Price’s Law says that 50% of work at a company is done by the square root of the number of employees. As an example take a company with 100 employees. In that company 10 people do 50% of the work.
Right you see you see how this works it's just well here are ways you can be creative and here are strata of accomplishment within those ways and so then the question is what does it look like yes yes yes fair enough and and this probably needs to be updated to reflect that so so there's there's the distribution of scores. Now that's dismal that's a dismal thing to look at you have to understand that why look at this zero right the median person has not done anything creative ever in their life with anything on any dimension right it's really important to know that. Then you have these horrible people out here right they do everything they do everything price is law here's Prices law this does something to hammer into your heart the square root of the number of people in a domain do 50% of the work. Okay so let's let's go through that you have ten employees three of them do half the work makes sense that's reasonable you have a hundred employees ten of them do half the work that's problem so the other ninety percent are doing the other half who cares about them. You have ten thousand employees a hundred of them do half the work right so here's that here's a nasty little law as your company grows incompetence grows in it exponentially and competence grows linearly. Got it right because it with ten it's three who are doing half the work but at ten thousand it's one hundred that are doing half the work so nine thousand nine hundred of your employees are doing as much as the best 100 you might not even know who the best 100 are but probably they know and maybe their peers know too. So one of the things that's really interesting when big companies start to shake which means maybe they've had a bad quarter too bad quarters and the stock price starts to tip down and the people the hot people who have options are not very happy about that. Maybe they start to announce layoffs all the hundred people who have opportunities leave and they're the ones who were doing half the work so boy that puts your company in a pretty rough situation because now you've got the ninety nine hundred people left over who we're only doing half the work and the next time you announced layoffs the next most productive hundred leave and so then you're left with nobody who's productive at a massive overhead payroll. Prices law you can look that up to soul a price to soul a price is a guy who was looking at scientific productivity and one of the things he found was when he was looking at PhD students is that the median number of publications for a PhD graduate when he did his work which was in the early 60s was one. Okay half as many had 2 – half as many as that had 3 half as many as that had 4. It's a real step down and one of the corollaries of that is that there's a certain number of people who are hyper productive and that's these people out here. If you were graphing the distribution let's say you graphed how many people in that population of 300 had $10,000 in a savings account it would look very much like this some of them would have or some of some of them would most people would have like no savings whatsoever the median person would have no savings whatsoever and then you go up here where the 1% is they have all the money. But the thing you want to understand about that 1% issue that you always hear about is that it applies in every single realm where there's difference in creative production every realm doesn't matter number of records produce number of records sold number of compositions written so here's here's an example 5 composers produce the music that occupies 50% of the classical repertoire right Bach, Beethoven, Brahms, Tchaikovsky and Mozart that's right those 5 ok so here's something cool so you take all the music those people wrote 5% of the music all those people wrote occupies 50% of the music that of their writing that's played. So not only do almost all the composers never get a listen but even among the composers who do get a listen almost none of their music ever gets played. So then that's a that's another example of this prices law scaling so when it applies to all sorts of things like number of hockey goals scored is also distributed this way number of basketball successfully put through the hoop.