Creativity Needs Breathing Room

A fundamental determinant of a company’s stock value is its free cash flow.

Simply, the free cash flow is the money a company has not already spent. When a company sells its inventory, some of that revenue is spoken for. It must pay for materials, services, debts, taxes, and its employees’ contributions. When things are tight, the company may have little or nothing left after settling those expenses. When business is profitable, the company has some money free of obligations. That money is its free cash flow. That margin is its breathing room.

Free cash flow enables creativity. When all the money is spent, the company can continue doing what it has always done. With a bit of free cash, it can invest in something new. Companies do not necessarily invest in innovation. It has other options: some wise, some silly. But without unencumbered money, those options are constrained.

Individuals have their own challenges in managing personal resources. Sometimes the issue is money, but more often the critical non-renewable resource is time. For busy professionals, so much of their time and energy is committed well into the future. Free time/energy flow becomes the enabling or limiting factor for their creativity.

    • Work as Time. Despite cogent arguments for a pay-for-performance approach, most jobs are defined as pay-for-time. Individuals face difficulties in realizing the gains from increased efficiency at work. The work week is committed to the job. The free cash flow of time and energy at the end of the work day or the work week is limited.

    • Life is Complicated. Work is not the only ongoing time/energy commitment. People have family, friends, sports teams, charitable organizations, religious organizations, and on and on. These commitments have their benefits—they may be a the very core of a meaningful life—but they soak up some potential free time/energy flow.

    Creativity takes Time and Energy. In fact, creativity draws upon a different part of the brain than do the humdrum parts of ordinary life. When creative, brains call upon their capacity to actively suppress the rational control functions that are the bread-and-butter within much of ordinary worklife.

What To Do:

    • Value Free Time/Energy Flow. Fight consistently and passionately for your free time/energy flow. When others encourage you to take the more time-consuming but cheaper alternative to work, home maintenance, or whatever, fight back as if your time and energy are the most precious commodities in your existence.

    • Make Choices. Reflect on an ongoing basis about your life commitments. They have a cost; be certain they have a value.

    • Stop Wasting Your Time. I am sure you already know how you waste time. If you do not know, you are well advised to figure it out and to take appropriate action.

Creativity needs room to grow!

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