Optimal Growth and Productivity in Organizations (UMAP)

We examine the interaction of growth and productivity. We put forth a very simple model to enable managers to understand better what occurs as new team members are integrated into an existing organization. While the model is straightforward, it does permit some interesting predictions. We show with some simple graphs how the various factors interact, with a cautionary note on nonlinear relationships. Once we have understood the implications of the model, we need to do whatever we can to mitigate the negative effects of growth. While there are no clear answers to all the problems that growth presents, we suggest some measures that directly affect the parameters to which the model is sensitive. Experience shows that paying careful attention to these factors can pay big dividends. This article sits at the intersection of organizational development and project management. The organization needs to cope with the problems of growth in order to prosper, while the projects that it does need to be concerned with productivity and cost. These two needs are often seen to be in conlfict, requiring delicate tradeoffs. We attempt here to show areas of commonality and ways in which both objectives can be achieved.

Table of Contents:

INTRODUCTION

THE NAIVE MODEL

THE EFFECT OF NEW HIRES
Contribution
Drag

THE MODEL AND ITS ASSUMPTIONS

CONSEQUENCES OF THE MODEL

NAILING THE MULTIPLIER

USEFUL HOURS ADDED TO PRODUCT

WHAT ABOUT COST?

AN ILLUSTRATIVE EXAMPLE

A NOTE ON NONLINEARITY

CALL TO ACTION

CONCLUSIONS

APPENDIX A: NOMOGRAPH

APPENDIX B: SPREADSHEET

REFERENCES

ABOUT THE AUTHOR