Every company pays a hidden cost.
It has been there since the day the business divided its commercial work into separate teams. You will not find it on a tax return or in a financial report. No government collects it. Nobody signs it off. It does not appear as a line in the budget. Unlike every other cost your business manages, almost nobody is asked to reduce it.
In my last essay, I argued that nobody has ever seen the famous "10%"—the share of revenue that is said to disappear between marketing, sales and customer teams (Customer Success, Key Account teams). The reason is simple. A leak is revenue that never happened, and companies only record what actually happens. Lost opportunities leave no trace in the data.
That leads to a harder question. If almost every company loses something at the points where work passes between teams, perhaps this is not an unusual problem at all. Perhaps it is a normal part of running a business. That is the argument of this essay.
The 10% is not a mysterious leak. It is a coordination tax: the ongoing cost of dividing commercial work between specialist teams. Every company pays it. The fact that it is normal is exactly why so few companies try to measure or manage it.
But every tax has a rate. Rates vary from one organisation to another. The important question is not whether you pay the coordination tax. The question is whether you know how much you are paying.
Why the tax exists
Dividing commercial work into marketing, sales and customer success is one of the best decisions a growing company can make.
Specialists become better at their work than any generalist could be. Marketing focuses on creating demand. Sales focuses on winning customers. Customer success focuses on keeping and growing those relationships. This specialisation allows businesses to grow faster and perform better.
However, there is always a trade-off. Economists have understood this for decades. Ronald Coase and the economists who followed him showed that every time work moves across a boundary, there is a cost. Information is lost or misunderstood. Context has to be explained again. Each team starts to optimise for its own targets instead of the company's overall goal. Inside a business, every handover between departments works like a small marketplace. Like any market, it creates friction.
That means a company with no coordination tax is not a well-managed company. It is simply a company without specialists.
Zero was never the goal. The coordination tax is not a sign that something has gone wrong. It is the price of a structure that creates far more value than it costs.
The surprising part is something else. Businesses negotiate supplier contracts carefully. They work hard to reduce their tax bills. They examine almost every cost in detail.
Yet very few stop to ask a simple question:
What is the cost of the internal boundaries between our own teams? Why a normal cost never becomes a priority
Think about the issues that reach the leadership team's agenda.
Most of the time, leaders focus on things that have changed. They pay attention to unexpected costs, falling performance, or results that differ from the plan.
The coordination tax has none of those features. It is always there. It affects almost every company. Because it feels normal, it rarely gets discussed. There are four main reasons why it stays hidden.
The first is that it has no budget line. Most financial reports are organised by department. Marketing has a budget. Sales has a budget. Customer success has a budget. But the cost of work moving between those departments belongs to none of them, so it never appears in the accounts.
The second reason is that it creates no obvious variance. The coordination tax existed last year, and it will probably exist next year. Since it changes very little, it never triggers the reports that highlight unusual performance.
The third reason is that it has no owner. Every department has someone responsible for hitting its targets. But who is responsible for what happens between departments? Usually, the answer is nobody.
The fourth reason is that it is already built into expectations. Budgets, forecasts and industry benchmarks all assume that companies pay some level of coordination tax. When everyone around you pays a similar price, your own costs look normal, even if they are higher than they need to be.
There is another reason as well, and many leadership teams know it all too well. Most organisations have already tried to improve "alignment" between departments. They have held workshops. They have created shared communication channels. They have organised off-site meetings and cross-functional projects. For a while, everyone feels positive.
Then daily pressures return. Quarter-end targets take over. Teams go back to protecting their own numbers. Before long, the improvements fade away.
As a result, many leaders hear the words sales and marketing alignment and think, We've already tried that. The problem is not only ignored. It has also lost credibility.
The coordination tax is already on your agenda—just under a different name
This is why the discussion matters today more than ever.
Look at what leadership teams are focusing on. They want to improve productivity. They want to reduce costs. They want more accurate forecasts. At the same time, many companies are increasing investment in sales and marketing because those teams are expected to deliver future growth.
