Lessons in Leadership: Short Term Thinking Can Kill Your Business

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How many times did I lose the girl to the fast-talking smooth talker? Too often to count.

How many times did I miss out on business deals because I did not just tell the client what they wanted to hear – and someone else did? Plenty of times.

Am I happy about it? Actually, yes.

In the end I not only got the girl, but I got the right girl – although my wife of 29 years says that I tricked her by “acting” like an interesting, fun-loving person. In my defense, it was so hard to “act” interesting that the real boring me came out on the second date – and she still married me – so blame her.

And the business that I did actually win was good, honest, long lasting, mutually beneficial business that continues to this day.

Lesson 1: Fair Pricing and Profit Margins

Your product or service must provide real value to your customer. If it does not, then stop reading this and re-evaluate your business completely. If it does, then you should set your profit margin in line with similar businesses in your industry. You should assume that your client will find out your profit margin – because they often can and do. If you cannot realistically defend your profit margin, then you are making a conscious choice of short-term, unsustainable profits over long-term, healthy, mutually beneficial business. Short-term thinking may get you a small profit now, but that profit will be dwarfed by the lost profit over a lifetime in business, not to mention the irreparable damage done to your reputation.

Lesson 2: Winning on Low Price

Some are successful at winning business with the lowest price. Unfortunately, this is often also a form of short-term thinking. How can your price be significantly lower than your competition without negative ramifications? Where are you cutting corners and how does this ultimately affect the true value your customer receives? Is your product defective? Do you have high turnover of your employees resulting in poor customer service to your client? Will you have to raise prices or reduce your service offering in the future, effectively pulling a bait and switch with your client? Plan for the long term by coming up with a pricing model that reflects the quality, service and reliability that your business provides.

Follow along for the Lessons in Leadership shared by the rest of our Senior Leadership Team throughout the month of March, and share your own on social media with #LessonsInLeadership! 

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The featured photo on this post is a derivative of “Binoculars at The Top of the Rock” by Jeramey Jannene and is licensed under CC BY 2.0

Follow Bert Morano:

Founder and Executive Chairman

As a life-long consultant himself, Bert founded Solving IT in 1992 with the vision of transforming IT departments within Fortune 1000 companies. Under his leadership, and with support from many valued team members along the way, the one-man shop he started is approaching 25 years of excellence in the IT solutions and recruitment industry and has employed over 800 consultants and full-time employees in its tenure. He continues to be a hands-on leader and is a key supporter of a fun and productive work environment, as well as the IT recruitment industry overall.