Tuesday, December 13, 2011

Threshold Effect II

Just as an individual cannot solve five problems at once, most organizations concentrate on a few critical issues at any one time.

Due to similar forces, business strategists will often prefer to dominate a small market segment over having an equal number of customers who represent only a sliver of a larger market.  Politicians will often prefer a plan that delivers clear benefit to a recognizable group over one that provides larger benefits spread more thinly across the population.

Within organizations, some of the factors giving rise to concentration are the substantial threshold effects in effecting change and the cognitive and attention limits of the senior management group.  Just as an individual cannot solve five problems at once, most organizations concentrate on a few critical issues at any one time.

ACTION POINT: Recognize the "few" critical issues and focus on them.

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