How Much Did That Cost?

It’s always been somehow impolite to talk about money in most of the circles I mixed in growing up. But even then there was a cost awareness that crept into the conversation. People wouldn’t directly ask about things like that, but they’d come in from a side angle “where did you get that from?”

This cost awareness is deeply ingrained in all of us. In every case, we look for the ways to achieve our goals with the minimum expense. The biggest problem is that we often don’t think about how to manage our resources, or even which resources we are choosing to prioritize.

Think about one of those mobile games everyone gets sucked into. They always have two kinds of resource – the “gold” and the “gems” or something like that. You know you’ll always be able to get more gold easily, but the gems are hard to come by. And those gems are the ones that you’re tempted to go spending money on – even though you know you’re going to delete the game in a few weeks anyway. We get that concept immediately.

Scarcity teaches us what to value.

If you grew up playing games in the 90’s, you may remember something of a strategy game boom period. We saw games like Age of Empires, Alpha Centauri and Civilization. In these games, we managed multiple types of resource and would easily switch focus to the resources that we needed to unlock a new technology, to move past whatever was holding us back from advancing in our quest for world domination.

Strategy teaches us what to pursue.

Life isn’t so different from these games. In fact, these games can be a powerful tool for learning if we take the time to apply the lessons. But applied learning is another post altogether. The lesson we can take from these games is to be particular about what we pursue – things that are valuable for our cause as well as for their scarcity.

There’s this wonderful model raised in the Seven Habits of Highly Effective People which is simply two circles one within the other. They’re called the circle of concern, and the circle of influence.

circle-of-influence-circle-of-concern

This model is used to help people understand that there are some things they care about, but which are outside of their control. In this case we have very limited influence on scarcity (there will always be competitors offering similar products and services that you offer), but we can control the strategy.

Scarcity is often in our circle of concern, but Strategy is always in our circle of influence.

What this means for us is that our cost controls – especially in small, growing businesses – need to be focused first on strategy. This is more than just thinking about how you “spend” your time (although that’s also part of it). This is primarily about how we plan our strategy to pursue our organizational goals and objectives.

Measure twice, cut once.

One difference between these games and our personal and business lives is that the games limit our options, and display (prominently) exactly what we have, and what we need. It’s easy to develop a strategy when your options are limited. Play Noughts and Crosses for 10m and let me know if you’re able to work that one out. But as more options are made available to us, it becomes increasingly difficult to determine the best course of action – or even to get a clear picture of your current position. Watch a few games of grandmaster level chess, and compare that to your noughts and crosses session.

The point of this is that it’s vital for your success that you get a good sense of measurement – both what you currently have and what’s available to you with some effort. You can use this to develop a limited set of strategies that you can implement – go-to choices that enable you to make well considered decisions in a moment. Develop real plans around how you will break into that new vertical, or how you will make use of the new social platform to connect with new and existing customers. Allocate those resources you have to those plans so you know what it will cost you to execute on them. How much time do you need to put in to start seeing results? How does that change when you bring in a 3rd party or delegate some responsibility to your team? Can you call in favours, and is it the best option to do so for this opportunity?

The best part of this kind of planning is that once you’re prepared, you can take advantage of those moments that come up. And you’ll start seeing opportunities everywhere, because you now know what they look like.

Planning out how you will manage your resources is key to victory in many games. Planning out how you will manage your resources is key to success in life.

Learn from the game you love the most, and figure out how to apply that to your business, your investing, and your personal success.

What game have you learnt the most about life from? Add a comment below and let us know what the lesson was for you.

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