5 ms·

The 3/2 rule of employee productivity

120 points by mixmax 16y ago

kylemathews 16y ago
It's not just bureaucracy + increased communication costs of course. At some point, it just becomes harder to find as many skilled employees to hire either because there isn't any left (a common problem when looking for skilled developers) or the really talented people are looking for smaller/younger companies where they can get outsized returns.
- mixmax 16y ago
  I think this is the exact problem Goolge is facing right now. It's increasingly hard for them to keep their high standards in hiring worldclass engineers and hackers. There simply aren't that many of them.
  - umjames 16y ago
    If that's the case, then why not stop hiring until more sufficient talent becomes available? Does this mean that Google's new hires are primarily there to increase headcount?
    - RickHull 16y ago
      You seem to present a dichotomy for employment motivations: securing talent (i.e. so Facebook can't have 'em) vs. increasing headcount. However, Google is probably hiring because they have more opportunities and workload than their existing employee base can handle.
    - thematt 16y ago
      It's a difficult situation to be in. Google can't stop hiring because the only asset the company has is brainpower. If they don't continue to recruit the best they will wither into just another internet company. Many large companies can sit on their existing products because there exists some competitive advantage that prevents competitors from overtaking them in the near term. Google's competitive advantage is the algorithms and data, both of which result from having top talent, hence the need for them to continue hiring.
      - mkramlich 16y ago
        I'd argue that brainpower is not their only asset. It's an important input, but not their most important "asset". True assets can't walk out the door one day and not come back. People can do that, at any time. I'd say that Google's best assets are their vast technology infrastructure that's been "proven" and optimized for performance, reliability, etc., plus their brand and their existing userbase inertia. Employees can come and go. They are very useful and valuable. But Google's codebase and hardware isn't going to simply disappear one day on a whim. Folks like Guido and Vint Cerf and Thompson and Kernigan, etc., just might. Plus humans have egos and ambitions and dreams, and get old and tire or lazy or want lifestyle changes. Code and machines do not. A true asset can be sold off like a commodity. An employee cannot be sold off like this, not directly and explicitly anyway.
        jacques_chester 16y ago
        Google owns one unreproducible asset: its data. Indices, searches, clickstreams for hundreds of millions -- even billions -- of users, going back a decade.
    - far33d 16y ago
      Your responsibility to your shareholders is not to maintain the highest profits/employee - it's to deliver the highest total profit per share. If you need people, and can maintain the 3/2 ratio, you should add them.
      - neilc 16y ago
        Your responsibility to your shareholders is not to maintain the highest profits/employee - it's to deliver the highest total profit per share. Management is legally obligated to act in the long-term best interests of the company; that is NOT the same as "deliver the highest total profit per share." For more, see: http://en.wikipedia.org/wiki/Business_judgment_rule http://en.wikipedia.org/wiki/Business_judgment_rule http://crookedtimber.org/2008/07/25/what-obligation-maximise-what/ http://crookedtimber.org/2008/07/25/what-obligation-maximise...
  - btmorex 16y ago
    Is that really Google's problem? I mean I realize there aren't a lot of great engineers, but it seems to me that their primary problem is that they are no longer the "hot" company to work for. I think all companies reach this point as they mature. Either they have to start paying a lot more than their competitors or they have to lower their standards. Most companies do some of both (best example would be Microsoft right now, they have good engineers, but not as good as they used to. They also pay well)
