Tag Archives: Order of magnitude

An order of magnitude difference in performance

I was recently comparing the metrics of two companies which were founded at similar dates and operating in the same space.

Despite this similarity, there was a 15-fold difference in the companies’ core performance metric. This order of magnitude difference was the result of just two key choices which differentiated the approaches of the two companies.

Very often we look for operational improvements to gain a few percentage points here and there. And these are indeed important.

However, they only become important after you have made the right choice in those areas that create an order of magnitude difference in performance. Such areas often exist. And given the large payoff they offer, it’s worth spending time to think about what they are for your business.