While the most effective leaders are almost always proactive, the vast majority of organizational leaders I have met in the last three decades of working with organizations have behaved effectively in reactive ways. Dictionary.com defines “proactive” as: “serving to prepare for, intervene in, or control an unexpected event or situation, especially a negative or difficult one; anticipatory.” On the other hand, when we refer to reactive leaders, we usually refer to leaders who have their actions determined by situations, so they generally act after the fact.

One of the main causes that organizational leaders react reactively instead of proactively is that a large percentage of leaders are afraid. Unfortunately, many leaders are not prepared for leadership and are afraid of making the wrong decision, so they procrastinate when action would be the recommended course. This can result in incorrect and indecisive action being taken, or procrastination and not taking the necessary action. Many of the most effective organizational leaders become extremely frustrated when dealing with reactive co-leaders.

Organizations must do strategic planning, continuously. There is also, in most cases, the need to take more financial control of your organization. Another area that proactive leaders realize they need to emphasize includes the organizational budget and the importance of effectively using the zero-based budget. Another danger for many organizations is that too many leaders don’t recognize the importance of taking real fiscal restraints and controls. Most organizations should severely limit the amount of control staff have over the organization’s funds, including limiting the size of checks a staff member can sign. It is also recommended that organizations create a maximum amount where only one signer is required for a check, and above that amount more than one signer is required.

Leaders must recognize that the financial obligations and methods for organizations, and what are the appropriate courses of action, are different for organizations than for individuals. Much has been written about the “prudent man rule,” which requires leaders to act in a fiduciary fashion as the most prudent (or careful) individual would. While certain financial risks may be acceptable for individual portfolios and investments, much more conservative restrictions should be placed on organizational funds.

One of the most recurring issues that organizations face is related to personnel. Proactive leaders try to anticipate what might happen, while reactive leaders often take a wait-and-see attitude, not ride waves. Organizations that have continuous periods of reactive leaders almost always end up with problems, and sometimes even crises, that are both preventable and unfortunate.