I confess that I tend to crack up on the inside when I hear a CEO talk about unit economics, and even more so when I hear young financial analysts using examples in their organizations. In my situation, I can tell they have heard the term, but they really don’t understand unit economics.

And don’t get me started on the LinkedIn gurus talking about unit economics. Show me ten posts on this topic, and you’ll get a range of explanations on this topic.

I’m not downplaying unit economics. Understanding unit economics in QSRs, dentistry, eCommerce, niche contracting, HVAC providers, and many other industries is a great starting point for applying our business acumen smartly and effectively. However, if we stop there, unit economics is narrowly scoped relative to the organization’s broader financial picture.

And that’s where throughput economics comes into the picture. It’s part unit economics, and part functional finance.