    - thematt 16y ago
      A third option would be to break the company up and let the by-products run like small companies that need to survive, potentially making it more attractive for recruiting purposes.
    - mixmax 16y ago
      The two are probably linked. A hot company for hackers is one where there are other hackers that are great. Once you reach the point where your company isn't only staffed with only great hackers but also merely good developers the company seizes be as hot as it was. It's a hard problem to solve. Especially if, like Google, you're a publicly traded company that needs to grow constantly to appease investors. Growth means hiring more people.
    - jamesaguilar 16y ago
      Personally I think Google has plenty of engineering talent. It's not that they don't have enough people to design the bridge, they just don't know exactly where it is suppose to go.
cullenking 16y ago
I wonder at what point it starts dropping off. I know that if I added two employees to our company (currently just my co-founder and I), we would be vastly more efficient, since neither of us would have to context switch so much.
netmau5 16y ago
Sometimes I wonder why big corporations can even exist competitively as there is such downward pressure on productivity as they grow. Some companies handle this better than others, Amazon being one that comes to mind first, but everyone ultimately suffers a significant efficiency loss at scale. The only reasonable answer that occurs to me is that the economies of scale and available capital provide such a dominating competitive advantage as to allow outmaneuvering of smaller companies whom are 10x as profitable.
- bioh42_2 16y ago
  Sometimes I wonder why big corporations can even exist competitively as there is such downward pressure on productivity as they grow. High barriers of entry. In 99% of cases the barrier is either capitol requirements, government regulation or both. Or to put in other words, any business which can be challenged by a startup, will be. And it is only a matter of time until enough startups iterate through enough business plans until they find one that will steal your business. So either be productive or be behind significant barriers to market entry.
  - _delirium 16y ago
    Network effects are a major barrier as well. The biggest problem facing a Facebook or eBay competitor, and the problem that's faced various would-be Windows competitors, is that it's hard to beat a platform that derives value in large part from its ubiquity.
zeteo 16y ago
This study seems fundamentally flawed. The Fortune 500 are the 500 companies with the highest revenue. This means that smaller companies only make it into the Fortune 500 if they already have very high revenues/employee. Since costs/employee are necessarily bounded, what the study ends up comparing is the productivity in the most profitable small companies with the productivity in the (roughly) average large companies. That's a serious sample bias and invalidates the conclusion, IMO.
- duncanj 16y ago
  It's the S&P 500. I agree, though, that it is not a very good sample.
- notahacker 16y ago
  Exactly. It's not that diseconomies of scale don't exist, but this study doesn't really show them. Every company in the S&P 500 is big enough to suffer from levels of bureaucracy unheard of in smaller companies; virtually all of them are as unwieldy as they are large. This isn't showing Walmart is less profitable per employee than thrifty independent retailers and small, focused chains. It instead illustrates the unremarkable fact that Walmart is less profitable per employee than Goldman Sachs.
  - vacri 16y ago
    It would be interesting to see a study done on profitability per employee based against employee wage. Now it's just a hunch, but my guess is that Goldman Sachs with it's approaching-six-figure average employee wage is going to be a lot more profitable per employee than mega-marts employing minimum-wagers by the thousand.
- achompas 16y ago
  I would upvote you 10 times if I could, if only because your comment should be pinned at the top of this thread. The fundamentals of this study are very flawed, and anyone reading the article should know as much.
