Manage with your Head, but Lead with your Gut

Posted on January 17, 2011 04:00:00pm by Okanagan Business Examiner

A small business can be nimble and quick, but, if you’re like Jack and thinking of jumping over the candlestick, make sure the risks are factored in first so you don’t get burned. When it’s time to leap, go for it without hesitation.

A small business can be nimble and quick, but, if you’re like Jack and thinking of jumping over the candlestick, make sure the risks are factored in first so you don’t get burned. When it’s time to leap, go for it without hesitation.

That’s the advantage of a small business: the ability to move quickly when necessary. When the economy is booming, that’s a plus.

Now, the urge to move quickly may be costly. There are many tempting opportunities around, but you may want look before you leap in this economic environment.

In my years of banking and working with entrepreneurs and businesses of all sizes, two things were abundantly clear:

• Owner-operated, smaller businesses tend to be lacking in good analysis and evidence-based decision-making.
• Larger corporations often get mired in the details and are more likely to suffer from analysis paralysis.

What’s the happy medium? My advice is to spend time on your strategy —quality time— and ensure you use all the expertise you can. Just don’t forget your instinctive strength.

With a slower economy, this is the time to weigh decisions and work on the important long-term strategy that needs to be behind every seemingly quick decision.

Take a good, hard look at where your company is today, where you want to go and the options of how to get there. Chart your course and start making decisions daily that help you move closer to your goals. Measure your progress often and regularly against predetermined milestones.

Good, strategic management starts with thorough analysis of the current situation and options. Nowadays that’s easily accessible and affordable with computers and software applications that have simplified complex decision making.

As well, many successful business owners are now setting up advisory boards to help with strategy.

Don’t forget your strength as a small business, however. Instinct plays a key role, too. You need both the research and awareness to make sound business decisions.

In other words, manage with your head and lead with your gut.

You have heard the adage: “A poor strategy brilliantly implemented is better than a perfect strategy poorly implemented.”

Dynamic and outstanding leadership requires razor sharp instincts and passion to catapult ahead of stiff competition. Often, no matter how good the objective data is, implementation requires a more human element.

Taking too long to decide can complicate matters. Opportunities can be lost in the meantime. You may have to pounce on immediately or lose out. Trust those instincts.

How many times have we found ourselves saying, “If I only jumped on that sooner or when I had the chance?”

This is often the case in property purchases. In your gut, it seems like a lucrative buy, but you debate over the price and, in your analysis, think it is probably too expensive. Someone else jumps on it, creates value and makes the money you dreamed about.

This is the defining characteristic of master entrepreneurs. They jump on opportunities, and move boldly on calculated risks —never looking back; emphasis on “calculated risk.” Good entrepreneurs know their market, their business and recognize the opportunities, even when they come up unexpectedly.

They will have a formal strategic plan that they are firmly committed to and can confidently jump on opportunities because they instinctively know what will work for them.

Yes, knowledge is power and it is important to use good information when solving problems. Evidence-based decisions are usually better than those made blindly, but don’t get bogged down in the data and let analysis paralysis set in. Trust your gut. Your experience, insight and wisdom play a vital role in the process.

The best case scenario is when your head and gut are aligned. Then, you know you’ve made the right decision.

Lorraine McGrath, MBA, of McGrath Executive, is a strategist, corporate director and advisor to businesses that are driven to succeed. Her achievements in business, community-giving and role-modeling have been recognized with several significant awards including Distinguished Alumni, Athabasca University, Woman of Distinction, Woman of the Year and Honourary Fellow. www.mcgrathexec.ca.