Kim Warren on Strategy
Strategy insights and living business models
Strategy Dynamics Briefing 25: Resource quality: understanding attributes
It is not easy to understand and manage changes in attributes and the impact of those changes. Strategy must recognize and cope with change over time, so needs a method for quantifying both scale and speed of progress. Now we must not only work out how key resources are changing, but also the quality of those resources.
How is this done?
The table below looks at how the customer base and sales for the manufacturing firm from briefing 24 would evolve if it started with a large number (240) of small customers (each buying 35 units per month), and set out to win larger customers, each buying 105 units per month. Its customer base increases, but its total sales rise still faster, and over two years the average customer size increases from 35 units/month to more than 58. It does not actually end up with 355 customers each buying at this higher average rate, of course. Instead it has the original 240 buying at the low rate and an additional 120 customers buying at the higher rate.Table: Adding larger customers to the manufacturing firm’s customer base.
Table 1: Examples of attributes for tangible resources
This change in customer quality can be displayed as a time chart (below). As in earlier chapters, the causal arrows reflect specific, explicit relationships:
The attribute Total sales per month is shown as a resource, in parallel with the Customers resource. This is because, like customers, it accumulates and would deplete if customers were lost. In other words, sales per month is something that “flows with” customers, so this relationship is referred to as a “co-flow” structure. There are two potentially confusing features of this structure to clarify.
Surely the additional resource in this figure is breaking the rules that were so carefully laid down in earlier briefings about what is or is not a resource? We insisted then that variables such as sales, revenue, costs and profits are not resources. Since their units are “XXX per time period” they are instead flows of orders or of money. That rule remains important, but the attribute resource in this figure is being used only to describe the quality of the customers, not as a resource in its own right.
We can (and should!) still calculate Total sales from Customers multiplied by average sales per customer and the resulting chart of Total sales would be exactly the same as the lower chart shown here. Sorry if this seems pedantic, but it’s right – and important.
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Start of month | 1 | 2 | 3 | ![]() ![]() |
22 | 23 | 24 | end |
Customers | 240 | 245 | 250 | 345 | 350 | 355 | 360 | |
New customers per month | 5 | 5 | 5 | 5 | 5 | 5 | 5 | |
New sales per new customer units per month | 105 | 105 | 105 | 105 | 105 | 105 | 105 | |
Increase in total sales rate | 525 | 525 | 525 | 525 | 525 | 525 | 525 | |
Total sales units per month | 8,400 | 8,925 | 9,450 | 19,425 | 19,950 | 20,475 | 21,000 | |
Average sales per customer | 35.00 | 36.43 | 37.80 | 56.30 | 57.00 | 57.68 | 58.33 |
New sales each month = new customers per month * new sales per new customer
Average sales per customer = total sales per month divided by customers Depicting changing customer quality as larger customers are won.
- The attribute of Total sales: units per month is increased by the arrival of new sales from newly won customers. The units of this increase are therefore “units per month, per month,” so the phrase New sales each month: units per month is used to avoid confusion.
- Why is the attribute resource given as total sales? If we want to track the average customer quality, why does the lower resource not contain average sales per customer? The reason is that the math works out much more easily if the lower resource contains the total sales, rather than the average per customer.

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