• James Walton

The Fundamental Rule of Organizational Economics

If two people in the organization can do the same task, who should do it? The one with more free time? The one with more seniority? The one with more connections to upper management? The one who should do it is the one who is paid less.  The fundamental rule of organizational economics is that work should be down at the lowest possible level of the organization. This means that you as the leader should be actively looking for ways to push work down.  Two things happen when this is done well:

  1. Those who can only do certain things are able to focus on them.

  2. Those who can do certain things have their skills developed. 

Two things happen when this is done poorly:

  1. An attitude of entitlement and "I'm above this sort of thing" is bred, ultimately destroying culture.

  2. Exasperation and frustration set in when senior leaders have to focus on logistics more than strategy and vision.

Effectively delegating work ensures that the organization doesn't bottleneck at the top and that people at all levels of the organization can thrive. What can you do to begin actively delegating tasks to others?

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