The Change Dude’s Blog

The Price is Right: Cracking the Code of Productivity

Leading a highly productive organization—that’s every executive’s dream, isn’t it? But here’s the catch: it’s like herding cats. I mean, have you ever tried to herd cats? Exactly.

In my line of work, productivity issues pop up like whack-a-mole. Weak leadership, lousy tools—you name it. Clients think tech can magically fix these bumps and potholes on the productivity road. Some even go all out on training programs, as if a few webinars will turn Bob from accounts into Steve Jobs. Spoiler alert: it won’t. Enter Price’s Law.

Understanding Price’s Law: The Square Root of Productivity

Price’s Law—the square root of productivity. Sounds fancy, right? Derek J. de Solla Price, who probably had too much time on his hands, came up with this in ’65. He basically said that if you have 100 employees, about 10 of them will do half the work. So, next time you’re in a meeting with 100 people, look around. Ten of them are actually doing something. The rest? Well, they’re probably forwarding memes.

This isn’t just office gossip. It’s everywhere! Academia, business, creative industries—yep, same story. It’s like we’re all part of one big, inefficient sitcom.

Then there’s the Pareto Principle—the 80/20 rule. It’s like Price’s Law’s less nerdy cousin. It says 80% of the effects come from 20% of the causes. Both say productivity is uneven, but Price’s Law is more like, “Hey, let me give you a precise math equation to show you just how much everyone else is slacking off.”

The Origins of Price’s Law

In the 60s, Price noticed that a few scientists were making most of the significant contributions. So, while everyone else was pretending to read their emails, these folks were doing all the actual work. Thus, Price’s Law was born and applied everywhere. Sales teams, coding departments, universities—you name it.

Organizational Structure Implications

Businesses can learn a thing or two from this. In a sales team of 100, about 10 people will close half the deals. The rest are probably just updating their LinkedIn profiles. Managers should identify their top performers and maybe, just maybe, reward them. Shocking idea, I know.

As companies grow, the number of genuinely productive people doesn’t keep pace. You end up with more dead weight, and things slow down. So, the key is to create an environment that keeps those top performers happy. Maybe don’t give them an open-plan office right next to the kitchen, yeah?

Real-world examples? Sure. In a research lab with 100 scientists, about 10 will come up with the groundbreaking stuff. The rest? Well, someone’s gotta make the coffee. In a tech company with 200 developers, about 14 will write the code that actually matters. The rest are probably arguing over tabs vs. spaces. In academia, out of 40 professors, around 6 will publish the papers that get all the citations. The rest are perfecting their PowerPoint animations.

Critics argue that Price’s Law simplifies complex human behavior. No kidding! But, even with its flaws, it’s a handy way to understand productivity.

Take Aways

Price’s Law offers a compelling perspective on productivity and performance within groups. By recognizing that a small number of individuals often drive a significant portion of the results, organizations can better allocate resources, identify top performers, and create environments that foster high performance. While it is not a one-size-fits-all solution, Price’s Law provides a valuable framework for understanding and refining productivity in various domains.

So, takeaway time: Price’s Law tells us that a small group often drives the bulk of the results. Spot these people, reward them, and don’t let the other ones drag the whole thing down. Easy, right? Well, it’s a start.

October 16, 2024 - Posted by thechangedude | Uncategorized | Business, Change Management, economy, Leadership