Is Your Business IQ Lower Because of Financial Constraints?

Earlier today, an Associated Press/NYTimes article reported on a study published in the August 2013 issue of the journal Science, authors Anandi Mani, Sendhil Mullainathan, Eldar Shafir, and Jiaying Zhao reported that the poor show reduced cognitive capability (IQ) and are less effective at decision-making specifically because of their financial circumstances.  In essence, the authors’ studies showed that individuals faced with financial stress lose about 13 IQ points because their financial problems dominate their thinking to the detriment of their ability to solve other problems.

Oak & Apple Partners focuses on the quality of management’s decision-making in organizations under stress.  The parallel of individuals and companies (comprised of people, after all) under financial stress is unavoidable.  Isn’t it likely that management teams under financial stress are so pre-occupied with their financial constraints and peril that they are worse at making good decisions with respect to strategy and tactics in sales, marketing, operations and other areas?

If you’re concerned that financial (or other) stress is affecting your company management’s decision-making, you may find our free executive self-evaluation guide Decision-Making in the High Stress Environment  to be a useful and quick tool to assess your management team’s decision-making under stress.  To get your free copy, simply click here.

About Ken Drossman

Ken Drossman is a Managing Director at Oak & Apple Partners, LLC. Ken has spent more than 35 years demonstrating practical financial acumen by leading, advising and guiding privately-owned, small and middle-market companies through financial and operating challenges. He has in-depth experience in all phases of financial, strategic and operating management from hands on cash flow budgeting through acquisition financing, from divestiture of business units to reorganizing and leading newly formed companies. Prior to co-founding Oak & Apple Partners, Ken has been the principal at Lakeview Business Consulting, LLC, which assists entrepreneurial business owners and their companies in achieving their business vision. Ken earned both his undergraduate and graduate degrees from The Wharton School of the University of Pennsylvania. Before founding Lakeview Business Consulting in 2006, he served for 18 years as CEO, COO and/or CFO at several privately-owned companies, in industries including financial services for hospitals; digital document storage and outsourced back-office services for professional service firms; design and distribution of personal business accessories through big-box retailers; capital goods manufacturing for national and regional retail chains; and information services for beverage alcohol manufacturing and marketing companies. Previously, Ken was a Partner at Grant Thornton, LLP, where he provided management consulting services to such companies as AT&T, Baxter Laboratories and GTE-Sylvania, as well as many middle-market companies.
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