- ora600 16y ago
greenyoda 16y ago
Whether it's possible for an employee to contribute a huge amount of profit is highly dependent on the business and the function of the employee. If you're a restaurant chain (like one of the examples in the article), and most of your employees are waiters or cooks or delivery drivers, then there's no way that any one of them can possibly generate a million dollars of profit. If you're a software developer or a banker, then you can. Making generalizations across such widely different business categories doesn't seem to make sense. A better methodology would have been to track productivity per employee vs. number of employees, but broken down by industry group. Then you could see if the relationship is true of only some industries, or across all of them.
- chibimagic 16y ago
  It is broken down by industry group. If you look at the graph, each industry is a different color.
  - Zakharov 16y ago
    It's fairly hard to tell from the graph, but it seems that if you look at any particular industry, the gradient is much less steep.
  - greenyoda 16y ago
    It's not really broken down by industry group, since there's only one trend line for all the data points, not a trend line for each industry group. So it's hard to see which industries match his hypothesis and which don't.
Jabbles 16y ago
I don't think the correlation is that strong. Most of the points are in the centre. Is there any statistical data on how strong the correlation is?
stcredzero 16y ago
It reminds me of the Main Sequence graph: http://www.google.com/imgres?imgurl=http://cs.wellesley.edu/~cs112/assignments/assign1/HR.jpg&imgrefurl=http://cs.wellesley.edu/~cs112/assignments/assign1/assign1.html&h=564&w=824&sz=51&tbnid=WJx5qfvKHs3FMM:&tbnh=99&tbnw=144&prev=/images%3Fq%3Dmain%2Bsequence&zoom=1&q=main+sequence&usg=__aFXgeDXUrr6JiJKYW-hy54_RHwk=&sa=X&ei=O1pUTa-FGcT_lgebycTbCg&ved=0CDMQ9QEwAg http://www.google.com/imgres?imgurl=http://cs.wellesley.edu/... I wonder where the White Dwarfs and SuperGiants are?
Isamu 16y ago
An update of this is at http://www.cybaea.net/Blogs/Data/Employee-productivity-as-function-of-number-of-workers-revisited.html http://www.cybaea.net/Blogs/Data/Employee-productivity-as-fu... This echoes the often-cited effect that communication overhead increases drastically with headcount. Barry Boehm: adding programmers to a late project makes it later.
- jacques_chester 16y ago
  > Barry Boehm: adding programmers to a late project makes it later. It was Fred Brooks who observed that. So famous is the observation that's known as Brooks' Law. Not to denigrate Barry Boehm, mind you, who is a fantastic researcher.
nocman 16y ago
One other potential problem I see with this study is that it doesn't seem to take into account that not all employees put in the same amount of time for an employer. For instance, some employees work only part time. So if 80% of your workforce is part-time, you're going to have a lot more employees than a company that produces the exact same profit with all full-time employees. The numbers would look a lot worse for you because of your high employee count, even if your productivity per employee-hour is the same. Also, in salaried situations, you may have some employees who work 60-80 hour weeks while others only work 40 hour weeks. Now the high hour-per-employee count will probably effect productivity in other ways (extended periods of long hours tend to actually reduce productivity), but the difference in hours-per-salaried-employee is going to have some bearing on productivity also. This may not make as big a difference as the part-vs-full-time situation, but it could be significant.
deleted 16y ago
[deleted]
duncanj 16y ago
I suspect that a relationship of this sort is due to Parkinson's law. But I have trouble identifying a power law from his graph.
radu_floricica 16y ago
Yet another flaw with this study is domain bias. Domains which require many employees per company are domains which are based on economies of scale, and usually have low profits per employee (manufacturing, retail). A better study to support (or refute) the conclusion would be one comparing similar companies.
