Finance vs Strategy

The financier cares about the next 3 months or less.

The strategist cares about the next 3 years or more.

The financier wants the deal to close as soon as possible so that he can earn his bonus.

The strategist is open to taking action if it will strengthen the firm’s position over time, and a better outcome can’t be achieved in some other way.

Pushed to his limits, the financier will find ways to package debt in more creative ways. While the strategist will carefully assess the situation and consider various ways to respond or adapt the approach.

A successful firm will need to pursue sound strategy and, at the same time, stay on top of its finances. However, the outcome that results when the leader focuses primarily on one or the other could not be more different.

Leaders who have exhibited a strong “financier” mindset include Jeff Skilling, Ken Lay and Bernie Madoff.

Leaders who have played the role of the “strategist” with gusto include Steve Jobs, Warren Buffet and Richard Branson.

The conflict between the financier and the strategist is a very real one, and must be fought by each of us.

The tension between short term needs and the long and more difficult road towards building a sustainable position from which you can consistently solve problems and delight people.

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