The Scariest Thing in Business

With thanks to guest blogger Donald Minges, CFO…

“People have many fears. In the business world nothing is feared more than the unknown.

What can happen next? What can cause client loss or expense gain? What else should I be worried about? These questions, along with the countless others that fill the head of the average business leader, are enough to make even the most composed and experienced CEO break a sweat.

In the business world, the unknown can be terrifying, so much so that it can make even the nicest of occurrences daunting. Contrast the reaction you have receiving an expensive gift in a friendly setting and receiving the same gift in a business setting. If a close friend presented you with an expensive gift, would you wonder about his motive? No. You would be touched by the gesture and think only thoughts of gratitude. Now imagine this scenario again except instead of a close friend, it is a business associate. Now what do you immediately think? Chances are those thoughts of gratitude are gone and those about motives and expectations take over. The moral of this story is that even in the form of a gift you would otherwise adore, the unknown in the business world is something that is feared.

This is why savvy leaders want to minimize surprises in business. No one wants to inform their superiors of a problem; however, it is equally bad to report an unexpected good earnings surprise. While this seems counterintuitive, the negative implications of a surprise in expectation boils down to the surprised parties looking uninformed. If you report a success above expectations – the questions rain down immediately. Aren’t you on top of the situation? Why didn’t we know that sales would ramp up that much? Did we plan properly for this? Why didn’t we know that deal would close? How could we miss that?  All in all, it leads people to believe that there must be something else wrong to make up for all that has gone unexpectedly right. There is no way to know for sure if this is the same unless you are omniscient.

Unfortunately, omniscience is neither practical nor affordable. You can’t oversee every meeting, premeditate every decision or insure against all possible risk. There aren’t enough hours in the day or dollars in the bank.  The most practical solution is to prioritize and plan. Think about the more crucial aspects of your enterprise and what can happen to them. Then take the tried and true approach where you anticipate what can happen to these aspects in regards to your business. Consider what would hurt (or help) the business and what can be done about it. After considering these benefits and detriments, make a list of how you can enhance the benefits and/or avoid the detriments. Ideally, you’ll be able to enforce everything on your list, but in reality, some of the items on your list will not be worth the cost. You can’t be perfect, but you can be prepared. So prepare.

In my line of work, I see a lot of businesses that did not adequately prepare for the unknown that we all fear. While I can, and do, fix most of the problems unpreparedness can cause, cleaning up these problems is significantly more expensive than it would have been to plan for them. Wise parents say, “An ounce of prevention is worth a pound of cure.” Make this your mantra as you protect yourself from the unknown we all fear. If this isn’t enough to put your mind at ease, contact us. We can help you and that is something that is known.

Donald L. Minges

704-942-0413 (m)

[email protected]

http://www.linkedin.com/in/donminges

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