spazmaster 16y ago
This study focuses on big corporations. I wonder how these findings would hold to small companies - let's say, that a company grow from 5 to a 100 employees. Management-layers and meetings would certainly bog down productivity, but as much as for large corporations, or more?
deleted 16y ago
[deleted]
ojbyrne 16y ago
Isn't this just rational behavior? As long as the marginal profit produced by hiring another employee > 0, then you hire another employee.
jonmc12 16y ago
Automation? With 100,000 robot waiters Darden Restaurants would have a much more favorable ratio.
stretchwithme 16y ago
Creative knowledge workers make more than those operating their creations. And companies that can really scale have many more of the latter.
j_baker 16y ago
I think it's a bit more nuanced than this. It's like the example given in the Mythical Man Month. If you want to grow corn, you can pretty much be assured that no matter what you do, you can harvest the corn more quickly if you put more people towards harvesting it. This is because harvesting corn is a partitionable task (in other words, you can easily divide the work up amongst an arbitrary number of workers). Of course, productivity per person will go down, but the overall rate at which you're harvesting corn will still grow. Programming isn't easily partitionable. Programmers need to communicate with each other to do their task. Thus, adding more people makes you progress faster up to a point. At a certain point, adding more people starts to slow you down. Therefore, individual worker productivity will go down more quickly faster than it would for the corn harvesters. Lumping all the different positions from all these different kinds of companies ignores these differences and really makes it difficult to apply the idea in general. For technology companies in particular, I'd say that the productivity loss can be even higher than 3/2.
- stoney 16y ago
  But that's assuming that you're hiring more programmers to do the same task. Programming is partitionable at a larger scale - if I hire more programmers I can start more projects/create more products. So I guess what I'm saying is that for a one product company, yes, there is a point where the productivity loss from adding another employee gets very big. But for multi-product companies (think Google, Adobe, Microsoft, Apple), more employees just means more parallel projects.
  - larrik 16y ago
    It would seem that way, but I seriously doubt all of those parallel projects exist in vacuum. They likely will share frameworks, they should certainly share UI elements and designs. I mean, Apple can't have the iPad, iPod, and iPhone teams not talk to each other, their clearly linked on numerous levels. Likewise, Microsoft's apparent reliance on "parallel projects" is why we geeks poke fun at them so much. Anyone remember the screen shot of the 20+ styles of Window decorations just in Microsoft products on XP? Or howabout the fact that the Windows team has to basically reverse engineer (or at least re-develop from scratch) all of the UI features of the Office team.
scotty79 16y ago
anything is linear if you use a log-log scale and a thick marker pen
hartror 16y ago
This throws aside IMO the major contributing factor, that these big companies generally run in heavily commoditized sectors where the margins have been forced down by the competition. High volume, low margin.
xeodox 16y ago
I'd think it's more steep than this.
mistermann 16y ago
I wonder how much can be attributed to: the larger you get, the less transparency, which contributes to the greater likelihood of hiring someone who is "corrupt". Most of the work I've done is at large corporations, and some of the things I see there, I can't fathom there not being a brown paper bag full of cash being involved somewhere during the decision making process. I was having lunch with a friend of mine the other day, and according to him, in his industry, it is routine for employees to take kickbacks in the form of "unrelated" consulting gigs through their side companies in exchange for choosing a certain vendor. That's just the way it works.

