In my recent Econ of the Firm class in my MBA program, we discussed certain laws including one of diminishing returns. This law simply states that the value gained from each additional resource obtained will eventually decline after a certain number of resources are obtained; hence it’s not economically feasible to continue purchasing more of that resource since it’s returned value will eventually be less than what the resource costs. I found this law to be quite fascinating, especially when applying it to my current job at a fulfillment or distribution center. At these types of facilities, a common strategy for completing huge volumes of orders in a short amount of time is by throwing all of our available resources at the task. So, with the law of diminishing returns in mind, where is how much too much?

Obviously, there’s a lot of logistical math that’s already been made and used to answer this very question and I will not go into that detail bit, (shamelessly, I’m not going into the math because I know I will get my ass handed to me by my industrial engineer friends and colleagues). But, I would like to go into the less-celebrated importance of providing the right resources to your team and not making cost the #1 priority.

As a supervisor of a department with up to 100+ associates at one time working hard to ship out orders, each day is plagued by the constant challenge of being more efficient with our labor and how we can get more shipments out per labor hour. As a human being, it’s even harder for me to ask for more from people who are already on their feet 10+ hours a day filling orders. However, expressing simple and honest gratitude to them daily does make a big difference in their day and productivity. On top of appreciating the people who work with you, providing them with the effective tools to make their jobs and the overall process easier makes the economic difference that upper-level managers are constantly looking for. So how do we do this?

Glad you asked! The first and foremost thing is to know your process and the problems your associates are facing. Get in the trenches with them. See what they see. In conjunction with the reality of the situation add the idealistic future expectations to generate a plan of what the business process should be, both in terms of the associate as well as meeting upper-level management objectives…which hopefully are one in the same. If they’re not, you either have a major coaching opportunity that needs to be taken care of or you’re trying to fix the wrong process. A lot of times I see, (and unfortunately do) managers not listening to the actual problems of the associates, when it’s vital to keep that feedback in higher regard than other potential cost-saving opportunities.

So the next question you may be asking is why? Again, glad you asked! Remember the law of diminishing returns discussed earlier? Well, empowering your employees with the right tools consistently through coaching and tangible resources can hold off the diminishing return threshold, aka keep increasing the returned value per additional resource longer. Trust your employees, provide them with the tools to be autonomous, and provide proper motivation for all to keep the law of diminishing returns from ruling the land. Long-term, this provides an excellent and efficient return on increased productivity from loyal and hard-working employees at all levels.

How do you or your company increase the returned value your resources provide for your life and/or business?

Photo credit: http://leadershipmanagement.com.au/motivate-and-dominate-5-motivation-strategies-to-increase-productivity/