Pursuing Excellence – and Knowing When You’re There
If you are reading this, you are probably an achiever and have standards that you strive to achieve and exceed. But how do you set those standards and really know that you have achieved them?
The real answer, I think, is in the concept of "marginal utility" and "marginal cost".
Marginal utility refers to the benefit from putting forth additional effort. Let's say that, for example, you are mixing batter to make cookies. Once you have all of the ingredients in the bowl, you begin to mix them by hand. In the beginning it may be a little hard to mix, and it may also look like you are accomplishing very little mixing. But after a bit, things are beginning to move smoothly, and each swish of the spoon around the bowl seems to accomplish more and more. But after another little bit, each swish of the spoon around the bowl starts accomplishing less. In this example, your marginal utility starts out low but increases to a point and then begins to decline.
Similarly, marginal cost can vary throughout the task also. Back to our cookie batter mixing task, initially your cost of mixing can be high in the beginning and then decline precipitously to a low cost steady state. And while that cost of mixing may remain low, marginal utility declines to where eventually it is not even worth the cost.
Marginal Utility on Projects
The concepts of marginal utility and marginal costs apply directly to projects - to individual tasks as well as over the entire project.
First of all, it applies to the individual tasks on a project - whether developing a program, moving earth, performing market research, or building a house. There is a struggle to get things going in the beginning, where the marginal cost is high and marginal utility low. As the task picks up momentum, marginal cost decreases and marginal utility increases. There is usually a sweet spot where the marginal cost is lowest and marginal utility is greatest. Eventually the marginal utility trends lower, and the cost at some point becomes prohibitive.
This also applies across an entire project. Efforts in the beginning may set the stage, but they do not produce the output of the project. Eventually you reach the execution phase where you truly begin to produce something. As the project goes on, there is a need to, at some point, declare that the product is "good enough" - called "definition of done" on agile projects.
Marginal Utility and Teams
Another way that this applies to projects is in the management of teams. People are motivated to achieve something, and as a project manager you need to be aware of the phases of accomplishment on the project, as determined by marginal cost and marginal utility. As the leader, you need to coach your team to understand the concept and how to use it, and you need to monitor the project and set standards that are respectful of the concepts of marginal cost and marginal utility.
Marginal Utility and Personal Psychology
This post is all about pursuing excellence. Applying the concepts of marginal cost and marginal utility can help you avoid pursuing perfection to the detriment of excellence. And it can help you to know when you have achieved your goals and when you should stop. But there is a potential psychological downside that you need to be aware of.
We as individuals have developed personal standards for performance that is part of our personal psychology. As a result, people have different standards that need to be considered in different situations. Some situations may take an extreme amount of patience in order to achieve the optimal result. You need patient people to stick with it to where the marginal cost and marginal utility are optimized. Other situations may take a lot of energy and effort over time. You need hard-working, persistent people to reach the optimal points of marginal cost and marginal utility.
In the end, you need to recognize that you are pursuing excellence - not perfection. You need to acknowledge that there is a cost and benefit to everything, and that the costs and benefits are not fixed but rather shift marginally over time. Apply the concepts of marginal cost and marginal utility to optimize for excellence on your projects!