Why the directive to “minimize costs” in your industrial sales business is foolish

22 July 2025

The directive to “minimize costs” is foolish. It demonstrates a lack of understanding of system dynamics.

Practically, you can only maximize (or minimize) a single parameter in a system. (Imagine advising a competitor in the Tour de France that he should simultaneously ride as fast as possible and minimize energy consumption. This advice would have precisely zero utility!)

Given this, the “minimize cost” directive implies that revenues should be controlled while costs are minimized. Obviously, the opposite is the better approach in almost every case.

If you minimize costs relentlessly, you strip protective capacity out of the system, generate chaos, and dramatically reduce its revenue-generating potential.

Imagine what would happen if you attempted to improve the efficiency of a Formula One pit stop by reducing the number of pit crew until the remaining team members were fully activated.

That would be idiotic!

We should act to maximize revenue and control costs. The system should never be allowed to become chaotic, which is to say that the capacity of the pit crew should never be allowed to impinge upon the performance of the race car.