What is Expertise Worth?

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There’s an old story about industrialist Henry Ford. The generator in his automobile plant shut down. None of his engineers could fix it, so Ford called his old friend Charlie Steinmetz, a gifted electrical engineer. With a few tools Steinmetz tinkered with the generator and in no time it was working again. When Ford got a bill from his friend for $10,000, he questioned the huge fee. Steinmetz sent him back a simple, itemized invoice, which stated:

  • $10 for new part
  • $9,990 for knowing where to put it.

Henry Ford paid the bill without question.

As a consultant, I’m often confronted with clients who wonder about fee structures and the cost of the services I provide. I have been asked, “Why should I pay you that much money if it only took you an hour to do it?”

What often goes missing in these conversations is the value of expertise. Many businesses pay their employees based upon the hours they work. This ends up being a quantitative model that equates value with the number of hours spent on an activity. Expertise is driven by qualitative metrics, meaning that experts are evaluated based upon their ability to solve a problem. Experts provide value by leveraging their experience to meet their client or employer needs.

Bob Ross was the landscape painter who was made famous by his TV show “The Joy of Painting.” On his show, he was able to produce beautiful watercolor paintings within the confines of his half hour show. When people asked him how this was possible, he simply responded, “It takes 20 minutes and 20 years.” Upon further questioning, he explained that the only way that he could produce those paintings in 20 minutes was because he had been practicing and refining his techniques for more than 20 years.

Bob Ross passed away in 1995. If you look on eBay, you’ll find his smaller paintings start at over $5,000. His larger ones go for over $15,000.

Not bad for 20 minutes worth of work.

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