The Point of Diminishing Returns

The Point of Diminishing Returns is when it is time to move to another step of a project, objective, problem, or to make a decision. This occurs when your time and energy generate minimal useful information.

There are only so many hours in a day. Using them effectively becomes increasingly important as our schedules become busier.

Learning to move on to another phase of a project, objective, problem or decision when you come to a point of diminishing returns can be a huge time saver.

Learning where the diminishing returns are dramatically helps:

• Minimize information overload

• Keeping you from getting wrapped around the axle

• Keeping away from going down blind alleys

Another way of thinking about diminishing returns is as the opposite of The 80/20 rule (Pareto Principle). The 80 20 rule states that 80 percent of the results come from 20 percent of the inputs.

Diminishing returns can be thought of as when 80 percent (or more) of your efforts are producing 20 percent (or less) of what you are attempting to accomplish.

Knowing where is that point of diminished returns is a personal decision based on knowledge, experience, reasoning, intuition and common sense.

An Example:

Here is an example of a when your efforts are not producing fruitful results.

Say you are researching purchasing a new television. You are interested in buying either a plasma or LCD television but don't know which one will be best for you and your family. You have decided on how much you can afford, and the size of TV you would like.

First you read several articles on the internet about the different benefits and drawbacks of both the Plasma and LCD technologies. You also purchase read articles in Consumer Reports® (assuming you take the magazine...a worthwhile investment) about the ratings of the different types of Plasma and LCD TVs, which companies are good, and which prices are reasonable.

Next, by going to some stores that sell the different brands you are interested in (because of your research), you are able to look at the quality of the picture, hear the sound and talk to some knowledgeable sales people about the different Televisions you are interested in.

When you get less and less "new information" in the articles you are reading, the people you talk with and have settled on a size and have reached the point of diminishing returns.

It is time for you to make a decision and purchase your new TV!

Return from Point of Diminishing Returns to Accelerated Learning