isn’t true.

I’m not trying to get everyone who focuses on productivity to quit their job and go into business for themselves, but if you are someone who works hard and puts a lot of effort into being productive, you need to recognize that your contribution is going to exceed your compensation. This isn’t always a bad thing, but you don’t want to get to your retirement years only to discover that all the effort at being a high performer went to benefit others instead of yourself.

I do think that highly productive people need to seriously consider starting their own respective businesses. At the very least, it is important to make a conscious decision about why you do NOT want to run your own business instead of just making a default choice to be an employee because that is what everyone else is doing.

Modern technology makes running your own small business a completely different experience than what it was in the past. As a simple example, just think what someone had to go through to get their own business telephone number back in the 80s. They would call the phone company, explain they need a second line, somehow drop that it was a business line, be shocked by the price of business lines compared with their residential phone number, schedule a time for the phone company to come out and install it, buy a phone, etc. They could easily spend five to ten hours or more just getting a phone line and that is if they knew what they were doing.

Today, you can go to Skype, Google Voice, or Ring Central and in 15 minutes have a phone number set up with features someone from 20 years ago couldn’t even imagine being available.

And that is just talking about a telephone number. You’ll find the same thing when it comes to setting up business office software, accounting, payroll, and advertising. I’m not trying to make it sound easy, but the amount you can do as a lone, productive self-employed person is really amazing.

Self-employment may not be the best option for you. You’d need to consider your personality, skills, comfort with risk, etc. But every productive person owes it to themselves to at least consider whether or not they should be running their own company instead of working for someone else.