Without fail, every one of our semiannual Dealer Summits drops several ideas to swim in my brain for weeks on end. And the record-setting 2023 Precision Farming Dealer Summit in St. Louis did not disappoint.
More so than for its reporting value, most often it’s something that I can also apply to our own business at Lessiter Media. That’s the beauty of reporting on, and communicating with, the caliber of business professionals who we cover daily in our machinery titles – free consulting.
It was a dealer-to-dealer roundtable in St. Louis that spurred one of these moments this year. Prior to his address at the Summit, Skip Klinefelter, owner of the fast-growing independent group, Linco-Precision LLC, spoke up on the ongoing staffing challenges dealers are facing to satisfy the endless demand for precision ag services. He introduced many of us in that small room to Price’s Law. As Klinefelter explained to his very attentive peers, British scientist Derek Price proved that 50% of the outcome of any activity is executed by the square root of all participants.
In other words, if you have 10 people, 3 will prove responsible for 50% of the outcome. The other 50% gets handled by the other 7 people.The size of the department or the company is irrelevant; the number of contributors doing one-half of the work boils down to that square-root number. And if considered a law of nature, it’s not something that can be fixed nor manipulated.
I did a quick review on areas where the output measurement was fairly transparent (like completed content project assignments and sales), and found it’s pretty much spot on for us, too, if not even a bit conservative.
A few observations as I’ve let it wander around upstairs since hearing from Skip:
- Doing the arithmetic on Price’s Law number quickly reveals and reminds you of your golden geese – in any given department and organization. Next time you’re reviewing the dollar volumes, the work orders completed, the transactions, etc., note your square root calculations and the outcome balance of the contributors, and of course, who they are.
- The law doesn’t account for the size of the outcome but rather those who contribute toward it. For our business, it’s important to also note how stages of life can change. The top performers of yesteryear won’t necessarily mean the same results exist today, or will tomorrow. Employee motivations, technologies, as well as changes in the customer base are all in constant flux. The relative size of the outcome, even with the same players may be smaller while the Law’s principles remain intact.
- The law indicates that not everyone on the team can be a high-performer. It reminded me of a resignation letter I accepted years ago from one who felt they couldn’t match the results of the others, even though they were performing in a new territory, just as the rest of the top performers had just a few years earlier. Evidently, I hadn’t understood Price’s Law at that time or I would’ve been able to better communicate both of our expectations.
Adding bodies isn’t the answer, say students of Price’s Law, despite the common misconception that more results come only via more bodies. Take a 9-person department. By Price’s Law, this means 3 are responsible for 50% of output. So the department would need to add 7 bodies to the payroll (to 16 in total) just to get 1 more individual to reach a participating level of 50% output. In today’s world where qualified talent is both scarce and wildly expensive, loosely adding to payroll compounds competency issues and is highly frustrating inside and outside your company (including but not limited to your top performers). And the pressures of payroll often result in chasing what perhaps never should have been pursued in the first place. That’s a blog for another day … why stopping or exiting a segment or service to concentrate on your “sweet spot” may be the best decision for talent appropriations today.
I’m reminded again of the words “let the big dog eat.” The context here is about clearing the path for your top-performers, as long as missions are aligned and these “big dogs” are not damaging the esprit de corps.
Speaking of military terms, the observations on Price’s Law reminds me of the “foxhole test,” something our company looks at both corporately and at the peer level.
One of our core values under Teamwork is a commitment to keep your coworkers from failing, and hopefully aspiring to be named on their “foxhole test.” I wrote about this in a blog 12 years ago this month. Several recent events, including dialog yesterday with my 22-year-old Army Reservist in Kuwait, brought it back to the surface again.
First, imagine yourself stuck in a foxhole in a combat setting. Now for the test: you get to choose 2 of your co-workers to join you in that foxhole. What, and whom, will you value and trust the most when the chips are down and it’s all on the line?
In that February 2011 blog, I publicly shared a list of 6 items; that covered things like keeping wits under pressure, taking action, and being able count on another’s word as gold — without any excuses or reminders required of their word.
Those all still apply, but the depth of the “ask” seems more distant in the 2023 era. One I would add for 2023 is to recognize when the landscape has changed, and when the heat is indeed on.
What do you think of these 2 concepts and how they do, or don’t, work in your business? Email me at email@example.com or use the comment box below.
P.S. For the 9th Annual Dealership Minds Summit this August, we’re responding to requests for a sales-themed event that will provide solutions for dealers in farm machinery’s “new world order.” Executive Editor Kim Schmidt and I are working on the topics/presenters list right now; please let us know your ideas!
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