How to Assess ‘Diminishing Returns’ Of Whatever We Do?
Edition #061
Introduction
Welcome to The ContraMind Code.
The ContraMind Code provides you with a system of principles, signals, and ideas to aid you in your pursuit of excellence.
The Newsletter shares the source code through quick snapshots for a systems thinking approach to be the best in what you do.
The Code helps you reboot and reimagine your thinking by learning from the best and enables you to draw a blueprint on what it takes to get extraordinary things done. Please share your valuable thoughts and comments and start a conversation.
Take a journey to www.contraminds.com. Listen and watch some great minds talking to us about their journey of discovery of what went into making them craftsmen of their profession to drive peak performance.
How Elon Musk Seeded The Idea of Transforming The Future of Education
Elon Musk deeply felt that the education system should change for a long time, and he created a school- Adastra, for his kids and the SpaceX employees located at the SpaceX factory. And now, Synthesis is adopting this concept at scale.
Elon’s thoughts were as follows:
Why do we continue teaching kids the same as we did 100 years ago when success looks entirely different today?
Ditch the assembly line model — no grade levels. Age segregation doesn't work because kids have different aptitudes and interests that vary across time.
Problem-focused, not tool-focused. Learning to use tools is pointless and boring unless those tools help you solve a real problem.
At Adastra, children do not take a class in front of a teacher but instead participate in group work where they are free to explore their interests and passions. The school is located on an idyllic campus near San Francisco Bay, which means that kids get to exercise every day by playing outdoors or taking part in activities such as kayaking or rock climbing.
The school’s unique approach has already seen great success, with many students achieving higher grades and better test scores.
Synthesis is the most innovative learning experience from that school. It is designed to cultivate student voice, strategic thinking, and collaborative problem-solving.
You'll be able to read more about it here.
David Senra - Yvon Chouinard: Patagonia's Founding Principles
In the review & reflections of the book - ‘Let my people go surfing’ by Patagonia’s founder Yvon Chouinard, David Senra, who is the host of Founders, brings to light Yvon Chouinard’s exceptional clarity of thinking, Yvon’s understanding of the pure form and function of the product vision that he wanted to create, his ambition for the brand while not compromising on the core principles and values he believed in, will blow just your mind.
Here are some key learnings:
Having a big ambition is essential: Can a company that wants to make the best-quality outdoor clothing in the world be the size of Nike? - That was Yvon’s ambition.
Focus on the Product - Make it so good and unique that there is no competition for it.
The importance of maintaining a balance between design and functionality.
Learning by doing is essential. Also, be willing to step forward if it works well or step back if it is not working right. There is no room for emotional feelings in business decisions.
Finally, summarised beautifully by David - ‘Yvon is a master in the art of living as he draws no sharp distinction between his work and his play.’
The best ones will find it hard to differentiate when work and play start and end.
The Secret To Giving Great Feedback
In this TED video, LeeAnn Renninger, who is a co-founder of LifeLabs, also a researcher, curriculum design specialist, and co-author of many top-selling books like The Leader Lab: How to Become a Great Manager, Faster and Surprise: Embrace the Unpredictable & Engineer the Unexpected etc. talks about the problems of giving feedback and shares her views on ‘The secret to giving great feedback.”
Here are some key takeaways:
LeeAnn talks about the importance of feedback being brain-friendly.
Either the feedback being given is indirect and so soft or sometimes very confusing that the brain of the person to whom the feedback is being provided cannot recognise the message!
Else, the feedback being given is at the other end of the spectrum, which is direct, and this ends up with the person receiving feedback getting defensive.
She has studied closely how the brain processes this feedback, and the Amygdala, where the brain senses whether there is a social threat and helps the person decide to move forward or retreat.
She shares four ideas for giving great feedback, borne out of her extensive research work in this area.
You can go ahead and watch the above video. Don’t forget to take notes about the four ideas that were shared, and see if you can incorporate them into your daily meetings consistently.
How to Assess ‘Diminishing Returns’ Of Whatever We Do?
This is an important question that got triggered reading the article on Elon Musk’s approach to transforming education or listening to Yvon’s conviction of what he dreamt Patagonia should not be or LeeAnn Renninger’s thoughts on giving feedback as sometimes the brain does not recognise the feedback message.
