There were a lot of jokes at the Oscars last night about the vast sums of money that Hollywood top talent are paid for their work:
Chris Rock on spending 5 days recording an animated film, “and then they pay me a million dollars!”
Billy Crystal on the Oscars, “Nothing helps the economy like a bunch of millionaires handing each other statues made of gold.”
Billy Crystal to the front row, “I think we should all chip in and buy the Dodgers. George, you can still throw, right? When you own them, you get to play.”
and so on.
It was humorous, for sure, but there’s also a lesson here – if you worked out the “hourly wage” for these men and women, the rate would be exorbitant; nearly impossibly to justify. Which is why the studio heads don’t look at it as an “hourly wage”. Instead, like any business, they’re looking at their return on investment. Brad Pitt can charge $20 million for 3 months work because he brings $20 million worth of value to the project. Pitt, his agent, and the studio heads understand that by having “Brad Pitt” in the credits, they can expect to generate $20 million + more than they would if they didn’t have him in the credits. It’s simple math.
Good business owners understand this. When it comes to knowledge workers – where they’re paying for your brain and specific results, they truly don’t care how many hours you work. They care about the value they get from your involvement. Most of us, however, continue to cling to our employee mindset, focusing on how much we’re paid for our time. I humbly suggest that you can make considerably more money, with less headaches, by focusing on how much value you provide to the buyer (aka, your employer)… not how much time you give them.
The first step to doing this is to really think about why your job exists in the first place. What is it that the company is expecting to get for the salary they pay you? What’s that deliverable worth to them? How fast could you give them that? Better still, how fast could you give them a little bit more than they’re expecting? Wouldn’t that dazzle them? Wouldn’t that make you indispensable?
Key takeaway here: Your client (and employer) pay you for the result, not your time or effort. Ignore that at your own peril.
