Macky McNeill, Mackey Advisors
In his classic book, The 7 Habits of Highly Effective People, Stephen Covey's introduces habit three, Put First Things First. He presents the Four Quadrants tool as a guide for effective and purposeful time management. His four quadrants are built upon the intersection or Urgent and Not Urgent and Important and Not Important.
Here is how they come together:
- Quadrant 1: urgent and important matters that require your immediate attention, putting out fires and crisis management
- Quadrant 2: non-urgent and important matters that do not require your immediate attention, but are the keys to improvement, like planning, and values clarification
- Quadrant 3: not important and urgent are those areas where time is spent impulsively and are for the most part, time wasters, like email and interruptions
- Quadrant 4: not important and not urgent matters are mindless activities that burn our days, like trivial tasks and unplanned meetings without clear agendas
Covey points out that in order to make dramatic improvement in your life; you must spend time in Quadrant 2, where planning, values clarification, goal and systems planning activities reside. To spend more time on Quadrant 2 you must reduce the time spent in Quadrants 3 and 4.
This same framework can be applied to financial management of your business. The same principles apply. The more time spent in Quadrant 2, financial management, planning, budgeting and building better systems and processes, lessens the time you spend in crisis matters in Quadrant 1.
My experience is that those companies that invest in Quadrant 2 thinking and systems dramatically out perform their peers, with less owner stress! They move from ordinary to extraordinary.
Here is my version of the Covey 4 Quadrants, adjusted for financial management.