Have you ever heard the phrase, “defense wins championships”? This nugget of sports wisdom asserts that offense, while glorified and exciting, will not actually determine who comes out on top. If your team wants to win they are better off laying a foundation and protecting the home turf. But defense-heavy strategy is often frustrating to fans and players alike. Defense is the smart way to play, but offense is more fun. Charging the line, racking up points, and playing aggressively is exciting. It gets the adrenaline pumping and makes the players feel like champions, but it will never yield great results by itself.
The allure of offense exists outside the world of sports as well. Living life and conducting business like an offense player is thrilling. Spending money, chasing adventure, and living aggressively are all emotionally pleasing activities – and they are way more fun than responsibly watching your expenses and making smart, less-exciting choices. But here is the thing…those players, people, and business owners who ignore defense strategy are extremely unlikely to actually take home the gold. They are fun and exciting to be around, but they are not champions.
This phenomenon is particularly pronounced in business. Entrepreneurs and business owners who aggressively spend money in pursuit of a huge outcome without actually grinding the budget are way more likely to go bankrupt than their financially well-balanced counter-parts. Entrepreneurs and business owners who blindly move towards the goal line under the assumption that there is no way they can fail are all bound to be taken down by something avoidable. Basically, anyone who neglects to realize the basic math that revenue has to exceed expenses on a long-term basis is digging their own grave. Yes, there are strategic times when a business requires start-up or investment capital but that hypothetical strategy better work. Whatever you were investing in has to tangibly pencil on something more than hope or you’re dead. I see too many business owners and entrepreneurs fail to sweat the expenses because they are spending other people’s money. It makes them weak and the vast majority of the time, it makes them fail. When you’re at the helm and running a business and you’re model is out of whack and just not penciling, the most important thing you can do is call a timeout, regroup with the key players, and set up a strategy to defend have revenues exceed expenses – You have to defend the castle… AT ALL COSTS. If you don’t to that, game over, you are done. Very simple.
In business, defending the castle means ensuring that the core business is healthy. To me, that means a few things. First, all entrepreneurs and business owners should live with a healthy paranoia that their revenue might be affected at any time. Every expense, development, and market shift should be immediately analyzed from a revenue perspective. “It will all work out in the end” is not a good mantra to have. Second, entrepreneurs and business owners should panic early and often. If you panic at hypothetical situations, run drills and come up with the contingency plans before disaster strikes, then you will be in a much better position to handle market and organizational changes when they do inevitably arise. Once again, the blind assertion that the way you are doing things today will exist that way forever is detrimental. Third, you have got to own everything. When things collapse (and they very likely can because Murphy’s Law is alive and well in business), you cannot pretend it isn’t happening or blame someone else. You have got to make quick decisions, stick to your word, and take full responsibility.
As a entrepreneur or business owner, if you play both equal parts offense and defense, prioritize the financial health of your business, and only take risks when absolutely every “what-if” has been considered, then you are more likely to win it all. It takes patience and perseverance, but it is honestly the only way to play.