Comparative Advantage

The mental model of Comparative Advantage is drawn from economics. Here’s the basic idea: even if one country has workers that are more efficient and skilled at everything than the workers in another country, the more skilled country will still be better off by outsourcing some of the work to the other country.

Tech leaders often advance in their career because they are highly skilled in specific technologies. And when they advance they take on new roles that require new skills. But many of those tech leaders refuse or resist giving up some of the work they are skilled at.

The mental model of Comparative Advantage suggests that even if a tech leader is better and more efficient at every type of work relative to the people on their team, they will still benefit from delegating some or all of that work. When taking on a new role with more responsibility there is usually higher-leverage work they could and should be doing. With a fixed number of hours in each day, they can provide more value in their role if they focus their time on that high-leverage work, even if they aren’t good at it yet.

The lessons for tech leaders are…

  1. Just because you are highly skilled at something, that doesn’t mean you should do it. There may be higher-leverage work that you should learn how to do. And you can start doing that work if you delegate the things you are good at.

  2. When you refuse or resist letting go of work that you are skilled at, you are taking away an opportunity for those around you to become skilled at it. As a leader, your job is to create more leaders like you. The future benefits are almost always more important than immediate efficiency.

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