120 points by mixmax 16y ago

It's not just bureaucracy + increased communication costs of course. At some point, it just becomes harder to find as many skilled employees to hire either because there isn't any left (a common problem when looking for skilled developers) or the really talented people are looking for smaller/younger companies where they can get outsized returns.

mixmax 16y ago
I think this is the exact problem Goolge is facing right now. It's increasingly hard for them to keep their high standards in hiring worldclass engineers and hackers. There simply aren't that many of them.
- umjames 16y ago
  If that's the case, then why not stop hiring until more sufficient talent becomes available? Does this mean that Google's new hires are primarily there to increase headcount?
  - RickHull 16y ago
    You seem to present a dichotomy for employment motivations: securing talent (i.e. so Facebook can't have 'em) vs. increasing headcount. However, Google is probably hiring because they have more opportunities and workload than their existing employee base can handle.
  - thematt 16y ago
    It's a difficult situation to be in. Google can't stop hiring because the only asset the company has is brainpower. If they don't continue to recruit the best they will wither into just another internet company. Many large companies can sit on their existing products because there exists some competitive advantage that prevents competitors from overtaking them in the near term. Google's competitive advantage is the algorithms and data, both of which result from having top talent, hence the need for them to continue hiring.
    - mkramlich 16y ago
      I'd argue that brainpower is not their only asset. It's an important input, but not their most important "asset". True assets can't walk out the door one day and not come back. People can do that, at any time. I'd say that Google's best assets are their vast technology infrastructure that's been "proven" and optimized for performance, reliability, etc., plus their brand and their existing userbase inertia. Employees can come and go. They are very useful and valuable. But Google's codebase and hardware isn't going to simply disappear one day on a whim. Folks like Guido and Vint Cerf and Thompson and Kernigan, etc., just might. Plus humans have egos and ambitions and dreams, and get old and tire or lazy or want lifestyle changes. Code and machines do not. A true asset can be sold off like a commodity. An employee cannot be sold off like this, not directly and explicitly anyway.
      - jacques_chester 16y ago
        Google owns one unreproducible asset: its data. Indices, searches, clickstreams for hundreds of millions -- even billions -- of users, going back a decade.
  - far33d 16y ago
    Your responsibility to your shareholders is not to maintain the highest profits/employee - it's to deliver the highest total profit per share. If you need people, and can maintain the 3/2 ratio, you should add them.
    - neilc 16y ago
      Your responsibility to your shareholders is not to maintain the highest profits/employee - it's to deliver the highest total profit per share. Management is legally obligated to act in the long-term best interests of the company; that is NOT the same as "deliver the highest total profit per share." For more, see: http://en.wikipedia.org/wiki/Business_judgment_rule http://en.wikipedia.org/wiki/Business_judgment_rule http://crookedtimber.org/2008/07/25/what-obligation-maximise-what/ http://crookedtimber.org/2008/07/25/what-obligation-maximise...
- btmorex 16y ago
  Is that really Google's problem? I mean I realize there aren't a lot of great engineers, but it seems to me that their primary problem is that they are no longer the "hot" company to work for. I think all companies reach this point as they mature. Either they have to start paying a lot more than their competitors or they have to lower their standards. Most companies do some of both (best example would be Microsoft right now, they have good engineers, but not as good as they used to. They also pay well)
  - thematt 16y ago
    A third option would be to break the company up and let the by-products run like small companies that need to survive, potentially making it more attractive for recruiting purposes.
  - mixmax 16y ago
    The two are probably linked. A hot company for hackers is one where there are other hackers that are great. Once you reach the point where your company isn't only staffed with only great hackers but also merely good developers the company seizes be as hot as it was. It's a hard problem to solve. Especially if, like Google, you're a publicly traded company that needs to grow constantly to appease investors. Growth means hiring more people.
  - jamesaguilar 16y ago
    Personally I think Google has plenty of engineering talent. It's not that they don't have enough people to design the bridge, they just don't know exactly where it is suppose to go.

cullenking 16y ago

I wonder at what point it starts dropping off. I know that if I added two employees to our company (currently just my co-founder and I), we would be vastly more efficient, since neither of us would have to context switch so much.

netmau5 16y ago

Sometimes I wonder why big corporations can even exist competitively as there is such downward pressure on productivity as they grow. Some companies handle this better than others, Amazon being one that comes to mind first, but everyone ultimately suffers a significant efficiency loss at scale. The only reasonable answer that occurs to me is that the economies of scale and available capital provide such a dominating competitive advantage as to allow outmaneuvering of smaller companies whom are 10x as profitable.

bioh42_2 16y ago
Sometimes I wonder why big corporations can even exist competitively as there is such downward pressure on productivity as they grow. High barriers of entry. In 99% of cases the barrier is either capitol requirements, government regulation or both. Or to put in other words, any business which can be challenged by a startup, will be. And it is only a matter of time until enough startups iterate through enough business plans until they find one that will steal your business. So either be productive or be behind significant barriers to market entry.
- _delirium 16y ago
  Network effects are a major barrier as well. The biggest problem facing a Facebook or eBay competitor, and the problem that's faced various would-be Windows competitors, is that it's hard to beat a platform that derives value in large part from its ubiquity.

zeteo 16y ago

This study seems fundamentally flawed. The Fortune 500 are the 500 companies with the highest revenue. This means that smaller companies only make it into the Fortune 500 if they already have very high revenues/employee. Since costs/employee are necessarily bounded, what the study ends up comparing is the productivity in the most profitable small companies with the productivity in the (roughly) average large companies. That's a serious sample bias and invalidates the conclusion, IMO.

