BUSINESS PLAN

FEBRUARY 2023 Trade-offs

 Trade-offs are critical to success in work (&life)

Trade-offs are the choices we make about how to use (and NOT use) the
resources we have to achieve our goals.

We must make trade-offs because resources (time, people, money) are

limited, and the future is uncertain. We can’t have & do everything we want.

Learning how to make trade-offs effectively is the core skill of business

leadership – as a leader it’s your job to make the best choices about how you
and your team will use your resources to create whatever you are bringing to
the market.

As a leader thinking through your key trade-offs will help you define the value
your business adds to the market and how to protect it against the uncertainty
of the future (i.e. risk).
Trade-offs define your product, your people & your company
- & whether it will survive in the future

At Komari, we made some trade-offs effectively, and

struggled with others.

Most of the struggles came from my team’s inability

to make critical compromises to preserve resources
for the future.

We were able to preserve resources by sourcing

bottles/caps/labels locally.

But, on our crates we overinvested in quality where it

wasn’t needed and then found ourselves lacking
resources in the future when we needed it most.
While some trade-offs are obvious, others are difficult to
identify—and these are often the most important

Less obvious trade-offs:

Obvious trade-offs:
- Your focus (as a company)
- Costs (working capital, assets, investment)
- Your time
- Product/service quality
- Your relationships & network
- Staffing
- Your customer’s attention
- Your client’s satisfaction

Because resources are limited now & in the future and we cannot fully predict what our market will be,
we assess our choices to achieve the future we want to have, and preserve resources to mitigate risk

Limited Resources Uncertain future Trade offs

 If trade-offs are so important, why do we so often struggle to
make them?

• Sometimes we don’t realize there is a trade-off to be

made (we think resources can be stretched or changed
to be able to do it all)

• And other times we don’t want to say no to something– to

reduce the available options – it can be scary to say no
to something when we don’t know what the future will be
and if we will get the pay-off we want from the trade-offs
we make

• When a team is involved, it can be difficult to make

choices because people don’t agree on how to use the
available resources

(and not making a decision is, in fact, making a decision—

often a poor one)
Activity 1: Advise Fidel’s Flowers on trade-offs Fidel
has to make
Use a deep understanding of your goals to make trade-offs
more effectively

The more deeply you understand your goals for your product, your
people & your revenue, the more effective you will be in making
trade-offs

This is because making the choices to reach your goals IS how you
achieve those goals

If you don’t know what your goals are—you will struggle to use your
resources effectively to achieve them

Invest now to build the foundation for your goals: Understanding your
market, your product, your resources, your team and your revenue
(how you will replenish your resources)
And trade-offs are often complex with many possible
options & outcomes

Once you have a strong understanding of

your goals, you identify & define the critical
trade-offs to your business.

Anything that limits the choices you will have

in the future & shapes the way your future will
look is a trade-off.

Once you understand what your trade-offs

are, think through the available options and
how they will impact your product, people &
revenue.
Activity 2: Your 3 top trade-offs now (hint: that
decision you are avoiding is probably one)
 Trade-offs become even more complex when teams are
involved

Organizations essentially function as structures to make resource decisions effectively – bringing together a
range of expertise in multiple areas to make trade-offs

However, people with a range of expertise often want their area to “win” the most resources– a production
manager will want the fanciest equipment, a marketer will want the fanciest ads etc

Effectively getting the expertise of your team, balancing their information and ensuring the right mix of trade-offs
are made—is your role as a leader
Activity 3: Your pesky sister is back, and now she
has a budget! Work with your team to allocate
wedding resources and create her dream wedding