Decisions

The Blue Hook Philosophy [7/10]

This post is part of an upcoming e-book which will be completed in 2015.

“How often does leadership make short-term decisions that are contrary to the long-term vision?”

– Question #7 from the Startup Quality Survey

Short-term decision making affects everyone from customers to employees and investors. Deming pointed out that an emphasis on short-term profits was in direct opposition to creating a constancy of purpose and that the constant push for innovation could also cause employees to be fearful of losing their jobs. What would happen in your own life if you made decisions every day based on the immediate result? What if all of your decisions were centered around the long-term benefits? The outcome for a business isn’t any different.

Your first priority running a small business has to be your existing customers. The happiness and well-being of your teammates might be a close second, but they are dependent on sales revenue from clients. If your long-term goal is running a sustainable business, then the best way to get there is by keeping your current business partners happy and helping your team stay focused on that endeavor. While it is natural to want to grow by winning new clients, this must be balanced with your first priority, and kept in line with your long-term goals.

We discussed the merits of cross-functional teams in the previous chapter, yet even team members within a specific role benefit both themselves and the business by diversifying their experience completing various tasks. All too often a leader will choose to have the person with the most expertise take on a time sensitive issue. If there is a big divergence between highly specialized software developers for instance, encourage them to pair program and reduce that gap. It may take longer to solve the problem, but this is an investment in your business that will pay off in the future.

Financial decisions on the part of both investors and small business owners are generally focused on the short-term as well. This short-term outlook is explicit with something like venture capital, where raising a round can incite hiring and cause the team to stretch themselves too thin in the pursuit of revenue growth. Both parties should seriously consider the impact that this will have on existing customers and employees before jumping into an agreement that is dependent on an “exit strategy” if they are interested in being in business for the long run.