duncanj 16y ago
It's the S&P 500. I agree, though, that it is not a very good sample.
notahacker 16y ago
Exactly. It's not that diseconomies of scale don't exist, but this study doesn't really show them. Every company in the S&P 500 is big enough to suffer from levels of bureaucracy unheard of in smaller companies; virtually all of them are as unwieldy as they are large. This isn't showing Walmart is less profitable per employee than thrifty independent retailers and small, focused chains. It instead illustrates the unremarkable fact that Walmart is less profitable per employee than Goldman Sachs.
- vacri 16y ago
  It would be interesting to see a study done on profitability per employee based against employee wage. Now it's just a hunch, but my guess is that Goldman Sachs with it's approaching-six-figure average employee wage is going to be a lot more profitable per employee than mega-marts employing minimum-wagers by the thousand.
achompas 16y ago
I would upvote you 10 times if I could, if only because your comment should be pinned at the top of this thread. The fundamentals of this study are very flawed, and anyone reading the article should know as much.
ora600 16y ago

greenyoda 16y ago

Whether it's possible for an employee to contribute a huge amount of profit is highly dependent on the business and the function of the employee. If you're a restaurant chain (like one of the examples in the article), and most of your employees are waiters or cooks or delivery drivers, then there's no way that any one of them can possibly generate a million dollars of profit. If you're a software developer or a banker, then you can. Making generalizations across such widely different business categories doesn't seem to make sense. A better methodology would have been to track productivity per employee vs. number of employees, but broken down by industry group. Then you could see if the relationship is true of only some industries, or across all of them.

chibimagic 16y ago
It is broken down by industry group. If you look at the graph, each industry is a different color.
- Zakharov 16y ago
  It's fairly hard to tell from the graph, but it seems that if you look at any particular industry, the gradient is much less steep.
- greenyoda 16y ago
  It's not really broken down by industry group, since there's only one trend line for all the data points, not a trend line for each industry group. So it's hard to see which industries match his hypothesis and which don't.

Jabbles 16y ago

I don't think the correlation is that strong. Most of the points are in the centre. Is there any statistical data on how strong the correlation is?

stcredzero 16y ago

It reminds me of the Main Sequence graph: http://www.google.com/imgres?imgurl=http://cs.wellesley.edu/~cs112/assignments/assign1/HR.jpg&imgrefurl=http://cs.wellesley.edu/~cs112/assignments/assign1/assign1.html&h=564&w=824&sz=51&tbnid=WJx5qfvKHs3FMM:&tbnh=99&tbnw=144&prev=/images%3Fq%3Dmain%2Bsequence&zoom=1&q=main+sequence&usg=__aFXgeDXUrr6JiJKYW-hy54_RHwk=&sa=X&ei=O1pUTa-FGcT_lgebycTbCg&ved=0CDMQ9QEwAg http://www.google.com/imgres?imgurl=http://cs.wellesley.edu/... I wonder where the White Dwarfs and SuperGiants are?

Isamu 16y ago

An update of this is at http://www.cybaea.net/Blogs/Data/Employee-productivity-as-function-of-number-of-workers-revisited.html http://www.cybaea.net/Blogs/Data/Employee-productivity-as-fu... This echoes the often-cited effect that communication overhead increases drastically with headcount. Barry Boehm: adding programmers to a late project makes it later.

jacques_chester 16y ago
> Barry Boehm: adding programmers to a late project makes it later. It was Fred Brooks who observed that. So famous is the observation that's known as Brooks' Law. Not to denigrate Barry Boehm, mind you, who is a fantastic researcher.

nocman 16y ago

One other potential problem I see with this study is that it doesn't seem to take into account that not all employees put in the same amount of time for an employer. For instance, some employees work only part time. So if 80% of your workforce is part-time, you're going to have a lot more employees than a company that produces the exact same profit with all full-time employees. The numbers would look a lot worse for you because of your high employee count, even if your productivity per employee-hour is the same. Also, in salaried situations, you may have some employees who work 60-80 hour weeks while others only work 40 hour weeks. Now the high hour-per-employee count will probably effect productivity in other ways (extended periods of long hours tend to actually reduce productivity), but the difference in hours-per-salaried-employee is going to have some bearing on productivity also. This may not make as big a difference as the part-vs-full-time situation, but it could be significant.

