At the very foundational level, a business must make a profit and generate cash. While there is a lot more that a business could and should do, it is only with the foundation of strong cash flow growth that allows these other things to happen.
Like Maslow’s Hierarchy of Needs, we can’t focus on self-actualization if we don’t have our primary needs of security, shelter, and food met.
As a society grows, it is easy for people to lose connection with the basics required at the bottom of the pyramid. It can worsen as people take them for granted or become dismissive of them. A building will fall when the foundation is weakened. We can see this happening in today’s society in many ways.
Here, Simon Sinek talks about current generations wanting to impact the top of the mountain without knowing the whole mountain:
Ensure that this does not happen in your business by connecting profitability and cash flow to actions and outcomes at each level of the organization. This is exceptionally challenging but also exceptionally rewarding if done correctly.
Do you understand the importance of the Contractor Scoreboard?