Be Proactive, Not Reactive

Excerpt from Chapter 5, The Eighth System, from “The Art of Preventing Stupid: How to Build a Stronger Business Strategy Through Better Risk Management” by Matthew Neill Davis (An Inc. Original, April 2, 2019).

Offense is critically important to success in business. Having goals and taking steps to reach them is what leads to business growth and, in many cases, the survival of the business. You also need to address the defensive parts of your business. I want to stress the idea that you do not run a business on just preventing stupid, but you really do not run a business without doing it. That means you must know how to protect your end of the operations.

One day my pastor, Dan Barrick, admonished the congregation about all the messes they were making in their lives. He delivered a line that stuck with me ever since, “You don’t have to be smart; just don’t be stupid.” The gravity of those words worked its way through my mind and into all the predicaments I routinely must fix for my clients. The common denominator was, of course, stupid mistakes. Thinking back, I realize I could have easily prevented the vast majority of my clients’ draining problems.

A good example is a recent wholesale business we helped set up. The owners wanted to go with a generic name that was, frankly, boring and forgettable. These were smart operators in the underlying trade, but they had never been involved in the wholesale business. Little thought had gone into how to reach their customers. Their target customer market was local tradesmen, and my team identified the competitive advantage this business could achieve with a good Website, a memorable name, and an online inventory.

Together, we developed a list of solid names for the business and then did the research to determine the domain names available for use. We chose a name that met both requirements (memorable and available). We got the company started on a good footing, ready to implement the strategy. We did this, in part, by avoiding the problem a bad name can cause a business. In addition, we ensured we had ownership of the domain, because without it, our strategy was pointless. Before the business even began to operate, we built in the protection of the marketing system.

Another potential problem involves your team getting complacent in how they perform the work of your business. Your company’s training procedure for its employees may be spectacular. You can have a dedicated training facility and fly the new employees in from all over the country for rigorous instruction before you ever let them start their work. You can take all the right steps to make sure all the necessary skill sets are in place. As well you should, because this is how you build a rock-solid company.

However, most work is repetitious and routine. Employees get into a groove doing the same thing day after day. They may even make the same round-robin trip or do the same task several times a day. On the one hand, it is easy work. First, the employees check the equipment, and then they get to work. They are well-trained professionals who know their jobs.

To most business owners, this may seem like an ideal situation, and it almost is. The problem is that it is exactly this sort of repetitive work where the stupidest, most preventable errors can happen. It even happens to the most highly trained professionals in the world. Surgical teams, for instance, leave sponges in patients all the time when they do not follow the checklist to make sure every little step is done right. Pilots have checklists, as well. In nearly every business, the risks can become commonplace, and the dangers of the job can get lost in the routine.

Stupid mistakes happen when human error takes over. Due to boredom, fatigue, or a litany of other issues, something happens and you suddenly—and sometimes disastrously—have a problem on your hands. These mistakes happen. One of the remedies that can prevent this type of situation is to implement checklists that break up the routine and lead to spot checks to keep your workers on task.

This is one way to mount a good defense. Checklists allow you to prevent the ineptitude of interrupted production and the extra operational costs required to correct it. It also prevents management from being distracted, so they can stay focused on their real goal: finding new customers and closing deals. Address the situation with the truism, “A mistake made more than once is a decision,” and avoid slipping into complacency with the decision that “these things are going to happen.”

It is incumbent on management to take back the power to change the company’s policy and make the decision that this situation will not happen again. With the right management techniques (ensuring repetitive work correctly executed by using checklists), you can ferret out this ineptitude, thereby improving your bottom line.

Putting defenses like this in place does not take the control away from management. Instead, it frees them up to assert their efforts on business development rather than fixing the business. I stress control because it is one of the two most common issues business owners and their managers worry about, rather than where they should be putting their energy: on creating good defenses. They want hands-on control, when the more passive measures often serve them better. The truth is, a good defense adds to your control.

The other issue that prevents business owners from establishing good defenses is the satisfaction they derive in being the hero. Frankly, many business owners are addicted to the adrenaline pump of rushing in to fix the problem, thereby showing off their skills. The payoff for them is the immediate rush of gratitude by employees or customers.

What I suggest is that you ask yourself what you can do to prevent stupid mistakes from ruining your business. This is thinking proactively. Unfortunately, most business owners tend to think of fixing the problem that now exists, which is a reactive thought process. Changing your thinking from reactive to proactive will take the burden of being the hero off your shoulders. You do not really want to be the hero anyway. Most of the “hero work” done in a business is fixing preventable problems the owner allowed to happen in the first place.

Excerpt from Chapter 5, The Eighth System, from “The Art of Preventing Stupid: How to Build a Stronger Business Strategy Through Better Risk Management”  by Matthew Neill Davis  (An Inc. Original, April 2, 2019).

Matthew Neill Davis is an author, speaker, and attorney. He owns and manages Davis Law, PLLC, a firm dedicated to helping business owners make smart business decisions. The firm finds solutions to pressing problems and issues that business owners encounter, and runs custom legal departments for businesses and nonprofits. They use the comprehensive, proprietary systems Davis developed while serving as general counsel for a range of companies. Davis Law has made the Law Firm 500 three times as one of the fastest-growing law firms in the U.S. Davis’ new book is “The Art of Preventing Stupid: How to Build a Stronger Business Strategy Through Better Risk Management “(An Inc. Original, April 2, 2019). Learn more at: matthewneilldavis.com.

 

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