Virtually everything I needed to know to succeed in business, I learned while flying fighters, especially in combat. I intend to use this page to share some of those notions with you. Today’s topic is Position Reporting.
In flying, when pilots give a formal position report to air traffic controllers, it includes among other things, current location and altitude; the next expected turning point with estimated time overhead, and the next intended turning point after that. Thus, position report is a misnomer, because it is more than a snapshot of where one is—it also incorporates intentions, with a description of the next few anticipated steps.
To give a meaningful position report, when pilots arrive over a given navigational fix, they are forced to compare their arrival time with their previously estimated arrival time and determine the cause of any deviations. Once the effect of external factors such as wind and weather is determined, the data must be extrapolated to identify the adjustments necessary to get them to the destination as planned. Thus, in reporting their position, pilots do not merely address where they are, but they also evaluate how their progress compares to original expectations and how they must adjust to the unexpected conditions to get to their intended destination.
In business, the equivalent of a position report is a periodic review, usually quarterly, of the financials—the income statement, balance sheet, and cash flow statement. Consider how you use those financials. Are they taken to be merely a snapshot of where you are, or are they effective management tools?
To get the best use of your periodic financials, treat them like a pilot treats a position report. Use them to determine not only where you are, but analyze them to ascertain the factors that got you to where you are and to calculate the adjustments you will have to make in your immediate future to stay “on course.”
The types of questions to ask include:
Your financial statements do not merely reflect where you are—they are a critical tool in determining your next few steps. Use this approach and you will be doing business position reporting the Wingspan way!