Life of a Business Owner

Internal cooperation

Cooperation between people inside your company always involves what is called adjustment costs. Imagine a continuum of cooperation as a line between two endpoints X and Y. One of them represents what is ideal for one person in the situation; the other marks the ideal for the other person. When two people cooperate, they have to meet somewhere in the middle in a spot that is not ideal for either, but that is more beneficial for the overall results.

The distance between each one’s ideal and the solution they reach when cooperating is the cost of adjustment that both of them have to pay. ACX and ACY on the picture.

This cost can be financial, emotional, reputational, opportunity, time, etc. When people inside your company avoid cooperation, then someone else has to adjust and thus bear the costs.

It could be other people in your organization and owners. And sometimes, it is external people like customers who bear the consequences in terms of bad experience, low quality of service, higher prices.

Try to find points in your organization that need to cooperate, and draw the adjustment cost for every pair of those points. Reflect and adjust if needed.


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