The KEY Questions: What is experience worth?

There was once a British warship docked at Southampton that was suddenly called into service as a result of some international emergency. The Captain, having assembled his crew and given them their orders, commanded that the ship leave dock immediately. His Chief Engineer ran through the usual checks then started up the engines but for some reason they failed to engage with the ship’s propellers, and no amount of tinkering with dials and valves made any difference.

Time passed and the ship didn’t budge. Then the Captain, in desperation, remembered the name of a retired engineer, a real old sea dog, with a reputation for being able to read an engine like you or I would read a magazine. He was promptly sent for.

The very old man arrived with a tatty leather pouch containing only two items. As the vast engine idled he took out the first, a stethoscope, and moved quickly from place to place, listening to the various rumbles and throbs emanating from its insides, like a doctor examining a patient. After only ten minutes he took out the second tool, a mallet, from his pouch. He thought for a moment and then delivered a crisp hammer blow to one very specific point of the engine, whereupon the propellers whirred into action. The grateful Captain thanked him, adding that the Royal Navy would be more than happy to reimburse him for his trouble. But he was quite staggered when the old man thanked him back and told him the price: £5,000.

The Captain stifled a laugh and respectfully pointed out that the engineer had only been on board for fifteen minutes. At that the old man patiently volunteered to do a breakdown of exactly how he had arrived at this price. The Captain agreed. Taking out a piece of paper the engineer wrote down the following:

For ten minutes labour                               – £15.00

For wear and tear of equipment               – £0.01

For knowing where to hit the engine       – £4,984.99

When we’re good at something, no matter what our area of expertise, it can seem trivial to us after a while, a little bit too obvious perhaps, so we tend to undervalue it. Anyone could do what we do, if they only knew how… But they don’t of course, and that’s why in matters of business we often need to remind ourselves of the value of what we do to the customer, regardless of the worth we may put on it ourselves. Just because something comes naturally doesn’t mean it wasn’t the result of many hours’ hard work. And it certainly doesn’t mean that anyone could do it.

Since I discovered the Three Principles behind all our experience I’ve begun to interpret this story a little differently. I used to think that it was simply pointing to a universal truth about us humans, namely that the more time we spend doing an activity, any activity, the better at it we tend to get. And that’s true of course. But then I think back to my early career as a salesman in the budding I.T. industry, back in the 80s. It may have been because I ‘didn’t know what I didn’t know’ but I seemed to have a real knack for the job.

I was only twenty years old and hadn’t really been in the job for long when the company I was working for received a shipment of 60,000 computer chips from Japan. There were twelve of us whose job it was to sell these chips, which had been bought for only £1.80 each. The recommended retail price was £3.60, making the company a reasonable profit on each one. I was sitting in the firm’s canteen when I heard the Head of Marketing bemoaning that the Japanese had now stopped manufacturing the chips because there was a glut on the market. I suggested that this was a golden opportunity to raise the price, but the man just laughed at me. ‘No-one’s going to want them if we do that’.

The very next day I called a manufacturing company to ask if they needed any of these chips and it turned out they did. I then went on to sell them the entire shipment, all 60,000, at ten times the RRP, £36.00 each. (I’ll leave you to do the math). I can’t use the ‘experience’ model to explain my success in that instance. Somehow I just ‘knew where to hit the engine’.

Where does your experience come from, and do you value it?