The Punctual Pigeon: tl;dr / executive summary
Time deadlines (‘We’ll finish it in four weeks’) are a mistake. The Punctual Pigeon effect means you’ll finish close to whatever deadline you set at the start.
Task deadlines (‘we’ll finish it when it’s done’) will help you produce higher-quality work, and make you more productive, more efficient, and more profitable.
Part 3 is about the implications of task-based deadlines for pricing and salaries.
Pricing according to task-based deadlines
Don’t price your product according to the time it’ll take to make it.
Instead, price it according to the complexity of the problems it poses, its scarcity, and its importance to the customer.
That’s a much truer reflection of its value.
If you can create something brilliant in five minutes and your customer can’t get it anywhere else, don’t charge them for five minutes’ work – they will pay much more than that, and it’s fair that they should do so.
Don’t give your customers a discount because of your team members’ speed and skill.
Task-based pricing will increase your profitability.
Value the valuable
How does task-based pricing relate to salaries?
Even in highly creative industries, where value creation is not closely linked to hours worked, the bonus component in most employees’ salaries is negligible (I know this holds in TV, the industry in which I work, and elsewhere too).
If you’re pricing according to the value of the task you’re completing, not the time you think it will take, employees should be paid according according to the value they help to create, not the time they spend at work.
That means that salaries should be restructured to include a lower basic salary and a larger potential bonus.
If the bonus is fairly assessed and awarded, it should incentivise employees to work smarter and more productively, and you’ll see less of the Punctual Pigeon.