So, what is the Law of Diminishing Returns?
The law of diminishing returns is an economic principle stating that as an investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.
Identifying the variables, their relative impact over time and their root causes
Doing what we are comfortable with or have been used to doing them involuntarily over many years or by observing how generally things are done around us, or what a majority of the people around us seem to believe in or doing irrespective of whether it works or fits with our beliefs or strengths or not - may be the fundamental root cause of why we don’t observe enough of what we do, as we continue to do things and not determine if it is working or not for us. Also, when it is not giving the desired results, we don’t go back and assess it deeply to either do some tweaks or try something else to get the results we want.
The industrial era from the 1880s to 1970s required a particular kind of education method, and it was designed to produce and reward skills that helped mass production. It rewarded ‘efficiency’ - be it Production Efficiency, Education Efficiency, People Efficiency, Distribution Efficiency etc. Therefore, ‘economies of scale’ worked well. However, in the present knowledge and information era, the accent seems to be on ‘economies of scope’, and it requires both ‘economies of scope’ and ‘economies of scale’ to work in tandem.
‘Economies of Scope’ require work to be done on lower average costs, but the cost is spread across a variety of products. In comparison, ‘Economies of Scale’ require lower average costs, but the amount of what is produced increases. Right now, we are living in an era of ‘Economies of Scope’ where there is a need for new skills in shorter time horizons, requires new mental models of production thinking, and looking at alternative ways to solve problems and achieve outcomes in the work that we do. In addition, there seems to be a need for ‘mass customisation’ of products or services, and it is touching industries that were never touched before or existed. This era requires ‘thinker’ and ‘doer’ skills simultaneously.
However, when we look back, the industrial era produced a higher ratio of doers and a lower ratio of thinkers. But the knowledge and information era requires a higher proportion of thinkers and a lower proportion of doers or an equal balance of thinkers and doers. But, be it our education systems and methods, how companies assess, recruit and retain talent or envisage the production and management of knowledge or information work is entirely different from that of the Industrial era.
The Incredible Era of Talent Vacuum
What we see now around us is that there is an abundance of people with degrees, certifications, talent and skills. Still, they are being created or produced for the industrial rather than the information era.
This has created a ‘Talent Vacuum’, a scenario never seen or experienced before. Everyone or every company individually agrees about this during one-to-one chats but has refused to take the bull by its horns. And that is exactly what Elon Musk seems to have done. He has questioned the fundamental premise of education systems and methods, what value it delivers for today’s requirements etc. He saw the need to redraw assessment methods, recruitment, rewards etc., in the context of what the workplace of today or the future will need and the urgent need to instil in people new professional skills, a renewed purpose of being ruthlessly honest about themselves and then having the ability in them to think and find solutions for themselves and the organisations they work for.
Simply put, the law of diminishing returns kicks in when things are done repeatedly as a chore and not from the head or the mind. It soon starts to show in rapid decay of relevant skills needed in people as the environment or ecosystem changes around them rapidly, or for companies, it results in lost product opportunities, delayed product launches, poor satisfaction scores, ballooning costs, margin depletion, lack of risk-taking and innovation in fear of being pulled up for failure or poor performance and in the work environment diplomacy starts to take precedence over ‘honest conversations, reflection and acceptance’ and also producing a lot of insecure leaders or managers or people, amongst many other variables.
Applying the ‘Law of Diminishing Returns’ to people and companies is more than just a number; instead, it is a more nuanced sense or feeling. Because feeling comes from deeper observations of the reality around, genuine acceptance of the problems, taking personal accountability, and finding a solution.
When you see these variables having lower and lower scores over time, it is time to assess and see if what has been done for a long time is giving the desired results in the new environment. Or if there is a need to take a different approach to tweak or change how things are being done to create a higher impact on the above variables for better results and outcomes.
Some of the lessons we learnt from this week’s mission:
It would be best to rewire what you do when the environment around us changes. It is hard but necessary, which is not easy.
You need to shun ‘herd mentality’ and start to do things that you develop deeper convictions about and stick to them during testing times or crises.
Feedback is a two-way street. It is not about what message you deliver but also about the non-verbal cues you will need to keenly observe and pick them up as you deliver the message.