What is the Effect?

Everything is cause and effect.

Everything!

In business it’s especially important because the effect is one that could make or break your business or put you back a few years!

For example:  Going to and sponsoring an event is a cause.  The effect? Meeting new people, including potential clients, potential joint venture (JV) partners and potential friends for life.

Creating and launching a new program is a cause.  The effect being an increase in sales, in revenues. However an alternative effect could be that no one buys the program when you launch it. :-(

You spending weeks and months creating the perfect program is a cause.  The effect could be thousands of dollars in revenue, yes, but you also have spent precious hours that you can never get back, creating your masterpiece!

Your job as the CEO in your own company is to do what every other CEO does.  Increase the profitability of your company. Increase the sustainability by creating a healthy balance sheet!

Your strategy then is to foresee the effect of your decisions on your company’s bottom line, your profits.

Here are 3 ways to create congruency in the cause and effect processso that what you desire to happen actually does happen!

 

1.  Create a 3-year vision for your company.  I talk about this in detail in my newly-published book “Unlock the Code”. You must have an overall vision for your business and every strategy, very decision you make flows up to the achievement of your vision.

When I coach entrepreneurs, the first thing we nail down is their 3-year vision. If they don’t know where they are going, then it makes no sense.

I actually heard someone say that they don’t know where they will be next week, much less in 3 years. Here’s the thing though. None of us know where we’ll be, but if we don’t have some sort of plan, the strength of everyone else’s plan will cause us to drift away from our very own purpose!

2.  The Cause! Effect! Process. I use this process often. It’s really simple but could be tedious to use for you, depending on what business you are in. The process is one I used when I was working in corporate as an accountant and I continued to use the process when I started my business about 7 years ago.

   How does it work?

Every decision you take (the ’cause’) is instantly weighed against the results you achieve (the Cause-Effect‘effect).  You can create a simple Excel spreadsheet here with ‘+’ and ‘-‘ to perform your assessment.

For example, what’s the effect of you going for a company loan? One plus is that an immediate injection of cash into your business. One negative could be the loan fees or the interest charges. Another positive is peace of mind for you and the confidence knowing that you can purchase that company asset that you do want.

You weigh the pros and cons at every stage of the ’cause‘ and unless the ’cause’ leads to the desired effect, then you change course or stop doing what you had intended to do.

3.  Add a Strategic Adviser to your team. You should already have an accountant or CFO on your team; an attorney; a personal assistant or a virtual one, etc.

An adviser takes your overall strategy and formulates the plans and tasks to allow you to achieve your goals. What’s even better is that an adviser is not emotionally involved in your business and can give you the guidance you need to see beyond your ‘blind-spots’, as my mentor calls them.

Which ever way you choose, to grow your business you must be able to see the cause and effect of your actions at each step of the way. There is no other way to grow.

Now this process is slightly different from the Return on Investment (ROI) process that we all know and love because it really allows you analyze everything you’re doing in your business. It’s like the navigation system on an airplane, course-correcting at each second, at each minute of the flight.

 

Which strategy are you choosing to assess the cause and effects of your actions?