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Daily Leadership Thought #187 – Decisions Have Consequences

August 4, 2011

Free Pensive African American businessman in beige formal jacket and wristwatch and bracelet on hands looking up on blue background Stock Photo

There seems to be a dearth of good strong corporate values and basic common sense these days.  The objective of any business should be to make a good profit. It should also be to build long term, sustainable economic value accurately reflecting the risks inherent in its internal and external environments.  The best way to navigate these risks is to have a strong sense of who you are and what you will and will not do.   There are no shortages of opportunities or landmines out there. However, I have always believed what they say “No” to define a leader and their business.

Sometimes the reasons for saying “no” are obvious such as an unattractive return on investment, declining market potential or product obsolescence. Often, however, the rationale is less clear.  It is equally important to weigh considerations such as

In addition, many decisions have moral or ethical dimensions like choosing not to pay the fair share of your tax burden, disregarding the potential impact of your actions on the environment, ignoring safety and health concerns, and using child labor.

Many of our leaders are saying “YES” to things they should have said “NO”.  Examples of this can be seen across all industries:

  • Rushing an automobile through an assembly line at the expense of quality control
  • Creating financial instruments that hedge against the interest of their own clients
  • Putting mine workers in potentially unsafe and life-threatening situations
  • Inadequately protecting the personal and financial records of clients
  • Improper maintenance and conditions on offshore oil rigs
  • Manufacturing profits overseas to avoid paying US taxes
  • Continuing to spend money you don’t have and piling up a debt burden that will haunt future generations

All decisions and actions have consequences. The more people affected by your decisions, the more carefully they must be made. You should assess the pros and cons and consider the inherent risks.  Profit is good, healthy balance sheets are good, positive cash flow is good.  Lacking basic core values and fundamental common sense is bad.  It is never advisable to win on the cheap or at the expense of someone else’s personal well-being.  You can do well by doing good!  In fact, it should be preferable to operate in this manner.