Daily Leadership Thought #187 – Decisions Have Consequences

There appears to be a dearth of good, strong corporate values and basic common sense these days. The primary objective of any business should be to generate a profit. It should also build long-term, sustainable economic value that accurately reflects 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. Opportunities and obstacles abound. However, I have always believed that what a leader and a business choose to say “No” to defines them more than anything else.

Decisions Have Consequences

Occasionally, 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

• How will this decision affect our employees or the community?
• How will it benefit the consumer or end user?
• What are the ramifications for our strategic partners and vendors?
• Will we be chasing short-term gain and sacrificing long-term sustainability?

In addition, many decisions have moral or ethical dimensions, such as choosing not to pay the fair share of one’s tax burden, disregarding the potential impact of one’s actions on the environment, ignoring safety and health concerns, and using child labor. Many leaders say “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 interests 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 associated with the decision. Profit is good; healthy balance sheets are good; positive cash flow is good. Lacking basic ethics, core values, and fundamental common sense is bad. It is never advisable to win 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.