Self-Managed limits: How to Avoid the Point of Diminishing Returns. -

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What role do limits play in making great managers?

I have observed two ends of the spectrum played out in very different business environments – at one end the high tech start-ups constantly chasing cash, with a quickly eroding market window, and at the other end, mature companies with established market share, patient stakeholders, and deep pockets.

In both cases, whether the business conditions are either highly constrained or almost without limits, managers are not developing or refining a key business decision making skill – creating self-managed limits to avoid diminishing returns or non-value added features, analysis, quality, etc. Whether you are developing a product, building a team, or introducing a new brand, understanding the point at which there is no additional value is a fine art in crisp decision making.

Adopting self-managed limits will save you and your team both time and dollars in your next business decision.

An example of diminishing returns from Pixar’s “Up”

Even the corporate giants struggle with self-managed limits for their teams. President of Pixar, Ed Catmull’s, recent book Creativity Inc, included a great segment on limits. Catmull reflected on Pixar’s long business journey, and the management challenges of leading a highly creative team in a studio production business.

In particular, he mentioned the need to create self-managed limits for their team. The point was brought home during the creation of the animated film “Up”. Wanting to demonstrate the high quality and refinement of their animation technology, the animators spent an additional two weeks detailing an alphabetically organized stack of 200 CD cases that would eventually be knocked over in the film. In the end, the clip lasted a total of 2 seconds, and the detailing would be invisible to the naked eye.

Why should leaders adopt self-managed limits?

Now, when I meet with potential leaders, I always look for managers who can demonstrate how they create self-managed limits in their decision-making. Equally, when CEOs and business owners struggle with a difficult choice – it is often the discussion around diminishing returns that clears the fog and helps them find a path forward.

5 questions that help establish limits on decisions

To provoke your thinking around the adoption of self-managed limits, I have put together my top five questions that have helped myself and others establish effective and appropriate limits in their business decisions.

  1. “If there was only one more dime available – what would I spend it on?”
  2. When hiring – “Am I focusing on the problem I am trying to solve rather than the person I’m hiring?”
  3. “Will the next level of analysis tell me something different from what I already know?”
  4. Before continuing further – “What assumptions have I made that have not yet been challenged?”
  5. Lastly, my favourite: “So what, who cares?”

Regardless of your industry or experience level, practicing the art of refined decision making will help you save time, frustration, and scarce company dollars. Asking yourself the five questions listed above is a good start in establishing limits, and preventing diminishing returns. How do you establish self-managed limits and avoid the point of diminishing returns? Let us know in the comments section below!

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About the Author

Margo Crawford is the President, CEO and founder of the Business Sherpa Group where she has been involved with over 140 companies throughout North America from formation stage through to sale. Margo is a recognized thought leader in the area of human resources and entrepreneurship, and is passionate about the long term success of small and mid sized enterprises.[/vc_column_text][mk_contact_info email=””][/vc_column][/vc_row]