I just read a great article on the difference between a consultancy and a body shop. The author does an excellent point of laying out how perverse the incentives are at a body shop that charges time + materials, versus a consultancy that is very clear about providing value by bringing capability to the table, rather than time.

As a culture, especially a business culture, we persist in sticking to the decades-outdated idea that hours worked are somehow related to value. Sometimes the relation holds, say for an assembly line worker. Or a retail store clerk. But for most business jobs, there’s no link at all between hours worked and value created. In fact, anyone who has gotten rich by owning a company has made all that money through a market mechanism that completely disconnects hours from value. (If you doubt it, let’s film Bill Gates as he brushes his teeth, quiz him as to his thoughts during those moments, and see if those thoughts are directly worth the $100,000+ he earned during those moments.)

So when you find yourself obsessing over hours, yours or others’, let it go. Concentrate instead on the value you’re creating, and how you can create more of it faster, so we can all leave work early and go play.

How do you charge for your products or services?

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