By eweek  |  Posted 2006-04-27 Print this article Print

: A Little More Explanation on Ruination by Growth">
Martin explains the current model is to grow by repetition and scale; management drives heuristic knowledge into algoritha and then binary code to increase standardization, drive out cost and increase scale. My view is that model, by aiming to sell more by cutting costs, guarantees price pressure which in turn strips out margin and pressures income, incrementally making more existing consumers more price sensitive.
That amplifies the need to increase the organizations scope or geographical span or both, increasing complexity (need to manage new products or customers and regulations as they expand globally).
The complexity/opportunity ratio gets higher and higher, and harder and harder to manage. The management goes from algorithmic to automated to eliminate human contributors to pare costs. This results in less judgment being exercised per transaction, leading to more mistakes and wastage, leading to the cost-cycle above, where the cycle starts again.


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