Friday, March 14, 2008

The Cost of Excellence

Bobby Gruenewald of Swerve has posted some insightful thoughts on the cost of excellence. Check them out.

3 comments:

Anonymous said...

I think we are on the bisector oof the arc

Just my opinion...

David Wilcox said...

Anonymous, thanks for you comment. But without some context, it is unfortunately cryptic. Can you help the rest of us know who you are or where you're from? Thanks!

veeber said...

The curve is basically the same as a marginal cost curve. You can invest money into time and/or capital. At some point you have to switch so that the two are equal. The example we use a lot in school is the Pizza shop. You can invest a lot into buying pizza ovens but only hire one employee or you can have the one pizza oven and lots of employees. Eventually there are too many people in the same space and your productivity decreases for each additional person you add. At that point you can add more pizza ovens and space so that you can most effectively use the labor you have.

I would imagine that in our setting you are in a similar situation. We can put money into buying equipment to make each person more effective, or you can ask for more volunteers, but eventually you're too heavy on one end or the other and your effectiveness falls.