There are two essential business strategies that go hand in
hand. The first is "opportunity cost" and the second is
"planned obsolescence." They are not often linked together
in business texts, and I think they should be.
Opportunity cost refers to being "too busy" to take on a
new project or lacking the time, energy, capital or
creativity to grab an opportunity when it arrives.
We can be so busy that we fail to see the "next big thing."
We have no time or interest, no energy or capital to engage
in research, learn new skills or welcome opportunity when
it knocks.
A solution is to maintain a healthy "margin" of time and
energy that are available for innovation, and part of that
is to intentionally phase out old programs, old products or
old ways of doing things.
I'm told that General Electric earns half its income from
products and services that are less than five years old,
and they achieve this with a two-pronged approach:
1. Intense commitment to R&D so they always have new
revenue streams coming on-line.
2. A plan to phase-out and close-out obsolescent business
components.
What should you phase out this year? How much time and
energy will you need to see and seize the opportunities
that come your way this year? The cost of spending your
time making money is extremely high. Leave time around the
"margins" for creativity, and never hesitate to stop doing
whatever isn't working anymore.
hand. The first is "opportunity cost" and the second is
"planned obsolescence." They are not often linked together
in business texts, and I think they should be.
Opportunity cost refers to being "too busy" to take on a
new project or lacking the time, energy, capital or
creativity to grab an opportunity when it arrives.
We can be so busy that we fail to see the "next big thing."
We have no time or interest, no energy or capital to engage
in research, learn new skills or welcome opportunity when
it knocks.
A solution is to maintain a healthy "margin" of time and
energy that are available for innovation, and part of that
is to intentionally phase out old programs, old products or
old ways of doing things.
I'm told that General Electric earns half its income from
products and services that are less than five years old,
and they achieve this with a two-pronged approach:
1. Intense commitment to R&D so they always have new
revenue streams coming on-line.
2. A plan to phase-out and close-out obsolescent business
components.
What should you phase out this year? How much time and
energy will you need to see and seize the opportunities
that come your way this year? The cost of spending your
time making money is extremely high. Leave time around the
"margins" for creativity, and never hesitate to stop doing
whatever isn't working anymore.
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