The crisis of the U.S. debt ceiling has taken over all our media channels. It is an issue which cannot be avoided or ignored. The inability of our country’s leaders to come to an agreement on how to move forward threatens the stability of our economy, our security, our credit rating, and potentially even the strategic financial future of the world. Perhaps there is no easy answer; as we didn’t get into this pickle overnight, it makes sense that we can’t navigate out of it overnight either. However, as a business person, I can’t help but wonder why basic business principles can’t be applied to this situation.
Those of us in business (and those managing our own households) must embrace reality regularly. I live with real challenges of new proportions as I build a business, publish my first book, and reinvent my overall professional platform – all in the worst recession our generation has seen in our lifetime. I have to make brutally tough decisions every day. My funds are not unlimited; trade-offs must be made and faced. Things I once considered “given” are now luxuries. There is no magic button to push, and no giant bank in the sky from which to borrow.
A few basic business thoughts for our government leaders to consider:
1. We must spend less than we make to keep our businesses profitable. We need to live within our means. Simple concept – yet, for some reason hard for our nation to grasp. If we borrow, we have to pay it back on time and not default. There is no other option for us as individual business people unless we file bankruptcy. Is that an option we want to face as a nation?
2. When we are under the gun to make payroll, we have to prioritize around what absolutely must go right to stay afloat. We must do those things. Other things must be cut until we become profitable again.
3. We have to face the reality that there is the marathon race and a sprint race. We must determine which race are we in today and what strategy needs to be deployed. The races are different. Things will continue to change; nothing is permanent. However, hard choices must be made to look the current tiger in the eye. Oh – and this concept applies to everyone. Everyone will be affected and ultimately owns where we are – and where we are going. We are all in this together.
4. We must save and invest (even if this is a relatively slight percentage) for the future – if we don’t, who will? How to invest? We have to go back to our priorities and the “race” we are running. What is our obligation to our shareholders? What is our strategic intention as a business? Where are we going and why? What will enable us to continue to honor our bylaws, our rules of governance, and provide a strong place of employment for our constituents? (These questions absolutely apply to our nation, our forefathers, our veterans, and every legalized American living today. We own it.)
5. We have to continue to GROW our business. Operational cuts are never the only or the ultimate answer. We must grow, expand and diversify. Top-line revenue is the lever to pull. Sure, making budget cuts to continue to take fat out of our system is a necessary step – we refer to this as “working smart.” Yet, we also must have a strong strategic growth plan to keep business healthy. All else ultimately leads to cutting into bone to meet financial demands – and that is not a sustainable answer.
What do you think? I am not asking for political opinions, but perspectives on how basic business principles of aligning our strategy, our values, our investments, and ultimately our judgment calls could apply to the current realities facing our country.