As an entrepreneur, I’ve often found myself juggling a never-ending list of tasks. From managing my team to handling clients, there’s always something demanding my attention. It’s easy to think that working harder or longer hours will increase my productivity and help me achieve success. But the truth is, pushing myself too hard only leads to burnout and diminishing returns. In my quest to become a more effective leader, I discovered a game-changing principle that has helped me reclaim my time and focus on what truly matters. That principle is the Theory of Comparative Advantage.

In its simplest form, the Theory of Comparative Advantage, first introduced by the economist David Ricardo, suggests that each party (whether a person, business, or country) should focus on what they do best and delegate or outsource the rest. For businesses, this means not trying to do everything, but rather concentrating efforts on areas where you can offer the most value. Similarly, as a leader, it means recognizing that my time and energy are limited, and I must focus on the tasks that only I can do or where my skills are most impactful.

When I first came across this idea, I was overwhelmed with the demands of leading a growing business. I felt like I had to do it all — from overseeing day-to-day operations to being the face of the company. But I quickly realized that by spreading myself too thin, I was compromising my effectiveness and the success of my company. If I wanted to scale my impact, I needed to rethink how I managed my time.

Step 1: Remove Tasks for Which You Have No Advantage

The first step in adopting this principle is to identify and remove tasks that I have no real advantage in handling. For example, early on in my entrepreneurial journey, I took on roles that, in hindsight, didn’t align with my strengths. I found myself involved in tasks like managing day-to-day finances, organizing events, and handling marketing content — all things that could be handled by my team or outsourced.

While these tasks were important, I wasn’t the best person for the job. I realized that by holding on to them, I was limiting my ability to focus on what truly required my expertise. It took some time, but I began delegating responsibilities to team members who had the skills and capacity to take them on, freeing me up to focus on strategic leadership.

Step 2: Delegate Tasks with Modest Advantages

Once I had freed myself from tasks I had no advantage in, I took a closer look at those where my advantage was only modest. For instance, while I had some financial knowledge, it wasn’t where I excelled the most. I realized that I needed to invest more time in building relationships with clients and stakeholders, areas where I had a much stronger comparative advantage.

Delegating tasks that were within my reach but not aligned with my unique strengths allowed me to better serve my business in the long run. For example, I delegated more of the financial strategy to my Financial Director, while I focused on creating high-level business strategies and forging important partnerships. This allowed me to be more present in the areas where I could make the biggest difference.

Step 3: Focus on What Only You Can Do

The third step is about honing in on tasks that no one else can do. For me, this meant stepping back and asking myself: What are the unique contributions I can make to my business? What are the strategic decisions that only I can drive?

As the leader of my company, it was essential for me to spend time on things like shaping the vision and culture of the company, building strategic partnerships, and leading my team. These were the areas where I could make the most impact, and where my personal touch was irreplaceable. By reclaiming time spent on less important tasks, I could dedicate my energy to creating a lasting legacy and future-proofing my business.

Step 4: Prioritize Leadership Development

As my company grew, I realized that my role was no longer just about being the best at my craft. It was about developing other leaders within my organization who could take the reins and continue the company’s growth. Leadership development became a key priority. By investing time in mentoring my team, I ensured that the business could thrive even without my constant involvement.

This shift not only helped me grow as a leader but also empowered my team to step up and take ownership of key areas. It was a win-win — I was able to focus on high-level strategy, and my team was motivated and equipped to execute.

The Results: Leading to Win

By applying the Theory of Comparative Advantage to my leadership approach, I was able to make the hard decisions necessary to focus on what truly matters. I now spend less time on tasks that can be handled by others and more time on strategic initiatives that require my unique perspective and expertise. This has allowed me to lead my business more effectively, build a stronger company culture, and set the stage for sustainable growth.

As a South African entrepreneur, I’ve learned that being busy doesn’t necessarily equate to being productive. To truly succeed, I had to recognize where I could add the most value and make the tough calls to delegate the rest. In doing so, I’ve not only improved my own productivity but also created an environment where my team can thrive and contribute to our collective success.

For any leader feeling overwhelmed, I highly recommend adopting this mindset. The Theory of Comparative Advantage is a powerful tool that can help you reclaim your time, focus on what matters, and lead your organization to success.

Learn more about the Theory of Comparative Advantage and how it applies to leadership from the Harvard Business Review article.