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100% of the time is easier than 98% of the time. ~Clayton Christensen


Stashed in: Character, Decisions, Inclusion, Think!, Believe, Values

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HBS professor Clayton Christensen talks about marginal costs and the real costs of breaking your own personal rules "just this once":

The language of the disruptive attackers was completely different: “It’s time to create the sales force.” Hence, the paradox: Why is it that the big, established companies that have so much capital find these initiatives to be so costly? And why do the small entrants with much less capital find them to be straightforward? The answer lies in their approach to marginal versus full costs. Every time an executive in an established company needs to make an investment decision, there are two alternatives on the menu. The first is the full cost of making something completely new. The second is to leverage what already exists.

Almost always, the marginal-cost argument overwhelms the full-cost. When there is competition, and this thinking causes established companies to continue to use what they already have in place, they pay far more than the full cost—because the company loses its competitiveness. As Henry Ford once put it, “If you need a machine and don’t buy it, then you will ultimately find that you have paid for it and don’t have it.” Thinking on a marginal basis can be very, very dangerous.

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Many of us have convinced ourselves that we are able to break our own personal rules “just this once.” In our minds, we can justify these small choices. None of those things, when they first happen, feels like a life-changing decision. The marginal costs are almost always low. But each of those decisions can roll up into a much bigger picture, turning you into the kind of person you never wanted to be.

You are the sum of all your decisions.

Be who you are, as hard as you can, all the time.

The article is worth re-reading.

"We end up paying for the full cost of our decisions, not the marginal costs, whether we like it or not."

"The marginal cost of doing something 'just this once' always seems to be negligible, but the full cost will typically be much higher."

Decide what you stand for. And then stand for it all the time.

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