What Unconscious Trade-Offs Are You Making? And What Are They Costing You?
“How much did your last 1,000 long-distance calls cost you?”
Juan Enríquez Cabot, Mexican-American academic, businessman, author, and speaker.
Strategy requires making choices. It’s an exercise in trade-offs. It requires prioritizing one thing over another and saying “no” to more things than you say “yes.”
The same is true for life. It also requires making choices, setting priorities, saying “no,” and making trade-offs.
But what happens when you no longer need to make trade-offs?
That’s one of the questions that Juan Enriquez, best-selling author and TED All-Star, posed during his speech “An Uncertain, Scary, Exciting Future.” To illustrate his point, he took us back to the late 20th century when we used to pay for long-distance calls. In the 1970s, long-distance (state-to-state) calls cost a minimum of $3.50 per minute (in 2020 dollars). In the 1980s as industry competition increased, phone companies started offering discounted rates for evening and late-night calls.
I remember my mom talking to my grandma in Pennsylvania for an hour each week and my grandma in California for two hours each month. Assuming those were the only interstate calls made (they weren’t), at a discounted rate of $1.25/minute, those five calls cost $450 in 2020 dollars.
That’s more than 3x what I currently pay for unlimited calls and text.
We used to trade off money, frequency, convenience, and quality simply to stay in touch with family and friends. Now we don’t.
But we’re still making trade-offs.
There are ALWAYS trade-offs
No one likes trade-offs. We’d much rather have everything than just one thing. After all, if you have (or do) everything then when things change, you’re prepared. You’re safe.
But “all of the above” is not an option.
My mom would have been stuck on the phone for hours every day talking to my grandmas if long-distance calls were free. But, because we couldn’t afford the financial trade-off required for daily multi-hour, long-distance calls, my mom was free to live her life untethered from the kitchen phone.
Now, the financial and physical trade-offs of long-distance calls have gone away but we’re still tethered to our phones. Instead, we’re trading away our attention and energy, data and privacy, even our mental well-being for the “convenience” of always being connected and accessible.
What trade-offs are you making (because you ARE making them)?
Look at your business strategy, your team, your daily calendar. What are you trading off? What will you stop doing so that you can invest more in starting or accelerating something else?
If you’re like most executives, you can’t answer those two questions because you choose “all of the above.”
But you did make trade-offs. You’re trading off time spent with friends and family and your physical and mental well-being to do more with less. You’re trading off your business’ future to maximize today’s profits.
There are always trade-offs. The ones you proactively and consciously choose are always better than the ones that creep up on you, promising “all of the above” while taking the things you’d never knowingly give up.
The AI Pilot Trap
The Moment an 8-Year-Old Changed Everything
3 Deaths. 3 Lessons. 3 Questions to Survive (and Thrive)
Sunday morning, my phone blew up. Thirty-three text messages. Most mornings, I have zero, so my first thought was “who died?”
The texts were about a death. Sort of.
Sloan Management Review died (ceased publication) and a group chat filled with academics, thought leaders, and consultants were having an absolute meltdown.
Knowing that my husband, an actual Sloan graduate, hadn’t yet seen the news, I broke it to him gently. “Okay,” he shrugged, not even glancing up from his phone.
This was in stark contrast to his reactions to the demise of Spirit Airlines (howling with laughter at the memes) and the resurrection of Allbirds as an AI company (thoughtful and incredibly technical analysis).
Lesson 1: The Race to the Bottom Never Ends Well
CNN’s headline said it all, “Why did Spirit fail? Too many passengers hated flying it.” To prove the point, the article opens,
“Lousy service, not the Iran war, killed Spirit Airlines. Spirit was doomed to fail because of mismanagement, deep financial problems, and – crucially – its reputation for poor customer service. The spike in jet fuel prices during the war just accelerated Spirit’s inevitable demise.”
If that can be written about your business, you don’t deserve to be in business.
It’s only a matter of time until you’re not.
Lesson 2: Be Patient for Growth and Impatient for Profit
Allbirds raised $348 million when it IPOed in 2021 and, at one point, was valued at $4.1 billion despite never turning a profit. Six years later, its stock price had fallen 95% and it sold its business and IP to a brand management company for $39 million.
How did this happen? There are plenty of theories – it expanded too aggressively into bricks and mortar retail, it made ugly shoes but operated like a fashion brand, its Tech Bro image is no longer aspirational for Gen Z customers – but the fact is that it prioritized growth over profit and that ultimately bit them in the balance sheet.
Lesson 3: Some Businesses are Butterflies
While my colleagues’ alarm was understandable, it missed the bigger picture.
Sloan Management Review (SMR) didn’t die. It metamorphosed.
Yes, the SMR brand is going away, but future ideas, research and findings will continue to be shared through digital newsletters, short-form videos, podcasts, and social-first content.
In effect, SMR is metamorphosing to better reflect how its subscribers consume information. Busy executives don’t have the time to read long-form, dense research articles. They grab information in snippets and soundbites. This change ensures the people who need the ideas the most get them.
3 Questions to Find Your Fate
- Do you treat your customers like they exist for your benefit? In other words, are you more focused on value extraction than value creation and delivery? If yes, start planning your business’ funeral and don’t expect anyone to attend.
- Do you have a financially and operationally sustainable business model? If no, start planning your funeral but take comfort in the fact that people will attend and may even say nice things about you.
- Do you know the unique, relevant, valuable, and hard to imitate reason why you exist? Can you articulate the rare and essential Job to be Done you do for your customers? If no, you’re on life support. When you can answer yes, you’ll be ready to be a butterfly.
One quick caveat
When businesses die, people lose their jobs and that is incredibly tragic. The psychological, financial, and relational impacts of job loss are tremendous, impacting people far beyond the individual laid off. It can take months, even years for people and families to recover and, for some, it never happens.
Creative destruction is real and necessary for long-term economic, technological, and societal growth. But the short-term impact has human consequences that should never be ignored.