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Management Lesson: The Law of Diminishing Returns

Time is time. No one can buy more time. You can buy more labor if you think it will help your team do more work faster, but that’s not the same thing as adding time to a project. The law of diminishing returns dictates that adding labor doesn’t exponentially increase productivity; in fact, at some point productivity can even go backwards.

For a real-life example, consider that two hardworking and experienced programmers working on a project. In order to finish the project on time, you decide to add one more programmer. Now the programmers may be completing the code more quickly, you decide to add six more programmers so that the project can be finished even sooner. You soon realize that although adding one programmer increased your productivity, adding six more only created chaos with creating a contentious environment. You reached the point of diminishing returns when you added six programmers.

Bottom line: You can’t build a house in a single day even with 100 people.

73 thoughts on “Management Lesson: The Law of Diminishing Returns

  1. Great work! This is the type of info that should be shared around the internet. Shame on Google for not positioning this publish higher! Come on over and seek advice from my site . Thank you =)

  2. You really make it seem so easy with your presentation but I find this topic to be really something that I think I would never understand. It seems too complicated and extremely broad for me. I am looking forward for your next post, I’ll try to get the hang of it!

  3. perfectly true author!!, those software projects have failed who add more cook on emergency to prepare the broth.

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