Tiago Forte is the best contemporary writer on productivity and personal knowledge management I know.
It turns out that Forte has written about this idea of ‘time allocation as capital allocation’ in the past (because of course he has!) but he’s done so from the view of a freelancer managing a handful of income-producing activities. This thinking is documented in his publicly available series The Rise of the Full Stack Freelancer.
Forte argues that a necessary precondition to become a ‘full-stack freelancer’ is to think of your collection of career activities through the lens of ‘portfolio thinking’:
It’s trendy now to proclaim the universal superiority of “deep work.” We’re advised to lock out all distractions and interruptions, fixate completely on one project at a time, and optimize for long, long stretches of focus.
This advice isn’t wrong; it’s just limiting. It’s appropriate if what you want is to be the best employee you can be. If, on the other hand, you want to be a manager, run a business, develop side projects, or collaborate with others, it is terrible advice. It gives you no portfolio to work with.
Portfolio thinking recognizes that having multiple parallel projects provides many opportunities for synergy. They don’t have to interfere with and impede each other — they can actually combine into something greater than the sum of its parts. Each one can make the others easier, more fun, and more profitable.
He goes further to say that if you look at his schedule, the activities that produce 81% of his income takes up only 34% of his time. This is deliberate: his consulting activity, for instance, usually produces content and ideas that he can use for writing and course design afterwards; this makes up for the fact that consulting takes up 24% of his time and produces only 13% of his revenue.
The point is that Forte’s activities are a mix of lucrative and not lucrative, long-term and short-term, idea-generating and idea-consuming. Forte asserts that the key principle that makes portfolio thinking work is what he calls ‘the principle of opportunistic addition’: that is, ‘there are many things you can spend time on that add value when done in moderation, but whose returns quickly diminish the more of it you do.’
The trick, then, is to construct a portfolio of activities where each activity is allocated time below the point of diminishing returns.
The Principle of Opportunistic Addition
Forte takes the author James Clear as an example of this principle in action. Clear is a book author who also does speaking engagements. He makes far more money from each speaking engagement than he does from each sale of his book. Does this mean that he should fill his schedule with non-stop speaking engagements?
Forte argues: no, he shouldn’t.
The two activities reinforce each other: with less books, he wouldn’t be able to do the speaking engagements — but this is obvious. Less obvious is the fact that without Clear’s speaking engagements, it is likely that he would have to do more time-consuming activities (read: consulting gigs) in order to buy himself writing time. Below a certain limit, speaking engagements are an effective way for Clear to acquire the time needed for deep work. Go above the limit, however, and Clear is unable to write new books; this reduces his future speaking opportunities.
The point that Forte makes is that the limit is the thing. If you go beyond that limit, the synergistic benefits of a given career activity taper off. These diminishing returns mean that you can over-allocate on a career activity the same way you can over-allocate risk exposure on a particular class of security.
I’m struck by Forte’s clear framing of diminishing returns on generated value. This isn't purely monetary; instead, Forte evaluates the effects of each activity on the other components of his portfolio.
- Online courses and corporate trainings are time-efficient sources of income.
- Consulting is less efficient as an income-generating activity. But it generates ideas and forces Forte to do research on new topics that may power his writing for months to come. Forte then ploughs these ideas into other value-generating work.
- Performance coaching is time-consuming, but it also generates non-monetary value that makes the time-cost worth it. This is because it forces Forte to dive into someone else’s productivity systems; the insight he gains from inhabiting a foreign view feeds into his subsequent performance on other activities.
The key point is that each activity serves as a node in a network of value-creating activities. Forte takes pains to highlight that this isn't a funnel, it is a network: nearly every activity generates trust and advances his credibility; some contribute a measure of income, others create or nurture leads and ideas.
I like this a lot. I think one of the major tensions of my current work life (circa June 2019) is managing the balance between multiple activities:
- I write for this blog and for Management For Startups.
- I coach a manager at my old company, helping him become a better manager for the team that I built in my last job. Lessons learnt here go to my writing for MFS in (1).
- I do content marketing consulting for another company, which takes up two days of my time each week. Like (2), this generates income, but it also allows me to practice content marketing at a different level. Ideas I learn here feed back into both blogs.
- I have a 52-books-a-year goal this year; the books I read more often than not supports the work I do in (1) and (3).
- I run a bunch of career-related experiments that feed into Commonplace’s writing; currently this is a deliberate practice program for writing concise posts; an attempt to apply the Critical Decision Method to my work in (3), and a paper reading program for treating ‘time allocation as capital allocation’.
- I also build products — currently a book, and after that’s done I’ll be looping back to finally finishing Commoncog.
In the past, I often chafed at the fact that some activities ate into the time necessary for revenue generating work; Forte’s method of framing all the activities as a portfolio of mutually-reinforcing activities lifts some of the pressure from this view.
Is this generalisable beyond freelancing? I have my doubts.
Forte’s approach demands that you have activities with mutually-reinforcing upsides. Despite his assertion that this is relevant to ‘managers, entrepreneurs, and collaborators’, this isn’t always true.
The truth is that most day jobs aren’t enhanced by a portfolio of synergistic activities. At my previous job, my role as country manager did consist of a portfolio of activities, but that didn’t mean that they were synergistic!
Another way of looking at this is that day jobs usually have capped upsides; freelancing and entrepreneurial work often do not. If you enhance your career prospects by upskilling on nights and weekends, you are allocating time to an activity with some upside to your primary job, but that level of upside is still lower than the benefits Forte or Clear reap when they learn. In fact, their learning activities nurture future leads and generate future consulting opportunities; yours do not.
(Of course, this isn’t to say that you can’t make it work in your specific job. The one activity that generated synergistic upside during my previous job as manager was my writing a series of blog posts on lessons I had learned in management, as I was experimenting with various management techniques. This led to a) increased performance on the job b) some good conversations with fellow managers in my professional network, c) the backbone of a training program that I used to train my replacements and d) one good hire, who applied purely on the strength of my posts. This was by accident, and I suspect you'd have to be creative about it — but at least you'll now have Forte's ideas to guide you. If you can pull it off, however — more power to you!)
Where Forte’s ideas are universally generalisable, I think, is his observation about diminishing returns. Certain career-related activities benefit you in small, possibly non-monetary ways; just be careful to constantly re-evaluate if you’re allocating your time to those activities at a justifiable percentage.
In practice, this means scheduling sessions to reflect on your time allocation at a regular cadence. It's probably a good idea to set a recurring reminder at the end of each month to think about the percentage of time you give each activity in your career.
And if you’re not happy with the rate of return — perhaps because it's diminishing? Well, you know what to do.