Summary of Jules Goddard - Why Overall Cost Leadership Is A Losing Strategy | Nudgestock 2014

00:00:00 - 00:05:00

The speaker provides a brief overview of a study which found that high costs are necessary for superior long-run performance. He suggests that businesses should focus on finding value through insight and creativity instead of cutting costs.

• 00:00:00 Jules Goddard provides a critique of the prevailing belief in business that costs are the root of all evil and that efficiency is the key to success. He argues that this mindset is harmful and leads to mistakes. He provides an example of a type 1 mistake, which is a mistake that leads to evolutionary improvement, and contrasts it with a type 2 mistake, which is a mistake that does not lead to evolutionary improvement. Goddard believes that best practice is a concept that is shared by all players in the same game, and that the more we practice it, the more like we become like markets.
• 00:05:00 The speaker provides a brief overview of the study, which found that high costs are necessary for superior long-run performance. Board members in companies that achieve superior long-run performance often focus more on non-price differentiators, such as revenue growth before cutting costs. The speaker suggests that businesses should instead focus on finding value through insight and creativity.