Are Big Decisions Really Small?
Having owned a small business for many years, I’m used to making daily decisions. The buck definitely stops with me. There is no one else to blame if things go awry.
When we first started, my husband and I created a formula to price our products. If we were to be profitable we had to know our material and labor costs, overhead, debt and tax liabilities. We established a niche market and have never wavered from our commitment to maintain that focus.
The basis of our business philosophy has been to make every job profitable. We’ve always said, if we’re not making money on the order, we might as well lay on the beach. On the other hand, if every job is priced to turn a profit, we are bound to be successful in the long run.
The moral of our entrepreneurial story is that if you make smart, small decisions daily, they add up to big results. You don’t bet on the future but on the decision facing you at the moment. If you lose the bet, that’s feedback and an opportunity to make a wiser next step. There’s nothing wrong with long term goals, but achieving them begins with what you decide to do now.
Many businesses adopt a different philosophy. In Businessweek.com, Jeff Bezos, CEO of Amazon.com, is quoted saying, “Percentage margins are not one of those things we are seeking to optimize.” The Bezos philosophy is characterized as having more interest in free cash flow and market share in what he considers an untapped market (web sales). He prefers to cut prices more and more to drive growth. Customers and investors have so much faith that “they’re willing to tolerate razor-thin or nonexistent profits in exchange for continued market share gains and a promise of windfall profits someday.” (Read that last word again).
USA Today reported that Amazon sells their Kindles at cost to hook readers in so they’ll by Amazon e-books. Much like your local grocery selling toilet paper for $.25 so they can get you into the store to spend $200 on other stuff. Or your desktop printer that costs nothing compared to the ink cartridges that drain your wallet. These retailers and manufacturers are banking on your loyalty. Or capturing you in their web.
Internet marketing today is much the same. You must give away information and products to gain loyalty. Customers want assurance that your product has value. Empty promises will get you nowhere because the next guy’s giving it away for free.
I purchase from Amazon regularly and appreciate the cost savings. But I shiver at the thought of running a company with that philosophy. Like a maze with no sense of direction. I don’t know how to make future decisions. I only know how to build on decisions based on the outcome of previous decisions. Do more of this and less of that.
Daily decisions for strategists like Bezos are like grains of sand. Unseen until there are so many grains piled up a beach finally appears. The risk of one wave can wash all the progress away. It takes a certain kind of leader to drive that train.
I think most of us are better off stacking blocks than accumulating grains of sand. One small block (success) stacked upon another. Our own individual tower. It may be narrow and may topple a time or two but at least we can see our progress and learn from our mistakes.
Maybe I lack the sophistication of a business school graduate or just have a low risk tolerance. All I know is it’s been over 9000 days of small decisions in our business and we’re still tickin’ away. I never would have crossed the finish line of marathons had I not focused on completing the very next mile.
If you have big goals, or are paralyzed by ambition, focus on making one really smart, small decision today. That’s 365 wise decisions in a year.
If life is about the journey, those small decisions can add up to big success. With plenty of reasons to celebrate along the way.
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