Two challenging scenarios emerge from just about all the leaders with whom I collaborate:
1st Challenge: Cash Flow Followed by EBIT, then Revenue
In running an enterprise, bear in mind that some numbers are more important than others. For some unknown reason, executives concentrate on the 'holy grail' of revenue. Whilst I agree that selling is of the up most importance, earnings before interest and tax (EBIT) together with a positive cash flow take precedence over the notion of revenue. Here's why.
ENTERPRISE
Leave A Profit
You need to show a profit (earnings) not just for the organisation as a whole, but for each one of the product and service lines that you offer. The most effective business leaders understand, treat, and measure each product / service and their associated market sectors as a mini-enterprise, making sure that each one turns a profit.
There is nothing more demoralising than to find out that you have been selling or better still spent resources marketing a service that contributes nothing or very little to the bottom line after all relevant costs have been taken into account. If it doesn't contribute, shut it down. Your business is not a charity. By doing so, you respect yourself and translate that message to others.
Fair Exchange
Choose your clients carefully. Just because they buy from you does not necessarily make them a long-term client. Neither does the fact that you make a profit through the transaction.
Make sure they pay you on time through the Law of Fair Exchange. Otherwise you both move into a state of fear and guilt, and you the enterprise owner moves into overdraft mode so that you can carry the cost of the transaction. If they don't pay, you don't play!
2nd Challenge: Creating Space, Time, & Peace Of Mind
How many of us can truly say that as business leaders, we have an abundance of this Holy Trinity?
Busy Being Busy
As human beings, we are pre-conditioned from a very young age so that we conform to society's framework. Everyone goes to school during these times. Everyone works for 5 days, etc, etc. As business owners, we feel that we have to take care of everything in the 12-hour day under the spirit of leadership. But who said we have to follow this rhythm?
Results Only
What really matters at the end of the day are the results we have to show. More importantly, results within a reasonable time frame, not through overwork and burnout that is so common these days.
Streamline & Travel Light
Effective executives sit back and evaluate the enterprise regularly. Non-performing profit centers are eliminated. So are non-core activities, markets, staff, alliances, and relationships. It can be tough for some of us to reflect on how we spend our energies. Always keep in mind, either we run the day, or the day runs. Either we run the company, or the company runs us.
ENTERPRISE
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