Those of you who’ve been to our Dealer Summits know the power of the dealer-to-dealer roundtables and the aha-moments revealed in those settings. January’s record-setting Precision Farming Dealer Summit in St. Louis did not disappoint.
As the dealer-led conversation turned to demand-driven staffing challenges, Skip Klinefelter, owner of the fast-growing independent precision dealer group, Linco-Precision LLC, lent his perspective.
He introduced many of us to Price’s Law. As Klinefelter explained to his dealer 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.
A few observations:
- Doing the math on Price’s Law quickly reveals and reminds you of your golden geese. Next time you’re reviewing dollar volumes, work orders and transactions, note your square root calculations and the relative share of your contributors.
- The law states that not everyone can be a high-performer. I’m reminded of a resignation letter I accepted from one who felt she couldn’t match the results of the others on the team, even though she was performing adequately in a new role. Evidently, I hadn’t understood Price’s Law at that time or I could’ve better managed each of our expectations.
- Adding bodies isn’t the answer, say students of Price’s Law. Take a 9-person department. By Price’s Law, this means 3 are responsible for 50% of the output. So the department would need to add 7 bodies to the payroll (to 16 in total) just to get 1 more individual to participate at a 50% output level.
I reconnected with Klinefelter ahead of a precision event he hosted at his Illinois farm in mid-February. He elaborated on how he applies Price’s Law in his dealership.
“This eye opener led us to put more emphasis on the lower performing to help them obtain higher results,” he says. “We use guidance from the top to help raise all ships to try and overcome a percentage of the law.
“In livestock production, you’ll raise your average production more by culling the bottom than trying to reproduce the top. I believe most performers in the bottom one-third are not passionate enough or follow standard operating protocols enough to succeed. They’re comfortable in not producing, not following proven protocol, not excelling. Those are the ones we need to weed.
“I can’t teach passion, respect for proven protocol or timeliness. I can only show by example and pray for the best outcome for all our team members. We didn’t bring any of these folks into our family not expecting them to succeed.”
There are too many observations on Price’s Law to delve into here (please add your own observations in the comment box below). But I’m struck by what the arithmetic shows and also the impact of the scarcity and expense of qualified talent today. The competency issues following your unprepared hires, especially in technical services, will frustrate your customers and top performers alike.
So the smart play with today’s talent appropriation challenges may be to “just say no” to the idea of extending into the new horizons that your customer, OEMs or even an enthusiastic staffer might suggest. Leaders must choose which set of problems to deal with, and their knowns and unknowns.
By the way, at that same roundtable discussion, I learned of a brilliant (and profitable) planter service package requirement that ensures top priority for both parties while not wearing out your team. More to come on that in our next edition.
