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Preventing Stupid: 3 Questions Every Business Owner Must Ask


by Matthew Neill Davis, Esq., author of “The Art of Preventing Stupid: How to Build a Stronger Business Strategy through Better Risk Management

A recent Internet search for “problems in business” on Google produced 1.76 billion entries, often a list of the top 20 or 10. Rightly so, business leaders are obsessed with solving problems. But business problems really fall into just three essential categories: catastrophesignorance, and ineptitude — and the way to solve them starts long before they happen. While these three enemies of any business can rear their head in countless situations and endless forms, the key is spotting them even before they start.

The Chinese military strategist, Sun Tzu, said, “If you know your enemy and know yourself, you need not fear the outcome of a thousand battles.”

That means spotting the weaknesses in your business by asking yourself three very basic questions. The sooner and the more frequently you ask, the better you’ll be able to address and solve these problems before they can intensify and do real damage. The more you do this, the steadier and surer you can lead:

First question: What foreseeable disasters can strike my business?

Catastrophes are the natural and man-made disasters that originate outside your business and hinder your goals. They may be forces of nature, such as a fire or hurricane, or market fluctuations. In western Oklahoma there are many companies depending on oil production for their livelihood. But in 2014, the oil price crashed — from $120 per barrel to down below $30. This was an absolutely disaster for those who did not see it coming. But my firm did see it coming, and helped our clients prepare for it, which meant it was not a catastrophe for them.

Look inside your business: A catastrophe could be caused by a disgruntled former employee, or a dissatisfied customer who decides to disparage you on the Internet. Or, it may come from the competition. The only catastrophe you do have control over is a health crisis, but the truth is, way too many business owners are entirely blind to their own vulnerability. For the disasters truly beyond your control, anticipate their likelihood, and prepare for them. The key is sound foresight, coupled with preparation and often insurance.

Second question: What particular skills or knowledge do my team and I need to run the business effectively?

Unlike catastrophes, ignorance is the fault of the business owner or potentially other managerial employees. The first step to take to overcome it is to recognize it. Failure due to ignorance regarding your business can strike either the management side or the operations side of a business. But it will apply to both you and your employees. Aim to fix this problem with education, such as an ongoing crash course in business management or the technical aspects of the work. Don’t let it go.

Whatever your business — whether you are a skilled tradesman running a service company or a merchant running the corner quick shop — your business requires a whole host of skills that you likely do not possess. Not everyone can know everything, to put it simply. you can learn them, or hire someone who has them. As your company grows or changes, there will be new things to learn

and new skills to master. This is where outside firms — such as legal, consulting, accounting, human resources, or marketing — can advise, assist, and help you rigorously address the ignorance in your company’s personnel. There is no shame in ignorance for your employees: an MBA may not understand the practical skillset that’s the backbone of your business. But the converse is true for you: You devoted your life to becoming a pro at what you do rather than the intricacies of business management. It’s time to take that crash course. 

What systems and procedures do we need in order to ensure that the work is executed efficiently, safely, and correctly the first time?

Ineptitude is not the same as ignorance. It covers things that you and your employees actually know yet still screw up. The fixes in this case entail tasks like systems, checklists, and routines. Your goal is to minimize or, more ideally, prevent the element of human error — using sound management. This may be the most tedious part of a business owner’s job, but it is also the most liberating when done correctly. Once you get your systems, checklists, and routines in place for your employees, you’ve just made their job, and yours, much easier.

A business is a complex human system that you oversee — and you are the answer to the “why” and “how” of problem development. You started the business, set it in motion and created the goals. There are often elements that arise that can make it a challenge to establish and maintain your business’s systems. But it’s far more effective to be able to foresee them than be caught in reactive mode. Keep your focus on these three basic areas of business failures, and you’ll be able to deal with them in an organized, efficient manner. And running your business will become that much easier.


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. His new book is “The Art of Preventing Stupid: How to Build a Stronger Business Strategy through Better Risk Management“.