He defined just one metric for assessing the productivity of an engineering department: $/E
$ = revenue
E = number of engineering employees
The point is that any time you are exerting any kind of effort, you must ask "Is this adding value that someone will pay for?"
He also talked about efficiency, and he pointed out that there are only two ways to improve efficiency:
- Add more value for the same amount of work.
- Do less work for the same amount of value.
He did not give the following sobering example, but it is food for thought along these same lines as we go into the new year.
Let's say that your product has a profit margin of 10% and let's say an employee costs $100,000 a year.
A company would have to sell $1,000,000 of product to add $100,000 to the bottom line.
Or it could lay off that employee.
I worked for a guy who had been a colonel in the green berets. He used to describe poor performers as "So and so isn't worth their rations."