deleted 16y ago

[deleted]

duncanj 16y ago

I suspect that a relationship of this sort is due to Parkinson's law. But I have trouble identifying a power law from his graph.

radu_floricica 16y ago

Yet another flaw with this study is domain bias. Domains which require many employees per company are domains which are based on economies of scale, and usually have low profits per employee (manufacturing, retail). A better study to support (or refute) the conclusion would be one comparing similar companies.

spazmaster 16y ago

This study focuses on big corporations. I wonder how these findings would hold to small companies - let's say, that a company grow from 5 to a 100 employees. Management-layers and meetings would certainly bog down productivity, but as much as for large corporations, or more?

deleted 16y ago

[deleted]

ojbyrne 16y ago

Isn't this just rational behavior? As long as the marginal profit produced by hiring another employee > 0, then you hire another employee.

jonmc12 16y ago

Automation? With 100,000 robot waiters Darden Restaurants would have a much more favorable ratio.

stretchwithme 16y ago

Creative knowledge workers make more than those operating their creations. And companies that can really scale have many more of the latter.

j_baker 16y ago

I think it's a bit more nuanced than this. It's like the example given in the Mythical Man Month. If you want to grow corn, you can pretty much be assured that no matter what you do, you can harvest the corn more quickly if you put more people towards harvesting it. This is because harvesting corn is a partitionable task (in other words, you can easily divide the work up amongst an arbitrary number of workers). Of course, productivity per person will go down, but the overall rate at which you're harvesting corn will still grow. Programming isn't easily partitionable. Programmers need to communicate with each other to do their task. Thus, adding more people makes you progress faster up to a point. At a certain point, adding more people starts to slow you down. Therefore, individual worker productivity will go down more quickly faster than it would for the corn harvesters. Lumping all the different positions from all these different kinds of companies ignores these differences and really makes it difficult to apply the idea in general. For technology companies in particular, I'd say that the productivity loss can be even higher than 3/2.

stoney 16y ago
But that's assuming that you're hiring more programmers to do the same task. Programming is partitionable at a larger scale - if I hire more programmers I can start more projects/create more products. So I guess what I'm saying is that for a one product company, yes, there is a point where the productivity loss from adding another employee gets very big. But for multi-product companies (think Google, Adobe, Microsoft, Apple), more employees just means more parallel projects.
- larrik 16y ago
  It would seem that way, but I seriously doubt all of those parallel projects exist in vacuum. They likely will share frameworks, they should certainly share UI elements and designs. I mean, Apple can't have the iPad, iPod, and iPhone teams not talk to each other, their clearly linked on numerous levels. Likewise, Microsoft's apparent reliance on "parallel projects" is why we geeks poke fun at them so much. Anyone remember the screen shot of the 20+ styles of Window decorations just in Microsoft products on XP? Or howabout the fact that the Windows team has to basically reverse engineer (or at least re-develop from scratch) all of the UI features of the Office team.

scotty79 16y ago

anything is linear if you use a log-log scale and a thick marker pen

hartror 16y ago

This throws aside IMO the major contributing factor, that these big companies generally run in heavily commoditized sectors where the margins have been forced down by the competition. High volume, low margin.

xeodox 16y ago

I'd think it's more steep than this.

mistermann 16y ago

I wonder how much can be attributed to: the larger you get, the less transparency, which contributes to the greater likelihood of hiring someone who is "corrupt". Most of the work I've done is at large corporations, and some of the things I see there, I can't fathom there not being a brown paper bag full of cash being involved somewhere during the decision making process. I was having lunch with a friend of mine the other day, and according to him, in his industry, it is routine for employees to take kickbacks in the form of "unrelated" consulting gigs through their side companies in exchange for choosing a certain vendor. That's just the way it works.