Law of Diminishing Returns

Jon M Quigley

Let’s say we have a field full of wheat, and we have no automated equipment so the field will need to be harvested manually. We gather up our friends and commence harvesting and we are, on average, able to harvest 10 bushels per person per day (this is a fictitious example so it may not in fact be possible to harvest that much wheat per day).  We need to get the harvest completed by a certain date, so we add a few more people to our work entourage. We go out into the field and once again, we average 10 bushels per person per day.  We add one more person to this harvesting crew, and we have a new rate of accomplishment, 8 bushels of wheat per person per day.  This is a demonstration of the law of diminishing returns. In present day, in my experience, happens vary frequently in project management.  We are late, so we add more and more people to the work. This is often referred to as crashing the project, or all hands on deck moments.

If you have ever worked on a project that all of a sudden find the project to be way behind the planned or anticipated schedule, and rather than adjust the schedule or ascertain the reason for the schedule variance.  What parts of the project have been delivered later than expected and why for example?  First of all, a large schedule variance should be seen long before it becomes a large schedule variance.  This comes with follow up on the project work, and identifying key metrics of project performance., but that is beside the point.

The idea that it is possible to through large amounts of talent or as some call it human resources, can solve our schedule woes, flies in the face of this law, yet this happens.  In every training event and speaking event that have had anything to do with project management, suggest this to be a common approach to solving the scheduling problems.  There are no studies of which I am aware, that suggest this approach ever works, a project behind schedule typically remains behind schedule.  There are cost implications in addition to this law of diminishing return.

Some of the reasons this law of diminishing returns does what it does:

• our existing team members must mentor / coach the new team members on how this project works
• not all team members have the same level of domain experience or skill in the area
• more than just the talent (human) dimension must often grow to maintain the same rate (other fixed factors)
• variation in project delivery factors and the ability to substitute via other project delivery means (outsourcing)

By and large throwing talent (human resources) at a project that is late will not ensure the project to be delivered on time, to the contrary actually.  By throwing everything a the project late, the cost for the project gets out of control. It is far better to monitor variance early, and take proactive measures when schedule variance or schedule performance index show variation to which we are uncomfortable and work to solve this earlier rather than a stressful throwing everybody at the problem which will result in a late and over budget project.