Diminishing Returns - Mental Model

You need to find a new way of doing things because the old way won’t work forever.

We add more input and expect the output to increase proportionally.

For example:

•  we put more developers on a project to get work done faster

•  we put more features in the product to make users happy

We need to remember one important issue: putting in more effort doesn’t necessarily lead to better results.

The law of diminishing returns is a feature of complex systems, and used in Systems Thinking. It states that adding more resources or putting in more effort gives smaller benefits after a certain point.

The complexity plays its role:

• twice as many developers won't deliver twice as fast (Correlation Does Not Imply Causation)

• more features in the product may lead to lost clients who feel overwhelmed by new functionalities

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Solutions

There is no single solution, as we deal with different areas and scenarios. However, understanding the system you’re operating in can help prevent diminishing returns.

It's easy to say but hard to implement. Mapping complex systems is often difficult.

To see if we’re approaching diminishing returns, we should:

• Understand how our efforts impact our returns

• Observe if we’re improving at the same rate or starting to slow down

You’ll be surprised because you expect your progress to be steady, but your predicted positive trend starts to decline.

"What got you here, won't get you there.”

If you want to avoid diminishing returns in your career as an Engineering Manager, consider "EMpower: Hacking Engineering Management" our 10-minute-per-week email course:

Case: Running Faster

Since I started running seriously three years ago, I’ve been following the automatic training generated by my smartwatch. Every year, I beat my personal bests in every distance.

But this year, I failed. I broke my personal best only for the longest distance. Following the same routines with similar efforts didn’t lead to better results. That’s diminishing returns in action.

So, for the next year: what can I do to prevent it from going backwards?

• Try different approaches and address areas that haven’t been targeted before, like training at the gym or improving diet.

• Look for a professional trainer rather than relying on a protocol from a smartwatch.

You need to find a new way of doing things because the old way won’t work forever.

Summary

"What got you here, won't get you there.”
— Marshall Goldsmith

This quote is a great reminder that, without trying new things, we’ll eventually stop improving. What makes you a skilled senior engineer won't automatically make you a skilled engineering manager.

Understanding how diminishing returns happen over time can save your career or business. This knowledge is helpful in any area where you put in effort and need results.

Thanks for reading,

— Michał

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Post Notes

Discover Weekly — Shoutouts

Articles that might help you explore new perspectives, which I’ve read recently:

• "Overcoming Career Plateaus" by

  Samuel Kollát
  (highly relatable to this mental model)

• "5 Things you NEED to know before you become a manager" by

  Orel Zilberman

• "Engineering management in the next unicorn app" by

  Anton Zaides

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