Incremental Degradation

This is a preview of a concept contained in The Personal MBA by Josh Kaufman, a book that will help you master the fundamentals of business, hone your business instincts, and save a fortune in tuition. The Personal MBA distills the most powerful principles of business and delivers them quickly and concisely. Order your copy now…

What is “Incremental Degradation”?

“Quality, quality, quality: never waver from it, even when you don’t see how you can afford to keep it up. When you compromise, you become a commodity and then you die.” — Gary Hirshberg, founder of Stonyfield Farm

Key Points:

• Saving money doesn’t help it you need to lower the quality of your offering to do it.
• Cost saving measures Accumulate over time, and end up having an impact on quality. Cutting costs can help to increase the Profit Margin, but it usually comes at a steep price.
• Cutting costs can only take you so far. Creating value will always cost some amount of money, so there’s a limit to this strategy.
• Creating and delivering value is a much better way to improve your business. There’s no limit to how much value you can provide.
• Control your costs, but remember why your customers are buying from you.

Questions for Consideration:

• Are you trying to cost-save your way to profitability?
• Are the small changes you’re making degrading the value you’re providing?
• If you have to reduce costs, can you do so in a way that minimizes the impact to your offer’s quality?

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