The iceberg.

The most dangerous part is forgetting it yourself

An owner who has done the same thing for twenty years stops counting on their own iceberg. It becomes obvious, meaning something that just sits in the hands, and then it makes no sense why a new colleague can’t manage it after one walkthrough.

It isn’t competence the new person lacks. It’s the fifteen years below the surface that one of them has and the other doesn’t. An instruction can only move the peak.

The same blindness makes it hard to set a price, hard to delegate and hard to explain to a board why something takes the time it takes. All of it comes back to the same thing: the person who is genuinely good at something is the worst in the room at describing what it cost to learn.

Ten thousand hours, and the things that were given up

The most common picture of what lies below the surface is time. Ten thousand hours is the figure most people have heard, and as a rule of thumb it does the job: getting really good at something takes longer than you think.

The figure shouldn’t be taken literally, though. It comes from a study in the nineties where ten thousand hours was an average for the most skilled group of violin students at the age of twenty, not a threshold anyone crosses. The researcher behind the study has said himself that the popular version simplified away the most important part, namely that it’s the content of the practice and not its quantity that decides.

But the hours are still only half the iceberg, and it’s the other half that tends to catch an owner out.

Below the surface lies everything that was given up as well. The athlete who got good trained while others were out celebrating, had no time for three other interests, missed dinners and trips. They haven’t only put time into one thing, they’ve refrained from a great many others. The same goes for anyone who has built a company: the evenings, the holidays, the years when nothing else fitted.

That’s worth saying out loud, because it’s exactly what a buyer gets access to without having had to give up anything themselves.

Which is why the price is often calculated wrong

Here the picture becomes genuinely useful, and the example is a procurement.

Two consultants in the same field submit a price. The buyer has a list of requirements, ticks off both CVs, and one of them is twenty per cent higher on the hourly rate. The more expensive one is dropped, and the decision looks rational on paper.

But the hourly rate isn’t the cost. The cost is the price times the number of hours. If the more expensive consultant is twenty-five or thirty per cent faster, they come out cheaper, and finished earlier as well, which is worth something in itself. There are several reasons for the difference, but the most common one is simple: the experienced one has already made the mistakes. They don’t need to feel their way to the right route, because they’ve gone wrong down all the others.

The same arithmetic applies to your own pricing. A customer who only sees the peak prices the peak, meaning the hours that went in on this particular occasion. That’s entirely logical, and it’s precisely why companies with long experience sometimes have the hardest time charging what they’re worth: they’re so good that the work looks easy.

This is where the iceberg meets Total quality. Expectation is set by what’s visible, and if you never tell anyone what lies underneath you get judged against a tenth of what you actually deliver. The solution is rarely to work more, it’s to make some of the invisible part visible before the price comes up.

Nobody can roll someone else’s ball, but you can walk alongside

The iceberg meets the snowball here. Nobody can build someone else’s iceberg for them, and that’s why the time can’t be shortened however much you’d like.

It can be shortened somewhat, though, and that’s the whole point of having someone experienced nearby. A coach can say which of the three options usually works, be there when it goes wrong, and point at the mistake while it’s still small. That doesn’t remove the need to do the thing yourself, but it does remove some of the detours.

It’s also the difference between training someone and developing someone. A training course moves the peak. Company below the waterline is the other thing.

Something to try

Recalculate a quote. Take a quote you lost on price. Write down what you judged the work would take in hours, and what you think the winner needed. Multiply both by their respective hourly rates. Were you actually more expensive? If not, you’ve just found the argument you were missing, and that argument is a calculation rather than an opinion.

Make the iceberg visible in one place. Pick something you do that looks easy to the customer and write down three lines: how many years, how many times, and which mistake you no longer make. Those three lines belong in the quote, in a short sentence about why you can promise what you promise.

Ask your most recent hire. What part of the work turned out to take far longer than they thought it would after the introduction? The answer is a map of what you’d forgotten your own experience even contained.

Write down the things you gave up, once. What haven’t you done in order for the company to become this? The list is uncomfortable and doesn’t belong in a brochure, but it explains to you why the work is worth its price.

In practice

The iceberg usually comes up in two situations.

One is handovers. Somebody is leaving, going on parental leave or handing over a responsibility, and the solution becomes a written routine. The routine is the peak and can be written in an afternoon. The question worth asking instead is what the person writing the routine won’t think to write down, since for them it’s no longer a step but simply the way it’s done. That question doesn’t get answered in a document, it gets answered by the two of them working side by side for a while, and that time has to be scheduled before the notice period runs out, not afterwards.

The other is price conversations. When a company feels squeezed on price, the cause is almost always that the buyer and the seller are talking about different parts of the iceberg. Arguing harder about the peak doesn’t help then. What helps is moving the conversation to what’s included below the surface, meaning to why it goes quickly, why it comes out right the first time, and what it’s worth to avoid having to redo it.

In Genomlysningen the iceberg turns up as a question of dependency. The bigger the iceberg sitting with a single person, the more vulnerable the company is, and the less it’s worth without them. Moving parts of the iceberg down into the structural capital is often the single most value-raising piece of work an owner can do.