Law of Diminishing Returns by Celes

Law of Diminishing Returns

Wikepedia Law of Diminishing Return

When I studied economics in junior college, I learned about the law of diminishing returns, referring to a phenomenon encountered in labor and production. If you studied economics before, that wouldn’t be new to you.

Let’s say you have a plot of land growing maize. You want to use fertilizer to get the maximum yield (other conditions such as sunlight, water and oxygen are already in place). Fertilizer is the input, and yield is the return. However to do that, you need to understand two principles:

(1) Every additional unit of fertilizer generates a different increase in yield. The first few units probably gives a burst in yield compared to without fertilizer. After that, adding more fertilizer will still give more yield, but at a decreasing rate.

(2) There is an optimal point where adding X amount of fertilizer which will give you maximum yield. This is known as the point of diminishing returns. Any additional fertilizer beyond that will lead to a smaller increase in yield which does not justify the cost of buying more fertilizer. This is where the law of diminishing returns kicked in. The law refers to how every additional unit of input you put in leads to lesser and lesser additional output.

law-of-diminishing-returns

(3) If you continue to keep adding beyond that the point of diminishing returns, you will reach a stage where not only does your output not increase, your overall output decreases! In the case of the fertilizers, your overall yield will decrease because your crops get damaged or even killed.

Here’s another example – If you run a big restaurant and only have a cook, you are only going to get Y amount of cooked meals. Adding more cooks will definitely result in higher supply of cooked meals – initially. After that, you will reach a point where your additional output per new cook decreases instead even though the new cooks you are hiring have the exact same level of expertise as the existing ones. That’s because there is a limited number of kitchen supplies (pots, pans, stove, etc) which they can use.

If you continue to keep hiring beyond that point, you will hit a stage where overall output decreases with every new cook! That’s because everyone is going to start jostling and competing for kitchen supplies inside the kitchen, which results in a chaotic situation and affects the work of existing cooks. Cooking will less effective than if there are lesser cooks. This is also what they mean when they say ‘too many cooks spoil the broth’. ;)
Law of Diminishing Returns in Our Life

So how does this apply to the domain of personal growth? Everywhere! :D If you look closely, you can see this law in effect in different areas, probably more than you are normally aware of:

* Learning curve: After working at a new workplace for a period of time, your learning curve starts to slow down
* Daily work: After spending X amount of time at a certain task, your level of output decreases
* Recreation: After playing games/watching shows/engaging in your hobby for X number of hours, your enjoyment level decreases
* Sleep: After sleeping for X amount of hours, the amount you get rejuvenated by becomes smaller
* Exercise: After exercising for X amount of time, the amount of exercise you can do becomes lesser
* Friends: After spending X amount of time with your friends consecutively, your additional utility you get from hanging out decreases
* Eating: After eating X amount of food, your satisfaction of the additional food becomes lesser
* And many, many more

The ability to recognize the point of diminishing returns and cut off further activity from that point onwards can result in a huge benefits. These benefits can manifest in the form of increased productivity, fulfillment, happiness and vitality, depending on what area you are using it in.

If you are not conscious of the point of diminishing returns, you will fall into the trap of investing more input then your return is worth. That results in ineffective usage of your energy. This is something neurotic perfectionists are often guilty of. They keep hammering at a task, refusing to let go of it even till the last minute, because they want to beat them into perfection. In trying to fulfill their satisfaction of having a ‘perfect’ or near perfect outcome, they jeopardize the bigger picture. The effort they invested in trying to get the last few nuggets of output in place could have been more effectively spent in generating a lot more output in tasks. This is why quitting to win is so important.

The law of diminishing returns is related to the 80-20 rule. With 80-20 rule, 20% of your effort usually leads to 80% of output. The law of diminishing returns kicks in beyond the 20th percentile. With every additional unit of effort after the 20th percentile (this figure is dependent on the situation nature), the amount of output you get in return is minimal.

How do you find the point of diminishing returns then? It’s easy when the task is something quantifiable (such as with money, weight loss, time, etc). However, it gets tricky if you are involving intangibles, such as amount of happiness, fulfillment, quality of written work, and so on.

