By Chuck Cusumano
In 1921, genius inventor Henry Ford stumbled upon a major problem with his assembly line.
That’s right, a problem with that assembly line—the famous assembly line that had brought him fame, fortune, and plenty of accolades (not to mention endless praise) since its inception in 1913.
Unsure of how to fix the issue, Ford called up another famed engineer and inventor, Nikola Tesla, to help him with the problem—it made sense Ford called him up, the two innovators had worked for Thomas Edison several years earlier.
When Tesla walked into the Ford assembly plant, he surveyed the machine. He walked to the boilerplate, listened for a moment, and then swiftly reached into his pocket and pulled out a white piece of chalk.
Almost immediately, Tesla scratched the chalk over the boilerplate (X marks the spot, right?) and told Ford that the problem lay precisely where he made his mark. Naturally, Ford was thrilled—his engineers had worked tirelessly for days and hadn’t made a dent in the project, Tesla walked in and solved it almost instantly.
Ford thanked Tesla and told him, of course, to send the bill and he’d take care of it.
Obviously, the story doesn’t end there. When Ford received the bill, he saw Tesla had invoiced him for $10,000—and in 1921, $10,000 was quite a lot more than $10,000 today.
Outraged, Ford implored Tesla for an explanation. Tesla aptly responded with a breakdown of his billing— $1 for marking the boilerplate with chalk, and $9,999 for knowing exactly where to place the X.
You might have caught on by now, but this legend has been told over and over throughout the years, often with different leading characters and often with these characters fixing different problems.
But here’s the thing, even though it’s a tall tale, an exaggeration, or a myth, it does beg one of the most important questions you can ask yourself—what is the worth of the service you’re providing?
If you are in the business of selling your time, this is considered your most precious resource. And, as time goes on, you’re going to end up short-changing yourself as your productivity improves.
Why? Because ultimately, you’re going to be getting paid less for the same results.
This ideology is in sharp contrast to the business of selling results—in this scenario, as you become more productive, you increase your ability to receive more for the increased productivity.
Our advice? Don’t charge by the hour, don’t pay by the hour—pay for what you receive and charge for what you deliver.
Think about it—this idea makes sense, right?
When was the last time you purchased a car with a price that was based on the pound? Do you bill your surgeon for the hours he spends in the operating room? If this is the case, why wouldn’t we pay more for a size 12 shoe versus a size 7 shoe?
Sure, there are some cases where it’s not as efficient to pay for the solution (and rather, pay for the time), and in others, we’re unsure of how to value services, so we default to time on task. But ultimately, the issue here is that we often assume all parties work as hard, fast, and skillfully as everyone else—the reality is, this is rarely the case.
Whenever possible, we recommend selling solutions to problems—never your time. Why? Because as the seller (the one offering the service), you’ll be paid for your knowledge, your skill, and your effectiveness. As the buyer, you’ll avoid paying for the seller’s lack of knowledge, inability to solve the solution, and the ineffectiveness of their time spent.
We all need solutions for our challenges—what we don’t always need is someone getting paid to spend time in order to figure those solutions out! Remember that argument about X marking the spot? That applies here—and in infinite circumstances hereafter.
Knowing your value and knowing that you can provide a solution for a challenge is that X—and it symbolizes much more than a spot to dig for treasure. That X is the solution to the problem, not the time it took to solve it—remember that the next time you’re tempted to charge or pay for time.