Prudent Decision Making

If decision makers are not in their spiritual state of mind, the company’s strategies and goals would be short-sighted and that would in the long run, lead to strikes and losses. If majority of the business houses are not enlightened enough, our economy will suffer

Business in today’s COVID-19 pandemic situation is indeed challenging. Issues of liquidity, supply chain logistics, raw material availability, labour absenteeism are few of the many pain points.

Whatever be the situation, basic laws of ethics and common sense cannot change. Everyone in the value chain must be compensated adequately. Reliance on technology can increase manifold but the importance of employees can never diminish. It is people who drive the organisation. Good corporate practises make companies grow and be sustainable.

The key to business success is prudent decision making. Whether it is deciding source of finance, investing in long term projects, developing policies for working capital management and the like, a decision taken today will chart the organisation’s future success or failure.

To ensure prudent decision making, the decision maker must be in the right frame of mind. There is a dualism in us. We can all dwell in higher consciousness and live in the normal consciousness. The former has the ability to remain detached, to accept joys and sorrows with equanimity, to be at peace and in a state of bliss. This state can be achieved by meditation, introspection, constant pursuit of the truth and understanding oneself. It could be described as trying to be spiritual. In normal consciousness, we experience anger, anxiety, grief, jealousy, attachment and ego. Our spiritual self and our worldly self are with us in our journey of life, we must endeavour to dwell more in the former for our own good and for that of others around us too.

If decision makers are not in their spiritual state of mind, the company’s strategies and goals would be short sighted and that would, in the long run, lead to strikes and losses. If the majority of the business houses are not enlightened enough, our economy will suffer. It could lead to ecology damage, rampant corruption, a flight of capital, loss of market share and the same must be tackled before it is too late.

Constant monitoring is done of sales and cost figures, so also, constant monitoring needs to be done of the endeavours to usher in spirit of spirituality in organisations. Management must audit the systems, processes, policies, culture and leadership to understand if the same is at a higher consciousness, not in the normal consciousness.

“Reliance on technology can increase manifold but the importance of employees can never diminish”

Business without character or values is just quantifiable and not qualitative. It makes business sense for ushering in spirituality in organisations, it will lead to happy employees, better productivity, good reputation, and sustainability. Decision makers must be mindful of the important role they play. They must accept that merely focussing on revenues without considering the wellbeing of stakeholders could spell disaster. They must take a long-term view yet be grounded to the now situation. Decisions cannot be taken when one is stressed or emotional. IQ is essential, EQ helps but SQ (Spiritual Quotient) is an armour that protects organisations from headwinds. High SQ leads to superior decision making, one of the primary reasons for an organisation’s success.

Spirituality should not be confused with being religious. An SQ audit is the need of the hour. Greed, fear, fraudulent intent, petty mindedness, short term vision are some of the characteristics in lower consciousness and decisions taken in this state of mind are often wrong.

Practising being in higher consciousness is difficult but there must be a checklist to be followed before taking decisions. No stress, no tension, no bias, no conflict of interest, long term view, balanced and positive approach, making a larger view and not being petty and short-sighted.

Some examples of situations when people are not in the right frame of mind. People at the helm of affairs have rushed into a venture blinded by the profit estimates not considering whether they have the competency for the venture. Often, loans are given and taken not following related party transaction compliance requirements leading to bad loans and erosion of Net Worth. Mergers and Acquisition activities backfire with wrong estimates of future cash flows and expected synergy not happening. The M & A activity becomes a showcasing ego activity to project a person’s brilliance or company’s power rather than for reasons like growth. Having a capital structure highly skewed towards debt and promoters not wanting to dilute equity. When things are going wrong, being in a state of denial and not rectifying the damage before it becomes irreparable.

Companies prosper due to optimum capital structure, performing assets, operating efficiency and good quality products. But the catalyst that is needed for business success, without which, it is difficult to survive, and grow is having people who take prudent decisions. Decisions are prudent when taken in the right frame of mind. When the decision maker is in the higher consciousness and not lower consciousness.