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What is a Ripple Effect in Business?

Updated on June 23, 2013

Have you ever been in the middle of a ripple effect?

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Did you ever throw a stone or pebble into a pond? If you answered yes, you should know if you drop a pebble in a pond, the ripples will begin in the center (or point of origin) and will affect everything in its path; the lily pads, frogs, flowers, grass and then eventually the shore. The same thing can be said in a corporation. Actions begin with you and ripple from there.

A Ripple Effect when referring to business is stating when one action can ultimately indirectly affect the company as a whole. For instance, in the above-mentioned example, the pebble or stone is indirectly affecting the shore by creating waves against the shore. Think of yourself as the pebble or stone and the corporation you work the shore.

In the business part of it, your actions and your job responsibilities is a large part of an organization whether directly or indirectly affecting how the business succeeds. You can cause the success or failure for a company just by performing everyday tasks. If in your job duties you make a mistake this may cause issues with the rest of your department if not caught in the interim. If still not caught, other departments are going to be affected by the mistake in an indirect way, thus leading to the customer. At this point you have indirectly affected the customer, one of which you may never see or speak. If that customer receives a product that is not to his standards, he may not want to come back to the company for any additional service and that leads to how well or long the company will survive.

Let’s say you work as a janitor. You may think that you cannot possible affect how the company succeeds; because you don’t do any customer services. Think about this, if you don’t do half of your cleaning and a big tour is coming through of new larger commerce customers and they see your business in disorder, do you think they will want to do business with your company if it isn’t clean? They probably wouldn’t. I know if I go to a restaurant and it is a pigsty, I am more likely to walk away. The same can be said with me trying to find a new garage to get my car worked on. You as the janitor are affecting how those new prospects will see the company for the first time; a clean, spot free successful business or a dirty, box-filled warehouse with little success.

Get to know your company and how it operates. Know how your department can affect others and even the customer. How can you or your job relate to the ripple effect? What actions can you do to help make the company succeed? It could be as easy as making your job more efficient, cutting off some time in how you do something prior to it going to the next department, making the customer not wait as long. Or even combining two departments into one and getting the customer in and out in a quicker manner or with a better product meeting or exceeding the customer’s expectations.

If you are still unsure how the ripple effect works let’s look at it from a different point of view. Think about the oil companies and how they affect the world. When the oil companies raise their prices on a barrel of oil, what happens next? The prices of groceries, clothing, and fuel go up while affecting us the customer. We are not actual speaking directly to the oil companies, but they have a big part in our lives and how we interact with society. We may stop purchasing as much gas. What happens next? Smaller businesses that depend on us lose business. Traveling becomes less and now we are affecting the World as a whole. The World is one big corporation.

By knowing how the ripple effect works and how you are part of the ripple effect you can help your company succeed. Every department in a corporation has a purpose and know-how of customer service whether directly or indirectly affecting the customer’s needs. Your corporation is a team made up of multiple departments, but all are working towards common goals.

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