“5 Ways to Avoid Diminishing Returns in Your Business Strategy”

The law of diminishing returns is an essential concept in the world of economics, as well as in our daily lives. It describes the point where the addition of another factor of production results in a decline in the overall output. Understanding this principle is crucial in finding the right balance in productivity and efficiency. However, many people fall victim to the trap of thinking that working harder and longer will always produce better results. In this article, we will explore the concept of diminishing returns, its impact on productivity, and how we can prevent it.

Examples of Diminishing Return

The law of diminishing returns applies in various areas of our lives. For instance, when you spend endless hours researching and analyzing data, trying to make the best decisions, you may end up getting stuck at this stage and not be able to make any decision at all. Similarly, investing a lot of time and energy into a project after reaching the point of diminishing returns does not affect the results significantly. Moreover, excessive effort in trying to make something perfect not only wastes effort but also delays progress significantly.

Diminishing Return and Productivity

The concept of diminishing returns affects productivity in four major ways. Firstly, investing more but getting back less; spending too much time and energy on a task or project does not always translate to better results. A study conducted by Stanford found that by doing less, you can get more done. Secondly, not completing anything happens when you invest endless effort into something, and you delay completing it. Thirdly, putting off decision-making; to achieve an outcome for every task, you need to make decisions, but some people spend too much time researching and analyzing data in the process of making the best decisions. Fourthly, wasting time and losing opportunities; when you invest a lot of energy into a project and fail to achieve the objectives, you end up wasting time and losing opportunities.

Preventing Diminishing Return

There are two effective steps that one can take to prevent diminishing return. The first step is to use the Superstructure Method. This method involves quantifying the value of tasks and organizing them according to importance. Every task has three components: intention, value, and time. Under value, tasks fall under three categories, namely: must-haves, should haves, and good to haves. This method helps prioritize tasks and evaluate their costs in terms of time. By splitting tasks into half-hour intervals, it becomes easier to complete them within the allocated time, thus avoiding the trap of getting stuck or delaying decision-making.

The second step is to schedule the tasks. Once you have determined the priority of the tasks and evaluated their time cost, it becomes easier to schedule them on a weekly planner. This method ensures that each task is tackled at the right time and day, preventing the development of a backlog. Following this simple process makes it easy to master your time and achieve your goals, resulting in an organized weekly plan.


The law of diminishing returns is a crucial concept that applies in both our personal and professional lives. Understanding it enables us to find the right balance in productivity and efficiency, helping us to avoid the trap of investing too much effort and losing opportunities. By leveraging the Superstructure Method and scheduling tasks, we can prevent diminishing returns and achieve optimal outcomes in our tasks and projects. Finally, knowing when to stop investing more time and energy into a project is essential in maintaining a healthy work-life balance, reducing stress and exhaustion, and building positive relationships with family and friends.

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