Despite what the government would like to have us believe, it’s going to be a long old haul before we in the Midlands can say the downturn is over. The key factors which will determine how much pain individual businesses will suffer in the meantime will be: (1) the quality of decision-making by their owners and directors; and (2) their courage in taking pre-emptive or timely reactive action.
Being in charge of any business is a very lonely place indeed, even more so if it is struggling. Directors who obtain the right support at the right time will stand a far better chance of their company surviving than directors who simply carry on as normal, peddling the hamster wheel ever faster in the hope that somehow it will all come right. There’s an old saying that is as true today as it ever has been: ‘ If you always do what you’ve always done, you’ll always get what you always got’. The message is clear, peddling harder simply does not work, not now, not ever.
The question is when is it time for you to make those key decisions, take those major actions? – the answer in most cases is it’s never too early. It can be too late, but hardly ever too early. The earlier decisions are made and action taken, the more options you will have, the less it will cost you in the long run, the less time and effort you will waste. And importantly, the more likely it is that you will achieve the best possible solution under the circumstances.
But what if the decisions and actions you take do not work out? This could happen, after all no one gets it right all the time, not even the much revered captains of Great British industry. But there are two main differences between them and the many small businesses suffering in this recession: firstly the captains go to the right places for the right type of advice at the right time – they recognise that they cannot do everything, they acknowledge that the full skill set for succeeding in business in the 21st Century cannot lie in one person: they bring in the experts, they draw from others’ experiences, they then move forward together as a team.
Secondly, they do not fear getting it wrong. Having properly assessed their options, they then focus their efforts on achieving the best solution possible under the circumstances. They recognise that getting most of their decisions right is better than doing nothing, hoping that somehow it will all come good. They recognise that the optimal solution is never possible, they aim for something approaching the best solution given the particular circumstances. Their mindset is that a decision does not later turn out to have been wrong simply because it did not work out – it’s only wrong if they failed at the assessment, planning or implementation stages. If their assessment, planning and implementation was done right, it was the right decision, it’s just a case of the vagaries of life conspired to make it not succeed this time around. They then learn from the experience: they do not see it as a mistake, they do not beat themselves up about it: they see it as a positive thing. One of my favourite sayings is ‘ the only mistake you can ever make in life is not to learn from your experiences’.
This takes me back to a conversation I had with Steve Clarke of Maypole Financial Services a few evenings ago, which gave rise to this blog. Someone had belatedly approached him for advice, he’d taken one of those really important decisions in life on an personal finance issue. He had spent some time investigating his options by researching the internet, he’d then taken the worst possible option of those he had available. What’s worse, once he had implemented his chosen route, he could not retrace his steps. He had succeeded in avoiding incurring £700 of professional costs, but his bad decision had cost him over £50,000. He had mistakenly believed he could replace the many years of experience a skilled professional, with all the professional exams and programme of continuing training behind him, with a few hours of internet research. Naturally he couldn’t.
I see similar things happening time and time again: people who simply think that experts in their particular field cannot add real value, when in reality it is that person who ‘does not know what he does not know’. You only need to look at the miriad of debt advice companies who have set up to support individuals in debt: a few hours training and a standard computer programme / work plan does not, nor will ever, replace the experience of a seasoned professional. If they were buying a tin of beans from Tesco, I’d understand it, but they aren’t: this is a life changing decision: and you get what you pay for.
We in the Black Country are used to hard work. But nowadays, working hard at doing the same thing is not enough, not in these economic circumstances, not in this ever complex world. We need to work smarter as well, allowing our work ethic to complement clearer thinking and better strategy, giving us the innovative and competitive edge over other regions. And to do that management and individuals with problems need to draw upon the experts, the professionals who can add real value to our thoughts and actions. Perhaps you ask and expect too little of the professionals? Perhaps you focus more on cost when you should be focussing more on net benefit? Perhaps you do not know the questions to ask? Whatever you do, do not go into things blindly, demand a lot of your experts – others around you may not and that is why you will come out of your problems stronger than they will.