"There is a reason for specialization and why some people are into finance, and some are into management."
The reason is the result of a type of intelectual "fractional distilation". The heavy brains sink to the bottom while the mostly empty ones float to the top and are directly transfered into government.
Yes, "area under the curve" would lead to the correct result, as long as the area we are measuring is the Gross Profit (Revenue - Manufacturing Costs). The chart I had showed revenue. If the two are related by a simple ratio, your math is still valid. If the feature changed the gross margin (the ratio of gross profit to revenue), then the gross profit curves would be needed as a substitute.
And yes, going for the change would be correct if my handdrawn figure was accurate, as you stated. However, I just drew the chart to illustrate the concept, any given project will be different.
@Larry, for question number two your math seems overly complicated.
"Here's how I would look at it. Calculate the increased gross profit over the original lifetime due to increased sales volume. Then subtract an entire quarter of the new gross profit. Ouch."
Wouldn't a simple area under the curve analysis work? Using the overlapping graphs you provide, subtract out the common area and then compare the area above that ccommon area to the area to the left of it. In this case I'd say go for the change - the top's much larger.
What am I missing?
And, btw, I do love this statement: "...since the death of the product is defined by the marketplace, and is fixed." Not only does that remined us all who's boss, it helps put urgency into perspective.
David - The big difference between finance folks and engineers is that engineering creates things that are new. As such, a broader knowledge base, even outside of the field leads to a broader perspective, which leads to more practical designs.
Finance people track what's already been created, or already specified.
I don't think engineers need to be able to do detailed financial analysys, but an understanding of the principles can be helpful.
Thanks for spicing up the debate. I'm surprised that no one has replied to your contrarian view.
Of course you are right: All employees do not need to know everything about a business. But knowing some things outside of your specialized domain can be advantageous- for your company, but especially for you. A lot of innovation occurs at the nexus of business and technology.
In my own case I took single semester cousres on intellectual property and industrial engineering. Those legal and financial courses laid the groundwork for me to contribute at a higher level than pure engineering, especially when combined with engineering. I've also noted that top engineers in development centers I've managed have a nice handle on the business as well, and are the ones most likely to become thought leaders in their organizations and advance either on technical ladders or management ladders. That's why I recommend engineers knowing the basics of business and finance.
But if you're happy with a pure technical focus- go for it!
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