Why business owners need to be skilled short-term AND long-term thinkers
I was a bit shocked recently when a friend told me he had drawn down $10,000 from his super. This opportunity has been made possible as a short-term measure under provisions allowed by the Australian Government to help those who have been devastated by the economic downturn. At the time of writing 2.4 million people have withdrawn $27billion from their super policies. The reason I was shocked by my friend’s admission was because he stated he had drawn down the money so he and his family could have a much-needed holiday. Both he and his wife have full time jobs, but they do not have savings other than their superannuation.
He is in his mid-40’s and by the time he will need his superannuation for retirement income, that $10,000 would probably have grown to $30,000 or $40,000. This is a great example of unresourceful short-term thinking. My friend has made a poor financial decision for himself and his family. In this more challenging financial time, he would be better to forgo an expensive holiday for some cheaper camping weekends away.
There is a place for short-term thinking
Business owners have the challenge of being good at both short-term and long-term thinking. We need to be able to focus on the issue that is causing a problem right now and initiate action to solve it. We need to be totally present in the moment with a staff member who is not coping with their role. We need to be proactive and empathetic where there is conflict to resolve. We need to make sure we are tuned in to listen to our client’s real needs so we can truly serve them.
Focused short-term thinking is very important to all kinds of issues that contribute to business success.
Unresourceful short-term thinking is a trap. Business owners who spend their days responding to all kinds of demands from customers, staff, phone calls and emails are always going to find it challenging to be strategic and productive. They are too busy working in the business to be able to work on the business. So many tell me they cannot afford 4 hours each quarter to plan their next 90 days. Time after time I hear stories from my Quarterly Planning Workshop attendees of how carving out the time to create a strong 90-day plan saved them time and significantly increased their productivity.
Long-term thinking is usually a business owner’s bigger challenge
Long term thinking always involves delayed gratification. It requires us to learn to remove ourselves from the tyranny of the urgent and carve out time to think about our business. As Stephen Covey stated so well in 7 Habits of Highly Effective People, there are important things that can be totally eclipsed by our responding to things that feel urgent. Things like clarifying vision, creating strategy, goal setting, branding, marketing, planning and relationship and team building. Also, few business owners take the time to reflect on ways they might do things better. Without the perspective that comes from long-term thinking it is difficult to know which activities to prioritise each day. No wonder productivity is often low and profitability even lower.
Both long-term and short-term thinkers must be resourceful
Unresourceful short-term thinkers are usually driven by fear. For some reason they feel their survival is threatened. The recent Covid-19 lockdown initially stirred up a lot of uncertainty, but resourceful businesspeople were able to regroup and reshape their business to suit the new circumstances. A Sprite advertisement urges us to ‘Obey your thirst”. This could be the motto for unresourceful short-term thinkers. They are usually poor at saving or planning or any of the skills required to build a successful life or business. They struggle to say ‘No’ to people and end up doing their important work at night when they would ideally be with their family.
Unresourceful longer-term thinkers are the dreamers and procrastinators of our world. They are always planning and talking and thinking but NEVER doing much to make anything happen. These people are often disappointed and frustrated by the time they hit their mid-years.
Which type of Thinker are you?
How skilled are you at moving between short-term and long-term?
What do you need to work on? Your short-term or your long-term thinking. I would love to know. What questions do you have after reading this article?
If you would like help in any way to get the balance right in your business feel free to reach out and book a 30-minute call where we can begin a conversation about you and your business.
If you want a focused plan to build strong foundations in your small business check out my small business essentials group mentoring program which starts on August 1, 2020.