Managing Your Business for Long-Term Success

I want to share five business insights that made an important difference in the trajectory of my business career. These lessons are based on common sense. They apply to most areas of your business life and have no expiration date. They will be as valuable in 20 years as they are today. 

01 | The five P’s 

If you remember one thing about this article, it should be the five P’s: “Proper Preparation Prevents Poor Performance.” It took me a long time to learn this rule’s true value, and I paid dearly for it. Having outstanding performance is never easy. We may think that “great performers” simply have natural ability. Some do, but the majority are just like the rest of us. The main difference is that they spend time preparing. In fact, they are so well prepared that their performance looks effortless. 

Action item: There is no secret or shortcut here; just hard work. Encourage your team to develop the habit of preparing for everything—meetings, presentations, customer jobs, boss’s assignments, etc. You will get the best results by cultivating this approach as part of your team culture. It will take effort, but it will pay off. In my experience, the best way to accomplish this is through encouragement and example. 

02 | Recessions happen regularly and are largely unpredictable 

The possibility of a downturn or even a full-fledged recession is an ever-present concern for companies. Experience shows that recessions occur regularly and are unpredictable. Otherwise, the government would always take steps to prevent them. No one knows when a recession will occur, what will cause it, or how long it will last. The only thing we know for sure is that a recession will happen sooner or later. By the time it’s on the papers, it’s too late to prepare. 

Action item: The best option is always to be prepared. Keep an adequate cash reserve and manage costs carefully. For example, my company’s cash reserve is substantially larger than what is recommended. Having a large cash reserve decreases short-term opportunities but increases our chances of surviving a recession. 

03 | Do the boring work consistently and well 

Even the most interesting job comes with many boring tasks that we must do. Team members often perform these tasks grudgingly. This so-called mundane work doesn’t bring praise from managers. However, it is essential to the success of your company. Examples include preparing reports, managing schedules, collecting invoices, scheduling projects, paying suppliers, running payroll, etc. 

Action item: Your team members must understand that this work is important and fundamental to the company’s operations. Additionally, I take the extra step of praising employees who do routine but essential work for the company. They are often the backbone that keeps things running smoothly. Everyone must find a way to handle tedious, routine tasks. My approach is to spread routine tasks throughout the day. Mixing tedious stuff and interesting work allows me to keep my focus sharp. 

04 | Beware of the (expensive) sunk cost fallacy 

Recently, a sales team member was trying to land a major client. This account showed great potential. However, there was a catch. Sometimes the prospective client was very eager and acted quickly. At other times, they delayed decisions and did not return phone calls. A few months went by without completing the transaction. 

I knew where this was going. I told the salesperson that it was time to drop the effort. Understandably, the salesperson complained, “Why waste all the effort? I have worked so much and for so long on this account.” 

This situation is a classic example of the sunk cost fallacy. The salesperson evaluated whether to continue the transaction based on how much effort they had already spent. However, the time spent in the past is a “sunk cost” that cannot be recovered. The better approach is to ask if it is worth spending additional resources to continue pursuing this prospective client. The answer was evident in this case. Any further effort made no sense, and it was time for the salesperson to move on to newer transactions. 

Action item: Employees and companies often waste substantial resources on projects that should be canceled. There is no easy way to catch this problem since every situation differs. However, any project that does not yield results but is kept going “because we have already spent so much getting here” should be considered a strong candidate for cancellation. 

05 | Avoid unproductive meetings 

Early in my management career, I spent five to six hours daily in meetings and calls. This left me only with a few hours per day to do actual work. Many colleagues have complained of the same problem. In hindsight, many of those calls and meetings were not needed. They could have been resolved more effectively by email or other means. Accordingly, I changed my approach to meetings. This simple step allowed me to reclaim a large part of my schedule and freed my time to focus on productive work. 

Action item: Anyone requesting a meeting or Zoom call has to send a summary (e.g., one paragraph) of what they want to discuss and accomplish. The obvious benefit of this step is that you can determine if the meeting is needed. Oftentimes, the issue can be resolved via email or a quick chat. In cases where you must meet, the information allows everyone to prepare for the meeting. Consequently, meetings are short and productive.