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This is an argument that a lot of people make in a lot of business cases. It is not a correct argument. Find huge amount. Say "if only X%" (usually 1% or somet

by jib 11y ago

This is an argument that a lot of people make in a lot of business cases. It is not a correct argument. Find huge amount. Say "if only X%" (usually 1% or something else low) then increase of 1%*huge amount which is still a huge amount! Somehow the argument of "if only X%" is meant to avoid the need to prove that you can, in fact, do X%. 1% of extra revenue is hard. 1% time save across the board is hard. If you claim 1%, you better have some strong arguments as to how you can achieve 1%, not do "handwavy do something with synergy or extra information - even if we just get 1% which is a low number, 1% of something huge is still huge. We think we can do more than 1%!". It is almost as pervasive as hindsight arguments that ignore risk costs. "I put all my money on black at the roulette table and my business is up 100% in the last year - I will bring huge wins to you".

jacquesm 11y ago
It is a partially correct argument. If you apply a method to something small and it has an x% effect then your compensation will always be limited by that upside. Applying that same method (or knowledge) to a larger entity potentially has a larger upside and so your room for negotiation expands. Whether or not the difference in percentage is the same is of course debatable but if there is an upside in both cases then the upside is likely to be larger in absolute terms when applied to the larger company. And so those large companies will be able to pay higher compensation for the same skill levels. That's not at all the same as playing roulette and it does not mean this argument is not correct. It's correct in principle, you may want to argue about the degree to which it transfers from smaller companies to larger companies.
- marcosdumay 11y ago
  No, it's not valid. It failed to address the fact that it may not even be possible to increase anything. What if revenue is limited by the product? Then it's not the CEO that can impact it. What if the odds of ever changing anything fall as the company grows? Then there's no scale gain for the CEO's work. There's a huge number of problems that may impede that scenario, and the argument just distracts people away from those.

by jib 11y ago

jacquesm 11y ago

It is a partially correct argument. If you apply a method to something small and it has an x% effect then your compensation will always be limited by that upside. Applying that same method (or knowledge) to a larger entity potentially has a larger upside and so your room for negotiation expands. Whether or not the difference in percentage is the same is of course debatable but if there is an upside in both cases then the upside is likely to be larger in absolute terms when applied to the larger company. And so those large companies will be able to pay higher compensation for the same skill levels. That's not at all the same as playing roulette and it does not mean this argument is not correct. It's correct in principle, you may want to argue about the degree to which it transfers from smaller companies to larger companies.

marcosdumay 11y ago
No, it's not valid. It failed to address the fact that it may not even be possible to increase anything. What if revenue is limited by the product? Then it's not the CEO that can impact it. What if the odds of ever changing anything fall as the company grows? Then there's no scale gain for the CEO's work. There's a huge number of problems that may impede that scenario, and the argument just distracts people away from those.