Taken together, these priorities reveal something important. Companies are putting more money into their commercial engine while expecting it to become more efficient.
Yet almost nobody talks about the coordination tax itself. Instead, they talk about its symptoms.
When leaders ask, "Why does growth become more expensive every year?", they are seeing the coordination tax in rising costs.
When they ask, "Why can't we forecast accurately?", they are seeing the coordination tax in inconsistent data.
The name changes, but the underlying problem stays the same.
There is another consequence. If you increase spending on marketing and sales while the coordination tax stays at the same rate, the total amount you lose also increases. Imagine paying a 10% tax. If you double the amount flowing through the system, you also double the amount lost to that tax. That means you can improve efficiency inside every department and still spend more than ever on the gaps between them. The seams become more expensive, even though each individual team performs better.
Where the tax becomes visible: the buffers
If the coordination tax never appears in a report, where does it actually show up?
In my experience, it lives in the buffers that teams build into the way they work. Watch a commercial organisation closely and you will see each team quietly adapting to the friction between departments.
Marketing generates more leads than it really needs because experience has taught the team that some will be lost before sales acts on them.
Sales fills the pipeline with extra opportunities and adds a safety margin to its forecasts because deals often slow down or disappear during handovers.
Customer success teams may offer a small discount to secure a renewal. It helps them meet their targets, while the long-term impact on revenue is spread across the business and becomes nobody's direct responsibility.
None of these decisions are dishonest or careless. In fact, they are sensible responses to the system people work in. Each team is protecting itself against problems it expects to face at the boundaries between departments. These buffers are the coordination tax made visible. Taken one by one, they seem reasonable. Added together, they become a hidden cost that runs through the entire commercial engine.
This is another way to think about the famous 10%. It is not simply a statistic. It is the collection of habits, workarounds and safety margins that teams have developed because they expect friction between functions.
I saw one of these buffers develop over the course of a year in a sales-led organisation. Lead generation improved, and more enquiries entered the pipeline. At first, that looked like good news. The problem was that the sales team was already working at full capacity. Leads began to queue. As they waited, many gradually lost interest. They did not disappear because they were poor-quality leads. They disappeared because nobody was able to respond quickly enough. When planning time came around, the solution seemed obvious. Generate even more leads. The extra volume became another buffer, designed to compensate for an operational problem that nobody was measuring directly.
From the company's point of view, the numbers still looked acceptable. The system could not distinguish between a lead that was never likely to buy and a lead that had simply waited too long for a response. Both ended up recorded in exactly the same way. The real problem remained hidden.
Normal does not mean fixed
At this point, it is worth making an important distinction. Every business pays energy bills. That does not mean every business pays the same amount. Companies still invest in energy efficiency because they know their costs can be reduced. The coordination tax works in much the same way. The often-quoted 10% is best understood as an average, not a universal rule.
Some companies have designed their commercial engine so that teams share the same customer definition, the same view of the pipeline and the same performance measures. As work moves between departments, very little value is lost.
Others have allowed every team to develop its own definitions, processes and targets. Every handover creates extra friction. Every boundary charges a higher toll.
Because many companies operate this way, it is easy to believe that these costs are simply part of doing business. Against the average, they are. Against the best-performing organisations, they are not. That changes the goal. The aim was never to eliminate the coordination tax completely. Anyone who promises that is really promising to eliminate specialisation itself.
The real opportunity lies somewhere else. It is the gap between the rate you are paying today and the lower rate achieved by organisations whose commercial teams work together more effectively. That may sound like a smaller promise than the claims often made by the alignment industry. In reality, it is a more realistic and more useful one.
Before you can close that gap, however, you need to know where you stand. You cannot improve a tax rate that you have never measured. As I argued in the previous essay, that measurement does not already exist inside your CRM, your finance system or your dashboard. It has to be assessed directly, using evidence rather than opinion. Only then can you compare today's result with next year's and know whether you have genuinely improved or simply changed the story you tell yourselves.
Normal tells you where you sit against everyone else. It doesn't tell you what the coordination tax costs you — and that figure comes from your own handoffs, not from a benchmark.
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