I just finished another 19 hours in 2-day residency for my MBA program; the topic is financial management and decision-making. One of the ringing truths from the residency was how important cash flow is to any organization. One might think that profit alone is the driver of long-term sucess... well, one can have profit without having positive cash flow which can ultimately have negative impact and even cause bankruptcy.
I look at this in terms of my leadership and my life journey. If you've been reading these for a while (or otherwise know me), you realize that I'm keeping pretty busy with good things (church, family, MBA, work, friendships, etc). The concept of "net income" without "cashflow" seems to apply to my life right now. Am I "making profit" each year by growing my relationships, education, faith, etc, but lacking in "cashflow" which might be my time for myself, reflection, and more fun? I might need to take a look at my life income statement and see where my "profits" are coming from.... are they good profits (i.e. coming from cash flow)?
Another interesting way to look at this (which I won't bore you with) is the concept of "working capital"... one can have a lot of surplus, but the ability to liquidate is based on the relationship b between short-term assets & short-term liabilities (not the long-term). An organization (Steve Fredlund Journey, Inc.) needs to have a good relationship with working capital to be able to adjust to changing needs, environment, or competition.
Not sure if this makes any sense... I need to pare it out a bit. Later...
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Bro - You can keep trying, but I really don't think there is a mathamatical formulae behind human relationships. Now there may very well be an artistic brush hidden away somewhere....but not math! Later. PS how do you like that extra "e" at the end of formula, makes me look pretty smart eh? Adios
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