In real estate, a piece of property always has a 'highest and best’ use. Should the plot of land have a multi-family building on it or should it be a low density industrial warehouse? Land for the most part has a zoning ordinance on it that determines its use (except in Houston) and that dictates what can be built. A developer, however, might acquire the land and take it through an entitlement process to change its zoning, arguing both for the civic benefits of the new land use and also for the economic value of a higher-and-better-use.
In the labor market, a skilled worker always has a ‘highest and best’ use. Should the skilled electrical technician be working on commercial panel upgrades or transformer reconfigurations? Should a computer engineer who is adept at Python or NodeJS focus on building software for securing government platforms or blockchain platforms looking to unlock decentralization away from government strongholds? Everyone is unique in their desires and skillsets but one thing is apparent, labor markets are fluid and the highest and best use of a skilled worker twenty years ago might not be the highest and best use of their skills today. It goes deeper than that though as organizations are amoebic organisms that need to adjust with the times as they grow.
I’ve been thinking a lot about this and I find myself often times saying to my fellow leadership team, “is that really your highest and best use?” Maybe that was the case when we were ten people and you had to do everything but as the team has grown, how do you delegate so that you can focus on higher impact items? The risk in that statement is that you don’t want to build a dependent culture but like everything else, it’s a balance, and you need to find the right mixture of do-it-yourself initiative and empowerment of your team.
Just like in real estate, highest and best use is a good thing in aggregate because times change and an industrial zoning put in place in the mid-90s might not be the highest and best use for the land today.
So too, someone might have been hired to focus on customer success only to realize they are an absolute star sales person. Rather than boxing them in rigidly, you want to unlock their potential and move them to a higher-and-better-use if it aligns with the business goals.
Back to real estate, imagine if zoning was inflexible for land in Wynwood, Miami and it remained industrial despite the demand for high density housing in an artistic and industrial-chic part of town.
Similarly, imagine if you joined a company as a product leader but realized you were incredibly adept at marketing. In both scenarios, the organization writ large (city and organization) win in the end upon a “zone change.” Zone changes create economic value and unlocks a piece of lands’ highest and best use which is no different than labor markets as I see it.