Several times recently Team Members have explained (fully or partially) an expense decision by saying, “It’s in the financial plan.”
The rest of the story is that while they may be making the EXPENSE side of the financial plan, they are far off on the REVENUE side. They were not achieving financial plan net operating income (NOI).
• Always give BOTH sides, the FULL story. It is misleading to say an expense is in the financial plan when in truth you are missing NOI. Telling the FULL story builds confidence an creditability. Making others dig it out of you undermines your professional reputation. Furthermore, our words reflect our thoughts, our thoughts drive our actions, our actions impact outcomes.
• When you miss the revenue side of a financial plan, everything on the expense side comes under additional scrutiny (while still avoiding being penny wise and pound foolish).
• We all are leaders, to ourselves and as role models to others. It is a leader’s responsibility to enforce the small pain of discipline and self-control before reality imposes much bigger pain.
There are times in the business cycle when it makes sense to focus much more energy on increasing the revenue side than on tightening the expense side. Unfortunately in the current economic malaise, there is relatively little upside to be found in revenue, making expense control all the more vital.
“Thrift comes too late when you find it at the bottom of your purse.” — Seneca; 4 BC–65AD, Roman philosopher and statesman
“Industry, thrift and self-control are not sought because they create wealth, but because they create character.” — Calvin Coolidge; 1972–1933, 30th president of the United States
“Cannot people realize how large an income is thrift?” — Cicero; 106 BC–43 BC; Roman philosopher, statesman, lawyer