[netwanderer3]

Companies that strive to improve their effectiveness can develop a methodology to apply this principle from top to bottom.

A good manager will identify the optimal point for each of his team members. This optimal point will serve as a target performance ceiling for managers to motivate and encourage their staffs to work toward to. If we try and push them over this point then we will begin trading output quality for needless productivity.

For someone at the top, it’s important to determine the optimal point for your organization’s current equilibrium state as well. The goal is to always operate within this state, but slowly and incrementally move the equilibrium point up over time as your organization develops and increases its capacity.

Depending on each industry, the degree to which this principle will affect organizations will vary. For example, it would be more decisive to those who produce creative content as their main output since the negative impacts can be very noticeable and highly detrimental, whereas a manufacturing business relying on human labor can be quite flexible in re-adjusting their capacity.