There is a particular kind of confidence in a room where nobody’s actually seen the numbers.
In August 1980 I was appointed general manager of a company I had spent five years wanting to run. I had set myself a deadline – a general manager’s job in a South African food business by my 40th birthday. No particular reason.
I was offered the position the day before that birthday.
Then my new boss told me the business was broke, that the losses were substantial, and that I had until the start of the new financial year, some eight months off, to fix it. That was scary. I had not expected it.
Days after I arrived I sat through my first executive meeting, and it became clear that nobody in that room – apart from the financial manager, who had joined at about the same time as I had – knew what state the company was in.
These were not poor managers. They believed they were succeeding, and by the measure they were using they were succeeding: revenue was rising, and they were selling more products to more customers than before.
What none of them knew was that the price was wrong. Seriously wrong. Every additional sale was making matters worse rather than better.
The financial manager had already built a new price list at the margins the business actually needed, and my new colleagues were quite certain that if we took those prices into the market we would go broke. I had to tell them that the business they had been running was already broke.
It was not a good meeting.
I took control of the decision-making that day, which is not how I prefer to work and is not how I worked in that same company two years later. But decision-making was the weakest thing in that room, and we did not have the time to build it up gradually.
What I have thought about since is that not one of those managers was hiding anything from me. They had simply never been shown the numbers, and nobody had thought that odd.
If you asked the people around you this week what state the business is actually in, how many different answers do you suppose you would get?