Proactive Management – How to Make Better Business Decisions

Proactive management is the approach to management where the leader runs the company “proactively.” Meaning, rather they are active in terms of seeking out new opportunities for the company and dealing with any threats of problems before they even emerge.

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.Sir Winston Leonard Spencer-Churchill

Proactive Management: Definition, Strengths, and Traits

Proactive management is, as mentioned before, the methodology of leadership where the manager runs the company proactively. They look for new opportunities for the business, create safeguards against potential problems, and plan for decisions to be made far ahead down the line.

A proactive leader tends to be beneficial to whatever business they’re running, and this especially holds true in the case of entrepreneurship. Starting a business can be very hard unless you’re proactive.

A good proactive manager is capable of:

  • Foresight. Planning ahead for any potential problems for the business. If you’re a startup, for example, with a runway of a year. The proactive manager starts looking for new investors and funding 6 months in, not 11.
  • Opportunism. There’s always an unlikely partnership, a new way to create value or make more money right around the corner – and it’s going to stay there unless the manager is proactive enough to seek them out.
  • Risk Management. A proactive manager asks themselves – is there a chance for this decision to backfire within the foreseeable future? If so, the manager puts in safeguards that would help in case everything goes bad.

Proactive to Reactive Management

Reactive management is the polar opposite, and usually a follow-up, of proactive management. When a proactive leader gets swarmed enough with problems long enough, they turn reactive.

Reactive management is an approach to management when the company leadership cannot or does not plan ahead for potential problems. As a consequence of that, a reactive manager is always busy with putting all the fires to look for any sort of external opportunities – they just react to whatever might happen, as they happen.

While a good reactive leader has the skills and personality to fix the problems and get everything back on track real fast, they tend to always be a step behind a proactive manager, who already had a contingency plan for the situation.

What Makes a Proactive Leader Reactive

Even the very best at proactive management can slip – they encounter a problem they didn’t see coming, and start getting reactive. The more problems pop-up, the more reactive the manager gets, and the more likely it is for them to make mistakes. A proactive manager can turn reactive for several reasons:

  • The company is forced to abandon their current strategy because of a crisis. This forces the manager to make decisions on-the-spot, which have a tendency to be wrong and bring about even more problems.
  • The company is moving or growing too fast for the leader to keep up with, leaving only enough time for them to react to the new events, losing control over the future.
  • If the manager takes over someone who’d been incompetent, they’re going to have to spend most of their time fixing someone else’s mistakes, some of which just keep popping up.

While there are industries where a reactive leader can provide a lot of value, being proactive is generally more valued, as being in a reactive state tends to have some consequential downsides.

  • Lower Work Quality – In a reactive state, a manager tends to juggle several responsibilities at the same time. This, as a given, lowers the quality of their work.
  • Reactive Feedback Loop – A problem causes a manager to turn reactive, which then on results into birthing more problems, as the reactive leader was unable to plan ahead. The manager gets into a feedback loop with no end in sight.
  • Hindered Decision-making – Being piled on with problems means that you’ll have to make decisions on the spot. The lack of time to judge a situation makes it harder to make the correct decision, which will eventually end up hurting the business.

Going Back from Reactive to Proactive Management

Unless you make a real effort to get back to proactive management, you might get stuck in the feedback loop of reactive management. Something will always keep popping up, and you’ll have to make on-the-spot decisions, which will lead to even more problems.

There are, however, several ways to get back to reactive management.

  1. Make room for time. Whatever the case is, you should always have some spare time to plan ahead for your business. Try to cut out anything that’s time-consuming or ineffective. Meetings, for example, tend to be guilty of this. If you don’t have a clear “result” you want to get from the meeting, then that means that it’s just a waste of time.
  2. De-stress yourself and the office. Being in a reactive state long enough makes you extremely stressed out, and this transfers to your team. And the more stressed you are, the more likely you are to overreact to problems. Give yourself and your team a breath of fresh air, whenever you can afford to in a stressful situation.
  3. Re-evaluate emergency decisions. Depending on the situation, of course, there’s a chance that you’re overvaluing the urgency of a situation. If there’s a chance to take your time about making a choice with some consequence, take it. What might seem like a good idea in a reactive state might turn out to be an expensive mistake.
  4. Analyze your business processes. If you’re always busy and drowning in work, you should re-examine your processes to see if there’s anything you can optimize. If there’s something you’re wasting time on that can be done by an intern, delegate it! If a process can be automated with some software, use it. The more useless processes you cut out, the more time you’ll have, making it easier to get back to being proactive.

There’s always going to be situations where you can’t predict everything, putting you in a reactive state. These situations, however, can be mitigated a lot of the times. Ever been in a reactive management state? Have experiences to share? Drop us a line down in the comments! Want to learn more about management? Check out our article on Peter Ducker’s management theory.

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