Thursday, June 19, 2008

Without positive cash flow, there is no leadership. And vice versa.

I used to run a couple of student bodies when in grad school. The energy-levels were very high. The groups were very inspired. We used to whip up exciting projects to give ourselves a sense of purpose. However, everything boiled down to having or not having funds. When one schoolmate asked me for a quote on leadership that she wanted to incorporate into some presentation to her department, I came up with "leadership is positive cash-flow".

As I think about it now, that fact is timeless in its application. A business leader is all talk and no action without positive cash-flow. One can hire and retain the best of resources with postive cash flow. One can fuel a team on passion and purpose only for a short duration. To run the race for the long haul, one needs stamina of all kinds - physical, mental and financial. Sen. Barack Obama's case with the way he funded the primaries is a recent example. Flush with funds, he could keep his team focused on the larger goals of his campaign.

Having said the above, I must add that only when the positive cash-flow is consistent, and when it is sustained through operations, does it make a leader a clear winner.