This year has started off a little slow for us.  I discussed this in greater detail in the previous post titled “How is Business?”  As such profits have been hard to come by.  The pattern is that one month we make a little money, then lose a little the next, then make some, then lose some.  Overall pretty flat.  My initial instinct is to want to react to this pattern in order to firmly get us into the territory of making money every month.  We have made sacrifices before in tough times and we can do it again if that is what it takes.  During the downturn in late 2008 and 2009, we went to having mandatory days without pay once or twice a month, salary reductions, nearly stopped all travel and cut or delayed expenses wherever we possibly could.  It worked.  Even though sales were off significantly we were able to adjust spending to muster a profit.

That was the positive side of the conversation.  The negative side of that conversation is that some of the most important things in business were sacrificed in seeking profits.  By stopping travel, our customer relationships suffered.  By limiting expenses to a minimum, investments in new staff were not made.  Other investments that might have paid off in the future were not pursued as we were focused on limiting expenses, not building a better, stronger business to emerge.  In all honesty, we did not have a large number of projects, now known as shovel ready, at that time to invest in.

This time its different.  The future looks incredibly strong.  We have new products in the pipeline with marketing activities planned around their launch.  There are key equipment and process projects that demand investment, but bring significant returns once in place.  Customer relationships are being restored and strengthened by meeting face to face.  Plans are being made cooperatively with those customers for future growth by working together.  The pipeline of opportunities coming in remains strong and the remainder of the year looks like it could be very good.  We are in the middle of transitioning to a new Enterprise Resource Planning software package that will better support all divisions and aspects of the business for many years to come.  We have all worked very hard to build up the current level of momentum.  But still, all these investment activities cost money.

So now the battle is real.  It is always an interesting debate and easy to fight when you talk about it conceptually.  I could always answer that I would look to the future.  I would trust my strategy and have faith to see it through.  It becomes much harder when it is an actual decision to make right now.  It is also much harder to look in the faces of my team who have just seen the same tough results.  They look to me to test my confidence in the future.  They understand that continuing an investment course in the face of slow economic times carries with it some risk of consuming financial reserves.  They also understand that choosing to shutter projects in favor of short term profits has consequences, but those are hoped for while the results we experience right now are very real.

The decisions of short versus long term thinking will definitely test our fortitude and faith in the chosen path.

It is probably a good thing that this conversation is happening here in the spring as we see the world starting to grow around us again after a dormant winter.  Hopefully this season will bring us optimism for growth, promoting the long term perspective.