Stand by your personal line, always

Posted on May 14th, by James in Press & Reviews, Thoughts & blogs. No Comments

Forbes India, as part of a third anniversary special, is running an excerpt from HWYMYL.

The Hypothesis
Companies are biased to leverage what they have put in place to succeed in the past, instead of guiding them to create the capabilities they’ll need in the future. If we knew the future would be exactly the same as the past, that approach would be fine. But if the future’s different—and it almost always is—then it’s the wrong thing to do.

So What?
Every time an executive in an established company needs to make an investment decision, there are two alternatives on the menu. The first is the full cost of making something completely new. The second is to leverage what already exists. Almost always, the marginal-cost argument overwhelms the full-cost. When there is competition, established companies continue to use what they already have in place and end up paying far more than the full cost—because the company loses its competitiveness. Thinking on a marginal basis can be very dangerous.

Click on over to Forbes India to read the full article.

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