Satisfactory Margin and Value

Satisfactory Margin and Value

“Value is when the outcome of a situation exceeds the cost incurred by a satisfactory margin.”

But what is a ” satisfactory margin”?

Margin is the difference between the amount of cost incurred and the benefit derived. Not all margins, however, are created equal. In order to experience value, the margin must also be satisfactory. For example, a manufacturer produces an item that costs him $10.00 and sells the same item for $12.00. So this item has a 20% margin (($12.00 – $10.00) / $10.00). This manufacturer may be very happy with this margin. But for another manufacturer, and for a variety of reasons, this margin may be woefully deficient.

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When Exceeds Expectations Is No Longer Enough

When “Exceeds Expectations” Is No Longer Enough

In today’s “get-it-done-yesterday” business environments, tenure is shortening and relationships are becoming shallower. It’s no longer enough when an employee exceeds expectations. Herminia Ibarra, the Cora Chaired Professor of Leadership and Professor of Organizational Behavior at Institut Européen d’Administration des Affaires (INSEAD), reflected on this topic in a recent Wall Street Journal article. “With competition fierce and the business climate changing rapidly, companies are telling their leaders that it’s no longer enough to deliver results in their individual departments, or over the short-term.”

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Human Capital

When “Family” Turns into Human Capital

Every once in a while, you will hear CEOs of organizations declare “At Acme Products, we are like a family!” I am not exactly sure what a CEO means when she describes her company as a family.

Perhaps there was a time when organizations were familial. Your grandparents may reminisce about the “good old days” when employees were treated like family. In the not-too-distant past, family-like environments naturally flourished since tenures were longer and relationships were deeper. Doing your job well nearly guaranteed of lifetime employment. However, organizations today are not like a family, regardless of what your well-intentioned CEO tells you.

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Where Quantity and Quality Intersect

Quantity and Quality = Your Reputation

As recently discussed, the quantity of work produced and the quality of your work are keys to creating your good reputation. Let’s face it, if you produce a low quantity of work and the work you do produce is low quality, your days are numbered. Even the best attitude and behavior will not offset low quantity and poor quality.

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