There isn’t a hard and fast rule to identify this. Obviously, if there is a radar that goes off whenever we hit the point of diminishing returns, that’ll make things a lot simpler ;) My advice is to use your gut feeling. Get a good sense of when you think you are not getting your worth of returns for the effort you are putting in. The best way to develop your gut is (1) keep building up your experience (2) constantly evaluate and exercise your gut every step of the way.

The point of diminishing returns doesn’t remain there forever. With increased skill level through leveling up, it takes more input for you to hit the point where you are getting negative output. When I initially started off writing posts at my blog in Dec ’08, the quality of the writing started to decrease in the 3rd hour of writing or so. After 6 months of experience in writing, I can maintain the same quality of output even beyond the 4th hour. The point of diminishing returns has moved outwards since I’m now a more seasoned writer and I’m becoming more and more connected with my inner muse.
Be aware of diminishing returns in your life

Are there any areas in your life where the law of diminishing returns is in action? Here are some examples:

* Career:
o Are the additional hours you are spending at work justified with the additional work you finish?
o Are you past the point where you can learn and grow in your current role? Is it time to request promotion/advancement?
o Have you lost the passion for your work? Is it time to pursue something else you enjoy more?
* Relationships:
o Are you trying to keep up with so many friends that you are losing balance in your other priorities?
o Are you spending so much of your time with your partner that it has become an act of habit which does not result in increased fulfillment?
* Daily life:
o Are you sleeping more than necessary to become well-rested?
o Are you watching TV/playing games/engaging in recreation beyond what you really enjoy?
o Are you spending more time on facebook/twitter/social networking sites/forums than is necessary?

Exercise your gut and become conscious of the diminishing point. This will be an extremely important skill to use as you optimize your days and maximize not just your productivity, but also your happiness level.

Einstein’s Secret to Amazing Problem Solving (and 10 Specific Ways You Can Use It)

Einstein’s Secret to Amazing Problem Solving (and 10 Specific Ways You Can Use It)

Einstein's Secret to Jaw-Dropping Problem Solving

Einstein is quoted as having said that if he had one hour to save the world he would spend fifty-five minutes defining the problem and only five minutes finding the solution.

This quote does illustrate an important point: before jumping right into solving a problem, we should step back and invest time and effort to improve our understanding of it. Here are 10 strategies you can use to see problems from many different perspectives and master what is the most important step in problem solving: clearly defining the problem in the first place!
The Problem Is To Know What the Problem Is

The definition of the problem will be the focal point of all your problem-solving efforts. As such, it makes sense to devote as much attention and dedication to problem definition as possible. What usually happens is that as soon as we have a problem to work on we’re so eager to get to solutions that we neglect spending any time refining it.

What most of us don’t realize — and what supposedly Einstein might have been alluding to — is that the quality of the solutions we come up with will be in direct proportion to the quality of the description of the problem we’re trying to solve. Not only will your solutions be more abundant and of higher quality, but they’ll be achieved much, much more easily. Most importantly, you’ll have the confidence to be tackling a worthwhile problem.
Problem Definition Tools and Strategies

The good news is that getting different perspectives and angles in order to clearly define a problem is a skill that can be learned and developed. As such, there are many strategies you can use to perfect it. Here are the 10 most effective ones I know.
1. Rephrase the Problem

When a Toyota executive asked employees to brainstorm “ways to increase their productivity”, all he got back were blank stares. When he rephrased his request as “ways to make their jobs easier”, he could barely keep up with the amount of suggestions.

Words carry strong implicit meaning and, as such, play a major role in how we perceive a problem. In the example above, ‘be productive’ might seem like a sacrifice you’re doing for the company, while ‘make your job easier’ may be more like something you’re doing for your own benefit, but from which the company also benefits. In the end, the problem is still the same, but the feelings — and the points of view — associated with each of them are vastly different.

Play freely with the problem statement, rewording it several times. For a methodic approach, take single words and substitute variations. ‘Increase sales’? Try replacing ‘increase’ with ‘attract’, ‘develop’, ‘extend’, ‘repeat’ and see how your perception of the problem changes. A rich vocabulary plays an important role here, so you may want to use a thesaurus or develop your vocabulary.
2. Expose and Challenge Assumptions

Every problem — no matter how apparently simple it may be — comes with a long list of assumptions attached. Many of these assumptions may be inaccurate and could make your problem statement inadequate or even misguided.

