XYZ Company files for chapter 11. That is a headline we have seen all too much of in the past year. I saw it again today. XYZ Construction, with revenues of $70mm, cannot meet its obligations. The funny thing is – the article in the paper calls them a real estate company but the company name is construction. Now, I see plenty of firms that do both and I have seen plenty of firms that have lost focus on what they do and enter chapter 11. Is this another case of lost focus? Last year they were on the Inc list of fasting growing companies. As Dr. Emol Fails, founder of construction consulting firm FMI, used to say: Volume kills, profit thrills!

What about General Motors or US Airways? Did they lose focus? Was it poor leadership? We can argue the cause but what chapter 11 usually stems from is failure to accept the facts. Reality, as in the brutal gang of facts that shows up on your P&L, is harsh. All of these bankrupt firms saw the signs but they did not react to them.

We all do this. We reject information that would benefit us but to admit the information would require us to actually do something. At FireStarter we are in the final stages of a new program on decision making. It has its roots in USMC aircrew coordination, has been validated in nuclear power plant control rooms and is being tested with our clients right now. We now know that better decisions are made when we process the inputs correctly..when we don’t reject information.

What information are you rejecting today that would help you make a better decision?

This entry was posted on Friday, September 18th, 2009 at 1:20 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.