- Scott H Young - https://www.scotthyoung.com/blog -

What’s Your Growth Ratio?

If you’re running a business, you’ll often find your time split between two types of tasks. The first are maintenance tasks—these are the activities that sustain, but don’t substantially improve, the underlying business. The second are business development tasks that fortify the assets that generate your income.

Your growth ratio is simply the hours you spend each week on business development, divided by the total hours. A high growth ratio means most of your effort is going into investing for the future. A low ratio means most of your work is being spent to earn your income today.

I paid considerable attention to this number in the early days of my business. My goal was to have as high a growth ratio as I could afford, since only the growth tasks were going to eventually make my business work.

The trajectory of your life in a lot of areas can be defined by a growth ratio:

A high growth ratio doesn’t necessitate improvement. The ratio only measures your time and energy invested, it doesn’t specify the return you earned. I could spend a year on the business development of a failed project. High ratio, low returns.

However, a high growth ratio is a good proxy for actual growth and you have more control over it. You can’t always pick and choose your outcomes, but you do have some control over whether your time is spent on growth or maintenance.

Why Might You Have a Low Growth Ratio?

There are a couple reasons you might have a low growth ratio in some activity of your life, and not all of them are negative.

The first reason might simply be that you’re at an elite performance level in a domain that experiences logarithmic [1] (or some form of sublinear) growth. Elite athletes have low growth ratios precisely because their athletic abilities are so highly tuned. A couch potato who starts exercising will have a growth ratio of nearly 100%.

The second reason might be that you’re burdened with maintenance tasks. Most jobs have far lower growth ratios than entrepreneurial ventures for precisely this reason. Your professional duties are often mostly maintenance tasks, with development work being a side concern.

This doesn’t mean non-entrepreneurs should ignore their growth ratio. Just the opposite—because low growth ratios are the default, paying attention to shifting that default becomes more important. You need to push yourself to find growth opportunities to shift the ratio back in your favor.

A final cause of low growth is simply choice. Growth is hard, intense and uncomfortable. Many people opt for a lower growth ratio to avoid facing that difficulty. Maybe that’s fine—not all ambition is constructive. But I think knowing your growth ratio at least makes you aware of whether your future trajectory will be positive, stagnant or declining. If I wanted to cut back on a pursuit, I would aim to reduce my total investment instead of shifting it away from growth.

Improving Your Growth Ratio

There are a number of ways you can improve your growth ratio. Not all are possible in every pursuit, but usually a few are. By improving your ratio, you can generate faster results for the same amount of effort.

#1 – Eliminate Maintenance Tasks

This was essentially the premise of Tim Ferriss’s 4-Hour Workweek [2]. If you can eliminate maintenance tasks, you can reap larger rewards from your working life for less investment. Outsourcing routine parts of your work, automating systems with technology or even deleting tasks which can be allowed to fail, are all methods to achieve this.

An example of this from my business was writing less. In the beginning of a blog, writing is a growth task, because you need to establish a content base. Now that I’ve written nearly a thousand articles, nobody will read them all. Writing, unless it is going to become a traffic anchor for the website, is closer to a maintenance task than a growth task.

#2 – Turn Maintenance Tasks into Growth Tasks

Whether a task is growth or maintenance depends a lot on the context. Learning new job skills for the first time at a new position is clearly growth. However, those same tasks become maintenance task once you’ve performed them hundreds of times.

One way to shift your growth ratio therefore, is to disrupt your maintenance tasks so they become growth tasks. Careerists who move positions, projects or departments with a higher velocity will have a higher growth ratio than those who stand still. As a writer, breaking my writing habits to generate traffic anchors can turn a weekly maintenance task of blog writing into a growth task.

#3 – Inject Growth Tasks

Simply adding more growth work, in the form of side projects and tasks, can shift your ratio. This was a necessity for me in the beginning of my website. I didn’t have the funds to outsource or turn down paying freelance work at the start. The only option was to build on top of that.

People often raise eyebrows when they see someone working hard on growth tasks. This is because there is no immediate payoff for such tasks, and the logic of how such tasks will eventually result in greater income or freedom are often opaque to outsiders. Yet the people who ignore the critics and invest in that higher growth rate are often rewarded enough to make those investments seem obvious in retrospect.

Tracking Your Ratio

One way to visualize your growth ratio is to do a timelog [3] of your major tasks in the week. If you’re using weekly/daily goals [4], you can approximate this by reviewing your last weekly goals list and providing estimates of time invested per task.

Once you have a list of all your tasks with approximate time investment, pick out only the growth tasks and tally up the total number of hours. If you’re not sure whether a task is a growth task, ask yourself how it will continue to provide value five years from now. If its value time horizon is under a year, it is clearly not a growth task, anything between 1-5 years will be a judgment call based on the nature of the work you’re doing.

Divide this amount by the total amount of hours you worked. Be sure to count the total hours you set aside for work, not just the ones associated with completed tasks. Going in to work full time is 40 hours, even if not all of those hours were productive.

If you measure this ratio, you can track whether it is going up or down. A falling growth ratio generally means your progress will decelerate with time, unless the quality of the growth work you do manages to increase to compensate.

Is Higher Growth Always Better?

Higher growth ratios aren’t always better. As mentioned at the start, elite performers often have low growth rates because of their skill. Growth ratios also follow natural curves that bound them—steadily improving growth ratios are impossible or undesirable for some disciplines.

What a growth ratio does tell you, however, is a proxy of what to expect from the future. If you’re expecting more success than you’re seeing now, but your growth ratio is under fifteen percent, you’re probably deluding yourself. Similarly, if you’re struggling through hard times and wondering whether you should persist, but your growth rate is high, it will be wise to be patient.