Chapter 3. Cost

No one intentionally sets out to destroy value, but organizations can be complex. The true sources of cost, profit, and value can easily be hidden or masked. As a consequence, destruction happens every day. When you were a child, perhaps selling lemonade, things were simple. You had a limited number of ingredients, and it was easy to do the math and calculate how much profit you'd make. If only business were that simple.

Today, many of us have thousands of customers, hundreds of products, and multiple channels. We operate in markets and locations with a diverse set of employee skills, culture, and experience. We abide by regulations and laws—many different from one country to the next. We have multiple definitions of the same thing. ...

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