The first step to get rid of bad assumptions is to make them explicit. Write a list and expose as many assumptions as you can — especially those that may seem the most obvious and ‘untouchable’.

That, in itself, brings more clarity to the problem at hand. But go further and test each assumption for validity: think in ways that they might not be valid and their consequences. What you will find may surprise you: that many of those bad assumptions are self-imposed — with just a bit of scrutiny you are able to safely drop them.

For example, suppose you’re about to enter the restaurant business. One of your assumptions might be ‘restaurants have a menu’. While such an assumption may seem true at first, try challenging it and maybe you’ll find some very interesting business models (such as one restaurant in which customers bring dish ideas for the chef to cook, for example).
3. Chunk Up

Each problem is a small piece of a greater problem. In the same way that you can explore a problem laterally — such as by playing with words or challenging assumptions — you can also explore it at different “altitudes”.

If you feel you’re overwhelmed with details or looking at a problem too narrowly, look at it from a more general perspective. In order to make your problem more general, ask questions such as: “What’s this a part of?”, “What’s this an example of?” or “What’s the intention behind this?”.

For a detailed explanation of how this principle works, check the article Boost Your Brainstorm Effectiveness with the Why Habit.

Another approach that helps a lot in getting a more general view of a problem is replacing words in the problem statement with hypernyms. Hypernyms are words that have a broader meaning than the given word. (For example, a hypernym of ‘car’ is ‘vehicle’). A great, free tool for finding hypernyms for a given word is WordNet (just search for a word and click on the ‘S:’ label before the word definitions).
4. Chunk Down

If each problem is part of a greater problem, it also means that each problem is composed of many smaller problems. It turns out that decomposing a problem in many smaller problems — each of them more specific than the original — can also provide greater insights about it.

‘Chunking the problem down’ (making it more specific) is especially useful if you find the problem overwhelming or daunting.

Some of the typical questions you can ask to make a problem more specific are: “What are parts of this?” or “What are examples of this?”.

Just as in ‘chunking up’, word substitution can also come to great use here. The class of words that are useful here are hyponyms: words that are stricter in meaning than the given one. (E.g. two hyponyms of ‘car’ are ‘minivan’ and ‘limousine’). WordNet can also help you finding hyponyms.
5. Find Multiple Perspectives

Before rushing to solve a problem, always make sure you look at it from different perspectives. Looking at it with different eyes is a great way to have instant insight on new, overlooked directions.

For example, if you own a business and are trying to ‘increase sales’, try to view this problem from the point of view of, say, a customer. For example, from the customer’s viewpoint, this may be a matter of adding features to your product that one would be willing to pay more for.

Rewrite your problem statement many times, each time using one of these different perspectives. How would your competition see this problem? Your employees? Your mom?

Also, imagine how people in various roles would frame the problem. How would a politician see it? A college professor? A nun? Try to find the differences and similarities on how the different roles would deal with your problem.
6. Use Effective Language Constructs

There isn’t a one-size-fits-all formula for properly crafting the perfect problem statement, but there are some language constructs that always help making it more effective:

* Assume a myriad of solutions. An excellent way to start a problem statement is: “In what ways might I…”. This expression is much superior to “How can I…” as it hints that there’s a multitude of solutions, and not just one — or maybe none. As simple as this sounds, the feeling of expectancy helps your brain find solutions.
* Make it positive. Negative sentences require a lot more cognitive power to process and may slow you down — or even derail your train of thought. Positive statements also help you find the real goal behind the problem and, as such, are much more motivating.
For example: instead of finding ways to ‘quit smoking’, you may find that ‘increase your energy’, ‘live longer’ and others are much more worthwhile goals.
* Frame your problem in the form of a question. Our brain loves questions. If the question is powerful and engaging, our brains will do everything within their reach to answer it. We just can’t help it: Our brains will start working on the problem immediately and keep working in the background, even when we’re not aware of it.
* If you’re still stuck, consider using the following formula for phrasing your problem statement:
“In what ways (action) (object) (qualifier) (end result)?”
Example: In what ways might I package (action) my book (object) more attractively (qualifier) so people will buy more of it (end result)?

