How much should you pay for staff or vendors?

As a leader of a high-impact individual or team, be careful about paying too much attention to "hours worked" vs. "hours saved" and "impact made".

Imagine you have a problem with a highly specialized type of car engine. Something that multiple mechanics have spent hours trying to diagnose without success.

Now imagine you bump into a mechanic who has spent 20 years learning how to fix every possible problem with your particular engine.

They show up, flip a switch and your engine is fixed in 5 seconds.

Did they spend 5 seconds fixing your problem? Or did they spend 20 years and 5 seconds? Should they be paid for 5 seconds of work or for the value they created by fixing a previously unfixable problem?

Obviously, the answer is that their value far outweighs the amount of time they spent.

This is how a great leader values staff, teams, and vendors.

They factor in the saved time and the overall business impact of the contribution.

In fact, they are happy to pay a premium for speed and quality execution because they also understand the money saved from

a) All other operational costs that would have been incurred due to delay (e.g. imagine how many employee salaries, rent, etc are being spent when taking the slow path to an outcome)

b) Execution risk

c) Opportunity cost

d) Thrash

e) Other "soft" costs