financial procrastination, cfo

The Price of Financial Procrastination

by Mitch Owens, Marketing Executive at TOP CFOS

If we were to make a list of the most common human characteristics, good or bad, procrastination would most certainly be in it. Whether it’s getting around to perfecting your your jump shot, sending a thank you note to a friend, or finishing up that report at work, it’s safe to say that you and I have both been guilty of putting something off.

Why We Procrastinate

The reason procrastination is so common is because “we’re programmed” to do it. Caroline Webb, the author of How to Have a Good Day: Harness the Power of Behavioral Science to Transform Your Working Life and CEO of the coaching firm Sevenshift, points out that “in general, we all tend to struggle with tasks that promise future upside in return for efforts we take now.” The future is abstract to us, making it harder for our brains to process than the more concrete present. This explains why we tend to work on things with more immediate rewards, even if their value pales in comparison to other tasks with massive rewards in the future.

Programmed or not, procrastination is costly. James Surowiecki, in his article in the New Yorker listed out many ways procrastination costs people. He pointed out the following:

Americans waste hundreds of millions of dollars because they don’t file their taxes on time. The Harvard economist David Laibson has shown that American workers have forgone huge amounts of money in matching 401(k) contributions because they never got around to signing up for a retirement plan. Seventy per cent of patients suffering from glaucoma risk blindness because they don’t use their eyedrops regularly. Procrastination also inflicts major costs on businesses and governments. The crisis of the euro was exacerbated by the German government’s dithering, and the decline of the American auto industry, exemplified by the bankruptcy of G.M., was due in part to executives’ penchant for delaying tough decisions.

Whether you’re a student or a CEO, you have the natural tendency of procrastination to work against. For this reason, everyone should put together safeguards, including help from others, to protect themselves from life’s great thief.

Pushing Past Procrastination

With this in mind, I’ve included some principles from the Harvard Business Review that can help business professionals seize the day.

  1. Visualize how great it will be to get it done. If there is something that you need to get done, spend a little extra time thinking about all of its value to you. This could be the financial or mental benifit it yeilds. This could be greater profits, VC funding, peace of mind, and more time spent doing things you enjoy and so forth.
  2. Pre-commit, publicly. Telling others, especially those you work with, will make you more accountable to doing important things first. You change your task from an idea on a mental list to a requirement in your company.
  3. Confront the downside of inaction. “Research has found that we’re strangely averse to properly evaluating the status quo. While we might weigh the pros and cons of doing something new, many don’t consider the pros and cons of not doing that thing. Known as omission bias, this often leads us to ignore some obvious benefits of getting stuff done.”
  4. Identify the first step. Many fall into the fallacy that everything can get done at once when, in fact, everything gets done in small increments. You climb a mountain step by step and you accrue interest day by day, dollar by dollar. If you need to accomplish something, stay focused on the goal, but make sure you break it up.

Conclusion

By avoiding procrastination you can avoid costs you don’t need to pay. Successful companies put their finances first, so don’t fall for the fallacy of procrastinating them. Reach out to TOP CFOS today for a free consultation. We help your company make more money by helping you make greater profits today.

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