“Marginless is the disease of the new millennium; margin is its cure.”
– Richard Swenson, MD (b. 1952), in his 2004 book “Margin; Restoring Emotional, Physical, Financial and Time Reserves to Overloaded Lives”
In business, “margin” is a simple term, right? In most of our internal conversations, margin is the difference between our costs and our revenue. We paid 80 cents to produce that widget and we sold it for $1.12, so we made 32 cents of margin.
There are two other important applications we ought to keep at the front of our minds, though.
For the second one, let’s turn to dictionary.com;
- a limit in condition, capacity, etc., beyond or below which something ceases to exist, be desirable, or be possible:the margin of endurance; the margin of sanity
In this case, we apply margin to our decisions, our presumptions and our calculated risks. Our prediction that demand for our Widget will be “x” has to be considered within a range. What if a major competitor launches a full-frontal attack? What if a market shift occurs? What if a disruptor changes the rules faster than we can respond? What if someone in a position of power Tweets something negative about our Widget’s spokesperson? (What? It could happen!)
In summary, the amount of margin we earn is critically important, and the margin around the concepts we base our strategies upon must be discussed out loud.
They may not be the most important applications of the term, however.
What about the margins we build in to our day-to-day? What about time to think? Time to reflect? Time to watch the kids’ choir without checking the phone? What about time to throw the ball for the dog, take a walk with our spouse? What about time to ask the person in the call center or on the floor of the factory what they think? What about time to listen to their answer and time to just consider it — without an action bias, reactive steps or anything other than a “what if?” mindset?
In these times, it’s almost as if we’re allowing ourselves to be judged — or worse, judging ourselves — by how much we pack in to the day rather than what we get out of that same day. More is not always more, and in a marginless world, more often leads to less.
Will more mind-margin in the here and now lead to more profit margin on the bottom line, and less risk-margin in our presumptions about our business?
On the margin, that’s a bet I am willing to make. Are you?
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