4 ms·

I love this parable, but here's the kicker: The company lost money, and probably, to this day, doesn't understand that it did. Certain costs are very visible t

I love this parable, but here's the kicker: The company lost money, and probably, to this day, doesn't understand that it did. Certain costs are very visible to business leadership. Like the costs of toilets. Others, not so much. Like the time lost in the shunting yard farting around with the cars. Or the costs of people that used someone else's train service because they were pissed at not finding a toilet. Business, on a whole, is great at optimizing those visible costs, but only the good companies are good at managing those soft costs. All other things being equal, how you manage those soft costs is how you beat your competition.

3JPLW 14y ago
> All other things being equal, how you manage ______ is how you beat your competition. What a spectacular tautology. But, yes, you are right. More importantly: It's an easy place to win or lose dollars.
- run4yourlives 14y ago
  how you manage ______ is how you beat your competition. Thanks for the backhanded compliment, but no, how you manage hidden 'soft' costs is how you beat your competition. Extending that to be "value x" is simply a race to the bottom. Measuring (and reducing) costs that other people also have but don't realize is the kicker. For example: Understanding the cost difference between client acquisition and client turnover. Everyone focuses on growth, but in reality it's often cheaper to retain a client - even if you do things like give your product away - than it is to lose them and add a new one. (Which can often looks better on the surface). Another one: Firing bad customers. Telling a customer that pays you a large sum that you aren't interested in the relationship anymore looks bad on your bottom line. Recognizing that you were actually putting 120% more money into servicing them than they were paying (or even worse, recognizing that those services are out of your preferred scope) is what puts you ahead of the game overall. You don't see that on any report though, at least not right away.
  - 3JPLW 14y ago
    Yes, I know. It was a joke. You are right. I apologize for not conveying my tone adequately.

3JPLW 14y ago

> All other things being equal, how you manage ______ is how you beat your competition. What a spectacular tautology. But, yes, you are right. More importantly: It's an easy place to win or lose dollars.

run4yourlives 14y ago
how you manage ______ is how you beat your competition. Thanks for the backhanded compliment, but no, how you manage hidden 'soft' costs is how you beat your competition. Extending that to be "value x" is simply a race to the bottom. Measuring (and reducing) costs that other people also have but don't realize is the kicker. For example: Understanding the cost difference between client acquisition and client turnover. Everyone focuses on growth, but in reality it's often cheaper to retain a client - even if you do things like give your product away - than it is to lose them and add a new one. (Which can often looks better on the surface). Another one: Firing bad customers. Telling a customer that pays you a large sum that you aren't interested in the relationship anymore looks bad on your bottom line. Recognizing that you were actually putting 120% more money into servicing them than they were paying (or even worse, recognizing that those services are out of your preferred scope) is what puts you ahead of the game overall. You don't see that on any report though, at least not right away.
- 3JPLW 14y ago
  Yes, I know. It was a joke. You are right. I apologize for not conveying my tone adequately.