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The Law of Diminishing Returns

The Law of Diminishing Returns - Tucker® USA

My Store Admin |

 

When I think about the effort I put into a task, I unconsciously do a calculation about how much time it will take versus how much time it can take. For example, the last time I cleaned my bathroom, I dug the caulking out of my tub surround and then used a drill-powered brush to dig out all the residue and then I caulked it all back in. It took me three hours to clean a bathroom that normally takes a half hour or less. Does it look five times cleaner than normal? No, it doesn’t. It looks almost the same as it normally does. That extra effort was for me, because I knew this was a better way that will make the bathtub cleaner, better sealed, and easier to maintain for years to come.

That extra effort was my choice. And if I was charging someone for this work, I wouldn’t be able to charge much more for the three hours than I would for the half hour, because generally customers pay for results, not for the time you put in. But if you have employees and one of your employees spent three hours on doing a perfect job, you’d lose money. You would have to pay them for their time and yet you can only charge for the results.

That is the Law of Diminishing Returns. The more effort you put into a task, you will have shrinking gains on results and money for every segment of time you put into it.

This is a very hard concept for your workers and it represents a balance you have to maintain as a boss. On one end of the spectrum you’ll have crewmembers who will try to get away with doing the bare minimum, cutting corners, sacrificing quality for speed, and generally doing poorly. Customers will complain about the results and you’ll know immediately. On the other end of the spectrum, you’ll have workers who will spend so much time chasing perfection that the amount you can charge will never justify the time and effort expended. Customers, on the other hand, will love them and congratulate you on such a great employee. Of course, they are getting far more value than they are paying.

Both ends of the spectrum are harmful to your business.

Yes, I basically said that when you deliver too high of quality, your business will suffer as much as when you deliver too low.

This is a really hard concept to gauge. It requires a tight and consistent awareness of how long things should take and a measure of what level of quality is both the lowest and the highest you’ll accept. You can say that you only accept perfection as a slogan, but in practice that’s financial suicide.

You Missed a Spot

I can walk up to any window cleaning job done by any window cleaner in the world and I can find mistakes. It’s a craft and there are always going to be small imperfections no matter how hard you try. But that’s okay. To a customer without the training and experience that I have, the job is going to look fantastic and that’s the level of quality you want - to the level which exceeds your customer’s expectations. If you try to get it to a level where I’m not going to find errors you’re going to spend double or triple the amount of time.

So do you want to tell your team that they need to do a great job, but not a perfect job? No. You tell them to strive to do the best that they can, but then you put them on a time limit. Get used to saying, “That’s good enough.” When it is. Or even finding two or three marks and still saying, “Great job.”

When I give trainees their speed test, I have a set number of panes of glass they need to get done in two hours. Then I inspect the work and I try to look at it with the level of care a moderately picky client would have. I don’t want to overly criticize someone who’s learning with tiny problems pointed out because if they do try for absolute perfection, they’ll never reach a level of speed we need in order to make jobs profitable.

Finding that Balance

The reason it’s your business and you set the standards is that the area between good enough and too good (or too much time) is yours to define. Trying to explain that to your crew either by description, inspection, or example is your job as well. This is probably the hardest bit of judgment you’ll have to do, because you’re going to have to admit to yourself that you’re accepting something that’s less than perfect and that someone “could” do a better job if they really put forth the effort.

Back to the internet forums, you’ll see people all the time saying they are the best, the most perfect, and have the highest quality. Whether it’s true or not is open for debate, but when I see that, I always think that this is a person who hasn’t spent much time looking at their bottom line. They also haven’t paid much attention to what it is that their customers want and expect, instead imposing their own standards over that of those who pay the invoices.

Take some time and really look into it. Walk through a job that your tech did and look at it with the idea of good enough versus too much. Offer compliments even for jobs that aren’t perfect. Make suggestions and help your crew with their speed.

I’m here if you have questions.

Rick Wren

Photo by Christophe Hautier on Unsplash