I wrote to you two weeks ago aboard a UN plane bound for Mogadishu, Somalia. I was working there with a UN agency for most of the week, facilitating a multi-stakeholder meeting.
In preparation, I read a lot of background documents. And I came across this, new to me, concept of T.C.O., which made me think of you. I wrote part one of this post here. And now for part two (after a quick recap).
T.C.O. – Total Cost of Ownership – is a consideration when sourcing items.
It’s the sum of all costs related to an item.
T.C.O. takes into account current costs, things like:
- Customs (if it has to cross an international border)
- Storage (if it has to remain in inventory)
T.C.O. also takes into account ongoing costs, such as:
- Quality maintenance
And it hit me.
T.C.O. can be a simple, handy dandy tool when you’re dwelling on making a dogged decision.
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When you’re trying to make a decision, what type of “costs” can you include? Anything you wish!
In part one we covered things like your planning, tracking, time, performance management, upkeep, space, materials/supplies, and perhaps most importantly your “mental weight.”
Sounds good right? But maybe a little confusing still? Let’s run through a more specific example.
I gave you some brief examples for each type of cost in part one but let’s dive into a more specific example. One that actually happened to me.
I run a Learning and Development Roundtable each month where I design and deliver an engaging workshop to anyone interested in learning, education, or training.
A couple of years ago I was on safari (my best place to do deep thinking) and I remember in the wee early hours, talking to my hubs about how I was considering stopping the Roundtable. I was unclear about the benefits – both to me and to those who participate.
Looking back, I realized I did a sort of T.C.O. Here’s what I looked at before I made my decision on what to do.
- Time: I realized I was missing data. I wasn’t clear on how much time it was taking me to design, promote and teach. I didn’t know the time cost.
- Benefits to participants: I needed to be clearer on what benefits participants got from the Roundtable
- Benefits to me: I was missing information on how many clients came to me through participating in the Roundtable and what other benefits doing the Roundtable gave me.
- Performance management: I was using a VA (virtual assistant) to help me with the planning but it wasn’t working as well as I’d liked, which was a huge “cost.”
- “Mental weight:”: My big ah-ha came when I realized I was bogged down with uncertainty about whether to continue it or not, simply because I didn’t have enough data. The “mental weight” of the Learning and Development Roundtable had become hefty.
So what did I do?
Fast forward to today.
- Time: a couple of years ago I started tracking my time using Toggl and now I have plenty of data including exactly how much time I spend each month designing and leading the Roundtable.
- Benefits to participants: I got clearer on what I wanted to know from Learning and Development Roundtable participants and set about gathering that data. For example, each month I send out a survey. Included in the survey is asking participants how they’d describe the Roundtable. Here’s what they say in the form of a word cloud (the larger the word, the more often it’s been mentioned).
- Benefits to me: Wow! This was the biggest surprise. I started tracking referral sources (how clients come to me) and discovered that the Roundtable was a large source!
- Performance management: I ditched my old VA company who I was having an untold number of problems with and got a new one. Enter sweet success, ease, and efficiency.
- “Mental weight:”: The stress of not knowing what to do has been replaced with the certainty that the Roundtable is a key and critical component to the services I offer. And since that early morning safari a few years ago when I was contemplating whether I should even continue it, the Learning and Development Roundtable has been approved by the UN HQ in Nairobi and the UN HQ in New York. It counts towards UN-mandated annual staff training and the UN promotes it each month
It was a surprisingly fun journey to get clear on the T.C.O. of the Learning and Development Roundtable. Lots of learning along the way.
The next time you’re stuck making a decision, try applying the Total Cost of Ownership and see where it takes you.
In fact, do it right now. Pick something you’re having some issues with / a decision that you’re having a tough time making and then pick the items that you can run through the Total Cost of Ownership of. Et voila! Some outta sight insight to help you.
Now go on and learn, laugh, and lead
- Again, pick something you’re having some issues with / a decision that you’re having a tough time making, and then pick the items that you can run through the Total Cost of Ownership of.
- Have you heard of an Ames window? It’s an optical illusion that tricks your brain. Like thinking you’ve taken everything into consideration when making a decision, but without T.C.O. that may be an illusion. Check out this quirky guy explaining the illusion.
- Share this post with a friend and/or a colleague and do the T.C.O. exercise together.
- The last Roundtable of 2022 – How to really engage people for lasting listening, light-hearted learning, can-do, collaboration, and clever creativity – is happening soon – November 17th! More info here. RSVP now here.