For so many very important reasons – pursuing capital to grow, positioning a business for a sale, recruiting new executive talent – the vast majority of business owners seek to have their companies judged and valued on its future prospects, and not its past results.
The truism of this for any business, and the executives that lead them, should be obvious and freeing.
Obvious in that, of course the past is past, and that concepts of business value are inherently future-focused and determined.
The easiest analogy here is from the world of sports.
Who would be more valuable to a team seeking to win a championship? The 21 year old Chicago Bull rookie Michael Jordan, starting his career with no professional resume or accomplishments, or his 40 year Washington Wizards version, possessive of 6 NBA Finals MVPs, over 30,000 points scored, and universally regarded as the greatest player in basketball history?
Because sports is so visceral, so visual, it is far more obvious than in business to separate and properly rate past performance, and its predictive value for future results.
And this “past is past” motif is freeing, especially as we are confronted with the competitive and technological challenges of our modern, global business marketplace.
Yes, when we are feeling a bit overwhelmed by it all, “past is past” can be a mantra, convincing ourselves that we can manage and lead our businesses to new and better forms and brand positionings, and not just be defined and “boxed’ by what we have done and been before.
And isn’t this, beyond making money (which is so awesome in its own right!), what draws so many of us to the world of business?
To be masters of our own fate, to have and exercise control, to fight through and against, and to win.
But realistically, the past will always be with us, and it especially will rear its confining head when we seek help to grow and change our business in a big way.
It goes like this: A business plan is prepared, outlining the very bright future for our company that we seek to bring to life.
That plan, along with our company’s past financial statements, are reviewed by a prospective investor / partner and the feedback comes back as:
“I love your big vision and ambitious financial goals, and I want to be involved. But, last year your revenues only grew 10% and your net margins were very thin. So yes, your growth and business plans are awesome, but because of your results-to-date I value your business today as being worth….ZERO.
Now let me be crystal clear. The proof, of course, is in the pudding, the overriding purpose of a business always is to make money, and executives either lead their companies to do so or they do not.
The problem is when we hear, in the said and the unsaid, too much of “stop us in our tracks” feedback like the above, and it gets internalized.
And we pull in our sails, if even ever so slightly.
And we lose just a little of our virtue, and start concerning ourselves with what’s in it for ME and not the organization as a whole?
And we start defining, and not informing, ourselves by our past, and get into that rabbit hole dialogue genre of “it hasn’t worked before, so it won’t work now.”
And too many dialogues, internal and external amongst a company’s management team, and slowly but surely that company devolves from being one of promise and potential, to one stumbling along in that dreaded land of the walking business dead.
The way to keep this from happening (or if it is happening to your business, to reverse it!), is to come back to our obvious and so freeing first principles.
That the past is past.
That the most important day of our business life is this one, and then the next one, and the next one, and so on and so forth.
And if we feel ourselves being pulled back to the past and slowed and distracted from our future-focused visions and financial goals…
…let’s refocus ourselves on what got us excited to work in business in the first place.
To look forward. To build. To contribute. To fight the good fight every day in every way.
And yes, to break free of the shackles of the past and into that bright future that is our right and destiny as entrepreneurs and executives of ambition.