Chapter 202

Adaptive Cost Models

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Cost structures determine business fragility. Adaptive models convert fixed costs to variable opportunities.

The Accordion Organization

Like an accordion, these organizations expand and contract smoothly with demand.

Thomas built accordion capabilities: - Core team of versatile generalists - Extended network of specialists - Automated processes for routine work - Partnerships for surge capacity - Systems enabling rapid scaling

His 10-person core team could operate like 100 or shrink to 5, depending on conditions.

Platform Leverage Strategies

Instead of building capabilities, uncertainty-native businesses leverage platforms.

Sandra's platform strategy: - AWS instead of servers - Upwork instead of recruiting - Shopify instead of e-commerce development - Stripe instead of payment processing - Slack instead of communication infrastructure

She built a global business with three full-time people by leveraging platform capabilities.

Dynamic Resource Allocation

Fixed resource allocation assumes predictable needs. Dynamic allocation responds to actual conditions.

Carlos implemented dynamic allocation: - Daily resource reviews - Automated rebalancing systems - Cross-functional skill sharing - Project-based budgeting - Real-time priority adjustment

Resources flowed to highest-impact activities automatically, maximizing returns during uncertainty.