7. Make It Engaging

In addition to using effective language constructs, it’s important to come up with a problem statement that truly excites you so you’re in the best frame of mind for creatively tackling the problem. If the problem looks too dull for you, invest the time adding vigor to it while still keeping it genuine. Make it enticing. Your brain will thank (and reward) you later.

One thing is to ‘increase sales’ (boring), another one is ‘wow your customers’. One thing is ‘to create a personal development blog’, another completely different is to ‘empower readers to live fully’.
8. Reverse the Problem

One trick that usually helps when you’re stuck with a problem is turning it on its head.

If you want to win, find out what would make you lose. If you are struggling finding ways to ‘increase sales’, find ways to decrease them instead. Then, all you need to do is reverse your answers. ‘Make more sales calls’ may seem an evident way of increasing sales, but sometimes we only see these ‘obvious’ answers when we look at the problem from an opposite direction.

This seemingly convoluted method may not seem intuitive at first, but turning a problem on its head can uncover rather obvious solutions to the original problem.
9. Gather Facts

Investigate causes and circumstances of the problem. Probe details about it — such as its origins and causes. Especially if you have a problem that’s too vague, investigating facts is usually more productive than trying to solve it right away.

If, for example, the problem stated by your spouse is “You never listen to me”, the solution is not obvious. However, if the statement is “You don’t make enough eye contact when I’m talking to you,” then the solution is obvious and you can skip brainstorming altogether. (You’ll still need to work on the implementation, though!)

Ask yourself questions about the problem. What is not known about it? Can you draw a diagram of the problem? What are the problem boundaries? Be curious. Ask questions and gather facts. It is said that a well-defined problem is halfway to being solved: I would add that a perfectly-defined problem is not a problem anymore.
10. Problem-Solve Your Problem Statement

I know I risk getting into an infinite loop here, but as you may have noticed, getting the right perspective of a problem is, well, a problem in itself. As such, feel free to use any creative thinking technique you know to help. There are plenty to choose from:

You may want to give yourself an Idea Quota of problem statements. Or write a List of 100 problems to solve. SCAMPER your problem definition. These are just some of dozen techniques you can try.

Of course, how much effort you invest in defining the problem in contrast to how much effort you invest in solving your actual problem is a hard balance to achieve, though one which is attainable with practice.

Personally, I don’t think that 55 minutes of defining a problem versus 5 minutes acting on it is usually a good proportion. The point is that we must be aware of how important problem defining is and correct our tendency to spend too little time on it.

In fact, when you start paying more attention to how you define your problems, you’ll probably find that it is usually much harder than solving them. But you’ll also find that the payoff is well worth the effort.

Litemind

Exploring ways to use our minds efficiently.

10 commandments for a Good customer Service

Customer Service Quotes

10 Ways To Explain Things More Effectively By Calvin Sun

In the course of your work, you may sometimes need to explain technical concepts to your customers. Having them understand you is important not only for technical reasons, but also to ensure customer satisfaction. The ability to explain things clearly and effectively can help you in your career, as well. Here are a few tips to help make your explanations understandable and useful.

#1: Keep in mind others' point of view

You've probably seen the famous illusion that looks like either a young woman or an old woman. Two people can look at that same picture, and they can have opposite views of what they're seeing. Keep this idea in mind when explaining a concept. Something that might be perfectly understandable to you might be incomprehensible to someone else. Don't be the person customers complain about as using "geek speak."

2: Listen and respond to questions

It's easy to become annoyed when someone is asking questions. However, try to resist that reaction. A better attitude is to be happy that the other person is interested enough to ask questions. To minimize confusion and misunderstanding, try to paraphrase or summarize a question before you answer it. This step is particularly important if you're in a group setting, and you've just taken a question from someone in the audience. Repeating the question for the entire group helps everyone better understand your answer.

#3: Avoid talking over people's head

When you explain things to people, do their eyes glaze over? Chances are it's because you're talking over their head. Symptoms of such behavior include the use of jargon and acronyms. Remember, the people you're talking to probably lack your specialized knowledge, so you should use readily understandable terms.

