Can anyone here look at "identify a change which improved employee efficiency by $125 annually" and think it isn't going to be complete bullshit? That's in the region of 50c/day. "I told employees to reuse paperclips which I predict will save the company $1M per year"[1] PR/marketing/self-promotion - surely nobody believes it?. And that saving 50 cents per day is supposed to come from a manager who can influence all 8000 employees, but who doesn't think to axe the useless reporting department to save $1M/year in one go? And then the company which keeps a $1M department just to sound good is going to identify $1M in piecemeal efficiency improvements year on year, every year?
Who believes this?
Although I don't completely disagree, see[2][3] "Another reason to have in-house expertise in various areas is that they easily pay for themselves, which is a special case of the generic argument that large companies should be larger than most people expect because tiny percentage gains are worth a large amount in absolute dollars. If, in the lifetime of the specialist team like the kernel team, a single person found something that persistently reduced TCO by 0.5%, that would pay for the team in perpetuity, and Twitter’s kernel team has found many such changes."
But then again, at the bottom of [4] "At multiple companies that I've worked for, if you tally up the claimed revenue or user growth wins [of people claiming they improved things X amount per year] and compare them to actual revenue or user growth, you can see that there's some funny business going on since the total claimed wins are much larger than the observed total." which is pretty much my criticism of your comment; people will embellish their claims, especially when nobody can easily prove or disprove a claimed 50cent/day efficiency improvement over 8000 employees.
> "usually a hyperfocus on really insignificant numbers as evidence of their point."
$1M is roughly an average UK household income, after tax, for a lifetime. This just reads like dismissive boasting rather than a useful part of your comment. If it's "really insignificant" why do you then argue that the company will be motivated to save it in a more difficult piecemeal fashion, year after year five times over, if they aren't motivated to save it once in a big lump?
Firstly, I absolutely agree, the argument you're responding to gave me pause for a moment, then I realized it's probably nonsense in most cases and it also isn't disagreeing with me at all.
If the thing I am working on doesn't matter because it's a rounding error to the organization, but they keep telling me that it does matter and we should be driving for perfection, bla bla bla, then the original poster is agreeing with me, I think. I'm not arguing about whether it makes sense for the organization, I'm making an argument against believing the organization.
EDIT: actually, re-reading the parent post after posting this, I'm now not sure if I'm agreeing with him in arguing with the GP or disagreeing with him. But either way, I'll leave my comment here to try to explain the thinking behind $1m being insignificant to a company.
The point isn't whether $1m is significant to an individual employee. It would make a massive difference to almost any employee on a personal level (except maybe for C level in massive companies), but in a company with 8000 employees, $1m is a rounding error. Even looking at the example you quoted for the average UK income (currently £33400), for 8000 employees that's £267m or $323m just in salaries. When you consider all the other costs of running a business on top of that like buildings, light, heating, expenses (generally accepted wisdom is that a salary is about 50% of the overall cost for each employee), then factor in the material costs for whatever the company is doing, that $1m really is insignificant in the grand scheme of things from the company's perspective.
Average US salaries are higher than the UK at around $59k, and tech salaries are obviously higher, and in the US even more disproportionately so, making this $1m saving even less significant to the company.
The middle section of your post "If, in the lifetime of the specialist team like the kernel team, a single person found something that persistently reduced TCO by 0.5%, that would pay for the team in perpetuity" seems to be arguing a different point. It's not about whether saving the company $1m a year is worth bothering with or not, it's whether paying for a team that might cost $500k per year and can produce $1m per year in savings and/or revenue is worthwhile. Obviously, it is worth keeping the team as the ROI on their work is 100%. However the decision on whether to create that team in the first place is harder to justify because there is probably a more lucrative opportunity for the company to find - if the company is currently making e.g. 7% profit doing what it's doing, it probably makes far more sense to expand production capacity to increase total revenue as that will be be more significant to the bottom line than a small project that saves $1m.
I agree with pretty much everything you say here. But a thought hits me on the dan luu kernel issue - let's say we fund a team of kernel devs and they reduce TCO by .5% - the nature of FOSS means that the reduction in cost is illusory - all their competitors get the same TCO.
The funding of the kernel team is similar to paying taxes to fund science research ... it's just the more I look around the more I see a vast socialist society we live in that we think is some red in tooth and claw capitalism.
The main value of capitalism seems to be the creative destruction- replacing old inefficient companies with ones newly formed, built
differently.
It's just that if we found a way to close down companies after say ten years and forced them to build new, would that solve as many issues as schumpter?
Who believes this?
Although I don't completely disagree, see[2][3] "Another reason to have in-house expertise in various areas is that they easily pay for themselves, which is a special case of the generic argument that large companies should be larger than most people expect because tiny percentage gains are worth a large amount in absolute dollars. If, in the lifetime of the specialist team like the kernel team, a single person found something that persistently reduced TCO by 0.5%, that would pay for the team in perpetuity, and Twitter’s kernel team has found many such changes."
But then again, at the bottom of [4] "At multiple companies that I've worked for, if you tally up the claimed revenue or user growth wins [of people claiming they improved things X amount per year] and compare them to actual revenue or user growth, you can see that there's some funny business going on since the total claimed wins are much larger than the observed total." which is pretty much my criticism of your comment; people will embellish their claims, especially when nobody can easily prove or disprove a claimed 50cent/day efficiency improvement over 8000 employees.
> "usually a hyperfocus on really insignificant numbers as evidence of their point."
$1M is roughly an average UK household income, after tax, for a lifetime. This just reads like dismissive boasting rather than a useful part of your comment. If it's "really insignificant" why do you then argue that the company will be motivated to save it in a more difficult piecemeal fashion, year after year five times over, if they aren't motivated to save it once in a big lump?
[1] https://www.dailymail.co.uk/news/article-442813/Dragons-Den-...
[2] https://danluu.com/sounds-easy/
[3] https://danluu.com/in-house/
[4] https://danluu.com/people-matter/