Are you, or do you wish to be, a real leader, manager, or a place holder? How will you react when there are obstacles, adversity, or financial challenges? Will you be myopic, attempting to put a band - aid on a hemorrhage. or will you look at the bigger picture, identify and realize ramifications, and look outside the box, seeking a better, more viable, sustainable solution? Myopic leaders are referred to that way, because they are truly near - sighted, often over - reacting to issues and obstacles, and relying on draconian cuts, without considering the possible ramifications of these actions. True, relevant leaders, will address financial issues, by addressing current needs, priorities and challenges, in a manner, which avoid having a negative, long - term impact! Let's review 6 cases, when certain types of budget cuts, do not create the right type of savings.
1. When it impacts revenues:
Consider the affect any reduction might have, on revenues. For example, cutting/ slashing advertising, will obviously cut costs/ expenses, but what impact will it have on revenues, membership, relevance, sustainability, etc? While some reduction in revenues might be warranted, if they come at too high a price, one must be careful, to avoid the tendency to panic and/ or over - react!
2. When it impacts membership numbers:
Are you prepared to examine and fully consider, the effects of certain types of cuts, on membership numbers? How might this impact membership retention, as well as attract new members? Are you making cuts in services, or are they focused on waste reduction? If your cuts hurt your membership numbers, you are hammering a nail in your organization's coffin!
3. When it's a band - aid, and not sustainable:
Which approach will you follow: Merely addressing current perceived problems, or examining the cause, and addressing that, instead? Will your attempt to heal the wound and stop the bleeding, instead create a prolonged challenge, which, left unaddressed, will transform into a carcinogen?
4. When cuts are not, priorities - based:
If the approach is to cut everywhere, across the board, rather than focusing on waste reduction, reducing non - essential services, or evaluating when outsourcing might save funds, you are not really saving anything, but rather hurting your organization's prospects for sustainability!
5. When it's not timely:
The most efficient, effective way, to accomplish what's necessary, and address challenges in a productive manner, is to take well - considered, timely action. Rhetoric - driven, populist- focused leaders, blame and complain about what is lacking, without introducing viable, timely alternatives, or seeking solutions. When cuts are done methodically, and in a focused way, challenges are most effectively addressed and overcome!
6. When you don't follow the budget:
One of the primary reasons, organizations face financial challenges, is the failure to comply and stick to the restraints and suggestions of their budget. A budget, even the best - prepared and developed one, only works, when it is followed!
Be a wise leader, who is fiscally responsible, but not myopic! Always consider the ramifications of any financial decision!
Richard has owned businesses, been a COO, CEO, and Director of Development, as well as a consultant. He has professionally run events, consulted to thousands of leaders, and conducted personal development seminars, for 4 decades. Rich has written three books and thousands of articles. His company, PLAN2LEAD, LLC has an informative website: http://plan2lead.net and LIKE the Facebook page for leadership planning: http://facebook.com/Plan2lead
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