The same goes for acronyms. They're important, but if you use them, define them in "longhand," followed by the acronyms in (parentheses), so that everyone's clear. Doing so avoids the scenario of situation normal, all fouled up (SNAFU).

Even within IT, the same acronym can mean different things. For example, both "active server page" and "application service provider" have the acronym ASP. A story from the Vietnam War era further illustrates this point. A young woman brought her boyfriend home to meet her father, a retired military officer. The woman was nervous because the boyfriend was a conscientious objector. When the father asked the young man to talk about himself, the latter replied, nervously, that he was a CO. The father clapped the young man on the back and congratulated him, thinking the latter was a commanding officer.

#4: Avoid talking down to people

Avoid the other extreme as well. Don't insult people by assuming that they're only as intelligent as a three-year-old. An attendee at one of my communications training classes described it aptly as "Barney communications."

Greek mythology has references to two monsters, Scylla and Charybdis, who sat on opposite sides of a narrow strait of water. If a ship sailed too close to Scylla, it was destroyed and the sailors eaten up. If the ship sailed too close to Charybdis, it was destroyed by a whirlpool that Charybdis created. The ship had to go right between them to survive. Follow that same principle with your customers: Make your explanations neither too complicated or too simple.

#5: Ask questions to determine people's understanding

The people you're talking to shouldn't be the only ones asking questions. You should be asking questions as well, to make sure they understand. Your questions can be open ended, which gives people a chance to provide detailed information, or they can be closed ended, which generally calls for a simple yes/no response. In either case, asking questions tells people that you're interested that they understand.
#6: Focus on benefits, not features

What's the difference? A feature is some inherent property of an object. A benefit, on the other hand, is a way the feature helps a person. For example, one of the features of a Styrofoam cup, because of the material used, is insulation. Someone who's planning a party probably doesn't care how the cup provides insulation. That person is more interested in the fact that such a cup keeps hot things hot and cold things cold.

In the same way, try to focus on benefits of technology rather than features of technology. This distinction becomes more important the higher the level of the person you're talking to. The CFO probably has little need to know about the specific commands and steps involved in setting up database mirroring. That person will want to know, however, that such a practice reduces the chances of data loss.
#7: Use analogies to make concepts clearer

An analogy involves explaining an unfamiliar concept in terms of a familiar one. For example, in drawing an analogy between a firewall and a bank teller, you could say that people don't just go directly into a bank and take money out. They go to the teller and identify themselves; the teller makes sure they have enough money; and then the teller gives them the money. Similarly, a firewall ensures that people who want access to a system really are permitted to have that access.

When choosing an example for an analogy, first figure out the general principle you're trying to explain. Then, choose something from real life that illustrates that principle. Say, for example, that you're trying to explain memory leaks. Suppose you conclude that the principle involved is that of taking without giving back completely. An example/analogy might be the consequences of pouring a cup of pancake batter into successive measuring cups, or the consequences of lending money to your brother-in-law.
#8: Compare new concepts to familiar ones

Another illustrative technique is to use a familiar or existing product as a comparison. If you're explaining a new release of a software product, the comparison is easy. Simply discuss the additional capabilities it has over the previous one or how key features are different. If the person hearing your explanation is also an IT person and is familiar with different or older technology, try explaining in those terms if you can. For example, when explaining thin clients, consider a comparison to the old 3270-type terminals that IBM once used for connection to mainframes.
#9: Use the concepts of subsets and supersets

Brooklyn is a subset of New York City, because all of it is a part of that city. Conversely, New York City is a superset of Brooklyn, because the former contains, in addition to all of the latter, other boroughs as well. These concepts are helpful in describing, for example, a "lite" versus a "professional" version of a software product. If the latter does everything the former does, plus more, it truly is a superset of the former, and the former is a subset of the latter. Be careful, though: If the "lite" version does even one thing that's missing from the professional version, there's no longer a subset/superset relationship.
#10: Confirm that your explanation makes sense

Once you've finished explaining your point or answering a question, ask a final question yourself. Make sure the people who heard your explanation truly did understand it. Consider asking them to give you the explanation in their own words, just to double-check.
About the Author

Calvin Sun works with organizations in the areas of customer service, communications, and leadership. His Web site is http://www.calvinsun.com and his e-mail address is csun@calvinsun.com.