5150 Business Strategy

Life in the Corporate Fast Lane and Still Remaining Intelligent

Archive for the month “November, 2012”

Mas Tequila

What drives me to drinking…….

Those who can influence the success or failure of a business but have never run a business on their own. Generally, these folks make decisions based upon book learning where everything fits into nice little boxes. They have no clue what the true business drivers are behind the financial ratios they learned. They pontificate about debt to equity and cash flow but can’t relate that to real life outside what they have been told is acceptable. Mas Tequila.

You would be surprised that some of the worst offenders of this are in the banking or surety industry where decisions are critical to the ongoing success of a business. Too many times I have seen knee jerk decisions made based upon sterile financial analysis with no consideration given to the surrounding circumstances. According to one bank and one surety my current company should not be in business. What they failed to take into account is the environment in which the company operates. All they know is that debt to equity over 3.0 is bad and having a balance in the line of credit is equally bad. Why, you ask? They would not have a clue as to why this is bad except that someone told them it was. Mas Tequila.

Same for the auditor in Lafayette who was so convinced that management needed a wake up call regarding the accounting function of the company even though he had no clue about what really drives a business. According to him the company was on the verge of bankruptcy and he was hell bent on spreading the message. At the end of the day I fired him and we are still here better than ever. Mas Tequila.

Ask yourself why we as a country are where we are. I would put forth that one reason is that we have allowed those with limited intelligence to exert undue influence on who succeeds and who fails. In my experience there are simply too many people in positions of great power who have no clue about what they are charged with managing. It is easier to say you are the problem and deflect responsibility for their own shortcomings. To the extent everyone believes them they continue to cause businesses to fail that might have otherwise succeeded. They would have gotten the the line of credit they needed, the bonding for the big project, or the credibility needed from an intelligent audit. Mas Tequila.

Lesson learned: stand up against those of limited intelligence and expose them for what they are – those who have truly risen to their highest level of incompetence. Unfortunately, some have gotten into positions that influence the lives of others.

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