Keeping Momentum: The Hidden Costs of Binary Thinking in Business

Dan Nicholson

The word "momentum" has its roots in physics, where it is defined as mass times velocity. But for us in the business world, momentum can best be understood as the force that keeps a business moving forward. 

According to Newton's first law of motion, an object in motion stays in motion unless acted upon by an unbalanced force. Applying this law to a business, the entrepreneur becomes that force - the driving factor that can either maintain or interrupt this momentum.

What then could possibly count as friction in our business that slows down our momentum? The surprising answer to that is - we, the business owners, often unknowingly become that friction. 

When we over-complicate our decision-making processes with elaborate and ineffective tools, we create roadblocks that halt our progress.

For instance, business owners often end up spending copious amounts of time trying to create intricate spreadsheets that don't truly solve their dilemmas. Rather than providing clarity, these tools often further muddle the decision-making process with numerous assumptions, resulting in a state of inaction. Remember, binary thinking, or viewing every situation as having only a right or wrong outcome, is a classic momentum killer.

Take any simple question I frequently encounter: 

"Should I hire someone?”

“Should I start a marketing campaign?”

“Should I invest in this?" 

These decisions are often viewed through a binary lens that's in search of a definitive answer. This binary thinking is detrimental to your momentum because it tends to result in inaction and could ultimately limit your cash flow in terms of opportunity cost. 

While financial forecasts and KPIs serve as useful tools, they are typically designed by finance people for finance people. However, every decision you make in your business should first be run through the filter of your personal preferences and goals.

This principle advises us to understand our priorities and assess our current resources before we take action. Only then can we decide whether the proposed action brings us closer to or takes us further away from our goals.

The key here is to understand that spreadsheets and other tools are helpful, but they should not dictate our actions. Instead, they should be used as resources that aid us in making decisions aligned with our preferences and goals.

An enterprise with momentum is hard to stop, and it's much easier to steer, pivot, or direct an entity that already has some forward motion. Breaking away from binary thinking, aligning our decision-making process with our preferences, and avoiding unnecessary friction can help us maintain momentum in our business. 

Remember, as Newton’s first law indicates, keeping the momentum is easier than starting it all over again. It's time to keep your business moving forward with a strategy driven by your preferences, rather than getting stuck in the trap of binary thinking.

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

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