Tuesday, March 22, 2005

Communications and the Laffer Curve

Professor Art Laffer developed the concept of the Laffer Curve . The Laffer curve illustrates that as you move from a tax rate of 0% to 100%, tax revenue initially increases, but will then decline at some point once the tax rate reaches a level where it chases out the incentive to work harder to increase income. The curve ends with tax rates at 100%, no one bothers to work, and tax revenue is zilch. Oh happy day.

I think the Communication Laffer Curve runs the same path. Instead of tax rates, you have the volume of communications -- instead of revenues you have understanding. Communicate nothing, you get no understanding. Communicate everything, you get no understanding. Communicate somewhere in the middle, you maximize understanding. Not helpful, but interesting.

1 comment:

  1. Anonymous12:18 PM

    I agree with this and can see the parallel to your earlier email about the blatant overuse of email.

    The current team I'm on at work "owns" our P&L both from a reporting and a planning and forecasting perspective (yes, I graduated from intranet and content management work to actual finance...). As such, I'm constantly inundated with emails from the four corners of the earth explaining every little nuance of every little business unit's every little adjustment each month.

    Gets to be overwhelming, and at times, I'm way to the right on the Communication Laffer Curve - I know that something happened somewhere, but given the sheer volume of "stuff" in my inbox, I either have to go look it up or ask someone else. A happy medium would be greatly appreciated and would probably increase my productivity tenfold.

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