For leaders, there are always problems – a parade of challenges that command urgent attention, most with defined characteristics and threats.
There are always opportunities – innovative ideas or new relationships that could create value or accelerate progress, waiting to be embraced, but needing clarity and appraisal.
And there are always limits – limited time, energy, money and other resources.
How you prioritize where to invest your limited resources directs your actions and shapes your success.
Of course, problems can’t be ignored, and because they come with clearer parameters and a more distinct sense of risk, you may believe that your primary focus should be on promptly resolving them. But in the absence of some crisis, if problem resolution becomes your highest priority, then too much of your attention and the company’s limited resources may be consumed with tactical or short-term issues, often directed too inwardly, inhibiting your ability to sense, assess, and act on value-creating growth opportunities.
If you agree that a leader’s principal responsibility is to improve the performance and sustainability of the business, then more of your energy and resources should be focused on identifying, assessing, and developing longer term, strategic opportunities that can create value and contribute to future success.
There are more unknowns, and so greater uncertainty, associated with the pursuit of opportunities than with the resolution of problems. This uncertainty includes projected positive benefits, upside risk, as well as the negative cost risk related to the pursuit of an unproductive opportunity. But all progress involves risk; no significant progress is accomplished when the objective is to minimize risk.
Given that urgency to act often accompanies opportunities, being able to evaluate one quickly and efficiently is essential. After valuing both an opportunity’s projected benefits, and its estimated sunk costs, and assigning a probability and timeframe to each, ask yourself one more question: If your calculations are flawed, can the business withstand the consequences, including preserving the opportunity so you may consider a different way forward?
How do you assess your company’s investments in addressing problems vs. opportunities?