Marcus Clifford has been inspired to look at margin and profit from a different perspective in his latest blog
I was reading about the upcoming IPIA Annual Conference, always a high-value excellent event and noticed its compelling theme: ‘Beyond the Margin’ ‘, Charting new territory for growth, adaptation and commercial success in print.’ It got me thinking about the issues surrounding margin, the difficulties in generating one and different ways to look at creating one.
Perhaps it’s not what lies beyond the margin, but the margin itself, that holds the key to commercial success.
‘Beyond the Margin is visionary’. It carries movement, ambition, and energy. It also is an ongoing rally cry for us to review what we are doing to create margin and a sustainable business. The event is a place for exploration and creative thinking.
I often felt when I was selling print that customers thought the notion of us making a profit was immoral and wrong with their approach to driving down our quote! But now I know it’s about how efficient one is, how you become the lowest cost producer through harnessing technology, having a better business model that allows you to create margin, flex margin alongside delivering the right value in the eyes of each customer!
The word profit like margin has multiple meanings and room full of accountants would refer to some 10 definitions of profit depending on whether they’re focusing on production efficiency, operational health, investment analysis, or cash flow. Each one serving a distinct decision-making or reporting purpose.
All businesspeople of course know what profit and margin mean, what you are left over with and what you add to a cost. Creating and generating both seems very difficult at times.
So, here’s a different perspective to frame our thinking about ‘Beyond the Margin and how we might gain more from focusing on the margin itself rather than just growth. When thinking about margin creation, I was reminded of Charlie Munger’s use of Inversion thinking in Hathaway Holdings. Warren Buffet is his partner.
Inversion: A Smarter Way to Think About Margin. Some thoughts?
Don’t Just Ask: ‘How Do We Grow Profit?’ Ask: What Eats Margin and How Do We Stop It?’
- Hidden costs, operational drag, poor customer fit, excessive complexity. These all erode margin.
- By identifying what erodes margin, you prevent leakage before chasing new revenue.
- Result: a healthier, stickier, more defensible profit base.
Don’t Just Add. Subtract.
- Instead of ‘What more can we sell?’ Ask, ‘What should westopdoing that doesn’t add value or profit?’
- Cut unprofitable work, reduce manual processes, end vanity projects.
Many companies during Covid reviewed unprofitable customers and let them go which was a positive.
Flip the Innovation Question
- Instead of ‘What new product can we launch? Ask:
‘What pain point, inefficiency, or friction are we tolerating that’s costing us margin?’
- Solve backward from the leak, not forward from the dream?
Rather than only asking “how do we succeed?”, inversion thinking proposes we ask the opposite, ask what causes failure and avoid it. How do we fail? What’s stopping us? What traps, mistakes, or blind spots destroy margin?
‘Invert, always invert, Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Instead of looking for success, make a list of how to fail.’ Charlie Munger
It’s deceptively simple and immensely powerful. Munger and Warren Buffett have long said their secret isn’t that they solve hard problems. It’s that they work hard to avoid them. They stay within their circle of competence and design strategies that reduce failure before chasing brilliance.
Inversion thinking as an alternative can ground you in reality, risk, and resilience. It’s margin creation through:
- Elimination (cut waste)
- Discipline (focus on what really adds value)
- Protection (avoid margin-killers)
- Clarity (see through complexity)
This lesson matters in print a sector that has endured disruption after disruption, adapted, evolved, and persisted. It’s a sector where commercial resilience isn’t built on risk, but on reliable value creation.
Why Margin Still Matters Most
Margin isn’t just a line on a spreadsheet. It’s the signal that you’ve created real, differentiated value, not just once, but again and again. You don’t find margin by venturing beyond it. You build it by Design.
• Innovation that communicates and solves actual customer problems
• A competitive edge your customer recognises and values
• Strategic alliances that let you deliver faster, better, or more efficiently
• Relationships rooted in trust and long-term support, not just price
Being the lowest cost producer by automation, use of technology, lean mindset, a different business model that has more variable costs than fixed costs?
If it works for Hathaway Holdings the most successful investment management fund in the World, maybe we can take something from Inversion Thinking?