Balancing Your Perspective

By: Tom Cramer

Split personalities are normally thought of as a problem or the key element of a crime drama. However, the successful business owner and manager is forced to develop something of a split personality to successfully accomplish their unique jobs. Dealing with the wide range of issues, challenges, and decisions faced day after day requires the ability to rapidly switch perspectives from strategic to tactical, short to long term, and people versus mission.

Fighting the Tyranny of the Urgent

One of the best ways to become a more efficient and effective leader is to understand the role of perspective. Increasingly, everyday challenges leave you with more to do than time to do it. Ironically, the more successful you are, the more seeds of defeat are sown and allowed to grow.

Forcing yourself to deal with what is important instead of merely urgent is key to eliminating those seeds. For example, we all at one time or another find we have a difficult team member. If that person is creating a specific problem or is delaying a project, it is tempting to deal with that specific issue of the moment. Such a tactical approach deals only with an urgent problem, seldom producing a long-term solution.

However, the strategic approach is to schedule a time to consistently review team and individual performance. Done during a dedicated time that is free from the pressures of a project or deadline, you are able to focus on that core issue and devise solutions that eliminate those recurring “management fires.”

The same concept applies to every aspect of your business. The need to alternate between the immediate, tactical issues and the less immediate but vital issues of your business is best addressed as a developed skill, not merely using your gut as situations arise.

It might help to think about the difference in managing your business by cash flow or by the balance sheet and operating statement. Far too many businesses are not properly capitalized, so management time is inordinately consumed by the need to find the cash to pay bills, make payroll, or simply buy inventory. That “cash flow” mentality keeps you fighting fires throughout the day. You are the slave to the urgent, not the master of the important.

If, however, you step back and take the balance sheet/operating statement perspective, you can carefully address your company’s situation. You can ask why you are in a cash flow grind, and what the possible solutions are. Then, you are in the position to develop a capital structure that provides the cash reserves before they are needed.

Of course, many of you are shaking your heads, wistfully thinking that would be nice, but it’s just not realistic.

That is when you must ask yourself, “Why?” Why are prudent, standard business practices not realistic for your enterprise? There are only two answers.

First, your business is not doing well, and the cash flow problem is the symptom of a more critical issue. If so, it is even more vital to address that issue now, rather than when it is too late.

Secondly, you find your success is creating cash flow problems. It is axiomatic that growth consumes cash, fast growth consumes cash fast. While this is a problem we all want, it is also one that requires you to take the time to handle it properly before it damages your long-term prospects.

Allocate the time to reflect on an important lesson from the insurance industry. The most successful of these firms learned early on that their real job was to help policyholders prevent fires, not just pay out damages when fires occur. 

As the head of your management team, your role is more fire prevention than serving as the fireman putting out those fires. You, of course, must do both, but the more time spent on prevention, the less you have to pick up that hose!