Painful Business Lessons: Making Tough Decisions - FP Advance

Painful Business Lessons: Making Tough Decisions

BY brett

Painful Business Lessons: Making Tough Decisions | FP Advance

icon__0001_thinkingHow many wrongs make a right?

I was reflecting recently on all the things I’ve done wrong, and learned from, in my career. So this is the first of a 27-part series on those mistakes.

Ok, I’m kidding about the 27-part series, but I reckon I could fill it if you wanted me to.

Looking back I’ve come a long way from joining the Financial Services industry in January 1991 (during George Bush Snr’s first Gulf War), as a commission-only adviser with an Australian life insurance company. That job was pretty horrible.

Luckily, the Financial Planning profession was emerging at that time in Australia. I embraced that and, thankfully, the firm I was working in did too. Over the next few years we transformed an old-school business into a modern fee-based Financial Planning business.

There are a plenty of mistakes I learnt a lot from. I’ll share one with you in this article and cover more in future editions. Maybe these will be helpful for you too.

Lesson One: Don’t take too long to make a decision you know is right (but difficult)

Making decisions is something I’m much better at now than I was early in my career.

If you’ve ever read one of my articles or heard me speak and thought to yourself a comment or recommendation I’ve made was a bit harsh, then this lesson is the reason.

There are two good examples of this mistake:

  1. The underperforming employee

The first example of taking too long to make a decision, that I knew was right, was in relation to firing an underperforming employee. And yes, I’ve made this mistake more than once.

If an employee is still not working out after you’ve tried to remedy the situation, then there’s nothing to do but let them go. You’ve got to have the right team around you, otherwise you can’t perform.

In one extremely painful example of this mistake, our best team member in my Aussie business quit because we didn’t address the difficult issues with one of our worst performing, but long serving, team members. Out of loyalty we just couldn’t sack the long-serving person.

In hindsight we should have made it ok for them to leave financially; they were close to retirement and just hanging on for financial reasons. That would have rewarded their long tenure and the loyalty they’d shown us, but still made the right decision for the business and the rest of the team.

As I said, we lost the best person on our team, who quit directly as a result of us not addressing this issue. It didn’t have to happen, but our failure to address the situation had consequences for other people on the team too. Today I’d call it a failure of leadership.

  1. The small clients issue

The second example of taking too long to make a decision that I knew was right, was in relation to smaller clients that no longer fit where the business was headed.

This is another relationship-based challenge (like long-serving and loyal employees). However, failing to address it created problems for the team and for the business this time.

The team suffered because they were handling post, email and phone calls that were not really productive uses of their time. Although we didn’t see this clearly until we’d let these clients go. The time wastage never seemed that big, until we learned that there are no big or small mistakes; there are just mistakes. When you fix one, you get an immediate payback and improvement across your business.

The business suffered because, whether we wanted to admit it or not, some of our better clients experienced a second-rate service at times because we were just too busy. We always got there in the end, and because of that for a long time we told ourselves it wasn’t a problem. However, after addressing the issue, we saw that we were mildly delusional. There were times when we were slow to get to issues because of our workload.

Letting smaller clients go improved that, and allowed us the time and space to work on other improvements to generate much bigger productivity wins. Without that first decision, letting go of the smaller clients, we might never have been able to deal with the other issues that created the real wins.

I see both of these issues with clients I’m consulting with all the time.

icon__0007_ideaLesson Learned: Deal better with big decisions

Looking back at these errors in judgement I can see where the issues are, which means I can go forward knowing I won’t make the same mistake. So what did I learn?

What was my mistake?

Taking too long to make decisions I knew were right, which led to costs and impacts in other areas of my business.

What was the impact or cost?

Loss of our best staff member in the first example, and poor service outcomes and reduced fun and profitability in the second example.

How could I do it better next time?

Get honest sooner about the costs. Don’t discount the emotional and relationship challenges that making these decisions create, but do find a way to deal with them in line with your core values. That just takes some thought and creativity. These situations don’t need to end with blood on the carpet.

What did I learn and now try to live by?

It’s always better to front up to a tough decision sooner. Bad news doesn’t get better with time. The simplest motto of all is: just do what you believe to be right. It really helps strip out all of the noise in your head.

Is there a decision that you need to make right now that you know is right (but difficult)?

I hope this article encourages you to face up to it asap.

You can do it.

icon__0015_teamworkOver to you

What lessons have you learned in your career so far when it comes to making decisions? Can you relate to these issues yourself?

I’d love to hear more about your own experiences and lessons learned.

Is there a tough decision you need to make now that is right (but difficult)?”


More about Learning from Your Mistakes

If you after some more amazing insights into how best to learn from your mistakes then check out this list of TED talks on precisely that topic.

There’s some real gold here.

Ted Talks playlist:
Learning from Mistakes

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ABOUT BRETT DAVIDSON When you work with FP Advance you work with me, Brett Davidson, directly. My motto is ‘advise better, live better’ and I practice what I preach. I’m straight talking and get to the heart of an issue quickly. There’s no beating about the bush, just a focus on helping things improve. Ask my clients – what I teach works.